The Libertarian Case for a Basic Income

http://www.libertarianism.org/columns/libertarian-case-basic-income

by bhauer • 13 years ago

66 145 13 years ago

api2• 13 years ago

I consider myself a left-libertarian, and I strongly support a basic income. I'm also a supporter of some amount of public health care.

In theory I support the elimination of taxation and a purely volitional society, but I recognize that such a thing is likely a very long way away. What we have now is not even close, and trying to shoehorn it into that vision prematurely will not work. That kind of moral futurism should not blind us to chances to radically improve human life here and now while working pragmatically within the bounds of the political realities we have.

One also must ask the question: given that the abolition of force and fraud is a moral long term goal, what sort of society would we want to build that would be likely to evolve in that direction? I don't think crony capitalism with fascist tendencies and no social safety net seems like what you'd want. Seems like that would be more likely to regress back to feudalism... which is exactly the historical path that we seem to be on. Regression to feudalism takes us further -- much further -- from that goal.

Seems to me that the precursors to a volitional libertarian state are radical reductions in violence both within and between nations, a highly educated and healthy populace that is capable of taking care of itself, and the abolition of caste systems (e.g. sexism, racism, classism, guild systems, etc.). A basic income is a step in that direction.

nickff11• 13 years ago

"Public health care" is interesting, because it usually involves first forcing everyone to pay for a government healthcare system, then (usually) regulating the private system into oblivion, or destroying it outright. "Public health care" is fundamentally incompatible with liberty.

Your third paragraph is interesting, because you appear (to me at least), to endorse liberty, yet without believing in it.

"given that the abolition of force and fraud is a moral long term goal, what sort of society would we want to build that would be likely to evolve in that direction"

My answer to your question, (as quoted above,) is that I believe liberty would allow for people to prosper, and all the fascist, feudal, and that regressive tendencies we see are a product of coercion. I do not understand your answer to the question, as it seems to open the door for any type of coercive means with the stated intent (but not necessarily with the result) of improving the welfare of the populace.

The ends which you describe in the last paragraph are all interesting, and nice goals, but do not (in themselves) justify the use of coercive means; especially since the coercion presents many discrimination problems due to the discretionary powers granted to those who would 'solve' the problems.

dragonwriter9• 13 years ago

"Public health care" is interesting, because it usually involves first forcing everyone to pay for a government healthcare system, then (usually) regulating the private system into oblivion, or destroying it outright.

You seem to be using a strange definition of "usually" -- every OECD country has "some degree of public healthcare" (what the grandparent post suggested support for), and yet most of them have some degree of a private system.

orblivion2• 13 years ago

Seems to me that the precursors to a volitional libertarian state are radical reductions in violence both within and between nations, a highly educated and healthy populace that is capable of taking care of itself, and the abolition of caste systems (e.g. sexism, racism, classism, guild systems, etc.). A basic income is a step in that direction.

Does the libertarian within you believe that the State will accomplish this goal, without worse repercussions? Why remove the state at all if you think it can engineer society for the better in this way?

tokenizer7• 13 years ago

A libertarian could be a minarchist, and anarchist, or simply someone who looks at our current governance architecture (state control focusing on finance and asset wealth growth) as counter intuitive.

Does the libertarian within you believe that the State will accomplish this goal, without worse repercussions?

The libertarian in my worries that a state would either abuse a system for the benefit of a small elite, or purposefully skew results in favor for their brand of narrative (didn't work, too expensive, just not possible, abolishing labour laws because it needs to be done!, etc...).

Personally it depends on the policy details to me. If this leads to the abolishment of all other forms of social assistance, and can reduce the amount of government employees who simply decided who got them in our older models, then sign me up. A system would also have to not discriminate, neither down nor up in regards to income.

That said if our choices are current social assistance, negative income tax based minimum income, or minimum income for all without deductions, then both NIT-MI and MI work for me.

api2• 13 years ago

If you remove the state from a violent, fraud-ridden, still very feudal system, you will simply unveil the underlying less centralized tyranny latent in that system.

There's also a massive blind spot in most conventional libertarian thought with regard to soft power and indirect coercion. Eliminating direct coercion but leaving caste systems in place only frees those who are rich or powerful enough to evade those caste systems. The rest are consigned to poverty and oppression through manipulation instead of force.

So yes, I do think the state can play some role at this time in history at uplifting the human condition and empowering the general population in ways that could -- given a lot of time -- eventually lead to a future that is better and freer in multiple ways. Or it could not. The state can't be trusted, but I also don't think we can dispense with it (yet).

Simple reductio ad absurdium: imagine actually dispensing with the US Federal Government. Most US states in the interior would establish theocratic feudal totalitarianism along Christian Reconstructionist / Dominionist lines, and the coasts and anywhere resource-rich would probably be invaded.

craigyk5• 13 years ago

I'm confused as to how you think libertarianism is the path to get to that society, the only path, or even the best path. If we are dreaming futures, the goals you mention could just as easily be met by a system in which super-sentient AIs plan all the details, and robots provide all the labor. After all, the only monetary 'freedom' that is better than having complete control over one's money, is the freedom of not having to even worry about it.

natmaster• 13 years ago

The problem with the whole premise of this analysis is that libertarianism is some kind of idealistic belief to appeal to the pillars.

This is wrong. Libertarianism is about pragmatism, and a basic income would simply drive up costs of all basic things needed to survive especially if any of those are scarce. This would likely hurt those just above that poverty barrier the most as they would no longer be able to afford basic shelter even though they are gainfully employed. Because of this, those people will find it better to move out to land no one cares about and just 'do nothing' as decreasing costs is the only way for them to live decently. These people will not provide value to society, resulting in net loss of value (read: happiness, whatever you want to call it) for all.

orblivion2• 13 years ago

This is wrong. Libertarianism is about pragmatism

What libertarianism is about has been a subject of debate between libertarians for decades. There are others who see it as an idealistic belief.

craigyk5• 13 years ago

It is an idealistic ethos. In my mind it's as naive as centrally planned socialism, but just at the other end of the spectrum.

craigyk5• 13 years ago

I think you are wrong... but really, you should be advocating that it be tried anyways, because what neither one of us have is a lot of evidence.

jganetsk5• 13 years ago

Your assertion that a basic income would drive up costs is wrong. What evidence do you have of that? If it's done without printing money, it will not cause inflation. There will be more demand for housing, but how much more? The homeless will now be able to get homes. So, how much demand is that? How much will that drive prices up? The great thing about universal income is that people decide how to spend it. And they will not all spend it on "basic items", and they will not all spend it on the same things.

dragonwriter9• 13 years ago

Your assertion that a basic income would drive up costs is wrong. What evidence do you have of that? If it's done without printing money, it will not cause inflation.

Redistributing income can be expected to cause market-specific price increases in goods that the people benefiting from the redistribution have a greater propensity to purchase than those from whom income is redistributed. (And decreases in other goods.)

Adopting Basic Income is pretty clearly going to affect a redistribution of income.

So, the increase in prices for basic goods conclusion is sound (the idea that this will end up harming those just above the poverty line by giving them less purchasing power seems, however, far less sound.)

yummyfajitas15• 13 years ago

BI shifts spending from investment (money the rich would otherwise have saved) to consumption. Investment goods fall in price while consumption goods rise in price. CPI measures the price of consumption goods, hence it rises.

notahacker4• 13 years ago

If all of your potential tenants are getting an extra >$10,000 per year, and the supply of cheap housing in your city is basically fixed in the short term, you're not going to be looking for a small increase in rent...

dragonwriter9• 13 years ago

basic income would simply drive up costs of all basic things needed to survive especially if any of those are scarce.

Sure, you'd expect some price increase -- anytime a group of people get more income, the maket-clearing price of things they have a non-zero propensity to consume can be expected to increase by basic supply-demand analysis. At the same time, except with completely inelastic demand, the increase in price will not be so much that the amount they are able to afford decreases, by the same analysis.

would likely hurt those just above that poverty barrier the most as they would no longer be able to afford basic shelter even though they are gainfully employed.

I'd really like to see an argument for this. Since the people "just above the poverty barrier" are going to see the same increase in income as everyone else (basic income goes to everyone in equal amounts -- it isn't a minimum guarantee that is reduced 1:1 with outside income), what is the basis for concluding that the real purchasing power of those just above the poverty line would decline?

dllthomas18• 13 years ago

The real purchasing power of those just above the break-even point will decline (as will that of everyone else above the break-even point). If the break-even point is chosen to be the poverty line, then we have pushed everyone toward the poverty line, be it up or down, as a first-order effect of the policy. Second order effects might move things up (increased demand from those below the poverty line leads to increased opportunity to meet that demand and "lifts all boats") or down (inflation makes comparable quality of life less affordable)...

The poverty line has been suggested as a break-even point in some BI proposals, but certainly not all.

jasonwatkinspdx3• 13 years ago

You're assuming a basic income requires expanding the monetary base. It doesn't, it could be redistribution as well.

tokenizer7• 13 years ago

As a libertarian-socialist, I'd love for us to collectively and indiscriminately provide everyone with a fair and appropriate basic minimum income. The only problem with this policy is how you pay for it.

You can abolish all other forms of social assistance -but only if you can adequately justify the elimination of the bureaucratic government jobs associated with them. For an all inclusive basic income, no bureaucracy would be needed.

You could tax the wealthy heavily -in effect making the basic income a negative income tax policy. This also seems like a worthy policy worth investigating.

You could borrow the money by way of government securities. The only problem with this scheme however is that already you have people like myself, who are extremely skeptical of the long term health of the current world financial make-up of West versus Rest, which is already changing quickly.

Personally I dismiss all arguments regarding a basic income harming poor people in the form of "inflation". We're currently in a deflationary crisis according to the big banks, and the social and political benefits to these policy changes would make it extremely hard to simply get rid of due to "bubbles and pops" as we have that plenty as it is.

Can someone try to explain why something like this isn't possible? What if we increased taxes in the top most income bracket, abolished all forms of current social assistance, and took on more debt, hoping this can pay for itself (or to simply continue down the trajectory of more debt every year).

Can someone try to explain why something like this could be more simple than I'm guessing?

dllthomas18• 13 years ago

You would still need some bureaucracy to make sure people are not double-collecting, that people stop collecting after death, etc.

farmdawgnation• 13 years ago

Yeah, I was thinking the same. I'm wondering how much of that could be automated, though, through appropriate system design. The IRS knows when people are dead. Presumably, that system could then alert the BIG system to stop dispatching checks.

That's just one solution to one problem in a sea of them, but I think it's a representative example.

jjoonathan2• 13 years ago

Almost like the Social Security Administration?

liquidise5• 13 years ago

You could tax the wealthy heavily

At what % do we draw the line on taxing the wealthy? 35% 40% 50%? These numbers would be outraging to any other section of the populace.

dismiss all arguments regarding a basic income harming poor people in the form of "inflation"

Scare quotes on inflation? Lower and middle classes feel inflation the most when it affects the costs of basic needs: bread, milk, etc. Those are the very items a basic income intend to give ubiquitous access to. Practically by definition a basic income would raise the prices of those items.

and took on more debt, hoping this can pay for itself

This is the critical assumption here. There is an ongoing debate whether or not college degrees can even pay for themselves in many areas of study. This is a heavy handed gamble, and one i would be unwilling to risk our fiscal futures on.

nathos• 13 years ago

Post-WWII (and through 1964), the top marginal income tax rate in the United States was 91%

http://en.wikipedia.org/wiki/Income_tax_in_the_United_States...

tokenizer7• 13 years ago

At what % do we draw the line on taxing the wealthy? 35% 40% 50%? These numbers would be outraging to any other section of the populace.

I'd prefer if we didn't at all TBH, but something that would pass would most likely only be modest.

Scare quotes on inflation?

More like skepticism. The FED wants inflation[1]. I may not agree with them but I'm not the central planner with a printing press. I doubt we would see prices go higher, as some people would quit the workforce and live poorly living exclusively through MI. Some would stop working full-time (myself included) and figure out the best way to work less for the same amount of money. And most would simply use the money to combat their debt they've collected over the last 15+ years. It helps everyone, including the markets, due to velocity. I'd love to compete against a company who would dare raise prices. Press Releases condemning them, highlighting my lower prices, etc, etc.

This is a heavy handed gamble, and one i would be unwilling to risk our fiscal futures on.

Well how about we test it before dismissing it[2]?

[1] http://www.bloomberg.com/news/2013-11-12/fed-s-lockhart-want... [2]: http://en.wikipedia.org/wiki/Mincome

nawitus7• 13 years ago

These numbers would be outraging to any other section of the populace.

These numbers are normal in Nordic social democracies.

digikata• 13 years ago

Lower and middle classes feel inflation the most when it affects the costs of basic needs: bread, milk, etc.

Suppose there is a sudden massive increase in demand for basic staples after implementing basic income, isn't that an indicator that our current system + safety net is seriously inadequate? And that people were going hungry?

Really, I think there would be a small increase in demand sized to the backfill of the gap between basic income coverage and our current safety net. Maybe it would give us more leverage to remove some agricultural subsidies.

craigyk5• 13 years ago

Yes, for the ultra-wealthy basic income is essentially a fixed taxed deduction. I think almost everyone would agree that basic income would provide a marvelous opportunity to simplify things.

Inflation seems like the biggest risk to basic income, but I don't think anyone can say how big of a problem it will be in practice. I think people have already put up potential ways to remedy it as well.

nickff11• 13 years ago

What is the justification for taxing the wealthy disproportionately to their income? Is it out of moral need, financial expedience, or economic efficiency?

If you wish to tax them out of moral need, you hold a normative belief which is unlikely to falter, so I will not challenge it.

There is no financial reason why a 'progressive' income tax is better than a flat tax, as the 'progressive' system encourages evasion, and makes it easier, as well as greatly increasing the scope of government, requiring regulation of marriage and more.

Economically, the 'progressive' income tax is completely unjustifiable, as the wealthy invest disproportionately in economic (and job) growth, while lower income people spend more on consumption goods.

Your idea of borrowing money by way of government securities is not a long term solution, because interest gradually becomes an increasingly large part of the budget. In the long term, interest will either gradually take over the entire government budget, or an interest rate increase will force the government to default; in either case, borrowing to finance regular spending will eventually fail as a policy.

The 'inflation argument' against welfare policies is flawed as you point out, because it has never been demonstrated that wage increases cause inflation (so called "demand-pull inflation"). Whether or not some type of government welfare program should exist is an interesting question, and your answer seems to presuppose that the counter-factual is that there would be no social assistance program at all, whereas I would think that private charities would do a better job than the government, while avoiding coercion. If you require a government welfare program, I agree with you that a negative income tax is probably the least harmful, as it does not encourage unemployment.

bencpeters4• 13 years ago

One argument I would make is a marginal utility one - the marginal utility of $ decreases dramatically at higher incomes, so even if you have a (comparatively) punishingly high tax rate on the rich, the amount that your tax is affecting their lives in real terms is lower due to the marginal utility of money at those incomes. I'm in the camp that it's reasonable to want at least some semblance of equality of outcome though, so this argument resonates with me in a way that it might not to someone who favors a more lassez-faire approach. This probably falls under your "moral need" umbrella.

I don't agree with your statement about a progressive income tax being economically unjustifiable, especially in the economy that we find ourselves in at the moment (and, if secular stagnation proponents like Larry Summers and Paul Krugman are right, may be the structural norm these days). The current economy is strongly demand constrained, with plenty of money available for investment (corporate profits and cash holdings at record highs), but inadequate consumer demand to justify investments. From this perspective, a progressive transfer of wealth down the income scale makes a lot of sense economically because the poor are much more likely to actually spend that money than the rich are. There's also not much good evidence that high end tax rates affect macroeconomic growth as much as people claim - just in the US we've had tax rates all over the map over the past 100 years, and there's not much correlation with economic growth. We certainly haven't seen any miracles of economic growth for the economy as a whole since 1980 with the long running supply side, deregulation, and low tax experiment. If taxing the rich really has such a strong effect on economic growth and job creation, it's hard to see that in the data...

Finally, interest on government debt only becomes a long-term problem if the rate is higher than the rate of growth. It's not clear to me that that has to be the case, but that's another discussion ;)

jasonwatkinspdx3• 13 years ago

the wealthy invest disproportionately in economic (and job) growth, while lower income people spend more on consumption goods

This is a very strong claim that's difficult to justify by the data. Consumer demand is the largest driver of economic growth. Demand is what ultimately creates jobs. Capital cannot be applied to investment or growth if there is no demand to generate a return.

gshubert17• 13 years ago

What is the justification for taxing the wealthy disproportionately to their income? Is it out of moral need, financial expedience, or economic efficiency?

One argument I've seen is from marginal utility. To a person with few dollars, one more is quite useful. To a person with a million, one more (or less) is noise. J. S. Mill originally opposed progressive taxation, but may have changed some of his thinking on this subject later in life.

dllthomas18• 13 years ago

"Economically, the 'progressive' income tax is completely unjustifiable, as the wealthy invest disproportionately in economic (and job) growth, while lower income people spend more on consumption goods."

That's bass-ackwards. All the money in the world can be available to fund companies; if there's no money to realize demand, it'll sit around unused. If there is demand for goods and services, people can borrow money to provide it, to be paid back out of the revenue stream. That's healthy. What we've been doing lately (and more especially pre-crash) is borrowing to consume instead, and as you say, "borrowing to finance regular spending will eventually fail as a policy" - as partly evidenced by the crash.

ahomescu1• 13 years ago

"Libertarian-socialist" sounds like a huge contradiction to me; you can be either one or the other, but they contradict each other. You're either for personal freedoms and individualism (i.e., libertarian), or for "the common good" (as most socialists claim to be).

socalnate12• 13 years ago

This is the most even handed treatment of this topic I've read yet.

One topic not addressed (but important) is what we do when someone spends the entirety of their basic income and has nothing left for food or shelter. Do we just let them starve to death in the street? Or do we create a "secondary" safety net that prevents this? If so, don't we just end up with the same sort of inefficiencies and problems that plague our current system?

bendmorris• 13 years ago

Do we just let them starve to death in the street?

I imagine private charity would pick up some of the slack at this point. I feel that, if someone is given enough to live on but uses it irresponsibly, the state no longer has any obligation to provide for them (they already have.) It would fall to individuals to decide whether they personally have an obligation to assist them.

nickff11• 13 years ago

You are correct to point out that the article poses a counter-factual which is unsupported by the evidence.

dllthomas18• 13 years ago

Also, if someone is demonstrably, persistently unable to take care of themselves, help should probably take a form other than food stamps.

nawitus7• 13 years ago

The secondary safety net is private. That's why even Nordic social democracies have "bread queues".

mindcrime4• 13 years ago

One topic not addressed (but important) is what we do when someone spends the entirety of their basic income and has nothing left for food or shelter. Do we just let them starve to death in the street?

If you want to help, voluntarily, that is, of course, your choice. But if no one chooses to help them, well... the idea of individual responsibility for the outcome of your choices exists for a reason. By what possible argument can I claim that I should be able to blow all of my income on anything I want, except food and shelter, and then demand that someone else provide me food and shelter?

nickff11• 13 years ago

One might suppose that the reason many desire a government welfare program is to allow a complete abdication of responsibility (and disregard) for the situation of their fellow people.

jjoonathan2• 13 years ago

Here's a video in which Milton Friedman addresses this exact issue: http://www.youtube.com/watch?v=xtpgkX588nM

He proposes dispensing the funds weekly. You can't starve yourself in a week and drinking fountains + free cups of water at restaurants ensure that you won't go thirsty. Exposure could be a problem in certain cities, but under the new system I'm sure low-cost housing would adjust to the needs of the tenants since there's a profit motive for doing so. You might have to bus to the edge of the city to get low-rent food and housing, but the option would be there (and administered by a competitive private market).

I like this idea more than "bread queues" because it forces recipients to take responsibility for their spending without using so much force that the damage it allows to happen is greater than the value of the sense of responsibility it aims to instill (which I believe to be the case in the present system). Also, it leverages the free market to optimize its administrative specifics. Massive influx of poor people due to economic downturn? More low-cost establishments get built/converted. Massive outflux of poor people due to economic upturn? Low-cost establishments get sold or converted into high-cost establishments. No need to wait for next year's appropriations bill.

socalnate12• 13 years ago

This is a fantastic answer, thank you.

edraferi3• 13 years ago

I really like the implications UBI has for charity. because everyone has a minimum level of resources, charity's revenue can scale with the number of people they serve.

For example, a halfway house could collect BI funds on behalf of its residents. it uses these funds, plus monies from other sources like donations or grants, to provide in-kind aid (food, shelter, security, medical care). as a resident requires fewer services, you can progressively phase out the in-kind aid and pass the BI cash through directly.

obviously this would require oversight to ensure that the charity is a responsible steward of the residents BI. we do this with the foster care system already.

acjohnson552• 13 years ago

I think you could vastly reduce the number of people who are simply trapped in a gravity well of poverty, but there will definitely be need of additional programs. There are a lot of sociological problems that money by itself does not solve. For example, not everyone is capable of making decisions that will keep them alive and healthy. After all, a very large percentage of the homeless are not psychologically well. And we'll also still have orphans.

rpedela• 13 years ago

That is a good point. I view the poor and homeless as two different groups. Yes the homeless are also poor, but as you say they often have a whole set of other problems besides money. People who are just poor, money can help them.

JulianMorrison• 13 years ago

Spends it on what? The mind goes easily to stereotypes like "gambling" and "drugs" but how about "medical debt from visiting the ER" or "the rustbucket car they rely upon for work just broke down again"? Unless the basic income is quite large, it will leave people in the same kind of precarious situation as the working poor.

dllthomas18• 13 years ago

Well, it'll leave the working poor and the non-working poor all a little better off, and give them the ability to shift resources as they see fit instead of as we see fit, which should typically help increase their welfare.

ihnorton• 13 years ago

This is worth a read, especially for this point:

  However attractive libertarianism might be in theory, 
  “Libertarianism…Starting Now!” has the ring of special 
  pleading, especially when it comes from the mouths of people 
  who have by and large emerged at the top of the bloody and 
  murderous mess that is our collective history.

Social justice libertarianism? I was not expecting that. Very interesting. (the website is beautiful, too)

anExcitedBeast• 13 years ago

I think it's fair to call 'libertarian' a descriptor of political, economic, or philosophical ideas. There are many different types of libertarians who have occasionally conflicting positions. The only thing they share is a vaguely similar anti-state "flavor". I think it's about as precise as 'liberal' or 'conservative', which is to say it isn't precise at all.

liquidise5• 13 years ago

Hold on now. While i am going to do my best to avoid a No True Scotsman here, i have never spoken to a self-described libertarian who supports in reparation or affirmative action.

This is not by chance either. The idea of fiscal freedoms comes at the cost of fiscal safety nets. Where you draw that line is a sliding scale of course, but i still fair to see how this article is speaking a libertarian mindset.

tokenizer7• 13 years ago

Where you draw that line is a sliding scale of course

I disagree. As a libertarian-socialist, I think we can take care of ourselves while pursuing freedom in regards to economics.

In our current system, we judge people based on their employment, history, and need, and then select people to give benefits to. There are problems with this. Bureaucracy, favouritism, politicking, etc.

With a basic income, we can reduce spending by abolishing all social assistance, reduce the amount of government employees by firing the bureaucrats who used to deny/approve people for benefits, and simply guarantee everyone a minimum amount of support. This has the benefits of reducing bureaucracy, favouritism, and politicking.

liquidise5• 13 years ago

With a basic income, we can reduce spending by abolishing all social assistance

I would love to see the numbers that show a no-questions-asked basic income would be cheaper than the present social assistance monies.

There are a lot of logistics here. How do we prove you did not already get your check? What about those without mailing addresses. Or ID's? Is the basic income adjusted for families of 1 vs 7?

This idea of a minimalist ruleset for financial assistance seems like it is great at first, but will inevitably just get more and more bloated (and costly) as you actually implement it.

nawitus7• 13 years ago

Friedrich Hayek and Milton Friedman advocate basic income. One can debate if they are "libertarian".

javert• 13 years ago

Libertarianism is an assertion without a philosophy. You can't really define it. Usually it is synonomous with the non-aggression principle, but as you can see, oftentimes, even that is not the case.

There is an actual philosophy which defends individual freedom from aggression. Objectivism. About 5% of the whole philosophy deals with these kinds of issues.

notahacker4• 13 years ago

Who says reparations are linked to "affirmative action"?

Here's a simple case of a prima facie case for economic reparations in the form of unemployment benefit: the government actively manages economic policy to ensure unemployment doesn't fall so low as to stimulate wage inflation. That's not speculation or conspiracy theory; it's explicitly stated as the objective of effective monetary policy in the economic literature. People are unemployed as a direct result of a policy aimed at ensuring macroeconomic stability. Therefore, some form of unemployment insurance is justified (as, for that matter, is expecting the beneficiaries of said economic stability to subsidise it)

NB. I realise that some libertarians would prefer a "gold standard". But the logical consequence is the same: an arbitrary decision of the government to restrict the currency supply[1] in the interests of preventing inflation causes people to be unable to find work for a period of time. Ceteris Paribus, many _more_ people since credit would be a lot more expensive under a gold standard

[1]in this case to "the quantity of gold held in the Fed", which actually sounds a lot less "free market" than the status quo of to "the amount of credit private banks are willing to supply given the Fed's interest rate"

yummyfajitas15• 13 years ago

This article is almost self refuting - objection (2) is killer.

Immigration is probably the most important issue of our time. If we have a BI, we can't have immigration in any form remotely resembling what we have today, let alone some ideal situation where we have drastically more immigration. It's as simple as that. The cost of a BI (and the welfare state in general, really) is that millions of people are stuck in Haiti, India, Afghanistan and other desperately poor locales.

http://econfaculty.gmu.edu/bcaplan/pdfs/whyimmigration.pdf http://dipeco.uniroma3.it/public/WP%20163%20Liberati%202012....

I'm not an open borders activist. Most of the countries I mentioned are desperately poor due primarily to the people living there - any immigration policy needs to turn Haitians and Sudanese into Americans rather than turning the US into Haiti. But at the same time we need to recognize the tremendous humanitarian benefits of immigration.

If we prevent a Haitian person from selling his full time labor to an American employer for $7.25/hour, we are cutting his income by 90% (Haiti has a GDP/capita of $1300, cost of living adjusted). I can't see any benefits from a BI that would remotely justify doing this to millions more people. In fact, near as I can tell, virtually any policy which requires further restricting immigration is almost certainly a nonstarter for this reason.

A much better policy is the Basic Job, which is like Basic Income but you need to work for it (see FDR's CCC, jobs are things like improving public parks, planting trees, etc). This also has no disincentive effects and you get some productive labor out of the people who choose to make use of it.

tokenizer7• 13 years ago

Simple solution, have X amount of savings, or a job lined up. I'd love your opinion on the merits of anyone else being allowed into a country without X amount of savings, or a job lined up.

yummyfajitas15• 13 years ago

A glib response: I'd love your opinion on the merits of deporting unemployed Americans with $0 in savings to Liberia.

More seriously, suppose we had no BI or other welfare state - what is the harm of allowing an Indian to show up in NY with no money or job? The only cost I see is that he might annoy 30-100 potential employers before he finds someone to pay him $7.25/hour to wash dishes, making him richer than 95% of his countrymen. He might sleep on the street for a little while.

Now, there are real worries - he might eventually become a citizen and vote for Indian-style governance (see, e.g., the voting behavior of Mexican Americans), contribute to a corruption-tolerant culture, or other such things. But those are second order worries.

Locke1689• 13 years ago

To bring your proposal into more modern times, how does it compare to the EITC?

yummyfajitas15• 13 years ago

By "proposal", I assume you mean Basic Job? If you can't find a job, you don't get EITC.

A Basic Job means the government gives you a job if you can't find one. You show up, tell them you are unemployed, and they give you a job cleaning the DMV, filling in potholes, picking up trash at the park or whatever. At the end of the day they give you 8 hours x $7.25/hour. If you find a McJob paying $8.00/hour you quit the Basic Job and go take the McJob.

nawitus7• 13 years ago

Immigration is probably the most important issue of our time. If we have a BI, we can't have immigration in any form remotely resembling what we have today, let alone some ideal situation where we have drastically more immigration. It's as simple as that. The cost of a BI (and the welfare state in general, really) is that millions of people are stuck in Haiti, India, Afghanistan and other desperately poor locales.

No. There are countries that have comprehensive social security and have immigration resembling what we have today - e.g. these countries have immigration that they already have.

yummyfajitas15• 13 years ago

Could you explain how to have both a welfare state and a lot more immigration? How do you make the numbers work?

AnthonyMouse6• 13 years ago

There is a simple solution to this: An immigrant can become a citizen but doesn't receive the basic income until they have been here for 25 years, but also doesn't pay income tax until the amount they would have paid in tax exceeds the amount they would have received from the basic income. Thus, the immigrants who would have been a drain on the system become breakeven and net productive immigrants see no difference in practice from any other citizen.

chc2• 13 years ago

How does having someone do busy-work in exchange for the basic income address any of the objections?

yummyfajitas15• 13 years ago

Objection (1) - a BJ creates no disincentive for work. You can earn $7.25/hour at the BJ or $7.50 at McDs.

Objection (2) - it reduces the incentives of immigration with the intent of collecting welfare, thereby reducing the objections to immigration.

Objection (3) - due to the fact that it has no disincentives for work, and the economic cost will be far less than a BI ( I did some back of the envelope calculations here http://www.chrisstucchio.com/blog/2013/basic_income_vs_basic... ), it's far less likely to reduce growth than a BI.

bryanlarsen• 13 years ago

A lot of BI proposals pay the BI only to citizens. New immigrants aren't citizens; it takes many years to move from permanent resident status to become a citizen.

This would create an underclass of immigrants & refugees, and create incentives for voters & politicians to make getting citizenship even harder than it is today.

This is definitely not a good situation, but it is better than forcing people to stay in Haiti or Sudan.

yummyfajitas15• 13 years ago

This is a possibility - but so far the US tends to not do this very well. I don't have great data on the subject, but I've seen at least one study suggesting immigrants with children tend to be a net drain on the US.

http://cis.org/immigrant-welfare-use-2011

Don't get me wrong - I'd love to do what you propose, though I think a BJ is a better policy than BI regardless of immigration. But I'm not aware of any western society that actually manages to do it.

cema• 13 years ago

There is already an underclass of immigrants, those on H-1 visa (work visa), with all the restrictions of their position (employment restrictions, conditions on the length of stay in the country, and so on). Also students (F and J visas), severe restrictions on work, sometimes a requirement to leave the country (USA) and never show up for two years. Probably more cases like that, these are just the ones I had to deal with.

dllthomas18• 13 years ago

A "Basic Job" is not a "much better policy" at all. Paying people to take care of our public spaces is worthwhile (and should be done regardless, and much is done regardless), but makework is a disease. With BI, I have assistance when I work on my startup or retrain for a different career or take care of my children or volunteer in my community - there's no bureaucrat judging my activities and deciding what is and is not worthy.

lxmorj• 13 years ago

What about a Basic Job for non-citizens, Basic Income for citizens?

dllthomas18• 13 years ago

I am not convinced that BI and open borders are incompatible. So a lot of people move to the US - how is that harmful? Historically, increased immigration has lead economic happytimes. It's unlikely to get overcrowded; if the entire population of the world moved to the US we'd still be substantially less crowded than Singapore, and there's no freakin' way that would happen.

If we find that BI has problems, we roll it back. If we find that the only problem with BI is immigration related, we can encourage other countries to implement it too - possibly coupled with aid, if they need it.

I'd want to take a closer look before doing it, but it doesn't seem as crazy as common wisdom would suggest.

billpg• 13 years ago

Next week, a communist case for the private ownership of the means of production.

Finster• 13 years ago

i.e. China's economic system?

mindcrime4• 13 years ago

Background: I consider myself a Voluntaryist or Anarcho-Capitalist libertarian, and I can't see how I could ever support anything that violates NIF[1][2].

---

That was more interesting and enlightening than I expected, to be quite honest. My initial thought was that there would be no way to reconcile a "basic income" with the NIF principle, unless said basic income is paid entirely voluntarily. But the historical rectification argument strikes me, at first blush anyway, as having some credence.

That said, I'm a long way from fully onboard with this as long as it's rooted in our present system of taxation which is fundamentally based on coercion / force, or threat of same.

[1] http://en.wikipedia.org/wiki/Non-aggression_principle

[2] http://en.wikipedia.org/wiki/Initiation_of_force

jganetsk5• 13 years ago

Has anyone analyzed the impact on monetary policy and macroeconomics?

The Fed has a dual mandate of low inflation and maximal employment, and as a result, is currently printing money indefinitely. The ECB only has a mandate of low inflation, and has had an excellent track record. However, the Eurozone is currently having an unemployment crisis. The BI (potentially with abolition of the minimum wage) would then mitigate the impacts of unemployment. With basic income, couldn't the Fed become more like the ECB, and drop the employment mandate? Then, we could potentially greatly curtail our money printing.

Also, what are the effects on macroeconomics? Couldn't BI attenuate the boom-bust cycle? Deflation would even be constructive: the real value of the BI is increased without raising the nominal value. The Fed can then take its time, during recession, in deciding when to start the printing presses again.

AnthonyMouse6• 13 years ago

I want to point out that that there is no difference between a basic income and a negative income tax. Suppose you have a negative income tax rate of 30% up to $50,000, then an income tax rate of 30% thereafter. Compare this to having a $15,000 annual basic income and a flat 30% income tax rate starting from $0. They are the same thing using different words.

But the words matter, which is why I don't like calling it a negative income tax. Because if you call it that, people start asking questions like why should someone making up to $50,000 be getting the "subsidy"? And then people want to do something silly like make the negative income tax be something like 60% up to $25,000, then 0% to $50,000 and 30% thereafter, which is obviously very stupid if you stop to do the math on who gets screwed by that and what incentives to work it creates at the bottom: It's equivalent to a $15,000 basic income with the same tax brackets, and it makes no damn sense whatsoever for someone making $25,000/year to be paying a 60% marginal tax rate. But calling it "negative income tax" encourages people to think that way and expect high marginal rates on the poor to be Good when they are really quite Bad.

notahacker4• 13 years ago

If the ethical case for redistribution rests on the view that (A) inequality is partly the consequence of injustices that need restitution and (B) some people really need the money, and probably deserve it because of A, I can't see why that would leave you favouring a crassly simply form of redistribution like BI over another hypothetical form of welfare system which is better at focusing the redistribution on suffers of injustice and things people really need. That probably wouldn't be identical in design to the current US welfare system, but it wouldn't be difficult to argue that many of the features present in most actual welfare states are better at delivering A and B than a simple monthly transfer of a small amount of income to everybody.

Which leaves us with two main lines of argument against some more traditional form of welfare state. It's "paternalistic", but so are employers when they impose conditions upon people that expect to receive money or expenses from them, and I so don't see anyone making the case that expecting minimum standards of behaviour from people in return for giving them money is in general a bad thing. Secondly, it's expensive to administer, but potentially not as expensive and wasteful as the adverse consequences of an overly-generous basic income (or as deadly as an insufficient basic income). On the whole, better to have lots of subtly wrong things than one big politically-sensitive number that can make or break your economy.

Once you've conceded the case that centralised large-scale distribution is inherently justifiable and worthwhile, saying no to "big government" starts to look more like a slogan than an argument...

The Libertarian Case for a Basic Income

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