Monday, June 27, 2005

UBI, Freedom, and Reciprocity

There are many good reasons available for supporting the implementation of a universal basic income in our society, but I think most of them can understood in terms of promoting real freedom. A guaranteed income would boost people's opportunities in life, in a variety of ways.

Firstly, it would help relieve poverty. (As my first post on the UBI argued, it would likely be more successful than our existing methods of conditional/targeted welfare benefits.) Allowing people to meet their basic needs is an essential prerequisite to any form of freedom worth having. It would expand the quantity and quality of opportunities open to people, enabling them to live the sorts of lives they want to live. It would, in short, benefit humanity and promote one of the most fundamentally important values that there is.

Second, as discussed in my economy post, the UBI would increase the bargaining power of the worst off. Less desperation would leave people less vulnerable to exploitation. This in turn would relieve the need for many labour regulations. As I wrote before: We could realize the ideal of a genuinely free market, in which all participants - and not only the rich ones - can voluntarily participate.

Relatedly, the UBI would increase the market options open to individuals. It would, for example, enable people to work for less than a subsistence wage. This would make it easier for poorer people to find a job (as opponents of minimum wage laws are quick to point out). It would allow more people to accept more satisfying, if less well-paid, employment. It would also prevent people from being forced into accepting work that they greatly dislike. The most unpleasant jobs would thus have to offer greater compensation in order to entice people to accept them. This is only fair: people should be adequately compensated for performing distasteful jobs, they should not be forced into them from desperation. The guaranteed income would allow people to live for periods without employment, e.g. while they study or otherwise upgrade their skills. It would enable people to work more or less as they prefer. As Van Parijs notes, "access to an income, access to a job and access to leisure are all dimensions that must be taken into account when discussing justice." The UBI, unlike traditional welfare methods, and very unlike laissez faire capitalism, would offer greater access to all three.

It also has broader implications for social justice. Feminists argue that it would enable women to become less dependent on their husbands. Civil (little-'r') republicans point out that it would benefit democracy, by enabling more people to participate in public life. (If you're struggling just to survive, that doesn't leave you much time to get involved in politics or civil society.)

The most controversial aspect of the UBI, if high enough to meet people's basic needs, is that it provides individuals with the option not to work at all. This would seem to violate the reciprocity principle: if an individual takes from society, they have an obligation to give something back if they are able. But we should distinguish a moral obligation from its enforcement. I would agree that we do indeed have such an obligation, but its political enforcement might do more harm than good.

I discussed this more in my original UBI post. There are two main points to make. Firstly, valuable social contributions need not be economic in nature. Our present system woefully undervalues caring work (done predominantly by women) - especially the vital importance of childrearing - and other volunteer work done in service to civil society. Secondly, I think very few people would live lives that contribute nothing to society in this broader sense. Humans are social animals, and most of us want to do make something of our lives, whether through a successful career, or fulfilling some vital role in our communities. So I don't believe reciprocity would pose much of a problem in practice. What do you think?


  1. I don't think reciprocity would be 'too' much of a problem in practice either. However, why not insist that the able people volunteer a few days a week doing garbage collecting if they are unable to find (or bother) some other means of contributing to the society that is providing their UBI?

  2. There would be difficulties enforcing it and, even more importantly, assessing what does or doesn't count as a societal 'contribution'. (Should solo mums be forced into manual labour? What about fathers? Artists? Political lobbyists? Bloggers? It's difficult to see where to draw the line.)

    Also, making the income conditional in such a way would undermine many of its benefits. For exapmle, it would provide less of a boost to the bargaining power of the worst off. Either they accept my crappy exploitative job, or else the government forces them into manual labour. Given the alternative, it's gonna be harder for them to turn me down, or negotiate with me for more reasonable working conditions.

    So, like I say in the main post, even though we don't like free-riders, trying to coercively prevent it is likely to backfire with even worse consequences. Of course we can always appeal to their good will and sense of justice -- perhaps their friends and neighbours could shame them into pulling their weight :)

  3. > Should solo mums be forced into manual labour?

    maybe there should be a parental benefit sufficient that they dont have to BUT you probably cant distinguish between solo mums and poor married mums and rich married mums.

    But I think the govt should OFFER work to all. One of the problems of finding a job is fear of rejection and not knowing where to look. these are often pretty fatal problems. (you may not think they are big problems but since the unemployed do they are "real").
    the government offering work solves that problem.
    having it on top of a low level UBI (I think it should be somewhat uncomfortable to live onit) will help

  4. "BUT you probably cant distinguish..."

    Exactly why the UBI is a better idea than such targeted benefits - see point #4 here.

    "But I think the govt should OFFER work to all."

    I agree that it's important that people have access to employment (as the main post should make clear). But I'm skeptical as to whether a "central planner" (such as government) is the right place to look. It would be better if the more flexible market could take care of this.

    The UBI would again help in this regard. As described in the main post, it would enable people to take jobs that pay less than a subsistence wage. Without minimum wage restrictions, there would be plenty of jobs to go around. There would be no need for clumsy bureaucrats to get involved -- except, perhaps, to offer an "employment agency" to help match individuals up with the market jobs that suit them. This would be sufficient to overcome the problems you mention.

  5. > It would be better if the more flexible market could take care of this.

    yes but without specifics (with real provable benefits) saying that is just used as an excuse for doing nothing.

    > Without minimum wage restrictions, there would be plenty of jobs to go around.

    Too much risk to employers, too much risk of rejection too much cost to go to an interview get new fancy clothes transport costs and whatever else. These problems will remain even with no minimum wage they may even get worse. There are already enough jobs theoretically but I still think transaction costs are the main problems.

  6. This is an excellent post.

    Another point is also that a UBI could potentially encourage risk taking behaviour such as entrepeneuralism and other potentially risky behaviour such as upgrading skills and retraining because your ability to survive would never be on the line.

  7. Also, a UBI doesn't preclude the state proactively supporting people to find jobs- it just means the state doesn't have the power to coerce people into work by threat of witholding the basic means of survival.

  8. Thanks.

    I think you're quite right on both points. The risk-taking idea was discussed more in my earlier "UBI & economy" post, and the present post gives it a passing mention in the "market options" paragraph. (Though you've made the point more explicit, which is certainly helpful.)

    And yes, the state could still help people find jobs even with the UBI, so long as it didn't force them. It might even offer guaranteed community-service jobs. But I think the latter idea might have worse consequences for the economy as a whole, and would probably be unnecessary in any case. Simply having institutions to help people find genuine (market) jobs would be a better idea.

  9. The biggest problem from a practical point of view, like you mention, is the fact that people would not accept a UBI system if a significant number of people did nothing at all. I think, while it may not be best theoretically (although i don't see why not), it would be necessary to tie payment to at least some volunteer work so reciprocity can be seen to take place. I don't think it would be too hard to offer a bunch of options that would count towards maybe 20 hours a week 'community contribution' at places like SPCA, food kitchens, tree-planting - whatever. Volunteer NGO's are registered for tax purposes - this could be a start. And exceptions could be given to artists, writers etc. Like i say, it may not be best in theory, but if you present the UBI to the public of any capitalist country - you won't even get a considered debate started without some kind of plan to ensure freeloaders are minimised.

  10. You also say:

    "There would be difficulties enforcing it and, even more importantly, assessing what does or doesn't count as a societal 'contribution'. (Should solo mums be forced into manual labour?"

    There is no reason to assume community work would be government sponsored 'manual labour'. it would be as much about tax payers seeing conributions occurring, as much as anything.

    This could also create entrepeneuralism within the community for voluntary initiatives. I think everybody can contribute. Yes, why should a solo mum not - perhaps she could create a care group for respite for other solo mums once a week - and others could join, taking kids for an afternoon a week or something, where the other solo aprents are free to go an pursue other leisure activies. It is a public good. So people could be free to create their own community projects if they wish, which suits them. It is a much better alternative to having the state create and offer jobs.

  11. Excellent Post, Well Thought Out, Well Written, Well Communicated to the Layperson, and most importantly, completely devoid of any realistic basis in basic economic principles.

    Any look into the current welfare system in the United States would completly discredit any portion of said plan. Abuses are all that follow such plans.

    Furthermore, any such program would fall sqarely into the example matrix of Churchills famous quote: Capitalism is the unequal distribution of wealth while socialism is the equal distribution of poverty..."

  12. Churchill is well known for being great during war time and somewhat less than average during peace time.

    Humans aren't rational economic units and the very poor are the least rational of all (which is one reason why they are poor).

    The US probably restricts it's own ability to put into place the tools it needs to prevent abuse. Smart cards, national databases etc and of course enforcement.

  13. I'd love to believe that Engels was right and that human nature is contextual, and that therefore, in a society where it is "from each according to his ability to each according to his need", humans wouldn't (generally) exhibit rational self interest. That would satisfy my desire for social justice. However, I can't help but feel that (generally) modern economists understand our incentives and motivations better than Marx and Engels and that they would generally agree that a UBI would be a disincentive for too many people to work. Consequently, the State would be structurally (and unsustainably) indebted to pay for this type of program. This is one of the reasons the French government, which has a system similar to the UBI (called the RMI), is in such dire straits. I think political economists are still searching for that right balance between social justice and sustained economic growth that helps pay for it. Let's keep thinking about it though...

  14. Laurent - you seem confused. Conditional nemployment benefits (like we have at present) are a disincentive to work: this is because the unemployed person loses their benefit if they get a job. If the basic income is unconditional, then this 'poverty trap' disincentive effect is avoided (as explained in my first post on this topic).

    For this reason, among others, many libertarians like Charles Murray and Milton Friedman (does he not count as a "modern economist"?) actually support the UBI. (Friedman called it a "negative income tax".)


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