Tuesday, June 14, 2005

Universal Basic Income

Should the state provide a baseline income to all adult citizens? It need not be a lot - though it could be - but even a few thousand dollars a year would surely help many of the less fortunate in our society. I think it is a much better idea than targeted (non-universal) welfare benefits, for several reasons.

1) It avoids the "poverty trap" of perverse incentives, since the UBI is not contingent on staying in a bad situation. If you find a job, that's all extra money on top of the UBI. You don't need to worry about losing your benefits if you become successful.

2) Since everyone receives it, there is no stigma attached.

3) Since everyone receives it, it may generate less resentment. Nobody gets "special treatment". People might be more willing to support it since they too are among those who benefit. (Though that may be somewhat deceptive -- the rich will be paying more extra in tax than they will receive back through the UBI. Still, for middle-income families it would probably work out more evenly, and they might well appreciate the security it offers.)

[Updated to add two more reasons:]
4) Any "targeting" criteria will be imperfect, depriving some people who are in genuine need, and benefiting others who are not. This is because any criteria will rest upon sociological assumptions about, e.g., indicators of need and merit. These assumptions are "naturally prone to sociological error and to social change", as Goodin points out. The UBI, by contrast, is a "minimally presumptuous strategy" - it relies on fewer sociological assumptions, and so is less likely to go wrong.

5) The UBI could, potentially, benefit the economy. The linked post also points out that the UBI would increase the bargaining power of the worst off, thus protecting them from exploitation, and relieving the need for many market regulations (e.g. minimum wage laws).

On the other hand, two main objections spring to mind:

(i) "Why pay welfare to the rich? They don't need it!"
This is a poor objection. As already noted, the rich will actually be paying more into the scheme than they get out of it, so it's not as if we're doing anything so absurd as redistributing wealth to the rich. As for more positive reasons, see the three already mentioned above.

(ii) "Why pay those who contribute nothing to society? They don't deserve it!"
This is by far the more pressing objection (to all forms of welfare). But how many people does this really apply to? Surely the vast majority of citizens work in jobs or their community, or care for children. (Note that a valuable social contribution need not be economic.) Only the most spectacularly dismal life would truly contribute nothing, in this broader sense, to society. Even if there were a few such bludgers, we must recall that the law is a blunt instrument, so will never yield a perfect result. So long as the policy does more good than harm, it's worth supporting nonetheless.

Besides, it isn't obvious that anybody has grounds to complain of unfairness. If you really envy the surfer or the bum who bludge off the system, then you may join them. Quit your job and sit around watching T.V. all day (assuming the UBI is enough to live off, which it need not be in any case). Not so tempted after all? The fact is, most of us want to work. (Perhaps not so much as we currently do -- but then, I'm all in favour of people working less and reclaiming their time, and a UBI would help enable more people to do this.)

Finally, we might try to modify the UBI so that it wasn't fully "universal" after all, but rather, was only given to those who made a sufficient contribution (in the broad sense) to society. This would be harder to administer, but it might become necessary if there were too many free-loaders. And it would put to rest the "fairness" objection.

What do people think?

31 comments:

  1. I think..
    GOOD :)

    But of course I've been promoting this for a while, ever since having a talk to greyshade

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  2. Complicated and un-natural. The primary beneficiary of this scheme is not the recipient, but the bureaucrat.

    The idea of taking everyones money away via taxation, then handing it back as the state sees fit is extremely condesending.

    What you are advocating sounds like some form of communism.

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  3. " Should the state provide a baseline income to all adult citizens?"

    No.

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  4. I would have thought that the "universal" aspect would make it less complicated than regular welfare benefits.

    "Un-natural" is of course no objection to anything. (I assume you are in favour of modern medicine and technology?)

    You must be rather confused if you cannot tell the difference between welfare-liberalism and communism. If you define the latter so broadly as to include the former, then your attempted 'guilt by association' will lose much of its force. (Compare: "capitalism sounds like some form of fascism".)

    I also do not see what is "condescending" about the UBI. Could you explain that in greater detail?

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  5. Well that was certainly a compelling argument, PC :P

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  6. Robin, you said, "What you are advocating sounds like some form of communism."

    It was actually what Roger Douglas was proposing when David Lange called for his famous 'cup of tea.' At that point, I was glad Lange sacked him.

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  7. Richard, you said, " Well that was certainly a compelling argument, PC."

    No point in giving a compelling response to an argument and proposal so un-compelling.

    :^P

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  8. Condesending: You are assuming that the state (or you?) know/s how to better spend and look after money than the person who actually earns it.

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  9. You are confusing redistribution with paternalism. This is nothing to do with telling people how to spend their money - after all, people may spend their UBI however they please. There are "no strings attached".

    Instead, it is a matter of redistribution. When the state taxes for redistributive purposes, it is not saying to the rich man "you don't know how to spend your own money; give it to us for your own good". Rather, it is saying, "You do not have a right to all of that money. There are parents struggling to feed their children, and their right to a decent life takes priority over your right to a private jet."

    See the difference? You might think the latter is unjust (though you would, I believe, be mistaken). But there's nothing "condescending" about it.

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  10. I remain in disagreement.

    You are still assuming the state can handle money better than those who earn it.

    Those producers who make and earn money have nothing to gain from your UBI scheme, and in fact it detracts from the ability for employers to create work for those who need it.

    As one example, those extremely wealthy people with private jets etc, know how money works and how to increase it. As such they provide jobs and opportunites for the less well off. Alternatively, the wealthy person may feel it more effective to donate money to charities and organisations which give a "hand up" rather than the state welfare "hand out"

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  11. As one who would benefit ENOURMOUSLY from such an idea my (totally unbiased!) response is .. How soon can it be done?

    Seriously though, it is a practical expression of all those 'value' propositions that have been on this site recently . And you make, Richard, some good points I think on practicality.

    Here is another version of criticisms that might be made >>

    1. After analysis, it would be seen to affect detrimentally the most successful elements of the community. ..(who are in the best position to be vocal and influential.)
    2. It would then be said to impose so much extra cost on efficient producers that the country would be unable to compete succesfully .. and all would go down together.

    3. It is in most minds, apparently, unjustified to give something for apparent nothing with respect to the community. I once read a survey which concluded this was the strongest common attitude of a human group. Freeloaders are out!
    And that is how it would be seen and painted. The famous 'hard working taxpayer " would be said to be 'penalized' yet again in 'subsidising' the undeserving .
    ( Augh.. I hate that sort of stuff.
    which ignores the fact that even now the MAJORITY of taxpayers receive more than they put in . it's just a matter of relative numbers at different income/tax levels.)

    Maybe Richard , you are right to think that since everyone would receive it, it would be more acceptable.
    And as you say it could be conditional on some sort of ( widely based) contribution.
    But then, what a huge jump from a useful income to > "zero .. you are out, and on your own."

    4. It would be said to remove incentive to work at all .. or to work harder or better .
    Hmmp! I declare with high level outrage that this is nonsense. When you are scraping around at subsistence level you have MORE incentive than you can handle !!!!! You can just give up at the sheer impossibility.

    I'm not going to worry about those objections here, but simply ask >. is your proposal so very different from what exists now?
    Is it not just a simpler, more universal social welfare method which happens to be more inclusive and biased towards the very bottom economic rungs?

    In support of it, I once heard a greenparty(?) member advocating baseline income on the (vagueish) grounds that in a modern industrial society, wealth production has, to a fair degree, become a function of society itself

    The flow of knowledge, skill and infrastructure, work together so that an individual who receives income really owes it largely to this whole system. They could not stand alone and apart.
    Hence, it was said, each individual deserves, or is entitled to, the base income just by being in that society.

    I prefer the more focused alternative economics model myself.
    But maybe, a well developed society will always be so skill/knowledge based, so specialized, so hierachical that you could consider (in theory) "IT" is responsible for wealth production.

    I just read this techno style science fiction book in which machinery , consumer items and food were largely created ( assembled) step by step at the molecular level, from atoms selectively filtered from the sea at essentially no cost.
    Society as a whole had free 'basics.' ( the rest was pretty scary !)

    That is a scenario that matches the idea, but in reality ???
    One wonders if humans could ever get over the basic ... " you have to DESERVE to be part of society."

    In fact I will say the chances of it are near zero in new Zealand. The labour group would say targetting is more 'efficient,' ( despite the fact that there are people outside the targets who are thus much worse off ) and the other lot would dimiss it out of hand as 'social engineering' or any other non- reason they can come up with.

    what a nice cheerful note to end on!

    David L.

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  12. hah! as robin has confirmed since I started writing the above.

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  13. NOTE ..
    It is clear from other (eg. scandinavian) countries who have very profitable industry and a higher standard of living than NZ, and a hugely higher tax load, that for the government to redistribute income (as services) for all, DOES NOT, necessarily produce the losses robin claims.
    It used to be said that through taxes, money was simply recycled through society along a different path. Clearly that can mean actually more jobs and wealth production ( once you realise that real wealth can be defined as service or goods that are useful)

    have to go stop. but there is lot to be said there .. as for business knowing better how to make money .. HAH !!! SOME do.
    And there is a lot of so -called money making which is not real wealth productive AT ALL. Rather the reverse in some ways .

    I'm off.
    cheers

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  14. David, bear in mind that Richard is advocating theft of money (via taxes) to fund this scheme.

    If you organised this purely on a voluntary basis where person's X, Y and Z decided to pool part of their income to ensure everyone had their UBI, then I'd wish you the best of luck, and in fact there is nothing stopping you from enacting this system today. I suggest you and a bunch of buddies try it out to measure its success (or lack of)

    The part of the scheme I'd oppose is the compulsion, where people are forced to fund it. Richard would probably like to dress this up a bit, but at the end of the day the state should have no more right to take my property or income than the thug in the alleyway.

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  15. "You are still assuming the state can handle money better than those who earn it."

    Depends what you mean by "better". I think UBI scheme is more likely to benefit the worst off in society than letting rich people spend their money however they please. (Do you really disagree with that though?)

    But that is no slight on the ability of rich people, but rather, their motives. Most rich people are not particularly interested in relieving poverty, so it's hardly "condescending" to recognize that the UBI scheme would have better results in this regard. Your rhetoric has outrun your clarity of thought.

    "Richard is advocating theft of money (via taxes) to fund this scheme."

    You'll have to look out for my forthcoming post, "Why Taxation Is Not Theft". In the meantime, are you at least happy to grant that the UBI is better than targetted (non-universal) welfare? And if not, why not?

    David - "Is it not just a simpler, more universal social welfare method which happens to be more inclusive and biased towards the very bottom economic rungs?"

    I don't know why you think it "biased"? But yes, it is just a better alternative to our present welfare benefits -- or that's the idea, anyway.

    Also you suggest that a critic might say that it removes the "incentive to work", but this strikes me as exactly backwards, at least compared to regular welfare. (See point #1 in my main post.) People would want to work to get extra money on top of the UBI -- especially if the UBI is set too low to be able to live off by itself.

    But it's a good point you make, how "an individual who receives income really owes it largely to this whole system." That could serve as a principled (rather than utilitarian) justification for the UBI.

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  16. Richard: "Most rich people are not particularly interested in relieving poverty." Please justify this statement.

    "Your rhetoric has outrun your clarity of thought" and your spin has failed to make me forget my point. I suggest you jump to it and start some voluntary UBI to show its success, or lack of.

    "You'll have to look out for my forthcoming post, "Why Taxation Is Not Theft"' I eagerly wait :-), in the meantime, sum up. Why is taxation not theft, when it quite obviously is? Try not paying your tax for a few weeks and tell me what happens.

    Is UBI better than the targetted [state] welfare we have today? Its impossible to say. I dare say both systems are equally bad. Welfare in itself is a rather noble invention, but when the state takes over and starts stealing - sorry, taxing - to support it, it ceases to be charity or goodwill, and instead a tool of propaganda, coercion and force.

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  17. yes ..sorry richard, i was playing devils advocate . I should have answered mny own objections properly.
    No. I did not mean a 'bias' in emotive sense , just a 'tilting' of the intent to be more inclusive.

    In any case ,, as far as incentive goes, I had heard people say that a UBI would mean people sitting around unmotivated to work more.
    I was just noting that that this is wrong. Minimal income leaves plenty of incentive!
    Many very well off people still strive to earn yet more.
    It is a bit contradictory to think poor people will be somehow different.

    robin .. tax as theft? .. not really.
    I can see/feel what you mean but I believe there are classes of income source.
    They are so mixed up in reality that you cannot easily say what is strictly "mine' anymore.
    The comments elsewhere on this site about property rights apply then pretty well.

    I vanish (late) in cloud of smoke

    david l

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  18. Robin,

    Complicated? Er it would be MUCH simpiler than the current system and you wouldnt take it away away from all poeple it would be effectively a tax credit in certain circumstances.

    By the way this need not impose costs on producers - you could drop the minimum wage or benefits to compensate - this need not be a "socialist" policy as greyshade noted.
    Richard intends it as a socialist policy but I support it in principle socialist or not. maybe we can agree on that and then debate the socialism context later.

    Basically UBI tends to put costs and incentives where they should be. Is it better than the current system? Well for example those who are subject to abatements and their employers etc - YES.

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  19. David L: robin .. tax as theft? .. not really.
    I can see/feel what you mean but I believe there are classes of income source. They are so mixed up in reality that you cannot easily say what is strictly "mine' anymore.

    It sounds like you are verging into the esoteric, a region (thankfully), I'm not qualified to comment on.

    Furthermore, your comment "I vanish (late) in cloud of smoke" apparently disqualifies you from the realm of common sense and reasoning.

    * * *

    Theft, n
    Act of stealing, larceny

    Steal, n
    To take (the property of another) without right or permission.

    Tax is Theft

    Does the state have a right to take your money?
    Does the state have permission to take your money?

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  20. Obviously our answer is going to be yes, the state has a right to tax our earnings.

    But I'd rather save this for the future post. We're getting a bit off the main topic here (and not, I don't think, in a particularly productive direction).

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  21. By the way do you know that you could face a marginal tax rate in excess of 100% under certain situations in the current system?
    I myself have experienced this problem.

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  22. if you think 33% is a disincentive wait until you have to pay over 100% !

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  23. I note that Richard has abandoned arguement and discussion, in favour of evasion.

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  24. Robin: "Steal, n
    To take (the property of another) without right or permission.

    Tax is Theft

    Does the state have a right to take your money?
    Does the state have permission to take your money?"

    Richard: " Obviously our answer is going to be yes, the state has a right to tax our earnings."

    Robin: " I note that Richard has abandoned arguement and discussion, in favour of evasion."

    How has he done this? You do understand that, given your definition, if the state has the right to tax our earnings, then it is not theft, regardless of whether there is permission? (It was an or, rather than an and). You haven't really given any reason for believing that the state doesn't have this right. In other posts, Richard has argued both on utilitarian and more deontic grounds that the state DOES. How is he evading anything?

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  25. He has evaded the challenge to start a voluntary UBI scheme, or even explain why he wouldn't.

    He evaded explaining why tax is not theft, preferring to leave his explanation to an (indeterminate) future date.

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  26. Patience, young jedi ;)

    We cannot argue everything at once, and attempting to will merely produce noise, not progress. My present argument presupposes that the liberal welfare state is legitimate. If you deny this presupposition, then that is a different argument, which I am not going to get into here.

    It might be best to understand my argument as simply being that UBI is better than targetted welfare benefits. That makes it explicit that if you don't think any welfare is justified, then that's irrelevant to the present argument. We will note your opposition to the whole endeavour, and move on.

    (The sort of challenge I'm interested in is whether there are grounds for accepting current welfare benefits whilst rejecting the UBI scheme. Obviously if you reject all welfare, you won't have much to contribute on this point.)

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  27. On certain points like this it is rather difficult to get anyone to seriously argue with you. They generally seem to misdirect or just go away.. curious eh?

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  28. I guess I am coming extremely late to this debate so shall just say that I am absolutely in favour of a guaranteed basic income. I believe it should be a right of citizenship akin to suffrage.

    See Carole Pateman "Democratising Citizenship" for a really good discussion of the issues

    http://www.havenscenter.org/VSP/readings2sort/pdf/pateman.PDF

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  29. I know you want to keep this conceptual, but I don't think one can discuss a thing like this without providing some basic numbers. For example, consider the communism argument. If the amount of the UBI is equal to Per Capita GDP, then your suggestion is exactly equivalent to Communism (not Marxist communism, but redistribution to the point of absolute equality of income ... nobody can possibly improve their lot as compared to the average except by consuming less).

    This sounds absurd until you consider that in the United States, if you add up the cost of all the things that the Democrats want to give to "the poor", you might well find that their cost exceeded Per Capita GDP.

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  30. Well, I'd strongly object to the idea of some necessary contribution to the society as a precondition to the eligibility for the receipt of such a UBI.

    In fact this would be another pretext for the heinous capitalists to rob the poor and needy of their rightful share of the benefits.

    In fact, the UBI should really work as a compensation by the greedy and covetous capitalists for the poor proletarians and have-nots.

    It should be like a kind of geoism/Georgism (or perhaps geolibertarianism). The resources needed for the UBI could be extracted as tax levied upon the "land" and, consequently, the raw materials mined or otherwise extracted from it, and, consequently, all products using them. That could be quite fair then, although I do admit that it could be very complicated and problematic from the administrative point of view, cs certain exclusions and exemptions could be made.

    But the capitalists must compensate the other people for the capitalists' theft of the land and its natural resources. That is a just and fair compensation for the respect of the capitalists' claim to their "property rights".

    And there is no need to worry about the free-loaders, or their great numbers, really, since if there were too many free-loaders, the amount of the UBI (and therefore their share of it) would naturally decline.

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