My reservations about basic income
I’ll keep this short.
Lately, I’ve stumbled upon an idea, which I now use for evaluating all sorts of policies and proposals:
Government is defining obligations of one person toward another.
For a while, I’ve had reservations about basic income. I was supportive of the idea, but uncertain about its philosophical justification and macroeconomic effects.
Here are my key questions:
- What entity provides a basic income? How does a basic income fit into political and governmental roles?
- What societal changes would a basic income require? What societal changes would it create?
- Can we call something basic income if it is financed through income tax?
- What macro economic effects would a basic income have?
These aren’t the standard objections: “People will stop working, money will automatically inflate, and my favorite: work is a moral imperative.”
1 and 2 are pretty complex questions, I won’t address them here. To answer 2, you would need to look at the anthropological aspects of human economic and political relationships.
3 is interesting, but not important.
Let’s just talk about 4.
It is entirely concievable, that a basic income would work very well for a small subset of the population, but cause significant problems if you tried to make it available to everyone.
I think it is challenging to appreciate the delicate balance and feedback processes that govern our economies. We are in a “demand starved” environment right now, but overcorrection would be very easy.
I think what you need to look at here is federal deficits per capita. It fluctuates over the years, but comes to about $2k per person. A basic income of $10k per person is about 5 times that.
It could be argued that basic income would stabilize demand, making macroeconomic balance less precarious. But I think it would just make us less responsive to important economic signals, causing bigger balance problems. Imbalances could build up under the surface, and then we would need large corrections.
Right now imbalances are very visible in terms of income disparity. Basic income would directly fix these imbalances but allow other imbalances to form, such as drastic differences in the productive engagement of various communities.
I’m inclined to think the problems we have today would be completely different under a basic income, in that sense it is very appealing because it’s an extremely simple fix to everything wrong with modern society. But implementing basic income would create problems we don’t know how to deal with effectively.
There is a situation where basic income would work.
When the demands of a single political authority are so strict it justifies economic renumeration for simply conforming to the basic rules of citizenship then basic income would work great!
As much as I like assertive, proactive government, within proper roles, I don’t want an overarching political authority trying to orchestrate every aspect of our lives. That is the only scenario where basic income makes sense to me.
Our perspective is very distorted by the costs of rents, political confusion, a disfunctional labor market and other problems. Government is quick to impose rules and constraints because these are easy to implement politically, but it is slow to provide the matching proactive support required. I favor liberal politics, but it has relied too much on rules enforcing expectations instead of incentivizing and initiating.
The problem with a basic income comes down to the statement I made at the beginning of this post. You can’t give everyone a basic income without also imposing all the obligations necessary to support that income.
Every form of income or tax is government creating or forgiving obligations between citizens. You can never completely eliminate mutual obligations between people.
I want to see costs change to increase individual freedom and empower economically disenfranchised individuals. Basic Income is not the way to do this.