Basic Income : A Layman’s Introduction

Imagine that you come into work one day and your boss tells you that you’ve been replaced by a robot. You look for another job, but there are so many robots displacing workers that you can’t find one. Neither can most other people. What do you do?

OK, let’s flip the script : imagine coming home from work one day and getting a letter saying that an anonymous donor has created a trust fund for you. You’ll get $1000 every month for the rest of your life, no matter what. What do you do?

Basic income (or universal basic income) isn’t complicated — put simply, it just says that everyone should be given enough money to live off of. In a modern automated society there’s no need for everyone to work, and there aren’t enough decent jobs anyway, so a person’s ability to survive shouldn’t depend on whether or not they’re lucky enough to find a job.

This isn’t a new idea — Buckminster Fuller was advocating for something similar back in the 1970s :

We must do away with the absolutely specious notion that everybody has to earn a living. It is a fact today that one in ten thousand of us can make a technological breakthrough capable of supporting all the rest. The youth of today are absolutely right in recognizing this nonsense of earning a living. We keep inventing jobs because of this false idea that everybody has to be employed at some kind of drudgery because, according to Malthusian-Darwinian theory, he must justify his right to exist. So we have inspectors of inspectors and people making instruments for inspectors to inspect inspectors. The true business of people should be to go back to school and think about whatever it was they were thinking about before somebody came along and told them they had to earn a living.

More recently, Aesop Rock said :

Now we the American working population
Hate the fact that eight hours a day
Is wasted on chasing the dream of someone that isn’t us
And we may not hate our jobs
But we hate jobs in general
That don’t have to do with fighting our own causes
We the American working population
Hate the nine-to-five day-in day-out
When we’d rather be supporting ourselves
By being paid to perfect the pastimes
That we have harbored based solely on the fact
That it makes us smile if it sounds dope

Does that sound idealist? Maybe, but there are some good reasons to think it would work. Let’s consider what would happen to the typical person. Heck, let’s consider what would happen to you. First of all, you probably wouldn’t quit your job. That’s not just an assumption — when Mincome (which is broadly similar to basic income — more on that later) was tested in Dauphin, Manitoba, only teenagers and mothers with young children worked significantly less. Both of those are people who probably should be working less. It’s an outcome that makes sense if you think about it even a little bit : basic income is generally intended to provide a certain minimal quality of life. You’d be able to rent an apartment & pay for your basic necessities, but you’d have to work for anything else.

That’s not all, though. You might need a job to maintain your standard of living, but that doesn’t mean you’d keep your current job. With the security provided by basic income, you’d have the freedom to try out new jobs, to start your own business, or negotiate with your employers for raises and better working conditions. That’s one of the key advantages of basic income — it puts power back in the hands of working people. If you’re being harassed or exploited, or even just unhappy, you can leave your job confident in the knowledge that you’ll be able to pay your bills even if it takes a little while to find a new job.

For the poor and working class, the benefits of basic income would be even more significant. They could return to school, they could move to better areas, they could improve their quality of life. Perhaps most importantly, their negotiating power with regard to their employers would skyrocket. Let’s face it, there are a lot of terrible jobs out there. They’re demeaning, they’re demanding, they’re often dangerous, and they are almost always poorly paid. People take them because they their only other choice is starving. With a basic income, those jobs would have to improve or no one would be willing to do them.

There are also serious systemic benefits of basic income. World War 2 led to massive government spending, which helped cause the post-war economic boom. Basic income would act like a massive, ongoing economic stimulus — all of that money would be spent on something. I’m sure you’ve seen plenty of articles talking about how millennials are killing the diamond industry, or casual dining restaurants, or the real estate market. That’s not happening because they have different priorities and desires — it’s happening because they don’t have any money. The economy is collapsing because it depends on consumption, but millennials can’t afford to keep the economy propped up. Basic income would unleash pent-up economic demand.

There’s another important thing to consider when you look at basic income — it allows people to dedicate themselves to unpaid labour, whether that means staying at home to raise children, taking care of aging parents, or volunteering with community groups. Society would be better off if people could actually commit themselves to this kind of work, but right now it’s often a burden or a luxury — helping other people means sacrificing your own financial well-being. It doesn’t have to be that way.

That Sounds Great, But How Will We Pay For It?

This is a question that a lot of people have about basic income — even if it works well, giving money to everyone is an expensive proposition. There are a number of answers, but I think it’s telling that the people who ask how we’d pay for basic income are never the people who ask how we’re supposed to pay for the 1.5 trillion dollar F-35 program, or the hundreds of billions spent on corporate welfare. As a society, we seem quite comfortable handing a blank check to big business & the military-industrial complex, but we get really uneasy when we’re asked to help ordinary people.

The simple answer is that basic income should pay for itself. Studies have shown that programs like food stamps and unemployment benefits more than pay for themselves because they get spent immediately, and all that money is injected right back into the economy. The same should be true for basic income — there are some very rich people who might get basic income and not spend it, but they’re so rare that we can probably ignore them.

Even if basic income pays for itself, that doesn’t mean the government would have the cash on hand to begin with. Starting a basic income program might require increased corporate taxes, or some form of Tobin tax. Funding basic income wouldn’t be that hard — it just requires the political will.

Basic Income Vs. Mincome

“Mincome” is a proposal that’s very similar to basic income. Instead of giving everyone a certain amount of money, mincome is a guarantee that everyone would have at least a certain level of income. Under basic income, everyone would get a check for $1000/month (just as an example), no matter what. Under mincome, everyone would make at least $1000/month — people who don’t work would get a check for $1000, people who make $500/month would get a check for an additional $500, and people who make more than $1000/month wouldn’t get anything.

Mincome makes a certain amount of emotional sense — why should we give money to people who don’t need it? Wouldn’t it be better to take that money and spend it on other, more useful things? Maybe. There are two significant reasons to favour basic income, but it’s not clear if those out-weigh the advantages of mincome.

The first reason to prefer basic income is simple, but you have to change the way you think about government spending. Our society normally looks at any government expenditure as a bad thing, or a necessary evil. This is often tied to the idea that a governmental budget is a lot like a household budget, which is absurd. Government spending can be a good thing — investing in roads and bridges, or in education, is an excellent use of government money. Basic income is another investment — under mincome, we’d be distributing less money, which means there would be less economic stimulus.

The other reason to prefer basic income is one that should appeal to people from all parts of the political spectrum — it would require far less bureaucracy to implement. For basic income, all you need to do is verify identities and addresses. For mincome, you also need to either keep track of what everyone earns at all times, or you make people apply for mincome, which will require a small army of bureaucrats & introduces the specter of people falling through the cracks. Basic income is solid as a rock, while mincome is less certain.

There’s a third reason to prefer basic income over mincome, but it’s political rather than practical. Governments, especially these days, are very fond of “austerity”, which often involves shutting down successful programs so they look like they’re saving money, even if shutting down those programs will cost money in the long run. Even if mincome was a huge boon to the economy, it would still be a target. Basic income would be a lot harder to shut down — since everyone would get it, they’d have a personal stake in keeping it around.

Don’t get me wrong — if I had to choose between mincome and the status quo, I’d choose mincome every time. I think basic income is probably somewhat better than mincome, but they’re both solid policies.

Basic Income Vs. Full Employment

There are a lot of people (including some who I greatly respect) who believe that the government should guarantee everyone a job instead of just guaranteeing them a certain amount of money. That seems to make sense — after all, there are plenty of things that need to be done, and if we’re giving out money anyway, we might as well kill two birds with one stone. Things get a little more complicated when you look at what full employment would actually involve.

There are definitely important jobs that are being left undone right now — everything from building bridges to teaching high school. Hell, society could use more cancer researchers. The problem is that most of these jobs require special skills or qualifications. Even digging ditches is a job that only be done by some who’s healthy and in decent shape. We certainly can’t take random people off the street and put them in charge of kindergartens. Many of the people who need guaranteed jobs don’t have the skills that these important jobs demand — a full employment policy would just end up giving them make-work. That will become even more common as automation increases and useful jobs are taken over by robots.

Full employment just leads to paying millions of people to spend their lives doing something completely pointless. Basic income, on the other hand, would let these people do whatever they want — most of them would end up doing something that would actually make the world a better, happier place. Moreover, consider all the valuable unpaid work that our society depends on — full employment doesn’t encourage that at all. Single parents would still have to work instead of caring for their children.

Objections

I’ve heard a lot of people criticize basic income recently, mostly from the left, so I thought it would be worthwhile to address some of their problems.

“Basic income would let companies pay people less than minimum wage”

This may be true, but so what? The whole point of minimum wage is to make sure that everyone has their basic needs met (it turns out that minimum wage isn’t a great way to do this, but that’s another story). Under basic income, people would have their needs met from the very start — anything they make after that would be a bonus.

Besides, if you could be reasonably comfortable without working at all, would you do back-breaking labour for $5/hour? Would you work for $25/hour if you knew that you were making $150/hour for your boss? That’s the beauty of basic income — it allows for a truly free market. A major reason conservative ideas about free market labour never work out is because they ignore the fact that employers have a lot more power than employees. Basic income would give much of that power back to employees — if someone offers you an unfair wage, you really can tell them to pound sand.

Hell, there’s no reason basic income has to lead to a repeal of minimum wage laws. Just leave them in place and there’s no reason to worry.

“Basic income won’t overthrow capitalism”

Again, so what? Look, I’m no fan of capitalism. I’m well aware of the mass exploitation and death that it has caused. If you want some kind of democratic socialism to replace the capitalist system, I’m right there with you. But I’ve seen people who think that basic income would work, but isn’t worth doing because it wouldn’t replace capitalism. That’s like saying we shouldn’t have free education, or minimum wage laws, or old age pensions, because they won’t overthrow capitalism either. Capitalism is bad because it hurts people — if you remove its power to do harm, which basic income would do, then it doesn’t really matter if you get rid of capitalism or not.

“Basic income wouldn’t make a major difference for people who have huge medical bills or ongoing health problems.”

This is probably true. Basic income wouldn’t work nearly as well in a country that lacks universal health care. It would still help millions of people and improve the economy, but it would leave some people in trouble.

“If most people don’t have jobs, they’ll be less likely to get politically organized.”

There may be some truth to this — traditionally, people have often organized based on their shared identity as workers. On the other hand, basic income would give people who really care about politics the free time they need to dedicate themselves to it. What’s more, this problem only crops up if significant numbers of people leave the workforce altogether — studies show that this probably wouldn’t happen, at least not until the majority of jobs are automated.

“Basic income would lead to an increasingly stratified society — the majority of people would scrape by on handouts alone, leading sad little lives, while the rich would enjoy unimaginable luxury.”

I agree that this would be a terrible scenario, but it also seems incredibly unlikely. Basic income wouldn’t do anything to stop people from starting their own business or going back to school. It also wouldn’t stop them from working towards a political solution to this kind of dystopia. The nightmare future these critics describe sounds a lot more likely if we don’t implement basic income — we’re headed in that direction already.

“Conservatives hate social programs — they would just sabotage basic income.”

This may be true, but you could say the exact same thing about any social program — “Conservatives will just sabotage education, so there’s no point trying.” It’s not just defeatist, it’s also ridiculous. If you can get enough public support and political willpower to enact basic income, it’s not like the government will turn around the next day and shut it down. Look at Obamacare -it took years for Republicans to mount a serious threat to the PPACA, and they still haven’t gotten rid of it. They were only able to get this far because many of their constituents either don’t use Obamacare or don’t know that they use it — neither would be true of basic income.

“Basic income would let conservatives gut social programs.”

Maybe. Here’s the thing — if basic income is done right, most other social programs become redundant. If you’ve got basic income but you’ve still got millions of people relying on food stamps, it means you seriously screwed up somewhere.

There is, however, a grain of truth to this argument. There are some conservatives who argue for a form of “basic income” that involves giving everyone a few hundred dollars of every month while shutting down every other social program. This is just a way to turn middle class people into poor people and starve poor people into obedience — anyone with a shred of empathy or intelligence sees this evil bullshit for what it is it. It’s not like we’re going to say “Well, this will vastly increase human suffering, but it’s called ‘basic income’ and that’s what I want, so I guess it’s fine by me.” Instead, the sane response is “I support basic income because it will eliminate poverty and make the world a better place. This is an insane bastardization of basic income, and it can fuck right off.”

“We should make the necessities of life free instead of giving people money.”
Why not do both? An absolute guarantee that everyone will always have a roof over their head and food in their bellies no matter what sounds pretty good to me. Of course, this would face immense challenges. If you think basic income would experience stiff opposition from conservatives, imagine how they would feel about nationalizing large chunks of the food, transportation, housing, and clothing industries.

You also have to consider what kind of products would end up being distributed. These goods would mostly be consumed by people on the low end of the socio-economic spectrum — politicians would have very little reason to make sure they were of decent quality, and plenty of reason to cut costs. It’s hard to imagine a “free necessities” scenario where the clothing isn’t flammable, the housing isn’t full of asbestos, and the food isn’t a Soylent knock-off.

“Giving people money for nothing is wrong. People should have to earn a living.”

This kind of moralistic argument carries no weight with me, but I recognize that not everyone shares my perspective, so let’s take it seriously. The simple fact is that a lot of people can’t earn a living — our economy is structured in a way they prevents them from being productive, wage-earning members of society. Remember the Great Financial Collapse of ‘08? A bunch of banks broke the rules, and suddenly it was harder to get a job at McDonald’s than it was to get into Harvard. From a broader perspective, our entire economy is set up such that a lot of people who could work at a good job are denied the opportunity through no fault of their own. Saying that these people should have to “earn” a living while denying them the chance to do so is just cruel.

Moreover, we have to consider the practical upshot of saying that people have to earn a living. If they don’t, or can’t, are we willing to let them die in the streets? That would be inhuman, inefficient, and highly unstable — if people are condemned to death by the system, they won’t take it lying down. If we accept that society should make sure that everyone has a decent quality of life, then we need to figure out the best way to deliver it. Current social programs are just barely adequate — poverty and suffering are still rampant.

Maybe we need to step back and ask what it means to “earn” a living. If someone spends years caring for their ailing parents, have they earned a living even though they never made a penny? Do they have less of a right to live than a Wall Street broker or a Hollywood accountant? Van Gogh lived in squalor, but his paintings are now worth millions. Did he earn a living? It’s time to recognize that earning money and deserving a decent life are two very different things.

We need to look at basic income not as “money for nothing”, but as an investment. If we give people basic income, we’re giving them the tools to become more productive members of society. Basic income will unlock the potential hidden in millions of people who are now just barely scraping by. It’s a hand up, not a hand out.

What’s Next?

The status quo isn’t going to last. The economy is crumbling in front of our eyes. Good jobs are about as scare as unicorns, and they’re being replaced with part-time work, temp jobs, and the “gig economy”, which allows for a terrible quality of life. The economic situation right now is pretty awful, but it’s only going to get worse unless we do something. Basic income is our way out. It’s a silver bullet, a key to solving our economic woes and making the world a better place.