The Finland Basic Income Trials: Inching Toward Utopia by Solving Small Problems
Finland is doing something straightforward and ordinary. Finland is doing something revolutionary. They are making one change for a limited subset of recipients to one benefit program in their suite of social safety nets. They are piloting the future of social welfare in the developed world.
For 2,000 people, Finland is replacing standard unemployment benefits with an unconditional monthly stipend of €560 (~$597), which they will receive for two years. Those that were receiving more than this amount will have their standard benefits reduced by this amount. Given the incentives created by the current Finnish unemployment system, one could see this trial as a simple fix to a single program. The boldness of the program is conveniently masked in its practicality. Revolutions can start with thrashing and screaming, but they can also begin with minor administrative changes.
First, the small problem Finland is trying to solve: their unemployment benefits system incentivizes people to not accept many employment opportunities, because the pay they would receive for working is comparable to what they are already getting for not working. There are two basic options for fixing this incentive: add conditions or subtract them. The U.S., for instance, requires unemployment recipients to demonstrate each week that they are looking for work (and have not found it), and even holds out the threat of demanding benefits be returned if someone is caught gaming the system. Finland is trying the opposite approach: provide the benefits whether or not the recipient finds work. With the threat of losing benefits removed, the idea is that some of these people will now accept work that was not worth losing their benefits over. It’s a simple fix to a single program.
In fact, I would be nervous that Finland’s trial program was only trying to accomplish this one fix if I didn’t just have a conversation on the basic income podcast with Roope Mokka, cofounder of Demos Helsinki, which consulted with the Finnish government on their basic income trials. Mokka assured me that this is more than a trial run to change Finland’s unemployment system, they are dipping their toes into the waters of a new future.
“It’s quite a jump going from [this experiment to] something as radical as proposing something universal.”
To shorten that jump, Finland is planning more experiments, which drift away from the utilitarian work of incentivizing people to find jobs, and toward more open-ended experiments in providing a basic income.
“The next one, I’m quite sure, will be focusing on young people and students,” says Mokka. “Does it motivate them to study? Study quicker? Be more entrepreneurial? Take on more jobs or less jobs while they study? Another one that is on the drawing table is a local one where you’d give, let’s say, a village a basic income. That’s when the really interesting stuff starts emerging. You start seeing dynamic consequences. So if you have three people with basic income, what would they decide to do together? I think that’s the most interesting thing here — not just giving individual atomized people and seeing how they behave. People are not like that. People are more collaborative.”
So, unemployment benefits are the most obvious place to start — it’s mostly money that would be distributed as benefits anyway — but it is just step one. Finland is poised to use their prosperity to trial a new model in the relationship between government and citizens.
To bring a basic income to the U.S., we are going to have to find some halfway measures — ideas that have one foot in a new paradigm and the other foot in the mundane world of improving our existing administrative maze. As with Finland, it makes sense to look for “welfare cliffs” — situations in which a modest increase in salary reduces one’s overall prosperity because of the elimination or sharp reduction in benefits on crossing an income threshold. In these cases, we can look to universalize the benefit, thus eliminating the cliff.
Another in-road could be in benefits that provide goods or services instead of cash. While I don’t need to see every benefit liquidated into cash grants, each one should be scrutinized against the impressive body of research showing that cash transfers are an incredibly effective and efficient form of welfare. One effort in this direction: basic income advocate Max Ghenis is working on a legislative scorecard that would evaluate legislation on its unconditionality, universality and generosity.
We need ambitious, even utopian thinking as a lodestar in the basic income movement, but we also need incremental changes that shorten the leap from today’s massive, unwieldy welfare state to one that eliminates poverty head on with the efficiency of sending an email.