March 4, 2017

WE ALL KNOW WHERE WE'RE HEADED:

Money for nothing: the case for a basic income : a review of Utopia for Realists: And How We Can Get There, by Rutger Bregman and Basic Income: A Radical Proposal for a Free Society and a Sane Economy, by Philippe Van Parijs and Yannick Vanderborght (Akash Kapur, 3/02/17, Financial Times)

The notion of a guaranteed income for all may appear counter-intuitive, even heretical in an era marked by anxiety over rising deficits and creaking welfare states. Opponents of the idea also worry that no-strings-attached free money could reduce incentives to work. Bregman is relatively sanguine about costs, suggesting, alternatively, that a universal income would be cheaper than existing welfare programmes, or that it could easily be paid for by new taxes on "assets, waste, raw materials, and consumption". Concerns about incentives are similarly unfounded, he argues, relics of old, patronising thinking about poverty and welfare.

The book includes a variety of empirical evidence to suggest that cash handouts do not, in fact, make people less likely to work. In many cases, they actually increase labour activity, for example by providing recipients with the financial security to quit unfulfilling jobs and launch entrepreneurial ventures. Bregman is at pains to dismiss stereotypes of the poor as lazy or unmotivated. As the economist Joseph Hanlon (whom Bregman quotes) phrases it: "Poverty is fundamentally about a lack of cash. It's not about stupidity . . . You can't pull yourself up by your bootstraps if you have no boots".

Bregman is a champion of the randomised control trial (or RCT) in social sciences research; this increasingly popular approach to evaluating policy interventions borrows its method from the field of medicine. He cites a number of small-scale trials and experiments that indicate the many possible benefits of cash handouts. In countries as diverse as Canada, Brazil, Kenya, Namibia and Mexico, universal income schemes have been linked to reductions in malnutrition, crime and child mortality, along with improvements in indicators of education, equality and economic growth. Advocates also make several ethical arguments, pointing to the social and moral imperatives of providing citizens with an income floor at a time of rising concern over automation, structural unemployment and growing inequality. "This wealth belongs to all of us," writes Bregman. "And a basic income allows all of us to share it."

Bregman may be a particularly enthusiastic evangelist, but he is hardly the first to promote a universal income; the idea has a long, and in many ways somewhat surprising, pedigree. Thomas More, the godfather of utopia, envisioned something like a guaranteed income for the residents of his idealised world. Versions of the concept have also found favour among thinkers as varied as John Stuart Mill, Thomas Paine, Friedrich Hayek, Milton Friedman and John Kenneth Galbraith. In the late 1960s, no less a conservative stalwart than Richard Nixon presented a basic income bill, labelling it "the most significant piece of social legislation in our nation's history". It passed the US House of Representatives before dying in the Senate.

The idea subsequently fell out of vogue, obscured by Reaganite-Thatcherite pieties about meritocracy, hard work and individual responsibility. But it has recently returned from the fringes to the centre-stages of policymaking, once again a respectable option backed by influential figures on both the left (who like its egalitarian impulses) and the right (who find it less paternalistic than the welfare state). Several European countries -- including Finland, Netherlands and Switzerland -- have seriously considered some version of a guaranteed income scheme. This year, India hinted at plans for its own programme. In many ways, the idea seems particularly well-suited to our fluid political times, cutting across existing ideologies and affiliations. Precisely because the benefit is universal, it appears to have widespread political acceptability. 

Posted by at March 4, 2017 8:17 AM

  

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