From St. Paul’s venerable saying, “if a man does not work, neither shall he eat,” to the always-contemporary saw, “there’s no such thing as a free lunch,” the common sense of humankind has always seemed dead against a universal, unconditional basic income. Charity, of course, is no less a tradition: for widows, orphans, and the infirm in all periods, and in the modern period also as social insurance for the elderly and the involuntarily unemployed.
But aid for the deserving poor has at times, and especially in modern times, entailed the expensive and humiliating burden of proving to the satisfaction of donors that the recipient is indeed both deserving and poor. And even in the most generous and enlightened societies, such aid has sometimes had perverse effects. The most common is the “poverty trap.” When aid is means-tested, every dollar of earned income above the qualifying level results in a corresponding reduction of aid. This is a disincentive to accept the generally low-income, training-poor jobs available to welfare recipients. The same disincentive functions as a “household trap,” keeping women—the usual caregivers—with small children at home until the children are grown, insuring that when those women do eventually enter the labor market, they are at a severe disadvantage. In the United States, the Clinton administration resolved this dilemma by the simple, harsh step of eliminating long-term assistance to poor households, forcing even parents of small children into the labor force—a boon to low-wage employers. Unemployment insurance, meanwhile, is conditional on recipients’ producing evidence of a minimum number of job applications per week—a requirement that, as often as not, proves either burdensome or farcical.
We do not, obviously, take very good care of our poor and unemployed. And we will soon have even more of them: the elimination of jobs by automation has barely begun. Without a radical new approach to economic security, we are headed either for an even worse bureaucratic morass or for a Blade Runner, devil-take-the-hindmost world.
Basic Income: A Radical Proposal for a Free Society and a Sane Economy (Harvard University Press, $29.95, 400 pp.) by economist Philippe van Parijs and political scientist Yannick Vanderborght proposes a radical idea that will be new to many readers although, as they conscientiously point out, it has a rich history. Like most good political ideas, the right to a basic income originated in the Enlightenment, though proposals for the relief of the poor are of course much older. St. Ambrose waxed eloquently indignant on the subject of economic inequality. Luther admonished the German nobility that “it would be easy to make a law, if only we had the courage…that every city should provide for its own poor.” The narrator of More’s Utopia railed against England’s savage punishment of crimes against property: “It would be far more to the point to provide everyone with some means of livelihood, so that no one is under the frightful necessity of becoming first a thief, then a corpse.”
The philosophes radicalized and universalized this impulse. According to Montesquieu, the state “owes all its citizens a secure subsistence”; Rousseau posited that “every man has naturally a right to everything he needs”; Condorcet wrote that “society is obliged to secure the subsistence of all its citizens.” Thomas Paine even proposed the first universal basic income, combining an endowment at age twenty-one and a retirement income at fifty. The subsequent history of experiments with income-security schemes in modern Europe and the United States, from Bismarck to Milton Friedman, from the Poor Laws to the current experiments in Switzerland, is a secondary but fascinating theme of Van Parijs and Vanderborght’s book.
There are three defining elements in Van Parijs and Vanderborght’s proposal. First, basic income is individual, paid to each citizen rather than to a family or household. Second, it is universal, paid without regard to other income or assets. Third, it is obligation-free, a matter of right, and not tied to any work requirement. Other aspects of their plan—income levels, funding mechanisms, pace of adoption—are less fundamental.
The chief reason for individual rather than household payments is that marriage and cohabitation are complicated enough without introducing economic incentives into a relationship. Public-assistance programs usually take account of the economies of scale in consumption that living together entails, reducing benefits accordingly. But basic income is not a poverty-reduction program; it is a freedom-maximization program. Its purpose is to increase options for everyone, in both work life and intimate life.
Why universality? In the first place, because means-testing is an administrative nightmare. But even more important, because it frees recipients to work. At present, earned income reduces public assistance dollar for dollar, and a full-time job is likely to result in termination of benefits. But far too many of the jobs available to most recipients of public assistance are insecure dead-ends. If the jobs disappear or prove intolerable, the resulting interval until benefits resume can plunge a family into a debt spiral. With a secure basic income, taking whatever job is available entails no such risk, and recipients are freer to take a low-paying job that provides valuable training or experience, hence perhaps a way out of the low-wage ghetto. They are also freer to create their own jobs, and even to become entrepreneurs, on however humble a scale.
It is the obligation-free part that sticks in many people’s craw—who, after all, is not incensed by the spectacle of the idle poor? Forcing recipients of public assistance to prove that they are involuntarily unemployed serves several unworthy social purposes: it gratifies popular sadism; it keeps the number of recipients down; and it swells the reserve army of the unemployed, thereby subsidizing low-wage employers. Van Parijs and Vanderborght quote a sociologist’s scathing description of the effects of obligation-to-work regulations: by “allowing the authorities to force someone into a job, however rotten or badly paid,” they “assure that the meanest employer, paying the worst wages for the filthiest jobs, is not kept out of a worker while there is one able-bodied unemployed man available.” And of course, like means-testing, obligation-to-work regulations require a large, expensive, and intrusive bureaucracy.
Historically, the two main grounds for criticizing unbridled competitive individualism have been efficiency and justice: it wastes the talents of the losers and deprives them of chances for a decent life. These are also the moral underpinnings of a universal basic income. Van Parijs and Vanderborght repeatedly stress that their proposal is not a species of poor relief; it provides a floor, not a safety net. It is not only, or even primarily, intended to keep people from starving or sleeping in the streets. Shelters and soup kitchens might achieve that goal equally well, but the goal itself is too modest. A basic income aims at allowing people to design their lives, on the principle that while creativity in some form is a universal biological endowment, chronically insecure, degraded, and exploited people cannot be creative, and society will be worse off for the loss.
The argument from justice may, as in Rousseau, appeal to every individual’s natural right to realize her powers, rather than, as in the argument from efficiency, to society’s interest in her doing so. This argument is perfectly adequate, provided rights are derived from contingent moral intuitions—Smith’s and Hume’s “sympathy,” for example—rather than from supposedly immutable (but unfortunately nonexistent) metaphysical principles. But there is another, even firmer ground for treating basic income as a right: the social nature of wealth creation. Markets do not allocate rewards fairly; no one deserves to be filthy rich. Van Parijs and Vanderborght illustrate by quoting the economist and computer scientist Herbert Simon, one of the twentieth century’s biggest brains:
When we compare average incomes in rich nations with those in Third World countries, we find enormous differences that are surely not due simply to differences in motivations to earn [or natural resources, but to] differences in social capital that takes primarily the form of stored knowledge (e.g., technology, and especially organizational and governmental skills). Exactly the same claim can be made about the differences in income within any given society.... It is hard to conclude that social capital can produce less than about 90 percent of income in wealthy societies like those of the U.S. or Northwestern Europe.... [A flat tax of 70 percent] would generously leave the original recipients of the income with about three times what, according to my rough guess, they had earned.... In the U.S., a flat tax of 70 percent would support all governmental programs…and allow payment, with the remainder, of a patrimony of about $8000 per annum per inhabitant, or $25,000 for a family of three.... Of course, I am not so naïve as to believe that my 70 percent tax is politically viable in the U.S. at present [i.e., 1998], but looking toward the future, it is none too soon to find answers to the arguments of those who think they have a solid moral right to retain all the wealth they “earn.”
It is, indeed, never too soon to disturb the ineffable confidence of overpaid blockheads in their perfect entitlement to a disproportionate share of the common wealth. There most certainly is such a thing as a free lunch. There is, in fact, a free banquet, of which every rich person daily partakes. It is long past time they invited the rest of us.