We’ve had a few discussions here in the past concerning the concept of Guaranteed Basic Income (GBI), though it comes under various names. It’s a particularly socialist concept of making sure that everyone living in any given country has some bare minimum income assured to them for their entire lives, regardless of whether or not they have (or want) a job. Despite the obvious, catastrophic potential inherent in introducing such a concept into a capitalist society, it’s a plan which continues to make the rounds in liberal circles.
In yet another example, Matt Purdy at Public Radio International gamely takes another bite at the apple this week under the guise of preparing everyone for when robots take all of our jobs.
A handful of countries are even taking steps to make it a reality. The Swiss are voting on it this summer (though it likely won’t pass), Finland is looking into it, as are a lot of other countries. Under the Swiss proposal, fueled by the fear of an automated future, voters in Switzerland will decide whether to give every citizen $2,600 per month.
Skeptics have a lot of questions. Will people still work? Who will benefit the most? Can we afford it?
“Most people don’t quit real jobs because they’d rather live very close to the poverty line,” Forget says. “If you’re making $50,000 a year, you don’t quit a $50,000 a year job to live at $20,000 a year.”
Before tossing the entire concept out on the compost pile, allow me to point out a couple of things where Purdy highlights some actual truths about the idea of GBI and at least one aspect which could, on the surface, ring true to the heart of even a grizzled old capitalist. First of all, I will agree that the vast majority of productively employed people who are making at least somewhere in the neighborhood of the national median income probably wouldn’t be flocking to such a program. If you’re getting by on $50K per year I agree that most of you wouldn’t be too quick to sign on for a $20K income and enrollment in all of the other social programs you’d need to tap “just to get by” simply to be able to quit your jobs. Keep in mind, however, that when I say most wouldn’t, that doesn’t mean all.
The second, and more conservative oriented argument is the one which Purdy makes in terms of how much money we already spend on welfare programs. There’s a massive bureaucracy involved which eats up huge amounts of money just to keep itself afloat. In some ways one might argue that it would indeed be cheaper just to mail everyone a check every month and forget about all the monitoring and support staff. But even Purdy admits that in a country the size of the United States that would wind up costing around $4T per year. (That’s trillion.)
So are these good enough reasons to consider it? No, they are not. First of all, the number of people who would sign up for such a program would be daunting. It’s not the people making $50K and above we’re worried about because they don’t tend to be on social welfare programs to begin with with the occasional exception of unemployment insurance. And when they are, they don’t tend to stay there any longer than they need to. But if you already live on considerably less than that, what incentive is there to take a lower paying job and hopefully work your way up the ladder if you can get enough to “get by” by simply staying at home forever?
Social support programs have requirements to qualify for them for a reason. (And workfare programs even more so.) The fact remains that a capitalist system can allow for some people to occasionally ride in the cart while everyone else pulls it, but eventually you’ll wind up with too many people in the cart and it ceases to move. This isn’t just some general theory of human behavior we’re talking about. There’s statistical proof to back it up. Recall once again what happened in Maine where they had a largely unregulated SNAP program without any requirement for work by able bodied, childless adults no matter how long you were on the program. What happened when they introduced a work requirement?
In the first three months after Maine’s work policy went into effect, its caseload of able-bodied adults without dependents plummeted by 80 percent, falling from 13,332 recipients in Dec. 2014 to 2,678 in March 2015.
I know we’d all like to think better of our fellow human beings, but the fact is that there are a certain percentage of people who will take advantage of programs such as these even when they don’t need them. And that percentage is not small enough to disregard. In fact, it’s probably large enough to bankrupt us. If you want to live in a socialist nation where everyone is subject to the oppressive thumb of government and all must rely on handouts from Big Brother, then fine. Move to one of them. But you can’t take such a huge aspect of a socialist system and inject it into a free market capitalist society such as ours without poisoning the well. It’s just human nature.