Finland launches a guaranteed basic income program for the unemployed

Ah, socialism. Is there ever a time you fail to amuse us?

In Finland we are seeing the launch of an idea which has been popular among liberals for quite some time but hasn’t really caught on anywhere. The government there has launched a pilot program where a select group of unemployed people will be given an assured basic income starting this month with no strings attached, no requirement to work (or do anything else for that matter) and no end to the program even if they go back to work. What could possibly go wrong? (Associated Press)

Finland has become the first country in Europe to pay its unemployed citizens a basic monthly income, amounting to 560 euros ($587), in a unique social experiment which is hoped to cut government red tape, reduce poverty and boost employment.

Olli Kangas from the Finnish government agency KELA, which is responsible for the country’s social benefits, said Monday that the two-year trial with the 2,000 randomly picked citizens who receive unemployment benefits kicked off Jan. 1.

Those chosen will receive 560 euros every month, with no reporting requirements on how they spend it. The amount will be deducted from any benefits they already receive.

A few things to note here include the fact that this is a very small pool of recipients (2,000 people) and there’s no indication as to how they were selected to participate. Also, the amount of “income” is pretty low. Less than 600 bucks a month in U.S. dollars isn’t exactly living high on the hog, but I suppose with their other, generous social welfare programs it might be enough to get by on, if not putting one in the lap of luxury. Also, they already have so many other goodies in the socialist basket that it might not have that large of an impact. The article goes on to note that the unemployed currently don’t even have to accept a job when one is offered if it’s for a lower rate of pay or is only short term and the refusal doesn’t affect their ability to collect benefits.

So will this work? You may recall that a similar measure was proposed in Switzerland last summer, but it was ultimately rejected by the voters. It seems that the laboratory test mouse for this case will be Finland, and it may wind up proving a useful social experiment for the rest of the world, including the United States, where some liberals have been pushing for a similar program.

The real question to be answered is the viability of the capitalist theory which states that you always need more people pulling the cart than riding in it. Will an assured income cause people to simply stop looking for work and live a modest life on the public dole or will some combination of desire for more wealth and a feeling of responsibility to the rest of society prompt them to earnestly seek out work? We’ve seen examples in the United States welfare system which would seem to indicate that at least some portion of the population will be willing to make do with less and avoid a nine to five job, perhaps indefinitely. That system only works as long as there are enough productive workers to keep funding the programs.

Personally, I’ve been waiting to see something like this tried so we can get some hard data, but I’m unsure if this is a good test case. Finland is such a small country and its people are already so steeped in a socialist mindset going back many generations that their results might differ from ours. Still, it’s worth keeping an eye on. Frankly, I think a plan like this would blow up almost immediately if you tried it in the United States, but if it remains limited in scope it might actually work for Finland.


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