Proposals to institute a basic income are increasingly popular, especially in Silicon Valley. Philippe Van Parijs and Yannick Vanderborght make their case for it in Basic Income: A Radical Proposal for a Free Society and a Sane Economy. A basic income—an annual, unconditional cash grant to every adult, regardless of need, and without a work requirement to obtain it—would be non-taxable and total about 25 percent of GDP. The amount of the grant could vary depending on the age of the recipient, but it would start at birth. It would supplement existing safety-net programs and replace only those whose benefits are less than the basic income amount; thus, the grant would establish a floor, but not a ceiling, on government income transfers. (Publicly financed health care would remain outside the system, for example.)
The overarching goal of the basic-income proposal is to ease economic distress stemming from the structural disappearance of work and declining real incomes for lower-skilled workers. Technology has eliminated countless jobs, and there’s no reason to believe that this process won’t continue. Researchers from MIT and Oxford have estimated that technology already in development, such as driverless cars, could eliminate nearly half of all current jobs in the United States. One does not have to accept this particular analysis to recognize the anxieties that exist—one reason why Silicon Valley supports the idea.
Another goal of the basic income is to redirect the negative incentives created by current welfare systems. When you pay people for being poor or unemployed, unsurprisingly, they’re often motivated to remain poor. Welfare benefits get phased out as income rises; the poor and lower-income workers can face effective marginal tax rates as high as 85 percent, according to the Congressional Budget Office. Working longer hours or seeking out a higher-paying but more difficult job doesn’t make much sense in a system that punishes good behavior and traps people at the bottom of the income ladder.
Unfortunately, the authors’ version of basic income has several critical practical and philosophical flaws. A more controlled, restricted immigration system would be essential if everyone in the United States were entitled to a significant basic income just for being here. To their credit, the authors say that eligibility for basic income “excludes tourists and other travelers, undocumented migrants, and employees of supranational organizations [emphasis added].” While they would prefer a global basic income with open borders, they understand that, “if generous national (or, more generally, subglobal) basic incomes are to be made sustainable in the era of globalization, it will therefore not be possible to dispense with some version of the exclusionary [immigration] strategy.”
This would likely be a showstopper for basic income in the United States. Championing de facto unlimited immigration and the rights of illegal migrants is arguably the highest priority of a significant portion of the American political class. Chicago Mayor Rahm Emanuel closed 50 schools, shuttered half the city’s mental-health clinics, and cut library hours, but still found $1 million to pay for legal aid for illegal migrants. Until America reestablishes control over immigration and limits the number of poor migrants it accepts, basic income will be completely unworkable—as the authors concede.
Some humility from the authors would have been welcome about the risks of the radical restructuring that basic income would entail; Van Parijs and Vanderborght see only upside. To illustrate the downside potential, consider the poor results from annual per-capita payments of casino revenues to American Indian tribes (not discussed in the book). Some tribes enjoy a very high “basic income”—sometimes as high as $100,000 per year— in the form of these payments. But as the Economist reports, “as payment grows more Native Americans have stopped working and fallen into a drug and alcohol abuse lifestyle that has carried them back into poverty.” The magazine contrasts this fate with that of more successful tribes like Washington State’s Jamestown S’Klallam, which eliminated poverty by investing in tribal-owned small businesses instead of handing out cash grants.
Another major problem with the basic-income thesis is that its intrinsic vision of society is morally problematic, even perverse: individuals are entitled to a share of social prosperity but have no obligation to contribute anything to it. In the authors’ vision, it is perfectly acceptable for able-bodied young men to collect a perpetual income while living in mom’s basement or a small apartment and doing nothing but play video games and watch Internet porn. A basic income “differs from conditional minimum-income schemes in having no strings attached,” the authors concede. “It carries no obligation for its beneficiaries to work or be available on the labor market. In this precise sense, we shall say that a basic income is obligation free.” Their attempts to address the problems implicit in their asymmetric view of society are some of the weakest arguments in the book.
As is often the case with social reformers, Van Parijs and Vanderborght are making an argument that is fundamentally moral, not empirical or practical. “An unconditional basic income is what we need, we argued, if what we care about is freedom, not just for a few but for all,” they write. “We thereby appeal to an egalitarian conception of distributive justice that treats freedom not as a constraint on what justice requires but as the very stuff that justice consists in distributing fairly.” Make no mistake about what this means: if justice requires a basic income, then there is no moral right to dissent from it, and thus all disagreement with their position must ultimately be exiled from the realm of politics, democracy, and polite society. If a basic income were ever implemented, any attempt to remove it would be treated by its advocates as not just a bad policy idea, but evil, regardless of public support.
Basic income sounds to many like an attractive idea—but closer examination reveals that it’s also a dangerous one, based on dubious social and moral logic. Though it surely wasn’t their intention in writing this book, Van Parijs and Vanderborght have made the dangers clearer.
This piece first appeared on City Journal.
Aaron M. Renn is a senior fellow at the Manhattan Institute, a contributing editor of City Journal, and an economic development columnist for Governing magazine. He focuses on ways to help America’s cities thrive in an ever more complex, competitive, globalized, and diverse twenty-first century. During Renn’s 15-year career in management and technology consulting, he was a partner at Accenture and held several technology strategy roles and directed multimillion-dollar global technology implementations. He has contributed to The Guardian, Forbes.com, and numerous other publications. Renn holds a B.S. from Indiana University, where he coauthored an early social-networking platform in 1991.
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