The right-wing case for basic income

How does the largest welfare program imaginable have libertarian supporters?

The right-wing case for basic income
Photo by NeONBRAND on Unsplash
  • The idea for a universal basic income, or UBI, is increasingly popular.
  • While it seems like a left-wing handout, many prominent right wing thinkers have endorsed the idea.
  • The libertarian version of UBI does have a few key differences from the more standard version.


We've all heard of it: basic income, the freedom dividend, the income guarantee, or any of the other names for the program that would give everybody a payment as a right of citizenship. Such plans have been discussed by American thinkers for at least two hundred years and have gained increasing attention and popularity in the modern age.

On the face of it, it seems like a rather left-wing concept. The idea of sending everybody a check each month for existing seems as Marxist as it gets. It also doesn't help that many of the best-known supporters of the idea are on the left. However, the idea's popularity isn't limited to red book clubs. There are right-wing supporters of the concept as well, among them was famous economist Milton Friedman.

The libertarian case for the basic income

For those who don't know, Milton Friedman was an economist working out of the University of Chicago during the middle part of the 20th century. A leading thinker behind monetarism, he favored tinkering with the economy through controlling the size of the money supply rather than through fiscal policy. Even people on the American center-left acknowledge his brilliance as they criticize his mistakes.

When it came to the problem of poverty, Friedman supported letting the free market and private charity have a chance to solve it first. However, he understood that dealing with it effectively at the large scale likely required at least some state intervention. As he explains in Capitalism and Freedom, its the free-rider problem that causes this:

It can be argued that private charity is insufficient because the benefits from it accrue to people other than those who make the gifts [...] I am distressed by the sight of poverty; I am benefited by its alleviation; but I am benefited equally whether I or someone else pays for its alleviation; the benefits of other people's charity therefore partly accrue to me. To put it differently, we might all of us be willing to contribute to the relief of poverty, provided everyone else did. We might not be willing to contribute the same amount without such assurance. In small communities, public pressure can suffice to realize the proviso even with private charity. In the large impersonal communities that are increasingly coming to dominate our society, it is much more difficult for it to do so.

He argued that this justified having the state take steps to reduce poverty, as it is harder to skip out on paying money to reduce poverty when that is tax fraud rather then miserliness. This didn't mean Friedman supported the welfare state though; he argued instead for a much simpler solution in the form of the negative income tax, or NIT.

In our current welfare system, there are a myriad of programs that each deal with a different aspect of life for the poor. One program provides food aid, another deals with housing, yet another provides low-cost utilities, and another one deals with income security for the elderly. A large number of regulations, such as minimum wage laws, exist to help hold wages high enough to keep other working people off the welfare rolls.

Friedman viewed this multitude of agencies as wasteful and suggested that a single program would do the same job with a smaller government by just giving cash to people who needed it. As a libertarian who placed a high value on the freedom of choice, he also suggested it was a much more dignified way of helping the poor than telling them what they could and could not do with the money we give them as is currently the case with things like food stamps.

How would it work?

The mechanism is relatively simple. Dr. Friedman explains it above in his interview on Firing Line.

For those who didn't watch the clip, it is easily explained. The income tax system is changed a bit to include an exemption based on family size. Only earned income above that point is taxed. If you make less than the exemption amount, you instead receive a subsidy.

The size of the subsidy would change based on how much you make and would also be subject to a subsidy rate. This means that if a person makes $1000 less than the exemption point, they would only get a certain percentage of that difference back as a subsidy. Friedman argued that the subsidy rate shouldn't any higher than 50 percent, as it would discourage work if it were raised past that point.

As an example, suppose we lived in a society where with an NIT where the exemption for me is $10,000, and the subsidy rate is 50 percent. If I were to only make $8000, I would pay no taxes and get back half of the $2000 difference between what I made and the exemption point, or $1000.

If I made exactly $10,000, I would neither pay taxes nor receive a subsidy. If I made more than that, I would start to pay income taxes on the income above that point. If I made absolutely nothing, I would get the largest subsidy possible under this system, $5000, which would be the "guaranteed" income under this arrangement.

Such a program would also have the advantage of not having a "welfare trap," the point where making more money at work causes welfare payments to go down by a larger amount and leaves the recipient worse off. The trap is a well-known problem and is bashed by many economists as a significant flaw that discourages people from trying to improve their situation.

The numbers used above were just for discussion; the exact numbers used in a working system would reflect economic realities. It should be said that Friedman intended to keep the guaranteed rate low enough to encourage people to still work while at the same time being high enough to correct for the failures of private charity.

Has it ever been tried?

Yes, it has, and it worked.

Several experiments in the 1970s in the United States and Canada showed that the negative income tax could work as intended. The guaranteed income was set as equal to the poverty threshold and, as predicted, the labor supply fell because of this.

This fall was not as significant as experts feared, however. The simultaneous rise in high school graduation rates suggests that at least part of this fall in labor supply was caused people having the economic security to stop working and finish their education. Claims that the program resulted in an increased divorce rate were initially reported but are now known to be the result of a statistical error.

What do others think of the NIT?

Criticism of the idea comes from two directions.

On the right, critics often object on a fundamental level to any redistribution or an income tax of any kind. Some who do support the NIT see it merely as the best version of a bad deal.

On the left, criticism tends to focus on either the mechanism of the NIT or on the details of Friedman's plan. Josh Martin, an executive committee member at the US Basic Income Guarantee Network, explained his objections this way:

A negative income tax and a universal basic income seek to achieve the same goal — to ensure an income floor for everyone. But, given the choice between the two, a UBI is preferable as it solidifies this income floor as a universal benefit, while an NIT would only provide the income floor to those who need it. This conditionality makes it easier for politicians and for people who don't receive the NIT to justify cutting the program as they don't receive the benefit personally.

This concern that a purely redistributive program will be subject to political difficulties later is a common one. It is part of the reason why regressive taxes on the poor fund Social Security — you can't attack it in the way Mr. Martin describes. A system of basic income that pays everybody a set amount each month is similarly protected; it's hard to cut a program everybody gets direct benefits from.

Universal basic income is an increasingly popular idea that will likely exist in some form someday. It enjoys support from every part of the political spectrum for various reasons. While the far left and the far right might disagree on why a universal basic income program is needed or what form it should take, the fact that they agree on the need for such a program is surprising enough to almost count as an endorsement in itself.

Study: Unattractive people far overestimate their looks

The finding is remarkably similar to the Dunning-Kruger effect, which describes how incompetent people tend to overestimate their own competency.

Sex & Relationships
  • Recent studies asked participants to rate the attractiveness of themselves and other participants, who were strangers.
  • The studies kept yielding the same finding: unattractive people overestimate their attractiveness, while attractive people underrate their looks.
  • Why this happens is unclear, but it doesn't seem to be due to a general inability to judge attractiveness.
Keep reading Show less

Astronomers find more than 100,000 "stellar nurseries"

Every star we can see, including our sun, was born in one of these violent clouds.

Credit: NASA / ESA via Getty Images
Surprising Science

This article was originally published on our sister site, Freethink.

An international team of astronomers has conducted the biggest survey of stellar nurseries to date, charting more than 100,000 star-birthing regions across our corner of the universe.

Stellar nurseries: Outer space is filled with clouds of dust and gas called nebulae. In some of these nebulae, gravity will pull the dust and gas into clumps that eventually get so big, they collapse on themselves — and a star is born.

These star-birthing nebulae are known as stellar nurseries.

The challenge: Stars are a key part of the universe — they lead to the formation of planets and produce the elements needed to create life as we know it. A better understanding of stars, then, means a better understanding of the universe — but there's still a lot we don't know about star formation.

This is partly because it's hard to see what's going on in stellar nurseries — the clouds of dust obscure optical telescopes' view — and also because there are just so many of them that it's hard to know what the average nursery is like.

The survey: The astronomers conducted their survey of stellar nurseries using the massive ALMA telescope array in Chile. Because ALMA is a radio telescope, it captures the radio waves emanating from celestial objects, rather than the light.

"The new thing ... is that we can use ALMA to take pictures of many galaxies, and these pictures are as sharp and detailed as those taken by optical telescopes," Jiayi Sun, an Ohio State University (OSU) researcher, said in a press release.

"This just hasn't been possible before."

Over the course of the five-year survey, the group was able to chart more than 100,000 stellar nurseries across more than 90 nearby galaxies, expanding the amount of available data on the celestial objects tenfold, according to OSU researcher Adam Leroy.

New insights: The survey is already yielding new insights into stellar nurseries, including the fact that they appear to be more diverse than previously thought.

"For a long time, conventional wisdom among astronomers was that all stellar nurseries looked more or less the same," Sun said. "But with this survey we can see that this is really not the case."

"While there are some similarities, the nature and appearance of these nurseries change within and among galaxies," he continued, "just like cities or trees may vary in important ways as you go from place to place across the world."

Astronomers have also learned from the survey that stellar nurseries aren't particularly efficient at producing stars and tend to live for only 10 to 30 million years, which isn't very long on a universal scale.

Looking ahead: Data from the survey is now publicly available, so expect to see other researchers using it to make their own observations about stellar nurseries in the future.

"We have an incredible dataset here that will continue to be useful," Leroy said. "This is really a new view of galaxies and we expect to be learning from it for years to come."

Protecting space stations from deadly space debris

Tiny specks of space debris can move faster than bullets and cause way more damage. Cleaning it up is imperative.

Videos
  • NASA estimates that more than 500,000 pieces of space trash larger than a marble are currently in orbit. Estimates exceed 128 million pieces when factoring in smaller pieces from collisions. At 17,500 MPH, even a paint chip can cause serious damage.
  • To prevent this untrackable space debris from taking out satellites and putting astronauts in danger, scientists have been working on ways to retrieve large objects before they collide and create more problems.
  • The team at Clearspace, in collaboration with the European Space Agency, is on a mission to capture one such object using an autonomous spacecraft with claw-like arms. It's an expensive and very tricky mission, but one that could have a major impact on the future of space exploration.

This is the first episode of Just Might Work, an original series by Freethink, focused on surprising solutions to our biggest problems.

Catch more Just Might Work episodes on their channel:
https://www.freethink.com/shows/just-might-work

Personal Growth

Meet the worm with a jaw of metal

Metal-like materials have been discovered in a very strange place.

Quantcast