What’s supposedly progressive Dylan Matthews at the supposedly progressive Vox doing pushing an idea favored by Hayek, Milton Friedman, and Richard Nixon?
Of course, the devil is in the details. It matters a lot how minimal the income really is, how fast it phases out, and (crucially) how much of the rest of the income-maintenance and social-services structure it replaces. It’s an idea with the defects of its virtues: Insofar as it displaces direct services, it saves overhead expense and avoids subjecting recipients to bureaucratic meddling in their lives. That’s good or bad depending on how great the expense is, how much fraud results, and how much meddling turns out to be useful. It gives recipients maximum flexibility in how and when to spend their money, which is good or bad depending on the recipients’ capacities for foresight and self-command. At the level of political economy, the question is whether the superior performance of the system would give redistributive policies a political edge sufficient to compensate for the loss of support from provider interests.
For those - including progressives - who think the virtues obviously trump the defects, here’s the thought-experiment: Would you replace public education with unrestricted cash payments to families with school-aged children?
But if you think, as I do, that most of what’s wrong with poor people is that they don’t have enough money, and that many of what look from the outside like behavioral pathologies are actually the predictable consequences of scarcity and insecurity, and despair, as I do, of the prospects for changing the distribution of market incomes enough to manage rising inequality, then the guaranteed-income idea looks very, very attractive. The problem then is to get as large a base and as gentle a phase-down as possible, and - this is the hard part - to discern what specific services need to be delivered alongside the cash. Seems pretty clear to me that housing, home heating, and food mostly shouldn’t get specific subsidies or direct provision, while education and health care should. But there’s lots of crucial detail to be worked out: even with a relatively generous income guarantee, I suspect there would be a need for direct housing provision to people who otherwise would be homeless victims of severe mental illness or substance use disorder. (Day care is an interesting liminal case; so is disability insurance, which could be replaced by a cash income not conditional on disability - likely to lead to substantially improved health outcomes - plus direct services or subsidies to help people deal with the consequences of disability other than difficulty in earning a living.)
The other key progressive goal should be keeping the income-support system national, to protect the poor people of, e.g., Mississippi from the hostility of state governments doing the bidding of bigoted majorities and exploitative employers whose business model is based on employees with no alternative to poorly-paid work but starvation or theft. That would have the side-effect of reducing one perverse impact of the current system, which ties poor people to high-cost-of-living areas where the social safety net tends to be less frayed. A family barely scraping by in Section 8 housing in the Bronx could live rather comfortably in Arkansas if it could cash out the value of that housing subsidy as part of a national income guarantee.
I have no idea whether Matthews is right that a guaranteed income is poised to become a mainstream political issue. But it’s a nice possibility to think about.
peterzerzan says
I have to admit-I'm getting a little tired of hearing the line "conservatives support the minimum income." Nixon and Friedman's support came from their belief it was the best worst option. It the early to mid 70s, there was a general belief the left was on the rise. Proposals to strengthen labor unions and add more regulatory agencies to the economy were part of the Democratic mainstream. It appeared there was little conservatives could do to stop the left wing trend, so they supported policies they felt would be the least intrusive to the economy and still keep them politically relevant. For example, while most liberals support Obamacare, most of them would gladly get rid of private exchanges in favor of single payer. Pragmatism does not equal whole hearted endorsement. Given the fact that the debate has shifted so far to the right, while we are (probably) moving in a left wing direction, we are hardly at the point where conservatives would feel the need to endorse UBI as a means of holding off a Democratic Party that is calling for an end to Right to Work and a much higher tax rate for the wealthy…
Brett says
I think it's important to distinguish between a "Basic Income" and a "Negative Income Tax", because the former is usually proposed as a pay-out to everyone in society regardless of income - think everybody getting $10,000 a year. Whereas a Negative Income Tax is really more like a more generous EITC with no restrictions aside from income, complete with phase-outs.
I tend to prefer the former. It's more expensive, but it also has a broader political base (making it more politically stable) and it's easier to enforce than the income reporting requirements of an NIT.
I think you could have a system where that worked, but the transition to it would be incredibly difficult. You'd have to start by switching the public schools over to a tuition-payment model (like public colleges) while also rolling out the cash payment system. And of course you'd face a mountain of opposition from people invested in the current public system, particularly teachers and the teachers union.
More generally, I'd probably separate the single-payer health care system from the Basic Income, along with certain disability assistance programs and stuff like housing grants to local and state agency housing programs (such as the one my home state of Utah is running to help deal with long-term homelessness to good success).
J_Michael_Neal says
The reason for the difference in education and health care is that those are things that are not an ongoing necessity of life but that we insist that people get. The rationale for why we insist that people get them are different in each case but the implication are the same: either we need to provide them separate from the guaranteed income or we need a mechanism that forces people to buy them with their guaranteed income.
Matt Ruben says
Thanks for covering and discussing this issue - but your central point here is way off base:
“For those – including progressives – who think the virtues obviously trump the defects, here’s the thought-experiment: Would you replace public education with unrestricted cash payments to families with school-aged children?”
Compulsory public education is essential because children are… children! 99.9% of us need years of education as youth in order to assist with our maturation and become functional members of society.
This “thought experiment” recapitulates a long and dishonorable history of middle-class and wealth thinkers and policymakers treating the poor as if they were children. People of all classes have social pathologies. If you feel the social need is greater to control the pathologies of the poor, then say so. Otherwise, your school analogy says nothing about the effectiveness of a national minimum income on reducing poverty (and the problems that go with it).
JamesWimberley says
Unconditional or lightly conditional cash grants are getting a growing hearing in development circles. Middle-class Brazilian grumble about the Bolsa Familia as a vote-buying subsidy for large families among the poor, but outsiders find it works pretty well - especially on the conditions, like vaccination and sending children to school. Also charities like Give Directly claim good results for no-strings cash.