Should the government pay you to be alive?
Janill Gilbert stashed this in Money
Activists in Europe, most notably in Switzerland, have succeeded at injecting the idea into mainstream political debate. A recent poll showed that it has the support of nearly half of Canadians. The president of Cyprus says he’ll launch a limited version of the scheme this summer. Brazil has been giving direct cash transfers to poor families ever since passing a basic income law in 2004; pilot programs have in recent years been carried out in India and Namibia.
In the United States, the idea of handing out unconditional government allowances is seen, understandably, as a nonstarter, despite enjoying some recent buzz among policy wonks. If nothing else, in today’s political environment, it just sounds too much like a socialist fantasy. But the idea has a deep legacy in the United States that almost uniquely stitches together figures on the left and right: Its prominent supporters have included Martin Luther King Jr. and John Kenneth Galbraith, and a version initially suggested by free-market economist Milton Friedman nearly became law under President Nixon.
“You usually don’t have people from different ends of the political spectrum getting on board with the same sort of program,” said Brian Steensland, an associate professor of sociology at Indiana University and the author of the book “The Failed Welfare Revolution,”
For pragmatists on the left, cash payments to all would be the fastest way to eradicate poverty, by making sure everyone, no matter their circumstances, has enough money to live on. For the utopian-minded, it holds the promise of a liberation from work—a way to make sure that the next John Lennon doesn’t have to waste all his time lifting boxes in a warehouse. For conservatives, it is a tool for rebuilding the bonds of civil society, putting people’s fortunes back in their own hands, and wiping out the messy, piecemeal, nanny-state safety net in one swoop.
America’s modern safety net is a complex machine, estimated to cost almost a trillion dollars a year, which operates on the premise that there are those who deserve help from the government and those who don’t.
The idea of a guaranteed basic income throws all that out the window, replacing it with one straightforward policy that applies to everyone equally.
Charles Murray, in his book-length defense of the basic income, “In Our Hands,” suggests dismantling the welfare state and instead paying every citizen over 21 years of age $10,000 per year. Yale Law School professors Bruce Ackerman and Anne Alstott argue for one lump sum payment of $80,000 to be distributed to everyone on their 21st birthday. Others call for deciding on a particular income as a floor, and then using the tax system to make sure everyone takes home at least that much.
I think it's a great idea.
I think it will encourage more entrepreneurial efforts because people will have their basic living covered so they can focus on finding something they want to work on, versus just finding ANY paying job.
Switzerland has not rolled it out yet, right?
I'm very eager to hear how this goes.
Thanks for this article, Janill:
I don't think they have implemented it " have succeeded at injecting the idea into mainstream political debate" They are just the first country to start the discussion.
I wonder in America this could start with a state implementing it -- like Utah is doing with the homeless -- or if that makes no sense unless the change can happen at a national level.
I have heard this kind of system would actually save us money, as we could dismantle all the huge bureaucratic programs, that we currently have to manage the distribution of benefits.
A couple of problems: There are people currently on these programs who are not fiscally savvy or responsible, and would spend the money in a short period of time, and then be stuck with no services in place with a safety net to catch them, I suppose you could have it be a monthly check. What about a practicing drug addict? Would a system like this need to require that known addicts be tested, in order to get their check? Also would we need to protect people from others scamming them for their check? I suppose these are all problems even with the programs that exist today.
Saving money is the main way to get conservatives to embrace it.
That's why they're okay with paying for housing for the homeless in Utah:
To address the problems you mention:
1. It should be a monthly check -- or better yet, twice a month like most paychecks.
2. Yes, drug reform should accompany this so addicts are encouraged to check into treatment centers rather than just blow all their money on drugs. But even without that we're no worse off than today.
3. As for scammers, laws already exist today because the problem exists today. Keep prosecuting scammers aggressively.
I think there are plenty of reasons, where the government can save on many expenses while providing base pay level. The only way this will work is when it's combined with cleaning the mess in medical system, education, housing, labor and food supply.
Left untouched, "the system" will simply self adjust to raise prices and syphon these money out of people's pockets. We will get the same thing as Medicare. As government comes in with deep pockets and no price negotiations, so the providers, who charge orders of magnitude than anywhere in the world.
Without huge popular support it is very hard to dismantle a machine that resists change by design.
It would be challenging to disrupt any one of the systems you mention; disrupting them all would be near impossible without the public demanding it.
Heck, it would be damn near impossible even with the electorate demanding it because of all of the entrenched interests who will resist the change.
Well since majority of general public are Ron Swanson style libertarians, it's not going to happen.
I don't think that's true.
I think the majority of Americans like benefiting from all the social programs.
They're not libertarian -- they're resistant to change.
:) "Ron Swanson" style libertarians. Ron Swanson worked for the government (doing absolutely nothing) and will surely benefit from social programs. He just would not stop talking about smaller government:)
Haha, I get it. They complain about the government but still love the benefits.
And work (directly or indirectly) for the government.
I was born and raised in the US, but spent 20 years in Canada. So, I can see 'both sides', I hope! It's great to not have to worry about getting sick (Canadian system). And, who wants to lose your house to pay for the medical costs (US system). So, universal healthcare is one way to 'cover the basics'. And, although I have never needed free food, I can't imagine how horrible it would be to not be able to feed myself and/or my family/children.
My 'vision' for all of this is Star Trek. In that show, no one has to worry about anything -- not food or healthcare or housing. So, then they get to move on and do their 'best work' -- rather than just 'any work'.
If we look at Maslow's Hierarchy of needs -- taking care of the basics (like the above) -- absolutely makes sense. But don't pay me for 'doing nothing'. And, definitely don't give out money that would be spent on non-productive items like recreational drugs, alcohol and the such. For those things, I should have to make money and use my disposable income to cover them.
If we take lottery winners as a surrogate for 'handing out free money', most people blow all of that money right away and lots of them wind up worse than they started out.
Somehow, you should have to 'earn the right' to get something for nothing. As an example, in France, if you have a child, you get some free social services like nanny/day care/housekeeping. So, by procreating, you have contributed to the continuance of the French culture, so you are 'paid' for your effort.
In Canada, if you are an official resident, the government wants to ensure you have the basic capability to contribute to society -- so, free healthcare.
I think there are many models for people to 'give' and then to 'receive'. In fact, one of my passions is to work on ideas where you can 'give something' and then get 'credits' towards purchasing some other items. One of my 'big ideas' :) is to create this sort of barter system for healthcare. Kind of like participating in a consumer survey, then they send you a coupon to purchase that product. You give away your feedback, and then you get a gift.
Or, in my hotel room today, if I declined the housekeeping, I got a free coupon for $5.00 off in any of their restaurants. So, I am more green (no housekeeping), and I get free food! A pretty good deal in my mind!
Anyone interested in chatting about how to take this model to some of our basic needs, like healthcare?
If so, just find me on LinkedIn, or message me here ...
Dawn, it does seem like a system like this seems more likely to be implemented in Canada before USA.
How does Canada feel about US citizens moving to Canada?
Adam -- Well, the truth of the matter is that some Canadian policies have actually now been moved to the US (solving your immigration question!). The new ACOs in the US -- which are more about prevention -- have been around in various shapes and forms in Canada for (I think) 50 years. Holistic care (like the ACOs), rather than episodic care, has been shown to be more cost-effective and produce better outcomes, at a lower cost. The 'issue' is the transition time. To fund an episodic care system (I'm sick, fix me) at the same time as funding a holistic (preventative care) system is a lot to absorb.
In the meantime, if you find a Canadian partner, and marry them, you will get Canadian healthcare --- if you live there. :)
PS -- My challenge to the US healthcare system is that we 'can' find ways to get that 'trade' going on. What can we 'give', to 'get' more healthcare for all citizens who want healthcare?
What can we give to whom? It seems like there are many different interests in the US, and it's hard to make progress because there is no single system.
Some more great ideas. Dawn, you have a different perspective than most, having spent time in 2 different systems (US & Canada). Haven't thought about Maslow's needs for a long time, that ties in well to what Adam was saying, about freeing people up to do more interesting/investigative/entrepreneurial work, that one otherwise could not do, if you're just trying to eek out a living ;)
That's what I believe, yes.
The left is more concerned with the power of a minimum or basic income as an anti-poverty and pro-mobility tool. There happens to be some hard evidence to bolster the policy’s case. In the mid-1970s, the tiny Canadian town of Dauphin ( the “garden capital of Manitoba” ) acted as guinea pig for a grand experiment in social policy called “Mincome.” For a short period of time, all the residents of the town received a guaranteed minimum income. About 1,000 poor families got monthly checks to supplement their earnings.
Evelyn Forget, a health economist at the University of Manitoba, has done some of the best research on the results. Some of her findings were obvious: Poverty disappeared. But others were more surprising: High-school completion rates went up; hospitalization rates went down. “If you have a social program like this, community values themselves start to change,” Forget said.
Those results support the theory that with a minimum income people do focus on making themselves and their communities better.
Here is Alaska's Permanent Fund, a yearly pay out for all citizens of Alaska, since 1976
The money comes from the oil found in Alaska, and maybe is partially suppose to make up for the higher cost of living in Alaska, and the harsher conditions.
That one's not enough to live on. It's a supplemental income.
True, but it still is an example of government handing out a dividend to every citizen of that state.
Oh, good point. I think Alaska is currently the only state that does this.
There is also a theory in healthcare which is called the Social Determinants of Health. This fits with what happened in Manitoba. The Social Determinants of Health say that income, education, isolation, etc. have a direct and measurable correlation on how healthy you are. Intuitively, this makes sense.
Let's take income as an example. If I cannot afford to feed myself, how can I spend any money on that cut? And, maybe I can't afford a bandage, then it gets infected and now I have gangrene. (A bit extreme, but you get the picture.) So, now I turn to the healthcare system because I need an amputation -- all because I couldn't afford the bandage, because I needed to feed myself.
The Social Determinants of Health are pretty well aligned with Maslow's Hierarchy of Needs. I also have a bit of a biased world view on healthcare because I've spent my entire career there -- even though I am not a clinician. I am a business person, strategist and marketer -- trying to make healthcare better. In my view, it all starts with your health. Take a read here: http://www.rwjf.org/en/blogs/human-capital-blog/2014/01/focus_on_health_toe.html
Thanks Dawn, and it does make sense that income and education directly correlate with health.