Pros and Cons of Basic Income
This is the first in a series of public discussions on the merits and challenges facing a successful implementation of basic income. Proponents of basic income believe it will relieve unnecessary poverty and suffering. Detractors believe it is unethical wealth redistribution; Robin Hood was still a thief at the end of the day. I will try to avoid injecting my opinions into this open dialogue but in my eyes a basic income is only justifiable on instrumental efficiency grounds. I believe there are inefficiencies in global labor markets resulting from malinvestment and government intervention. These distortions in our labor markets result in the suboptimal deployment of capital and make humanity (every single one of us) poorer as a result. I only support a basic income that ‘grows the pie’ rather than merely redistributes the same amount of pie to different people.
We will start with the most simple proposed criticism of basic income: that people will no longer work if they are given a living income. At first glace this seems like a strong argument. If people need to work to live, then decreasing or destroying this connection may end up with fewer people working. If that is the case, and a basic income results in fewer goods and services being provided, it would be hard to justify this policy on economic efficiency grounds. However, this argument seems weak when you consider how many people continue to work beyond the point they have satisfied their bare necessities. People desire non-monetary goods like respect from peers, prestige, and luxury goods. See Maslow’s Hierarchy of Needs. There does not seem to be a strong argument that basic income would suddenly dispel these desires.
That’s it for today. I welcome thoughts and critiques of this reasoning. Also please suggest any other potential issues surrounding a basic income. Some of the issues include:
Qualified vs. Unqualified basic income and the ramifications of each.
What is the proper origin of the basic income? Government or private institutions?
Would a discrete shift in income/wealth simply result in greater inflation for necessary goods?
To what degree is inequality a concern? If everyone in the world had a steady standard of living but the result was greater overall wealth inequality would you still support it?
In Brazil, the Lula government (starting in 2003) introduced a basic income program called "Bolsa Família". It distributed money to families according to their numbers and the familiar income. It should have been a wonderful program,but many families that could not be in the program had their way and entered it...That was not the worst: many labourers stopped working because the money was enough for them to live. Others worked only at the end of the month, when the money was all spent.
So everyone, here we have the first empirical data point of a basic income program that discouraged some from working. Any responses to this specific point of the post? That a basic income will discourage some from being productive members of society.
@ronaldoavelino can you share any more details about the program you remember? Was there an income level above which a family would not qualify for the Bolsa Familia program?
Bolsa Familia should be for families that its members have a maximum montly income of around U$45 each. Each family should have a pregnant woman or children less than 17 years old. The families should have the pregnant woman with health care and all vacinations. The children between 6 and 17 years old should be in school. In 2015 the average government income was around U$45 for each member of the family.
Now you see one of the problems: people who were used to live on, at most, U$45 a month, now were receiving U$45 for each member, including the children. So, the women were pregnant all the time, generating children to generate money...
some interesting points discussing ubi and its feasibility
Practically all government attempts to redistribute wealth and income tend to smother productive incentives and lead toward general impoverishment. It is the proper sphere of government to create and enforce a framework of law that prohibits force and fraud. But it must refrain from specific economic interventions. Government's main economic function is to encourage and preserve a free market. When Alexander the Great visited the philosopher Diogenes and asked whether he could do anything for him, Diogenes is said to have replied . Yes, stand a little less between me and the sun. It is what every citizen is entitled to ask of his government
Great anecdote. Diogenes was a very interesting man. You raise a good point. All institutions are biased (at least towards the continuance of their very existence!!). One difference between public and private institutions is that private institutions can be disciplined more rapidly by an open and free market. The democratic political process in its modern form (at least in Western countries) faces appallingly slow disciplinary mechanisms. If gov't is not providing adequate/efficient services to the population then the gears turn very slowly (if at all) to bring those actors in line to better serve their people.
Basic income is not a utopia, it's a practical business plan for the next step of the human journey.
The opportunities, income, schools facilities, the basic income support that the government provides or any of these things .. public transport arrangements we have.. all these are part of the way our lives and freedoms are effected.
What is the proper origin of the basic income? Government or private institutions?
Would a discrete shift in income/wealth simply result in greater inflation for necessary goods?
At last question is so effective and valuable... I could not ans it properly.. Hopefully we get proper answer in your post comment @john-robert
It’s a policy idea that sounds crazy at first, but actually begins to make sense when you consider some recent trends.
One of the trends is that work isn’t what it used to be. Many people now struggle through a 50-hour week and still don’t have enough to live on. There are many reasons for this–including the heartlessness of employers and the weakness of unions–but it’s a fact. Work no longer pays. The wages of most American workers have stagnated or declined since the 1970s. About 25% of workers (including 40% of those in restaurants and food service) now need public assistance to top up what they earn. So basic income is a good idea and needs to be supported.
The second reason I'm proponent of basic income is that--- Robots already do many menial tasks. In the future, they’ll do more sophisticated jobs as well. A study last year from Carl Frey and Michael Osborne at Oxford University found that 47% of jobs are at risk of computerization over the next two decades. That includes positions in transport and logistics, office and administration, sales and construction, and even law, financial services and medicine. Of course, it’s possible that people who lose their jobs will find others. But it’s also feasible we’re approaching an era when there will simply be less to do. Hence, basic income would at least provide significant amount of money to lessen the burden of bills,etc.
Thanks I will check out the Frey and Osborne study. I think that everyone can see the increasing themes of technology and automation in our global economy. However, it is not clear that technology always destroys opportunity for productive labor. When the assembly line was invented it enabled many people to work in slightly different ways and create even more value. This view considers technology as an enabler rather than a destroyer of productive human labor.
I concord with you on this opinion. However, technology is two-faced, so we're just hoping for the better side of it.
Thank you for your continued support of SteemSilverGold
Thank you...
All I can say about basic income is that it would increase the number of lazy people, once you know you will earn without working, what's the essence of working?
Maybe you have desires for a quality of live above bare subsistence?
That's the point, the work we do is the value we contribute to our world. Not working for me mean not adding value.
Exactly. I think there are many people who would work regardless. Perhaps there are people in the world who could provide much more value to society if they were not bogged down in menial tasks for survival?
Well said, That's just it....
I believe everyone should have a guaranteed income to help them to buy the basic need. No matter the situation or background of the person!
The spending from this basic income will circulate the money into the economy!
That's the hope at least. Have you seen this in your real life though?
No, but a government can try it to see the experimentation!