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“Basic Income”: Sense or Nonsense?

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On June 5, Switzerland’s electorate voted 77% to 23% against a “basic income” proposal. The plan would have entitled each adult citizen to about US $2,500 per month from the Swiss government, with an additional payment per child, regardless of employment situation. Other polities, including Finland, the city of Utrecht in the Netherlands, and the province of Ontario in Canada, have trial runs of basic income schemes in the works.

Does the idea make sense? The identities of some who think it does — at least in principle — might surprise you. They include, among others, self-described libertarians such as Charles Murray of the American Enterprise Institute, professor Matt Zwolinski of the University of San Diego, and Tim Worstall, Senior Fellow at the UK’s Adam Smith Institute.

These supporters of the idea are, generally speaking, utilitarians or consequentialists. They accept the modern welfare state as a given and want to make it more efficient and humane. That is, they think it should cost less and accomplish more. Guaranteed income seems to fit the bill: Huge administrative cost savings from the elimination of a hodgepodge of welfare programs (for example, food stamps), more freedom for recipients to spend as they see fit (in the same example, the money could be used to purchase shoes rather than food).

Understatement of the Month alert:  Not all libertarians support government income guarantee schemes.  In fact, the vast majority of us vociferously oppose the idea.

In order for the state to redistribute wealth, it must first steal that wealth (the thieves call it “taxation”). And before the state can steal wealth, that wealth must first be created.

Morally speaking, why should the creators of wealth — a category that includes everyone who labors to produce valuable goods and services, from the lowliest fry cook to the CEO of the company that built your car — be forced to subsidize the incomes of those who produce less, perhaps even nothing?

Practically speaking, why WOULD those wealth creators do so? I don’t know about you, but if I can make $20,000 a year cleaning toilets or $19,000 a year sitting on my couch watching Storage Wars … well, if you need me, check the couch. Stretching those numbers in either direction will produce different outcomes, but any income guarantee will to some degree constitute a disincentive to work.

As is always the case, it turns out that the immoral and the impractical coincide. “Basic income” makes no sense.

Thomas L. Knapp (Twitter: @thomaslknapp) is director and senior news analyst at the William Lloyd Garrison Center for Libertarian Advocacy Journalism (thegarrisoncenter.org). He lives and works in north central Florida.

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