by Karl Widerquist | Sep 15, 2018 | Opinion, The Indepentarian
This essay was originally published in the USBIG NewsFlash in November 2007.
Public awareness of BIG took a small step forward this summer when the Simpsons Movie made a joke about it. Homer and his family are greeted at the Alaskan border by an official who says, “Welcome to Alaska. Here are a thousand dollars. We pay everyone in Alaska to let us destroy the environment.” It’s not the most flattering joke, but it makes a fair point about the oil-based dividend. Although taxes on the extraction of fossil fuels might be a good way to give firms an incentive not to over-exploit them, and although a BIG might be a good thing to do with those revenues for many reasons, a resource-linked BIG might make people more willing to accept environmentally damaging resource exploitation—thus partially counter-acting the exploitation-discouraging effects of the taxes. This is underlying moral behind the Simpsons’ joke, but it was funnier when they said it.
12.5% of state oil taxes go into the APF, which is invested in stocks and bonds. A portion of the returns on the fund is distributed to Alaskans each year. Of course, the Alaskan government does not pay people when they arrive in the state; Individuals must be residents in the state for a full year to be eligible for to receive dividends from the Alaska Permanent Fund (APF). But this is fairly within the confines of the writers’ license for a cartoon.
In one way the cartoon significantly understates the generosity of the APF Dividend. The APF gives the same dividend to every man, woman, and child in the state. Because of recent increases in the stock market to nearly 40 billion dollars, the principal of the APF grew by more than 17.1% for the fiscal year, according to Scripps Howard News Service. Because of this and recent years’ gains, the APF Dividend went up significantly again this year. APF checks this October and November were for $1,654, according to the Juneau Empire. The Simpsons arrived in Alaska with a family of five, and so the border guard could well have said, “Welcome to Alaska. Here’s $8,270.” In other words, the actual figure is eight times more generous the figure mentioned in the movie.
According to the Associated Press, “for many residents, the check is no joke. It means getting caught up on bills and supplementing the income that for some is a week-to-week living in Alaska, where the cost of living is high in part because of its distance from shipping centers in the Lower 48 states.” People who have lived in Alaska since the first Dividends went out in 1982 have received a lifetime total of $27,536 in APF Dividends.
It is doubtful that mention in the Simpsons Movie will spark a campaign for a National Permanent Fund based on resource use throughout the United States. However, Albertans have been eyeing the APF with envy for years. Alberta is a Canadian Province a few hundred miles southeast of Alaska. Alberta has also had large oil revenues, but it lacks a mechanism like the APF to ensure that all Albertans benefit from them.
Allan A. Warrack, of the University of Alberta, writing in The Edmonton Journal on October 15, 2007, called for an Alaska-style dividend for Alberta. The province has a fund based on oil revenues, called the Heritage Fund, which was set up for similar reasons as the APF—to smooth out the province’s gains from the boom-and-bust oil industry. But there is one important difference. The Heritage Fund pays no dividends to individuals. Its earning go solely into the province’s general revenues. According to Warrack, this fact has caused Albertans to take much less interest in their fund than Alaskans. Much less has been invested in the Heritage Fund than in the APF, and Warrack argues, it has been less well managed. Warrack writes, “For about a quarter-century, the Alberta Heritage Fund was static in nominal value, [and] fell in purchasing power due to inflation.” The APF has steadily increased in both real and nominal value.
Warrack mentions that Alberta actually had a social dividend in the 1930s, under the government of the Social Credit party. Although it was short-lived, the dividend was popular. Alberta tried it again with a one-time payment in 2005. Warrack writes, “Some right-leaning citizens viewed the government cash payments favorably because it meant there would be ‘less for the government to waste.’ Some left-leaning citizens favored the payments on grounds of social equity—equal payment amounts meant the needy would get the same amount as the rich, though the value to the needy would be much higher. Still, others said: ‘Just gimme the dough!’” Perhaps someday the joke will be, “Welcome to Alberta. Here are 10,000 Canadian Dollars, eh?”
But even as Albertans envy the Alaska Dividend, Alaska lawmakers are coming under increasing pressure to divert dividend funds into general state spending. Each U.S. state receives a significant amount of funding from the U.S. Federal government based partly on the perceived needs of the state. According to Hal Spence, writing for the Peninsula Clarion and Morris News Service-Alaska, Federal lawmakers are reluctant to give money to the Alaska, when they perceive that it can afford to give large amounts of money away to residents each year. Spence believes this pressure will grow as the APF increases.
Warrack’s editorial can be found online at https://www.cwf.ca/V2/cnt/commentaries_200710120811.php.
Information on the APF can be found online at: https://apfc.org/
Hal Spence’s story is online at:
https://www.alaskajournal.com/stories/081907/hom_20070819001.shtml
And he can be reached at hspence@ptialaska.net.
by Guest Contributor | Sep 12, 2018 | Opinion
The following is an open letter to the Ontario government from basic income advocate Rob Rainer. The Ontario government recently cancelled their basic income pilot program. Rainer is calling on the government to reconsider the cancellation.
Dear Premier Ford, Minister MacLeod, and my MPP, Mr. Hillier:
I am a resident of Ontario and a concerned citizen who is among the many who, in recent years, have been advocating for basic income as a vital form of economic and social security, and human dignity – not only for those in or on the cusp of poverty, but for the broad “middle class” within which millions of people are profoundly economically insecure. I respectfully ask that you reconsider the Ontario government’s decision to terminate the Ontario basic income pilot project. Further, I ask that you commit to seeing this project through to its intended completion and evaluation.
The Ontario pilot is a world-leading test of how basic income can transform lives for the better. The eyes of the world have been on Ontario because of it – and remain on Ontario now in the wake of the government’s decision. Sadly, yesterday’s announcement by Minister MacLeod that the government will terminate the project appears to have been made with little regard for not only the evidence in favour of basic income but also the evidence already emerging from the pilot itself – including how in just a short period of time basic income has begun to transform many lives for the better (see also this story). The announcement is especially galling given that, in April, it appeared that your Party was prepared to see the project through if you were to form the next government. As an unidentified Party spokesperson said then, “we look forward to seeing the results.”
And so, several questions for you:
Mr. Ford or Ms. MacLeod: On what evidence or information was the decision made to end the pilot? Who was consulted beforehand? Notably, did the government speak directly with any of the 4000 pilot participants spread across Hamilton, Brant County, Lindsay, and Thunder Bay, and/or any of the members of the pilot research team? If it did not take those steps, I recommend they be done ASAP if there is yet possibility to revisit the government’s decision. I believe that were your government to hear directly from pilot participants, in particular, that its views on the pilot might be much more informed.
Mr. Ford or Ms. MacLeod: Assuming this decision stands, what will be done to make the transition as painless as possible for the pilot participants – some of whom have already made critical decisions for their lives on the basis of having access over three years to the basic income? Specifically, will the government continue to issue monthly basic income payments for most if not all of the remaining intended duration of the pilot?
Mr. Ford or Ms. MacLeod: What are your ideas as to what might be more effective than basic income to providing a solid floor of economic security for Ontarians (with major health and other benefits in return)?
Mr. Hillier: I met with you in February 2017 at your constituency office in Perth. At that time you expressed general support for the idea of basic income and, I recall, at least conditional support for the basic income pilot. You may feel obliged to support the government’s decision here, but I nonetheless ask: Are you comfortable with the decision, or would you be willing to champion that the government reconsider?
It is not a stretch to say that lives may well depend on a turnaround here. I understand from colleagues close to the ground of the pilot that if the government follows through with its intentions, that one or more suicides may well follow – reflective of the economic desperation many people in Ontario suffer. In this light, I encourage you to read at least some of the ~500 short testimonials contained in the attached document, in which people from across Ontario and many other parts of Canada explain the difference basic income could mean for them and/or their loved ones (and note how some of the writers mention suicide in the context of their desperation). For further and very good introductory information about basic income, I also recommend to you Basic Income Canada Network’s Basic Income primer series.
Sincerely,
Rob Rainer
Basic Income Advocate
Tay Valley Township, Lanark County
by Guest Contributor | Sep 10, 2018 | Opinion
Written by: Jonathan Brun
For many years basic income advocates have lobbied for pilot projects to demonstrate the power of giving money to all citizens. Advocates all seem to use the short-lived Dauphin, Manitoba project in the 1970s as an argument for further pilot projects. This lobbying by advocates of Basic Income led to two pilot projects – one in Finland and one in Ontario, Canada. Finland’s program will end as originally scheduled this year and will not be extended. The pilot program in Ontario was canceled before any data could be gathered. This marks a significant setback for the Basic Income movement around the world.
The purpose of these pilot projects was to gather meaningful scientific data on the effects of basic income and use that to convince the public, bureaucrats, and politicians that basic income was a feasible and logical idea. However, scientific reasoning rarely works in the public sphere. Instead, basic income projects are at risk of ending prematurely. The reason Ontario’s experiment was canceled and Finland’s pilot program was not extended was not due to financial or scientific concerns, but rather because of politics. Therein lies the problem, if basic income projects are launched by politicians, they will be shut down by political situations.
Both of these pilot projects made a fundamental mistake – they targeted poor people. The projects were designed to show the benefits of a basic income over the traditional welfare system. They were not designed to show the benefits of a basic income for a wider part of society such as students, taxpayers or elderly people. By restricting the projects to people on or near welfare levels, the projects positioned themselves as yet another welfare program for the poor. As in most countries, the hard working, tax paying middle class has limited patience for welfare recipients. This is partially due to both constricting disposable income and human nature. We have seen country after country downsize their social welfare programs in an attempt to balance budgets, gain votes or free up cash for other programs such as tax cuts. Almost no country in the past thirty years has increased the size of their welfare programs. This should be a (big) hint to basic income advocates.
It is actually quite simple, most taxpayers have limited patience for people who do not work (for money). To think otherwise is simply idealistic and not aligned with the average (voting) population. At a recent discussion on the basic income debate in Montréal, Québec, I asked the famed basic income expert Evelyn Forget how she thinks we should pay for a basic income. Her response was that we should raise taxes on corporations and on people. When I replied this seemed challenging in the current political and economic situation, she responded that it was the best way to do it and people would just have to “deal” with higher taxes.
I strongly believe that the way you finance a basic income is the defining feature of a basic income. If you finance it through taxes, it will be viewed as another social welfare program not terribly different from numerous existing programs. This is a major problem. The entire idea of basic income is that it is different from other programs. If you finance it in the same way, through tax and redistribution, you are undermining the argument that makes basic income so appealing. Basic income is supposed to break the mold, join the left and right, simplify bureaucracy and give more freedom for individuals to build up their lives. If you fund it through taxes on workers, it will be viewed (rightfully so) as a transfer from workers to non-workers.
As an analogy to basic income advocacy, we can look at advocates for affordable housing. Both groups of advocates believe that what they are proposing is a basic right and should be made readily available. In the first case, basic income advocates argue that all members of a developed nation should have a minimum level of income that assures the essentials in life. Affordable housing advocates lobby that housing is a right, not a privilege, and it should be affordable for all members of society. I agree with both, but the way you go about implementing either is fundamental to the perception of the project by the general public.
For example, affordable housing levels in most western countries has decreased as an overall percentage of the housing market. This is due to affordable housing advocates taking the same approach as many basic income advocates – namely that affordable housing is there to alleviate the stress of expensive housing and that the affordable housing should mostly benefit the less fortunate. By casting their lot in with the poor, they are severely limiting the base of their political support.
Contrast that with Vienna, Austria. In Vienna, about 50 percent of the housing stock is owned, managed and maintained by the City. Basically, 50 percent of the housing stock is a public good, not a private good. Rents are remarkably affordable for a world class city and this brings dynamism and diversity to all the neighbourhoods. However, the main reason this was possible was because both the middle class and lower economic classes have a vested interest in the success of this public housing. This much larger political base assures that affordable housing projects continue. Basic income needs to take the same approach and stop advocating for basic income pilot projects as welfare replacements or as a poverty alleviation tool. It may indeed be that, but that is not the best way to advocate for basic income.
Contrast the controversy around pilot programs with the Alaskan Dividend Fund, which was instituted in 1976. The fund remains tremendously popular and has little risk of disappearing. Why? Because everyone gets it! No pilot project was done prior to the institution of the Alaskan dividend fund and no negative effects have emerged post-implementation. If there is one path forward for basic income, it is through the implementation of a lower level of basic income, but that goes to everyone – especially hard-working taxpayers who vote.
Basic income should think strategically about how they plan to convince the average person to vote for a basic income. It may take a distinct political party (for another post) or a clear advocate of basic income such as Andrew Yang in the United States, who has placed basic income at the center of his presidential campaign. No matter how you look at it, trying to get basic income to become a reality through the path of replacing or supplementing welfare payments is a doomed idea that will never work. Get the middle class on your side and basic income advocates can win this political battle.
Jonathan Brun, Cofounder Revenu de base Québec.
Slight edits by Tyler Prochazka.
Originally posted here: Basic Income Pilot Projects Won’t Work
by Karl Widerquist | Sep 5, 2018 | Opinion, The Indepentarian
This blog was originally published at the USBIG NewsFlash in January 2001. It’s a good example of the way Basic Income was treated by major media outlets before the recent wave of support took off.
On Saturday, December 9th, just after the ruling Liberal Party won a
decisive victory in the Canadian Parliamentary election, the basic income
guarantee suddenly and surprisingly appeared on the front pages of
Canadian Newspapers. Under a banner headline, the National Post (one of
the most conservative national dailies in Canada) reported that Prime
Minister "Jean Chretien assembled a top-level committee in hopes of
creating a cradle-to-grave guaranteed annual income program that he hopes
will be his political legacy. This news was very exciting to basic income
supporters because the Liberal Party has the strength in Parliament to
pass any such proposal even over the objections of all the other major
parties. Several in the Post articles over three days claimed that
high-level sources had confirmed that the government was looking into the
idea, but one could easily miss the disclaimer in the first article
saying, "The prime minister's office refused comment and refused to
confirm the existence of the special committee."
Although readers of the USBIG newsletter last April will remember that
Anthony Westell, of the Globe and Mail called for the Liberals to take up
Basic Income as an issue for the coming campaign, the Liberals ignored the
call and the issue was not discussed before the election. It was
surprising that the issue would then be brought up shortly after the
afterword, but a guaranteed income would help the Liberals fulfill
promises made during the campaign to use half of Canada's federal budget
surplus to restore funding to social programs and to attack child poverty.
Chretien was quoted as saying, "The fact is that our prosperity is not
shared by all. … As a Liberal, I believe that the government has the
responsibility to promote social justice." Such as speech would be
shocking in the United States, because he used the phrase, "As a Liberal."
Over the following four days, the National Post followed with more
front-page articles including one with the headline, "Foes slam
'Socialistic Experiment.'" All of the other major parties managed to say
something negative about either the idea or the timing of the action. The
Conservative Party leader criticized both the timing and the idea although
his party seriously looked into an income guarantee in the 1970s. A
prominent member of the liberal NDP slammed the timing of the proposal
saying, "It makes a farce of our democratic system." Then, surprisingly,
he went on to say that the NDP supports it in principle and he bragged
that the NDP had pushed the Liberals to endorse the idea back in the
1960s. Similarly, a member the Quebec separatist party criticized the
timing and said that income support is a matter of provincial
jurisdiction, but did say that the idea was worth further study. The
harshest criticism came from Stockwell Day, the leader of Canada's
Alliance Party, which is known for being
more-conservative-than-the-Conservative Party. He accused the Liberals of
misleading the Canadians during the election and said that Chretien should
name a mountain after himself if he wants to leave a lasting legacy rather
than spend billions to fund a cradle-to-grave welfare program. Such harsh
criticism is surprising coming from the leader of the Alliance party
because the Reform Party (as Mr. Day's party was known before it
restructured two years ago) endorsed the guaranteed income in its election
platform in 1993 as a way to streamline Canada's convoluted
income-security programs.
On December 13th, the basic income guarantee disappeared from Canadian
front pages as quickly it had appeared, when the Globe and Mail reported
in a small article on page 12 that Chretien denied any part in suggesting
the idea. Chretien said, "I don't know where that idea comes from. I
haven't said a word about it." While he was at it, he also denied any
desire to do anything to ensure that he has a lasting political legacy.
Apparently what we witnessed was a trial balloon that was quickly shot
down. Still, there is apparently a high level committee looking into how
to fulfill the Liberals promise to use half of the budget surplus to fight
poverty. It is possible that the committee will consider the guaranteed
income as a way of achieving that goal. Chretien is not expected to say
how he will attack poverty until his Throne Speech next month. If the
committee endorses the idea, conceivably it could still happen. Given that
all five of the major parties have either endorsed or seriously considered
some form of income guarantee at one time or another, there is some hope
that a broad coalition in favor of the idea could develop: Although they
will differ about the amount of income redistribution that should be done,
the various Canadian politicians could conceivably agree that an income
guarantee is the best way to redistribute income. But, such an agreement
does not seem likely. Nor does it seem likely that Chretien will make such
a proposal or make the needed effort to create such a coalition.
If the basic income guarantee is to succeed in Canada--or anywhere
else--it will need strong political leadership that will do more than
float a trial balloon. Leaders will need to convince the public of the
need for an income guarantee and build up a constituency in favor of it.
As is, the trial balloon was only an exciting piece of good news to the
tiny minority of people in Canada who already knew of and supported the
idea. Most likely, the Liberals did not make the guaranteed income an
issue in the campaign because they did not believe it was a political
winner and they didn't believe enough in the idea to risk their nearly
certain electoral victory to promote it. However, if the leadership in
Canada's Liberal Party decides to make such a bold move, the enactment of
a basic income guarantee could be closer than most supporters would have
thought possible.
-Karl Widerquist, Quebec City, Quebec, Canada, 2001
Jean Chretien
by Karl Widerquist | Aug 29, 2018 | Opinion, The Indepentarian
This essay was originally published on Basic Income News in March 2014.
Basic Income is suddenly the subject of much more discussion around the world. Political movements are growing. The media, social networks, and blogs have suddenly devoted more attention to basic income. Basic Income News (BI News) suddenly has much more news to report. The website is running two-to-five stories a day, and its accompanying NewsFlashes have more news than they can fit. This is a good time to talk about the goals of BI News and the accompanying NewsFlashes.
BIEN
BI News has three main goals. Most importantly, it keeps readers informed about all the news directly relevant to the Basic Income Guarantee (BIG) around the word. Secondly, it keeps readers informed about events organized about BIG and publications written about BIG. Thirdly, it includes features providing a mouthpiece for members of BIEN and its affiliates to write blogs, opinion pieces, and book reviews about BIG.
The first goal of BI News is important because activists, researchers, and anyone interested in BIG need a place where they can find out what is happening around the world that is relevant to BIG. No one other website is doing it, and no others are likely to start. You can’t just search Google News for “basic income” and expect to find all the news about BIG. There are more than a dozen, perhaps dozens, of terms for BIG in English alone. There are policies and programs that are forms of BIG or that share some of the characteristics of BIG but that are not discussed in terms of BIG: the Alaska Dividend, some cash transfers, the Earned Income Tax Credit, dividends from casino revenue on U.S. Indian Reservations, the Bolsa Familia in Brazil, GiveDirectly in Uganda, and many, many more. There are also policies that are described in the words “basic income” or words very similar to terms for BIG but aren’t BIG or aren’t very closely related to it. The news section of BI News shows readers what proposals, policies, and social activism around the world related to BIG and explains that connection.
USBIG
This effort requires consistent monitoring of mainstream news, social media, blogs, and other sources of information. It involves original reporting to make the necessary connections to BIG as well as meta-reporting—reporting about reporting. Articles in this section of BI News are written from a neutral perspective, because the goal of this section is not to persuade but to inform. There are many arguments going around about BIG, but only one news source dedicated to informing people about BIG. This service is valuable to activists, researchers, and anyone interested in BIG.
This section reports only on issues directly relating to BIG. It doesn’t report on other social policies or on the economic and social conditions that create a need for BIG unless there is some direct connection to BIG in the news on these issues. The reason is that news indirectly relating to BIG outnumbers the news about BIG by orders of magnitude. If BI News reported on all these other things, its focus on BIG would be lost.
Stories from the news section of BI News can be found at this link: https://binews.org/category/latest-news/.
CIT (UK)
The second goal of BI News is to keep people informed about events being held and literature being written about BIG around the world. The goal of publicizing events is obvious. It helps our members, our affiliates, other networks, and hosting institutions to publicize events related to BIG. The goal of keeping up with the literature is important because of the dispersion and the diversity of the BIG literature today. So many different terms for BIG are used that there simply is no easy way to find it on a search. As far as we know, no other group is keeping a comprehensive bibliography of the literature on BIG as BI News attempts to do.
BI News posts summaries of the more important publications and attempts to post at least the publication information and a link to all publications, even the less important ones. We do this because, even if one individual publication is not terribly importantly by itself, the dialogue as a whole is important. If you want to know what is being said about BIG at a given time or what has been said over a given period, BI News has collected and organized that information. We’re doing a fairly good job of that for English-language publications right now, and hopefully, as we expand we will do it for more and more languages.
Articles in these sections are also written from a neutral perspective, because as with the goal of reporting the news, the goal of reporting on events and publications is also to inform, not to persuade. The literature and events in this section also must directly relate to BIG, again because reporting on wider literature would sacrifice our focus on BIG.
The BI literature posts on BI News are here: https://binews.org/category/bi-literature/.
Events posts are here: https://binews.org/category/events/. Links are here: https://binews.org/category/links/.
BIN Italia
Persuasion is the third goal of BI News. The features section, which includes blogs, opinion pieces, book reviews, and occasional podcasts and interviews, performs this function. This section provides an outlet for BIEN members to write their opinions about BIG, sometimes directed at other supporters, sometimes directed at a wider audience. Arguing for the cause of BIG has obvious value, but there are several reasons why this goal ranks third. The readership of BI News is overwhelmingly made up of people who already support BIG. They’re already convinced; their primary need is for information. Another reason this is a lesser important goal is that there are many places around the world where people can publish features having to do with BIG, but only BI News is pursuing the first two goals. However, making the case for BIG is valuable. BI News provides a place for BIEN members and supporters to become a part of that dialogue. Right now we’re running an average of about one feature per week, but we are hoping to increase that substantially, perhaps eventually to one feature per day.
A list of and links to the latest features can be found on the homepage of BI News: https://binews.org/. Blogs can be found by going to the Features dropdown list and selecting blogs.
To keep up with these goals, BI News maintains a website, updated at least once a day, and a regular newsletter, collecting the recent stories from the website. As we expand our volunteer base, we will expand what we do.
-Karl Widerquist, Doha, Qatar, March 2014
Volunteers needed for BI News
If you’d like to help, we need volunteers. Primarily we need people with one of two skills. We need writers to help us report the news and we need people with website-design skills to help us improve how we present it. Among our writers, we need people with language skills. The languages we need most are English, German, French, Spanish, Portuguese, Dutch, and Italian, but if news is happening in any language, we need writers to report on it. If you would like to help spread the word about BIG, please contact the editor of BI News, Karl Widerquist <Karl@widerquist.com>.
by Michael Lewis | Aug 24, 2018 | Opinion
Michael A. Lewis
Silberman School of Social Work at Hunter College
One of the main criticisms of basic income is that if the government gave us money we did not have to sell our labor for, we would work less. Perhaps not all of us would reduce our labor supply but enough of us would render the policy unsustainable for example, if you are in a lawsuit you won’t be able to sustain your financial status since you would be struggling, therefore lawsuit loans would be able to help you and prevent you from drowning under financial stress. This is an important criticism and much of the basic income debate is centered around it. What I want to do in this post, however, is address another related criticism. I will call it the “something for nothing” (SFN) objection to basic income.
The SFN objection goes something like this. Even if giving people money they didn’t have to work for didn’t result in a significant decrease in labor supply, we still shouldn’t enact such a policy. The reason is that it’s simply wrong to give able-bodied people money without requiring something in return. I realize there’re those who’d object to the word “nothing” in the SFN objection. Many who received a basic income would work part-time, go to school, take care of others, or engage in a host of other activities we might not think should be characterized as nothing. Although I agree with this sentiment, for the sake of this post I’ll put it to one side. That’s because I want to address the SFN objection head on and believe the best way to do so is by conceding, for the sake of argument, that recipients of a basic income would do nothing.
The wrongness of giving people something for nothing is often couched in paternalistic terms. Here’s an example from economist Isabel V. Sawhill:
“Liberals have been less willing to openly acknowledge that a little paternalism in social policy may not be such a bad thing. In fact, progressives and libertarians alike are loath to admit that many of the poor and jobless are lacking more than just cash…. A humane and wealthy society should provide the disadvantaged with adequate services and support. But there is nothing wrong with making assistance conditional on individuals fulfilling some obligation whether it is work, training, getting treatment, or living in a supportive but supervised environment.”
But, as pointed out by economist Guy Standing in his book Basic Income: A Guide for the Open-Minded, many seem perfectly fine with people receiving something for nothing under other circumstances.
Take the cases of inheritance and gifts. Wealthy parents, grandparents, etc. are allowed, upon their deaths, to transfer vast sums of money or wealth to their heirs. And while alive, they’re able to make such transfers as gifts. Yet recipients of such bequests and gifts are under no obligation to work, receive training or treatment, or live in supportive environments. It’s rare to hear basic income opponents criticize this form of something for nothing. There’re several possible reasons for this absence.
Perhaps basic income critics opposed to such transfers among the wealthy do not say much about them because they are thought to be beyond the reach of public policy. That is, perhaps these critics believe it’s wrong for the kids, grandkids, etc. of the wealthy to receive something for nothing but feel such immorality must be tolerated because there isn’t much public policy can do to stop it. But this underestimates the reach of public policy, at least from a technical point of view.
Bequests and gifts are regulated by estate and gift taxes. So, technically, we could change tax laws to make it very difficult or impossible to transfer money or wealth to one’s descendants or heirs. Alternatively, we could allow such transfers to take place but require recipients of them to provide evidence that they’re working, or receiving job training, or in school, or have graduated from school, are receiving drug treatment if necessary, etc. To my knowledge, we currently do none of these things.
Another reason for lack of criticism of SFN transfers among the wealthy might be the view that we shouldn’t tell wealthy people what to do with their money and assets. If they want to leave a million dollars or a couple of homes to their kids, who are we to tell them not to? This raises a complicated economic and moral question: how much of the money and wealth we possess is ours? This may seem like a strange question to ask because the answer seems so obvious: all the money and wealth we possess is ours. But now consider the following autobiographical story.
I am currently a professor at a public university in New York City. I worked very hard to get where I am, having spent almost 25 years in school, culminating in a PhD. I’m not exactly wealthy but neither am I poor. I’m currently living, as many say, “comfortably,” as a result of making a “decent” salary. And I own (well co-own with a spouse) a home. Now here’s a question: what supports did I require to get to this point?
First, I was raised within a family. People don’t get to become professors, or anything else for that matter, without being socialized by a caring family of some kind, whether biological or not. Second, I spent 13 years in K-12 educational institutions. I, of course, did not teach myself but was taught to be a dedicated teacher. This continued throughout college and graduate school. Third, not only was I taught by teachers, but I took part in a number of group study sessions. This resulted in me learning a great deal from my classmates, as well as from teachers. Fourth, the things I learned were, in most cases, neither invented/discovered by my teachers nor my classmates. None of my teachers or classmates were Isaac Newton, Albert Einstein, Emile Durkeim, Adam Smith, Marie Curie, Shirley Ann Jackson, Rosalind Franklin, Ada Lovelace, etc. That is, a host of people no longer with us played an indirect role in helping me get to where I am today.
I could go on but suspect I’ve made my point: any income or wealth I currently possess is not an individual accomplishment. On the contrary, it is a collective one in which many others, dead and alive, played a role. And it’s very difficult to quantify how much of what I have now is due to what I did and how much a result of what others did. That is because what I have been able to do is so intertwined with what others helped make it possible for me to do. This doesn’t just apply to me; it applies to all of us, no matter how wealthy or successful.
To be clear, I am not saying people should have no say in how they allocate the money or wealth they possess. Perhaps they should have more say in deciding this than anyone else. That is, the point of my autobiography was not to support the assertion that the government can just confiscate people’s money/wealth for whatever purposes it sees fit. But it was intended to support the conclusion that government may have more of a claim on “our money” than many of us typically think. That is because government plays a big role in creating the legal/cultural environment which allows for the various collective accomplishments I spoke of earlier. It helps to define and enforce property rights, “nurtures” markets, and helps to curtail acts of violence and aggression, acts which could be quite destabilizing for any socioeconomic system. Thus, basic income opponents who worry about something for nothing transfers among the wealthy may have more room to maneuver than they think.
A third possible reason for reticence when it comes to criticizing SFN transfers among the wealthy may be their voluntary nature. When wealthy folks make transfers to heirs, this is something they’ve chosen to do. Current social welfare benefits (and this is likely to be true of any enacted basic income) are financed by taxes. If people do not pay taxes, they can be fined, jailed, or both. That is, social welfare SFN transfers are involuntarily financed. Perhaps this gives taxpayers the right to demand something in return from social welfare beneficiaries, a right they do not have when it comes heirs of the wealthy.
This is a fair point. But I think it implicitly takes us back to the question of whose money and assets wealthy people are transferring to their heirs. That is, implicit in the voluntary transfers argument is the notion that wealthy people can transfer any money or assets they want to their heirs because it’s their money and assets to do with what they please. But if what I said earlier about how achievements are collective, as well as individual, achievements facilitated in part by the government, perhaps the rest of us do have some say in what children of the privileged have to do in return for gifts and bequests from their rich friends and relatives.
There’s another point to raise about this voluntary transfers argument. The U.S. federal government currently has in place a number of tax expenditures. These are policies where the government allows people to reduce their taxable incomes or, in some cases, their actual tax bills. Those which allow people to reduce their taxable incomes are called deductions. Those which allow taxpayers to reduce their tax bills, that is, the amounts they owe in taxes, are called tax credits. I can make the point I want to make here by focusing on deductions, one in particular.
Under certain conditions, people who borrow money to buy a house can deduct the interest they pay on the loan used to finance that purchase. That is, when it comes to calculating their income which is subject to taxation, taxpayers in this situation can subtract the amounts they paid in interest before determining their taxable incomes. This could put them in a lower tax bracket and cost the government, that is, taxpayers lots of money in forgone revenue. The policy is arguably a kind of housing subsidy. Yet people do not have to work, take part in job training, prove they are staying off drugs, etc. to receive it. That is, this looks a lot like a “subsidy for nothing” policy. Why allow this one, as well as others like it, but not a basic income?
For the sake of discussion, let us put aside some of the things I have been saying in the past few paragraphs. That is, let’s assume any money or wealth people have is solely theirs to do whatever they please, and government has no claim whatsoever on these resources. Where does that leave us? Well it might leave us in the following situation.
The wealthy could continue transferring something for nothing to their kids because we would have no right to shape public policy to stop it. We could, by enacting a basic income, create a more equal playing field by allowing all of us the opportunity for a similar transfer. Yet if we could not tax people (wealthy or not) who did not want to be taxed, we might not be able to obtain enough revenue to enact a basic income. In fact, we might even be able to obtain enough revenue to enact the kind of conditional system Sawhill advocates. That is, if people had the right to decide what they wanted to do with their money/wealth and government had no claim on these resources, we might not be able to finance a social welfare system at all. That’s because folks might not want any of their money and wealth taken to finance such a system. So, the something for nothing objection to basic income, if taken seriously, could lead to the “free market Libertarian’s” first-best paradise. I wonder if something for nothing objectors to basic income have thought about this possibility.
Acknowledgements: I’d like to thank Michael D. Tanner and Eri Noguchi for their helpful comments on this piece. In contrast to what I said in the essay about accomplishments, I take full responsibility for any errors that remain.
