This essay was originally published in the USBIG NewsFlash in December 2006.
Four basic income advocates died in November 2006. Noble-Laureate Milton Friedman (Nov. 16), Brazilian economist Antonio Maria da Silveira (Nov.21), former director of the Citizens Income Trust (Britain) Richard Clements (Nov. 23), and inventor and philanthropist Leonard Greene (Nov. 30). Below is a short discussion of the role of each in the debate over the basic income guarantee.
MILTON FRIEDMAN
Milton Friedman, the economist who most popularized BIG in the United States, died November 16, 2006. Friedman was on the most influential economists of the Twentieth Century. His work has been influential in diverse areas of economic theory, but most particularly in the area of monetary economics. Although his proposal of a strict rule for increasing the money supply each year by a given percentage has been largely discarded, his critical work on the mistakes made by the central bank that led to the Great Depression and other economic downturns has simply become part of common knowledge.
More than his contribution to the science of economics, Friedman is known for popularization of free market libertarianism in numerous books, articles, and a television show on the Public Broadcasting System. He opposed government regulation of industry and the privatization of state-owned industries right up to and including the Post Office. He was an early advocate of public school choice and of the privatization of Social Security. Thus, he became known as a spokesperson for conservative republicanism, but his libertarianism was never quite in line with traditional American conservatism. As early as the 1960s, he opposed the military draft and supported the legalization of drugs. None of his proposals seemed more out-of-line with the 1980-2006 conservative revolution than his advocacy of the basic income guarantee under the name of the negative income tax (NIT).
Welfare state policy in the United States, and to some extent across the industrialized world, has been dominated by an uneasy marriage of the liberal desire to help the poor with the conservative desire to force the poor to become better people. So, we have a hugely complex system that is stingy with some of the people who need it most, generous with people who fit into arbitrary categories, and makes everyone jump through hoops to meet the conditions of eligibility. One might expect a free-market libertarian to oppose using the tax system either to help or to improve the poor, but to a free market libertarian it is clear which of the two is the greater danger.
To a libertarian, government interference, control, and humiliation of the poor is a waste of time and money and whatever it might do to improve the poor, it does not make them more free. Through this kind of reasoning, Friedman became a supporter of the basic income guarantee.
“He believed that if you wanted to fight poverty you should give the poor more money and let them figure out how to use it,” as Renée Montagne of National Public radio summarized his thinking. He, therefore, advocated BIG in the form of the NIT: a small in-cash grant to everyone who had a low income with a low “marginal tax” rate that would give them plenty of incentive to earn money on the private market if they could.
Friedman did so much to popularize BIG that many BIG supporters today tend to forget that he never lost his free market attraction to the idea that perhaps the government should do nothing for the poor. Friedman’s support for the NIT almost always came with the disclaimer to the effect that as long as we are spending money to help the poor, we might as well use the most efficient method to help them. He even sometimes described the negative income tax as a transitional program toward the complete abolition of all government assistance to the poor—not quite what most BIG advocates hope for.
Nevertheless there is good reason to think of Friedman as a champion of the BIG movement. Friedman’s NIT was broad and generous to those who needed it most. Daine Pagen, of the Caregivers Credit Campaign complained that many recent articles on Friedman treated the NIT as the precursor to the Earned Income Tax Credit (EITC). Although the EITC is a form of negative tax that was an outgrowth of the NIT movement, it is actually a very narrow and water-down alternative. Friedman’s NIT was a comprehensive solution to poverty aimed at everyone, not only at low-income workers as the EITC is.
Under the NIT, the government would make no judgment about why a person was poor. It would help everyone in need, and create an incentive system so that everyone who worked more had more a higher take-home pay. It would leave it up to the individual to decide whether that was in their best interest. This kind of thinking is diametrically opposed to “welfare reform” under Temporary Assistance to Needed Families, which is designed to force ever single parent into the labor market whether or not she believes the needs of her children make that impossible.
Friedman wrote extensively on the NIT between 1960 and 1980, but he paid less attention to the topic in the last 25 years of his life. However, in an interview with Brazilian Senator and economist Eduardo Suplicy in 2000, Friedman reiterated his support for BIG. When Suplicy asked what Friedman thought of basic income as an alternative to the NIT, Friedman responded, “A basic or citizen’s income is not an alternative to a negative income tax. It is simply another way to introduce a negative income tax.”
A quick web search will produce thousands of articles on Friedman. For a broad view of his career and contributions, see Samuel Brittan in the Financial Times: https://www.ft.com/cms/s/cb74eef8-7599-11db-aea1-0000779e2340.html
ANTONIO MARIA DA SILVEIRA
Antonio Maria da Silveira, professor of economics at Universidade Federal do Rio de Janeiro, died on November 21. According to his long-time friend, Eduardo Suplicy, “Antonio Maria was the first Brazilian economist who proposed the institution of a guaranteed minimum income program through a negative income tax. It was in the article Redistribuição de Renda (Redistribution of Income), published in Revista Brasileira de Economia, in April 1975.” Drawing inspiration from Economists as diverse as J. M. Keyns and F. A. Hayek, Antonio Maria argued that it would soon become feasible for the government to secure a decent living for everyone. Suplicy credits him with being a consistent voice in favor of a basic income guarantee right through the passage of a bill to gradually phase in a basic income in Brazil. Suplicy’s tribute to Antonio Maria da Silveira is in the December issue of the BIEN NewsFlash (www.basicincome.org).
RICHARD CLEMENTS
Richard Clements, former director of the Citizens Income Trust (CIT), died November 23, 2006. According to the CIT, “The Citizen’s Income Trust has been sorry to hear of the death of Richard Clements. After being editor of Tribune and running Neil Kinnock’s office, Richard was Director of the Citizen’s Income Trust from 1993 to 1996, when sadly he had to retire because of his own ill health and to look after his wife Bridget. He was a most effective Director, and we were very sorry when he had to leave. Not surprisingly, he was particularly good at raising the profile of the Citizen’s Income debate in the press.” Clements was also a campaigner against nuclear weapons and editor of the British left-wing newspaper, the Tribune. The British newspaper the Guardian article on Clements is on the web at: https://www.guardian.co.uk/obituaries/story/0,,1955580,00.html.
LEONDARD GREENE
Can you imagine a better way to make a fortune than to invent a product that saves lives? Can you imagine a better thing to do with a fortune than use to fight poverty and disease? Leonard Greene made his fortune inventing safety products for airplanes. His stall warning device (a safety feature that is now standard equipment on commercial aircraft) has saved an uncountable number of lives. After Greene was a well established business owner with dozens of patents and a multimillion-dollar business to his credit, he founded the Institute for SocioEconomic Studies, which funded research on healthcare policy and on the Basic Income Guarantee. Greene wrote two books on the Basic Income Guarantee, Free Enterprise Without Poverty and The National Tax Rebate. Greene’s BIG idea was simple: What if they United States replaced everything it is now doing to maintain someone’s income and replaced it with a basic income in the form of a tax credit or tax rebate? Greene found that the revenue currently devoted to tax deductions, welfare policies, farm subsidies, and many other programs could be redirected to a basic income large enough to virtually eliminate poverty in the United States. His ideas have not caught on with mainstream politicians, but they have continuing appeal. His idea for redirecting all U.S. income support spending into a basic income has been virtually reinvented by Charles Murray in his latest book, In Our Hands, and the idea of BIG in the form of a tax credit is very much the idea behind the BIG bill submitted in the 109th Congress by Representative Robert Filner. He is survived by eight children. He son, Donald Greene died in United Flight 93 on September 11, 2001. Leonard Greene died November 30, 2006 at the age of 88.
EDITORIAL NOTE
When I volunteered to write the USBIG Newsletter in 2000, I did no realize how many obituaries I would have to write. It is a particularly sad duty that I have never quite gotten used to. Friedman’s death, following Herbert Simon in 2001, James Tobin in 2002, John Kenneth Galbraith early this year, marks the end of an era when the great economists who seemed to disagree on everything else, all seemed united behind the guaranteed income as the best way to reform anti-poverty policy. Friedman was first among these because of long-term efforts to popularize the idea. Although Friedman considered himself a liberal (or libertarian) who believed freedom was the overriding value that should guide policy and who believed that freedom conflicted with egalitarianism and economic equality, he had something to teach egalitarians. His logic (if you really want to help the poor, give them money and let them decide how to use it) leads me inevitably to the belief that unconditional assistance, in the form of some kind of basic income guarantee, must be the centerpiece of any truly egalitarian program. It has also made me suspicious of anyone who calls himself egalitarian but advocates conditional assistance to the poor. There can’t be egalitarianism without respect for the poor, and how can we say we respect the poor if we advocate policies designed to promote “equality but…”? For example, I support equality but only for the truly needed. I support equality but only if they are willing to work. I support equality butnot one of them is going to get their hands on one red cent of my tax dollars if they’ve ever refused a job. I can’t help but be suspicious. I can’t help but come back that that idea, if you really care about the poor, if you really want to help them, you will give them money unconditionally, with no supervision, without asking for anything in return. Sometimes it takes a libertarian spot a true egalitarian.
-Karl Widerquist, New Orleans, LA, December 20