Don't cut taxes, give everyone an unconditional income

Should everyone be entitled to receive an income from the government that would allow him or her to live a semi-comfortable life regardless of whether he/she chooses to work?

Nick Woomer Back to the Woom

This idea isn't as ridiculous as it sounds on face and it is currently the subject of an academic dialogue.

A few months ago, the Boston Review's website (boston review.mit.edu /BR25.5/) published numerous responses to an article written for the Review by Catholic University of Louvain Prof. Philippe Van Parijs. Van Parijs' article, "A Basic Income for All," argued for the resurrection of political debate on a very old socialist proposal he calls "Universal Basic Income."

Essentially, the proposal calls for the state to pay every individual an income that would allow him or her to have a tolerable standard of living. The payment would be made to everyone unconditionally, regardless of his or her financial status, his or her living arrangement or whether he or she chooses to work or not. People would be free to earn extra "discretionary" income on top of the payment.

The economic feasibility of instituting a sustainable Universal Basic Income program hinges on an empirical question: Since such a proposal would probably be financed by a heavy progressive income tax, enough people would have to want to pursue work that would generate an income that could be taxed so that the system could be perpetuated. If too many people decided to pursue non-income-generating work or decided to watch the E! network and use drugs every day, a Universal Basic Income program could not be sustained.

For the sake of argument, let's make the only semi-problematic assumption that, ceteris paribus, the economy could sustain the gradual implementation of a Universal Basic Income program. What social benefits could possibly come out of a proposal that would literally pay some people (if they so chose) to waste their lives away on the couch?

One benefit of instituting Universal Basic Income would be that more people would have what Van Parijs calls "real freedom," since "the worth or real value of a person's liberty depends on the resources the person has at her command to make use of her liberty." Capitalism is inherently coercive since just about everyone (who isn't lucky enough to have a sizable trust fund or some other source of income he or she didn't work for) has to sell his or her labor for a wage that allows him or her to survive. By giving everyone the option of not working, the coercive aspects of a free market system are significantly mitigated.

Universal Basic Income would also compensate people who perform socially beneficial (but unpaid) labor and give people who might be more useful volunteering the opportunity to share their valuable skills with society. Women would benefit significantly from the flexibility offered by Universal Basic Income since it is often women who perform unpaid domestic labor or have to juggle their careers with domestic duties. Universal Basic Income would also erode the coercive aspects of marriages where only one partner is the "bread-winner." When one person controls the income two people live on, that person potentially has more control over the relationship than the other.

Van Parijs also argues that instituting Universal Basic Income is a way for advanced welfare states to reduce unemployment (redefined within certain parameters) without reducing the general living standard via cuts in entitlement programs. Having Universal Basic Income would give workers an incentive to seek jobs that might not necessarily be full-time or take time off to get more training. The rationale works like this: Suppose person X works 40 hours a week in the status quo but that Universal Basic Income allows X to maintain his or her standard of living by working only 20 hours a week. X's employer will have to find a someone who will work the remaining 20 hours of X's original work day, thereby creating another job.

Universal Basic Income has the potential to change the workplace in other ways - by forcing employers to pay workers more to do lousy jobs and less to do cushy, enjoyable jobs. And because fewer people will want to do terrible and/or degrading jobs, employers will have to develop technology that will make those jobs easier as well as technology that makes workers more efficient.

Certainly there are downsides to Universal Basic Income - it has the potential to promote a culture of idleness and high taxes could lead to massive divestment that could ultimately prove ruinous. Still, it is difficult to see how merely tweaking capitalism could solve the problems Universal Basic Income could possibly solve. Instead of simply focusing on tax cuts, contemporary political dialogues need to examine more radical proposals like Universal Basic Income.

- Nick Woomer can be reached via e-mail at nwoomer@umich.edu.