Guaranteed Minimum Income

Dylan MatthewsAs regular readers know, I idealize economist Dean Baker. But there is one issue that I have a frustrating disagreement with him. He argues that technological advances will make the economy better for everyone. This is true if you assume that the increased productivity that is brought about by these advances will be somewhat equally shared. Baker, of course, knows that they won’t. But he’s committed to making the argument that the problem is not the technology but the government policy (such as patents but also taxes and an almost endless list of other things) of taking or keeping money from the poor and giving it to the rich.

He is absolutely right about this. My frustration comes from the fact that he constantly attacks those that note that increases in technology are putting people out of work and making the lives of the poor even worse. The technology will continue to improve. Nothing is going to stop that and we can all be glad for that. But the fact remains that in the existing political-economic system, this is making things worse. And an end to patent protections won’t even begin to deal with the problem.

Another solution he’s fond of is work sharing. This is where, instead of laying people off in a recession, a company just cuts back on everyone’s hours and the government makes up the difference in pay. This seems to work rather well in Germany. In the United States, it has always been suffocated with so much red tape that companies rarely use it even when it is available. Regardless, it too isn’t going to solve our problem.

This has lead me to be in favor of something that Baker never talks about: guaranteed minimum income. And although I think Baker would be in favor of it, I think he also would consider it pie-in-the-sky and Loser Liberalism. But I was very pleased to see that Dylan Matthews over at Vox is taking the idea very seriously, A guaranteed Income for Every American Would Eliminate Poverty—and it Wouldn’t Destroy the Economy.

Pascal-Emmanuel GobryUnfortunately, the article is mostly just a response to Pascal-Emmanuel Gobry. And his argument is just that a negative income tax wouldn’t work because in the hand full of small tests, people didn’t work as many hours. Matthews responded with two main points. First, it wasn’t even true in all the tests. Second, the “not working as much” was basically just people staying unemployed slightly longer so they could get better jobs. Gobry seems to think that if everyone were guaranteed $5,000 per year, they would all stop working because, wow, with $5,000 per year, you’re riding high! Gobry is known for making big proclamation based upon nothing. And note what he’s actually saying here: giving workers more choices is a bad thing.

Matthews big point is that a guaranteed minimum income would not actually cost the economy that much: between 5% and 15% of GDP. Of course, it would mean that rich people would not be quite as rich and, let’s face it, they don’t need people like Gobry to stop this from ever happening. But the truth is that an end to poverty is available right now, and we don’t need any of Paul Ryan’s new bag of tricks to do it.

Matthews also made the point that people working less is not necessarily a bad thing. Let me take that further: people working less is the point of productivity growth. This idea that paid work is the only thing of value in the economy is madness. What especially makes me angry is that social conservatives should be in favor of this. Providing a guaranteed minimum income would necessarily mean that employers would have to pay people more because they could get a basic income by doing nothing. People making more money would allow, for example, one member of a marriage to stay home, manage the house, and raise the children. That’s a good thing!

Also, much of the greatest art and science ever created was done so by people who (because of the circumstances of their birth) had some kind of basic income. This is why advances in art and science have not traditionally been made by plucky youths born into poverty, even though there have always been a whole lot more of them. Gobry, like all conservatives, only ever wants to look at the down side of such policies. I think fathers and mothers being able to spend more time with there kids would be a great improvement. I think more great artists and scientists and thinkers would be a great improvement. Of course, so do conservatives. They simply aren’t willing to stop their immoral shifting of money from the vast majority of people to those who already have far more money than they can ever productively use.

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About Frank Moraes

Frank Moraes is a freelance writer and editor online and in print. He is educated as a scientist with a PhD in Atmospheric Physics. He has worked in climate science, remote sensing, throughout the computer industry, and as a college physics instructor. Find out more at About Frank Moraes.

4 thoughts on “Guaranteed Minimum Income

  1. Of course, until the space aliens arrive and force us to stop monkeying around, because they enjoy Nevada as a tourist destination and don’t want to see the planet destroyed, this is a moot point. Although I think the Nixon administration proposed something along these lines.

    A nice side effect of a minimum income is that most predatory employers provide almost nothing in the way of social benefit; the majority are socially quite harmful (think fast food, Wal-Mart, corporate agribusiness.) If Wal-Marts died, they would easily be replaced by the kind of locally useful businesses they once destroyed. (Of course those local business owners were sometimes small-town burghers, and that’s its own problem, but nothing like what Wal-Mart represents.)

    The few predatory employers who provide a useful social service — say, coal companies before we knew how bad coal was for everything — would have to up wages, up safety spending, and if that had, say, made coal much more expensive an end product, we would have all been better off!

    The funny thing is that when people have a knee-jerk reaction to greater social equality measures, they think of Soviet Romania or some such; crappy, ugly cities with too much pollution and apartments where the leaky faucet never gets fixed and everybody hates their jobs and gives the minimum effort possible. For many Americans now, life is far worse than that. Even for the wealthier ones in nicer dwellings in prettier areas, everyone works a 45-hour workweek (with two hours commute each day) at a job you can lose at any time for any reason, particularly as you get older and need stability more.

    You must, when you mention Republicans who value families, mean good-hearted, socially conservative Republican voters (or maybe some very small-time, local Republican politicians.) I’ll agree; these people are our natural allies, and once upon a time they were our allies. The culture wars changed that; maybe it can change back. Many of these people could have made peace with civil rights, women’s rights, GLBT rights (and many did) — it was the idea that they were being insulted and ignored that made them turn, not specifically a belief that blacks should get beaten for trying to vote.

    A lot of issues come up when we think about how to bring those who genuinely want more family coherence and security into the fold; I won’t do that ranting today.

  2. @JMF – I argue all the time that we have, in principle, the best system: a mixed economy with safety net and free(ish) markets. The only question is how we are going to partition this. This is the system we have [i]always[/i] had. But conservatives want to argue that we used to have a pure capitalism. No one has ever had a pure capitalism. It is as impossible as a pure socialism. So the question is that we should be discussing how much of each we want to have. But the conservatives have been great at labeling any movement as communist Romania. (See how smart you are: probably the only person I know who knew that Romania was the most repressive of the Soviet satellites!)

    I’m reading [i]Dog Whistle Politics[/i], and so I think I might disagree with why the social conservatives turned away. There is no doubt that the Democrats did a terrible job of dealing with issues like integration. And in the end, we find we are even [i]more[/i] segregated. If you haven’t read the book, you should!

  3. Did read that book. Hard to escape the conclusion that racism is still the main factor in our politics (well, that and religious fundamentalism, with some overlap.) It’s a misperception that we throw all this money at Black people and nothing works; why not try some of those innovative methods proposed by those innovating business types?

    Of course the GOP business types have never been innovators and the ideas they present are old and lockstep identical; it’s only one idea, really. But we do have a cult of success in this country (which oddly gets more worshipful as success becomes harder and harder for most to achieve); the poor must be doing it all wrong, the rich must be bright people doing it all right.

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