Free lunch—and breakfast and supper

Posted: 27 April 2016 in Uncategorized
Tags: , , , , , ,

538_progressive_finalflat 538_technologists_finalflat

According to mainstream economists, there’s no such thing as a free lunch.

Sure there is, I teach my students: just abolish monopolies and oligopolies, and the economy can increase production (technically, the economy can move from inside to the production possibilities frontier without any additional resources or new technology, just by eliminating imperfect competition).

There’s also another free lunch—and, for that matter, breakfast and supper: a universal basis income.

The idea of “just giving people money” seems to have returned as a real topic of discussion. And it’s about time, as inequality (already obscene) continues to grow, workers (already embattled) have less and less security on the job (whether because of outsourcing, automation, or just plain corporate reorganization and cost-cutting), and the ranks of the working poor (already enormous) have swelled.

Andrew Flowers summarizes the main points in the current debate—although strangely there’s not a single mention of the work of Philippe Van Parijs, who has offered the most comprehensive case for a universal basic income.

The modern debate actually began in 1848—no, not in the Communist Manifesto, but in a book by Fourierist Joseph CharlierSolution du problème social ou constitution humanitaire, basée sur la loi naturelle, et précédée de l’exposé de motifs, in which he proposed a scheme with a basic income paid unconditionally to every member of society, regardless of need or ability to work. (There’s a lot more in the work of the utopian socialists—Charles Fourier, Robert Owen, Henri de Saint-Simon, and others—we would do well to take up today.)

But, to my mind, Van Parijs (in a variety of columns, articles, and books, dating back to the early 2000s) has developed the most interesting and incisive elaboration and defense of the idea of a universal basic income and a critique of the alternatives (such as a negative income-tax system and lump-sum payments). Here he is responding to some of the major objections:

Suppose everything I have said thus far is persuasive: that the UBI, if it could be instituted, would be a natural and attractive way of ensuring a fair distribution of real freedom, fighting unemployment without increasing poverty, and promoting the central goals of both the feminist and the green movements. What are the objections?

Perhaps the most common is that a UBI would cost too much. . .

But these calculations are misleading. A wide range of existing benefits can be abolished or reduced once a UBI is in place. And for most people of working age, the basic income and the increased taxes (most likely in the form of an abolition of exemptions and of low tax rates for the lowest income brackets) required to pay for it will largely offset each other. In a country such as the United States, which has developed a reasonably effective revenue collection system, what matters is not the gross cost but its distributive impact–which could easily work out the same for a UBI or an NIT. . .

A second frequent objection is that a UBI would have perverse labor supply effects. (In fact, some American income maintenance experiments in the 1970s showed such effects.) The first response should be: “So what?” Boosting the labor supply is no aim in itself. No one can reasonably want an overworked, hyperactive society. Give people of all classes the opportunity to reduce their working time or even take a complete break from work in order to look after their children or elderly relatives. You will not only save on prisons and hospitals. You will also improve the human capital of the next generation. A modest UBI is a simple and effective instrument in the service of keeping a socially and economically sound balance between the supply of paid labor and the rest of our lives. . .

A third objection is moral rather than simply pragmatic. A UBI, it is often said, gives the undeserving poor something for nothing. According to one version of this objection, a UBI conflicts with the fundamental principle of reciprocity: the idea that people who receive benefits should respond in kind by making contributions. Precisely because it is unconditional, it assigns benefits even to those who make no social contribution–who spend their mornings bickering with their partner, surf off Malibu in the afternoon, and smoke pot all night. . .

True, a UBI is undeserved good news for the idle surfer. But this good news is ethically indistinguishable from the undeserved luck that massively affects the present distribution of wealth, income, and leisure. Our race, gender, and citizenship, how educated and wealthy we are, how gifted in math and how fluent in English, how handsome and even how ambitious, are overwhelmingly a function of who our parents happened to be and of other equally arbitrary contingencies. Not even the most narcissistic self-made man could think that he fixed the parental dice in advance of entering this world. Such gifts of luck are unavoidable and, if they are fairly distributed, unobjectionable. A minimum condition for a fair distribution is that everyone should be guaranteed a modest share of these undeserved gifts.

Such a moral argument will not be sufficient in reshaping the politically possible. But it may well prove crucial. Without needing to deny the importance of work and the role of personal responsibility, it will save us from being over-impressed by a fashionable political rhetoric that justifies bending the least advantaged more firmly under the yoke. It will make us even more confident about the rightness of a universal basic income than about the rightness of universal suffrage. It will make us even more comfortable about everyone being entitled to an income, even the lazy, than about everyone being entitled to a vote, even the incompetent.

As I say, it’s about time we take up the issue of a free lunch—and breakfast and dinner—for everyone, especially for those who are every day forced to have the freedom to be bent “more firmly under the yoke.”

  1. Pavlos says:

    Our collective morality has to adjust to the fact that labour supply now outstrips demand, at least for our current mix of industrial goods and consumer services. That is an epochal change whose implications the right has grasped and the left hasn’t admitted yet – for example the implication that labour has no bargaining power if it isn’t scarce and we have to find a substitute, such as the universal moral value of a human being.

    So we could “allocate” our surplus of labour capacity in a few ways. We could have massive inequality as we have now, we could radically change our pricing and consumption mix so that the middle aged, minorities, etc. provide services such as caring for which there’s latent demand, or we could buy leisure and self-development, doing good voluntarily, through universal income. UBI is by far the most pragmatic humanist option.

  2. […] in April, I argued the idea of a guaranteed basic income—of “just giving people money”—was […]

  3. […] by itself undoes many of the major propositions of neoclassical economics—including (as I explained back in April) the idea that there’s no such thing as a free lunch (since, as in the […]

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