Nothing could be less surprising than the Ford government’s decision to scrap Ontario’s universal basic-income pilot project. As liberals and anti-poverty groups reel in horror, Doug Ford supporters are cheering lustily. They think it’s ridiculous to pay people money with no strings attached, so that they can sit around drinking beer on the taxpayers’ dime. “Our society should only monetarily support those with real need,” said one comment on the CBC’s website. That sentiment was echoed by many others.
Yet the idea of a universal basic income is being championed in some unusual quarters. Silicon Valley loves it. Facebook’s Mark Zuckerberg is a big fan. So are libertarians and other critics of the welfare state. They believe that far from promoting government dependency, a universal basic income is the best way to check the growth of entitlement spending and to promote individual initiative, self-sufficiency and human thriving.
The basic premise of UBI is simple: If you want to end poverty, just give people money. “An income stream gives people moral agency whether they want it or not,” says Charles Murray in a podcast interview. He has argued for a universal income for years.
Mr. Murray is the co-author of The Bell Curve, one of the most prophetic (and wrongly maligned) books of our time. It deals with the profound impact of IQ on life chances, and raises fundamental questions about the nature of social fairness. “The Bell Curve sensitized me to the extent to which high IQ is pure luck,” he said in the interview. “We live in a society that is tailor-made for high IQs and people who got the short end of the stick ... deserve our admiration and support if they do everything right.”
Mr. Murray stresses that a universal basic income will only work if it replaces all other forms of transfer payments. His idea is to sweep away all the welfare and entitlement programs (along with their bureaucracies), including corporate welfare and agricultural subsidies. In their place, everyone would get a monthly basic income amounting to around US$10,000 a year, starting at age 21. That’s survival money, but only barely. The good part is that your work earnings wouldn’t be taxed back until your income reaches around US$40,000. (For the record, Ontario’s scheme pays considerably more money – up to about $17,000 a year per individual – and claws back far more earnings. It also does not deliver a simplified entitlement scheme.)
But what about the spongers and the layabouts? They wouldn’t disappear. That’s a problem even in the current system, where an estimated 20 per cent of uneducated young American men are currently out of work, according to Mr. Murray. Yet a basic income would prompt all kinds of good behaviour at the grassroots level, too. For starters, it would encourage people to work, because any money they make they can keep, up to a modestly high level. It would also encourage people to hold other people accountable. He gives the example of a guy living off his girlfriend. Now he has an income stream. She says, how about kicking in some money? It’s likely that one way or another their relationship will change for the better. Now that people know everybody has an income, they’ll demand more of each other. You get unintended side effects that have the potential of revitalizing America’s civic culture, Mr. Murray maintains in the podcast.
But the biggest incentive for a universal-income scheme is just around the corner. Thanks to AI and automation, millions of jobs will vanish over the next few decades. Less educated people will be hard hit, but so will a lot of middle-class professionals. Society’s biggest challenge is going to be how to deal with all those involuntary dropouts from the labour force. Somehow we will have to reshape our way of life to adjust to a world where full-time jobs are relative rarities, available only to the privileged few. Eventually a universal income may become the only solution.
Needless to say, not every conservative is convinced that a universal income is a great idea. The idea of redistribution on such a scale gives them a rash. Nor does the math work – yet. As the economist Kevin Milligan has written, if Ontario were to expand the program to everyone, it would have to add at least five points to the HST to pay for it. People on the left don’t like it either. They want it as an add-on to existing government programs, not a substitute for them.
Personally, I find something liberating about the idea of getting government out of our lives. I think that left on their own, small groups of civic-minded citizens can find better solutions to our problems than large groups of bureaucrats. I also like the idea of evening out the playing field between the haves and the have-nots. Life never, ever will be fair. But if we can make it a small bit fairer, then we should.