Give everyone money

Following a successful petition initiative, Switzerland is set to be the first Western nation to vote on whether to implement a basic income program.

The idea has various names: Basic Income, Negative Income Tax, or Guaranteed Annual Income, which have the same basic premise of giving everyone money. Rather than rely on complex welfare or unemployment systems that require the un(der)-employed to jump through various hoops in order to collect benefits, the state simply provides a cheque every month to top people’s income up to a living wage, regardless of how much work is done.

Perhaps most interesting was that this policy was actually tested experimentally in Manitoba, Canada during the Liberal 1970s. The Mincome Program ran for five years and measured a number of social outcomes. Unfortunately, when the Liberal government fell in 1979, the following Progressive Conservative government shut down the experiment and locked away the results were locked away for 30 years until researchers managed to gain access.

Their findings were quite impressive.

The major fear of these programs is that it will create a disincentive for people to work. If you can get paid to sit on your couch and play video games (or watch TV in the 70s), why work? In actuality, there was only a small drop (a few percentage points) in labour hours worked.

This minor loss in productivity though was overwhelmed though as parents spent more time raising children, pursuing continuing education, and teenagers graduating high school. Seemingly every social indicator showed positive results, with people staying home when sick rather than spreading infection and working themselves until they were hospitalized. This meant hospital visits measurably dropped by 8.5% and therefore health expenditures were lower.

Meanwhile, poverty was effectively eliminated as everyone had money to afford food and shelter.

Similar results have been found nearly every where basic income programs have been run. A two-year experiment in Namibian villages found it significantly reduced child malnutrition, improved school attendance, and had a net gain on the village’s income – that is, the community produced more than the money given away. Similarly, in Brazil a recent experiment has also found that families spend the money on food, healthcare, and starting small businesses.

I think these results all point to some basic features of humanity.

Primarily that we don’t like to be idle. Given the ability to not have to worry about our basic needs, people can instead focus on living healthier, earning an education, and working toward their dreams. People are able to look after themselves and can build happier families. In some cases that means women not being dependent on abusive husbands, while in others that means more time raising children.

The common criticism of Basic Income is that derisive view of the free riders who might game the system. It’s a natural emotion to look down on what we might view as cheats. It likely evolved to prevent fraud in small communities where resources were quite scarce. Enough free riders and a small tribe would collapse.

But I think this archaic morality doesn’t serve us well anymore. As our societies have become more productive and grown in size to a global village, it starts to take more effort to catch free riders than to simply let them share the benefits. There is more than enough to go around and the continued hoarding of wealth by the 1% only serves to harm us all.

A Basic Income could easily serve as a way to help transition to such idealistic pre-War ideas as the 21 Hour Work Week. Working hours fell fast after the Industrial Revolution but stalled at 40 hours. Some early ideas were that continued automation and the later transition to computers would continue the reduction in time required to earn a living salary. Instead, many people work what they view as pointless paper-pushing jobs. By giving everyone that basic salary, they could work as much as desired, while spending the remaining time volunteering, pursuing hobbies, or otherwise contributing to the human experience.

Unfortunately, no tests have been done at a large enough scale to determine whether it would cause enough inflation to offset the gains. Nevertheless, it’s worth further testing and I hope Switzerland implements their Basic Income for the rest of the world to learn from. My initial impression is that the improved social outcomes and stronger local economies more than offset the expenses, although income taxes may need to rise on higher income individuals to fully afford such a system.

Hopefully we can move past the cynical view of human nature that prevents such reform.