Why Basic Income Makes Sense in the United States

Basic income, or a citizen stipend, or a technology dividend, or whatever you want to call it, makes sense. Here’s why:

Automation and Replication are Replacing Jobs at an Accelerated Rate

I discuss this idea in detail here. Because many of the modern economy’s products and services are essentially algorithmic processes, many jobs are disappearing. The rate at which machines are learning to do things is speeding up. Even for those that want to work (most people) there is simply less paid work to do. But everyone still needs to eat.

Basic Income Doesn’t Make People Lazy

This is a major fear and criticism. A 2013 commission in Germany concluded that basic income is “unrealizable” because it would result in “decreased motivation.”

But that’s not what the evidence suggests. Results from Canada’s “Mincome” experiment showed that working hours only dropped between 1% and 5% (depending on demographic).

It’s Good for Health, Happiness, and Relationships

Providing people with baseline security doesn’t decrease motivation, but it does reduce stress and decrease family fights about money. This has a huge, lasting positive impact on children.

It Prevents Welfare Fraud, and Reduces Welfare Administration Costs

Most models of basic income involve replacing certain means-tested welfare benefits with a cash stipend for everyone. The problem with means-tested benefits is that they provide a potential incentive for cheating the system. This is called Murray’s Law (The Law of Unintended Rewards) and is a big reason conservatives hate welfare.

Replacing some means-tested welfare benefits with a universal (national) benefit removes incentives to cheat or game the system. It’s also much cheaper to administer.

It Might Deradicalize Citizens

There are huge anti-government sentiments among both liberals and conservatives. Receiving a monthly check from the U.S. Treasury could be a concrete reminder to all citizens that their nationally elected representatives are working for them (even, especially, those in poverty, regardless of ethnic background).

It’s not about paying off citizens to keeping them from revolting — it’s about sharing the giant real wealth dividends created by the digital/automation renaissance. While we all share some of these benefits (we can all stream video on our phones), many are reserved for the biggest capital owners (increased corporate profits from reduced labor costs).

Even A Small Amount Makes a Big Difference For Low Income Households

A very modest “citizen stipend” of $500 a month would still be very expensive to implement, and would require increased progressive taxation, reduced military spending, and reduced means-tested welfare. But that modest amount could make a huge difference for the poorest, highest-risk households that wouldn’t necessarily qualify for means-tested government support.

Those that didn’t need it could choose to waive the benefit as a patriotic gesture, or perhaps donate it back to the government flagged for use in a specific budget category (NASA, fusion research, education, etc.). Or just apply it against their tax burden.

But Isn’t That Socialist Wealth Redistribution?

No more so than welfare or progressive taxation.

But direct benefits are much more efficient. For the most part, individuals and families know best themselves how to put extra money to use effectively and efficiently. (And the poorer a family is, the more rational and calculating they need to be with financial resources, merely to survive).

Direct cash charities like GiveDirectly are extremely effective and enormously successful because of this idea. If you want to empower people, stimulate the local economy, and build trust in government, basic income/direct universal cash benefits work.

Sure, some people will blow the cash on drugs, alcohol, and gambling. But many more will be lifted from the despair and desperation that leads to addiction in the first place.

But What Can You Do For Your Country?

JFK’s words still ring true — we shouldn’t think about what handouts we can get from the government, but how we can make our country greater (and also be good world citizens in the process). So from that point of view, would basic income be a step backwards?

I don’t think so. Since basic income lifts everybody up, a safety net that has no gaping holes, it should increase the sense that we’re all in it together. Implementing a citizen’s technology dividend would make our country greater. People would still work (for both money and meaning), but with less fear and desperation.

Right now the U.S. population is deeply divided. Maybe a modest universal citizen stipend that replaces some means-tested welfare programs is a social policy that both liberals and conservatives could get behind, a small step towards a unified theory of modern economics.

What do you think?

Further reading:
Here’s a good discussion of basic income on Quora.
Here’s a comprehensive history of basic income concepts and experiments.
Plans for a Y Combinator basic income experiment in Oakland.