Why we should give free money to everyone
“I am now convinced that the simplest approach… to poverty is to abolish it directly by a now widely discussed measure: the guaranteed income.” — Martin Luther King, Jr.
Research shows that just giving people a few hundreds or thousands of dollars can lift them out of poverty more effectively than welfare. Furthermore, giving everyone a basic poverty-level annual income could shift the whole dynamics of economics towards greater quality of life and sustainability. It is high time for more of us to seriously consider this approach, which has had support from across the political spectrum, from Nixon to Martin Luther King, Jr.; from neoliberal economists to Green Parties…
Dear friends,
Imagine what would happen if poor people were just given a sizable chunk of money to do with as they pleased – or even if every citizen were granted a basic poverty-level income with no strings attached.
It turns out that such wild ideas are not as far-fetched as they sound – and could have some potent transformational impact.
THE BRIEF MAINSTREAMING OF A WILD IDEA
Transformational economist Robert Theobald – with whom I worked in the late 1990s – mainstreamed the idea in his 1966 book “The Guaranteed Income: Next Step in Economic Evolution?”. Interestingly enough, Theobald had been preceded in the 1940s by conservative economists Milton Friedman and George Stigler’s “negative income tax” proposal which was also supported by F.A. Hayek. Friedman’s and Hayek’s economic ideas are widely recognized as shaping today’s neoconservative economic agenda – although free money has – perhaps significantly – not been part of that.
The 1960′s and ’70s saw widespread debate about “guaranteed income” and “negative income tax” across the political spectrum. Socialists, libertarians, Republicans, Democrats, and several Green Parties all advocated some version. Among the more famous advocates were leading socialists Michael Harrington and Eric Fromm, liberal economist John Kenneth Galbraith, and even Martin Luther King, Jr. Supportive groups included a Presidential Commission, a panel of business leaders convened by Norman Rockefeller, the National Council of Churches, and the 1972 Democratic Party Platform of George McGovern. Perhaps the most notable advocate of guaranteed income was Richard Nixon, whose version passed the House in April 1970 (243 to 155) but died in the Senate. Jimmy Carter proposed another version, but it was eclipsed by the oil crisis and other attention-grabbing issues… and the idea was thoroughly buried during the Reagan revolution.
VARIETIES OF FREE MONEY PROPOSALS
Among the many proposals involving free money, the following five categories seem most common:
- A small but significant one-time grant to the poor.
- A very large one-time grant (e.g., $80,000) to each citizen upon reaching the age of majority.
- A “negative income tax” that gives people more money the less income they have.
- A guaranteed minimum income that gives everyone an annual poverty-level grant (e.g. $10,000), no questions asked.
- A share of revenues from a commonly owned resource (e.g., Alaska’s oil profit payments to all Alaskan citizens).
There seems to be no perfect free money proposal: As with everything else, they all have pros and cons. They usually involve some reduction – or, in extreme cases, elimination – of welfare state services and bureaucracy. This factor – and the size, recipients, and conditions of the grant – vary widely depending on the ideological leanings of the advocates. But these diverse factors also create space and flexibility for creative dialogue and deliberation to craft policies agreeable to a wide range of perspectives.
For me what’s most significant is that the very idea of free money opens up a promising realm for social change conversations and action that could make a huge difference, especially in the profound transitional times that are upon us.
A ROLE FOR FREE MONEY IN ECONOMIC TRANSFORMATION
A couple of years ago this idea surfaced again (in my world) in Charles Eisenstein’s remarkable book Sacred Economics Chapter 14 “The Social Dividend”. Eisenstein’s whole book thrilled me with its integrated vision of how an economy based on gifting and abundance could actually function at personal, interpersonal, community, and national levels.
I was especially struck by Eisenstein’s idea that a guaranteed income could be instituted not just to alleviate poverty, but as part of a strategic downsizing of our dangerously overly-consumptive economy. It could play a major role in shifting out of an economic order that leaves so many profound human needs unfulfilled yet destroys natural systems on which we all totally depend.
If done well, a guaranteed income would create an immediate break between “income” and “job” and then help make “livelihood” increasingly independent from “money”. “Unemployment” would cease to be the curse it is today. The job market would shift towards what people wanted to do. Technologies that replaced jobs would cause less social harm and, if planned well, could become the asset it once seemed to be. People could meet their needs in a broader range of ways….
I see a guaranteed income potentially supporting some very world-healthy, human-healthy dynamics:
- Simple living: More of us would leave unsatisfying jobs to live high quality, low impact, low-income lifestyles. As part of that, we would co-create and participate in systems that support gifting, sharing, and developing do-it-yourself skills, so that we could meet more of our needs without money, together.
- More of us could afford to attempt small scale entrepreneurship which would help reduce the dominance of large multinational corporations and strengthen local economies.
- More of us would be able to spend more of our time on activism and exercising our citizenship to heal, improve, and transform society.
- More of us would have more freedom to follow our passions in creative, spiritual, family, volunteer, intellectual, personal development, and other minimally materialistic activities without having to worry so much about “making a living”.
Furthermore, a basic income system could be set up to be financed by taxes and fees on the profitable use, exploitation and abuse of the commons – from natural resource extraction, pollution, and carbon emissions, to speculative transactions and financial crimes. Such arrangements would improve social conditions, slow climate and environmental degradation, and address poverty all at the same time.
WOULD IT WORK?
For years I found this whole idea very intriguing. But would such a counter-intuitive program work? Could we institute it without destroying the economy? Would people believe it was possible?
Then a couple of weeks ago a good friend sent me the article below — and I knew I had to share it with you. It describes circumstances in which the wild idea of just giving people money has actually been tested. Contrary to expectation it proved to address poverty more economically than bureaucratic welfare models and did not result in the recipients of the free money wasting it or becoming lazy.
These experiments suddenly cast the proposals I’d read about in a different light. A guaranteed income system might actually work.
If you want to read a shorter version of the article below, see the Washington Post version “Free money might be the best way to end poverty” However, I encourage you to read the long version included here. Given the revolutionary implications of this idea, it really helps to have multiple examples of how it has actually worked.
LEARNING MORE
I also highly recommend these two histories of the basic income idea in the US
http://www.usbig.net/papers/Sheahen–HistoryOfBIGinUSA.docx
http://www.remappingdebate.org/sites/all/files/Guaranteed%20income’s%20moment%20in%20the%20sun_0.pdf
Variations and various trials, pros and cons, nuances and consequences can be explored through such sites as these and others searchable on the web:
http://en.wikipedia.org/wiki/Guaranteed_minimum_income
http://en.wikipedia.org/wiki/Basic_income
http://en.wikipedia.org/wiki/Asset-based_egalitarianism
http://usbig.net/bigblog/
http://truth-out.org/opinion/item/17104-jobs-are-not-the-answer
Catalogues of papers and commentary re basic income include:
http://www.basicincome.org/bien/papers.html
http://www.usbig.net/papers.php
http://www.levyinstitute.org/search/website.php?q=basic+income
Blessings on the Journey… which becomes more odd, challenging, and intriguing the more we learn…
Coheartedly,
Tom
