Wednesday, June 14, 2017

Why does a basic income need to be universal?

A Universal Basic Income is a wolf in sheep’s clothing. Even Australia’s opposition party has rejected the policy proposal on the grounds it is free money for millionaires. So why does this idea continue to be so popular?

Robots are a foolish reason to consider a universal basic income (UBI). And yet so many still want to indulge in such nonsense. The link between technological disruption, income security, and UBI, is weak at best. And existing targeted welfare systems already achieve income support from any type of workplace disruption, robotic or otherwise.

The fundamental idea behind a UBI is that all members of society should get an equal share of that society’s income prior to even attempting to earn a market income, and regardless of what their market income is. It is a worthy principle.

In contrast, a targeted welfare system phases in income support when individual or family income falls below particular thresholds, and phases it out again when market incomes rise. This is in effect a national income insurance scheme, and again, a worthy idea.

So why all the buzz about the less progressive UBI welfare system that will have to raise additional taxes from the wealthy, only to give it right back? Wasn’t less administrative cost one of the big selling points of a UBI in the first place?


  1. This comment has been removed by a blog administrator.

  2. Extending the loss aversion response to everybody by unnecessarily forcing up taxes is not going to get anybody elected.

    Compare this to a Job Guarantee where from the individual's point of view nothing changes when they go work in the private sector. They still get at least a living wage income. But the public spending instantly stops.

  3. Isn't the appeal of a universal basic income political? It treats everybody equally. Poor people don't have to grovel before bureaucrats to get their due. And everybody getting an equal share means that grousing by taxpayers can be met with, "You're getting your share, what's your problem?" And there should be less administrative cost with a universal income.

    1. BTW, I don't think that less administrative cost is a big selling point. And an excuse to raise taxes on the wealthy may be a selling point. :)

      Another appeal, perhaps, of a universal basic income is one it shares with universal education, universal telephone service, and universal health care. Such universals help to define our society. We are people who both provide and receive these universals.

  4. No link between universality and administrative cost shown. We're supposed to make an unthinking association of scale? Intuition suggests the opposite, a one size fits all would be much simpler to administrate. Given you support Basic Income there's not much to argue about though, as the effect is similar. Not sure how you plan not to tax the wealthy to pay for the markets failure to deal with the underpaid or non-employed though.

    The robot focus is more a warning that a significant and likely permanent change is coming, and a threat to the idea of the job market's capability to go on supporting the needs of the population needs to be recognised.

  5. Why do we have a basic deduction on income tax? Hint, it is exactly the same question as your first question. A UBI has very little value to a billionaire, and to pay it, the total tax take needs to rise (ultimately hurting the better off on net). And being universal, it saves on intrusive bureaucracy. I really don't understand your objection, and I'm a fan of yours. And whenever you have means tested benefits there is not only intrusive bureaucracy, there are arbitrary points of irrational and unintended marginal effects.

  6. The other point is, it makes the politics simple and transparent. The question becomes not whether to redistribute (hint we always do in some way or another) but simply how much.