For more than a year, Finland has been testing the proposition that the best way to lift economic fortunes may be the simplest: Hand out money without rules or restrictions on how people use it.The Finnish experiment was intended to solve a problem they and other European countries have with their relatively generous unemployment benefits: they discourage people from taking less-than-perfect jobs, because any work reduces your benefits. Economists have worried that unemployed young people don't take part-time jobs that might lead to better jobs later on, or start small businesses, because losing their benefits makes the effort seem not worth it. So, they reasoned, why not just give people money and see what they do?
The experiment with so-called universal basic income has captured global attention as a potentially promising way to restore economic security at a time of worry about inequality and automation.
Now, the experiment is ending. The Finnish government has opted not to continue financing it past this year, a reflection of public discomfort with the idea of dispensing government largess free of requirements that its recipients seek work.
The basic income trial, which started at the beginning of 2017 and will continue until the end of this year, has given monthly stipends of 560 euros ($685) to a random sample of 2,000 unemployed people aged 25 to 58. Recipients have been free to do as they wished — create start-ups, pursue alternate jobs, take classes — secure in the knowledge that the stipends would continue regardless.The data has not bee released yet, so we don't know what actually happened. But we know how people felt about it:
The Finnish government’s decision to halt the experiment at the end of 2018 highlights a challenge to basic income’s very conception. Many people in Finland — and in other lands — chafe at the idea of handing out cash without requiring that people work.Which, honestly, some of them do. But so do other unemployed people.
“There is a problem with young people lacking secondary education, and reports of those guys not seeking work,” said Heikki Hiilamo, a professor of social policy at the University of Helsinki. “There is a fear that with basic income they would just stay at home and play computer games.”
Universal basic income is a very old idea, going back at least to Thomas More's Utopia. Among its advocates have been economists like Milton Friedman – who also liked it because it would not discourage people from seeking work – and Martin Luther King. These days people are interested in it because they worry robots and AI will cause enormous job losses.
I am interested in the question posed by this study; what would people do if they had this guaranteed income? But given the widespread anger at people who collect money when they might be working I expect it would take an economic catastrophe to make this happen.