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.
"I am interested in the question posed by this study; what would people do if they had this guaranteed income?"
ReplyDeleteCouldn't we look at existing data on people who already have guaranteed incomes?
At the low end of the spectrum you have people receiving small incomes such as stipends, veteran's benefits for families of soldiers, long-term payouts from things like life insurance or winning the lottery, or even just frugally living off interest from a hard-earned nest egg.
And at the high end of things you have wealthy inheritors, trust fund babies, et cetera. Although many such people could easily never work a day in their lives, it seems that quite a lot of them still choose to work anyway - presumably because many people will always want more money, even when they don't actually need it.
It's funny. As a society, we can effortlessly justify letting billionaires and CEOs rake in utterly absurd amounts of money - far more than could ever truly be justified by the labor they actually perform. But the moment we talk about giving poor people a safety net, allowing them to actually seek out work without dropping themselves further into poverty by removing the benefits they need to get by... well, that just makes people uncomfortable, for some reason.
Our diseased culture is caught in a toxic mindset where we villify the poor, and lionize the rich. We'll gladly give massive tax breaks to the 1%, who neither need nor deserve such staggering largesse, but we can't bring ourselves to give poor people the money that they desperately need in order to have access to the opportunities which will elevate them OUT of poverty.
Because in our culture, we tell ourselves that poor people deserve to be poor, and the only way we'll tolerate them escaping poverty is through killing themselves chasing better fortune. At the same time, the rich deserve to be rich, and it is our civic duty to not just do everything we can to keep them rich, but also help them to become even richer.