When asked if “Granting every American citizen over 21-years old a universal basic income of $13,000 a year — financed by eliminating all transfer programs (including Social Security, Medicare, Medicaid, housing subsidies, household welfare payments, and farm and corporate subsidies) — would be a better policy than the status quo,” 58 percent of the IMG Economic Experts panel at Chicago Booth disagreed or strongly disagreed, while 19 percent of them were uncertain, and only 2 percent agreed.
Some interesting answers include the one by MIT’s Damon Acemoglu. He is in the uncertain camp and he says “Current US status quo is horrible. A more efficient and generous social safety net is needed. But UBI is expensive and not generous enough. Stanford’s Robert Hall who is against the proposition says “Limitation to people over 21 can’t be the right answer.” Chicago’s Steven Kaplan who is in the let’s do it camp says “UBI is step in right direction, but very complicated. Devil would be in details. So, lots of uncertainty.”
The whole thing is here and well-worth looking at.
Also very worth reading is a debate on the issue between economists Deirdre McCloskey and Paul Winfree.
Giving money is good because it respects the dignity of the recipients. It treats them like adults, not children. When you treat people like adults, they tend to act like adults.
Yet a far better way to help the poor is to have a vibrant economy. The money for the minimum income doesn’t grow on trees — it has to be taxed from someone. And such redistributions as a minimum income are minor sources of enrichment of the poor when set beside the mighty engine of trade-tested betterment. Income per head adjusted for inflation has risen since 1800 by an astounding 3,000 percent. If half the income of 1800 were redistributed from rich to poor that would be nice. Yet it would result in only a 100 percent increase in the aggregate income of the poor, and 3,000 beats 100 every time.
There are, however, important differences between Friedman’s proposal and the universal basic income in conversations today. First, Friedman didn’t accept the technological unemployment justification for a basic income. Second, his negative income tax would have replaced the entire safety net (including Social Security and Medicare) and also any government restrictions on access to markets and capital faced by poor people. This included eliminating minimum-wage laws, licensing restrictions, pro-union laws, tariffs, and agriculture subsidies.
Furthermore, Friedman wasn’t blind to the public-choice problems of a basic income. “The major disadvantage,” Friedman wrote in 1962 “Capitalism and Freedom,” “is its political implications. There is always the danger that instead of being an arrangement under which the great majority tax themselves willingly to help an unfortunate minority, it will be converted into one under which a majority imposes taxes for its own benefit on an unwilling minority… I see no solution to this problem except to rely on the self-restraint and good will of the electorate.” …
But those interested in poverty would be better off changing focus altogether. Rather than debating competing systems to alleviate poverty, we should be focused on integrating the poor into an expanding overall economy to end real poverty altogether.
As for me, like McCloskey I believe that UBI “respects the dignity of the recipients. It treats them like adults, not children. When you treat people like adults, they tend to act like adults.” I also agree with Acemoglu that the “current US status quo is horrible.” I believe that it needs to be fundamentally and dramatically reformed. But like Friedman and Winfree I am “not blind to the public choice problems of the basic income.” I don’t believe politicians and the interest groups they cater too would agree to replace all existing anti-poverty programs with a UBI and that, if by some miracle they agreed to get rid of everything else, they wouldn’t bring some anti-poverty programs back over time.