Matches

A Universal Basic Income is the opposite of a Handout. The 'No Strings' removal of who deserves the foundation, and who doesn't, removes the categorising of dependents. The guarantee provides a permanence that is independent of a relationship between the person giving and the person receiving. Viewed as a dividend, it gives everybody an ownership stake in society. It reinforces, and provides a moral foundation, for property rights. The Basic nature of the payment means all normal incentives remain. There isn't the huge marginal tax that normal applies to handouts - 'if you need it, you get it, if you get money elsewhere, you don't'. It isn't welfare, it is well fair. It is like providing a box of matches, and some kindling, but expecting people to collect their own firewood. 

Get Stuff Done

Before we looked to Government to provide basic human rights as part of the social contract, we had to do it ourselves. Although for most of humanity, we have lived in material poverty struggling for basic survival, many of us have a natural instinct to support each other. Voluntary Associations (clubs, religious groups, charities) sprung up where need existed. One of the things that hold us back now is the sense that everyone, particularly those wealthier than us, should pay for this support. If they don't, we don't. We can't be so scared of free loaders or scrooges that we don't just get on with it. A downside of the welfare state has been that we think we have to vote for change. We think that if we lose a vote, the change we want won't happen. In liberal democracies, we are largely able to get stuff done if we are willing to find people who voluntarily want to help. Don't vote for change. Change.

Common Wealth

Property Rights help us invest our efforts with knowledge that we will be benefit from the fruits of our labour. Fruits come from a combination of Capital and Labour. We stand on the shoulders of giants. We produce far more fruit today than our ancestors because human knowledge is cumulative. 

Two challenges to Property Rights are (1) The First Mover, and (2)  The Veil of Ignorance.

When people first started to employ their labour, there would only have been shared resources. These resources would have been used from the abundance, and mixed with labour. Gradually there would have been more competition as resources grew more scarce, and, pre-'rule of law', force was used to take resources. We don't have full detail about the starting point, but we know it was dodgy. We know our ancestors, judged by today's moral standards, fail uniformly. Things as they stand are a fuzzy mix of today's rules and yesterday's first movers. To go forward, we need to be comfortable with a starting point.

Secondly new-comers need to be comfortable with their starting point. Our communal wealth today is not the same as that of our first conscious, common ancestors. We are born, at random, with differing genetics and geography. Much of our success depends on our starting point now. The 'Veil of Ignorance' suggests that in order to accept the rules, you have to be happy with the starting point of every player. 

An Unconditional Basic Income is analogous to a dividend on our communal wealth. It is impossible to determine what the level of that dividend should be and what our Common Capital is. 

Tax is partly re-distributive, but it is also partly a fee for use. If we are all common owners/custodians of the earth through our shared inheritance, the 'systems' our ancestors built belong to us all. The fee for use doesn't need a central government to decide how to spend it. It needs to go to the owners. It needs to go to everyone.

Welfare is redistributive. A UBI doesn't carry the stigma of charity. A UBI may simplify or reduce the need for welfare, but it is not welfare. It is part of the deal that allows people to accept the system that allows us to prosper. Why should someone in Poverty agree to accept the Rule of Law? What ownership do they have in that system? 

It is impossible to figure out what is common wealth, but if we can afford it (which we can), ending poverty through an unconditional basic income is the bare minimum.

'Olive Grove' by Van Gogh

Fruits of our labour, from shared wealth

Welfare State

The Modern Welfare State - a mixture of Democracy, Welfare and Capitalism - rose in response to the Great Depression as a middle way between Communism and Laissez-faire Capitalism. The first Welfare State was the Rashidun Caliphate in the 7th century, with charity one of the Five Pillars of Islam. In Europe, historian Paxton says the Welfare State was introduced by Conservative and Fascist governments to make unions and socialism less attractive to workers. 'Modern twentieth century European dictatorships all provided medical care, pensions, affordable housing, and mass transport as a matter of course, in order to maintain productivity, national unity, and social peace.' In Britain, a National Insurance contribution was introduced, in return for 'benefits for those who sick, unemployed, retired, or widowed'.

OECD Welfare States - % of GDP spent on Social Programs

Means-Testing
When benefits are tied to income and savings, the recipient of benefits effectively has to prove they need help. Like the opposite of a job interview. You have to convince someone that you can't help yourself. That you can't afford to. That buzz you get when you get the endorsement of a job offer, must be analogous but opposite. Means-testing also requires bureaucrats to ask the questions, and make the decisions.  The more strings are attached, the less of the money is available to actually help. Individuals also need to understand they are eligible. As the system gets more complicated, just knowing which forms to fill out and where to go may be a step too far to get out of the rut.

Incentives
Investors will often talk about maximising after-tax returns. I have always felt queasy about that. As tax laws get more and more complicated, you can stop spending your time on making sure your capital is doing the best job, and instead focus on working the system. Tax Law and Benefits are two tools government has to pull the strings of society. There is still a belief that decisions are best made centrally. A simplified tax code, without loopholes, and the end of means testing would reduce the ability of government to affect individual decisions.

Moral Hazard

Benefits which are only given if there is proof of need for help can lead to a poverty trap. Sharp cut-offs or change of circumstances can make taking on work, or getting out of the hole that led to the need, unattractive. Unconditional support takes a blind eye to circumstances. Universality reduces the cost of means testing, but also prevents the unintended consequences of trying to direct assistance to particular causes. There are stories of children being taken out of school so that the parents won't lose their illiteracy support.

Stigma

The concept of 'Personal Responsibility' runs deep even amongst those who aren't religious. In the UK, those on benefits are often called 'Scroungers' - a person who borrows from or lives off others. A deep part of modern society is a belief in helping people who help themselves. A push back against hand-outs. This is tricky. We find it easier to see the help others have been given, and can forget about the support we have received. I have never met a self-made man.

I support the concept of an Unconditional Basic Income because it removes the wasted costs of means-testing, retains the incentives of a market system to participate in society, cuts out the moral hazard of strange behaviour in order to justify help, and loses the stigma of 'benefits'. A UBI is a dividend on the collective wealth of society. In the same way as we get hereditary support from our parents, this is hereditary support from humanity. It provides the security to lift your eyes from living hand to mouth, so that we can build the kind of community we would like to live in.