Friday, August 30, 2013

Guaranteed Income

From time to time Matt Yglesias pushes the idea of a guaranteed basic income as an alternative to minimum wage, welfare and various other programs. For one thing, it would do away with all the bureaucratic nuisances of welfare and minimum wage. It also eliminates the economic distortions caused by the minimum wage. Combine that with universal single payer health care, and one alleviates many of the burdens of poverty, which among other evils, effectively causes lower IQ.

Of course there are some potential difficulties, including the fact that the people who work would have to pay for it. The central problem, though, is the free rider problem. How do you avoid creating a dissipated class that won't and can't work and that lives parasitically on the rest of society? Have any rich countries tried this?

If automation continues to destroy jobs, tactics like this might become necessary for the stability of society.