This is written in response to William Dry’s article published on August 11 titled “Finland’s Basic Income Experiment – The Coming of Economic Freedom?”
Libertarians who support universal basic income (UBI) emphasize how it will reduce bureaucracy and make government more efficient. Dry claims UBI accomplishes this without creating disincentives for productive labor. Gary Johnson also supports UBI for these reasons.
UBI likely would reduce bureaucratic inefficiency and administration costs, but Murray Rothbard argued it would still discourage work, in his book For a New Liberty. He said a universal basic income, or negative income tax, would increase the opportunity cost of labor. For example, if the UBI stipend was $1,000 per month, then an individual could except to make $12,000 per year. If a job offered him or her $20,000, then the individual would only gain $8,000.
However, arguments about efficiency, bureaucracy, and incentives are secondary for libertarians.
These are arguments a conservative should make, not a libertarian. Conservatives value fiscal responsibility for its own sake. Libertarians need to reject this idea. Fiscal responsibility is a libertarian principle simply because it reduces the amount of coercion in society.
When it comes to universal basic income, libertarians somehow forget their principles. Theft suddenly becomes legitimate under the cloak of efficiency, and the redistribution of wealth becomes a worthy goal because UBI could actually make it happen.
If libertarians truly believe taxation is theft – as they should – then why would they want to expedite the process? Instead of chancing robbers breaking into your house, would you rather send them monthly checks for the sake of efficiency? Is it somehow moral for the government to take your wealth through UBI rather than through Medicare, Medicaid, Social Security, and all other welfare taxes?
This is central to the debate between pragmatic libertarians and purist libertarians. The former take the conservative approach. They want to make government serve people better, and they want to portray themselves as fiscal conservatives who just want to leave you alone. The latter see these efforts as contrary to libertarianism.
UBI should only be justified to a libertarian if it promises to reduce the overall amount of taxation in society. Any reason other than this rejects the central tenet of libertarianism: that violence and theft are immoral.
Dry makes another claim which libertarians should criticize. He writes “Given that the total abolition of all welfare programs would be catastrophic for a society which has grown dependent upon them, UBI offers a promising alternative.”
It is widely asserted that dependence upon a welfare program could not be cut off without negative consequences. If government dependence holds people back from their greatest potential and is immoral, then libertarians cannot advocate for anything except welfare’s abolition.
Libertarians do not believe the abolition of welfare will harm the poor. It is central to libertarian thought that the market will provide a better standard of living for the poor than the current social safety net.
That being said, UBI presents an interesting idea as a free market solution. Many libertarians, myself included, would voluntarily give a percentage of income toward a system such as UBI to help the poor. Again, the problem is not UBI itself, but the way it would be implemented: through the use of force.
Furthermore, UBI would perpetuate an entitlement society and reduce voluntary charity. Interestingly, Dry falls into the entitlement mentality when he writes “Individuals tend to make wiser choices when spending their own money.”
The money UBI would distribute would not be “their own.” Government will have to take it from one individual to give it to another. Individuals have no reason to give voluntarily when the government provides all basic needs.
Society is beautiful when people take care of each other, but it lacks compassion when government does the job.
Lastly, in denial of economics, Dry writes “we could afford to do away with the minimum wage without the risk of causing distress to millions of workers.”
The minimum wage harms workers. It creates unemployment by bidding wages above market value. Its elimination would not cause distress. Its abolition would simply allow people to legally sell their labor at any wage they want.
Many libertarians view universal basic income as the next best option to the current system, but efficiency alone does not make it better. It must bring libertarians closer toward the final goal of creating a society free from state coercion.
* Joshua Paladino is a student at Hillsdale College, Michigan, majoring in politics and economics, with a minor in journalism. He is currently an opinions editor for his school newspaper, the Hillsdale Collegian. He also writes on pension reform and other fiscal issues for the Michigan think-tank, the Mackinac Center for Public Policy. Paladino is a minarchist and loves political philosophy.
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