A Libertarian Argument for a Basic Income Guarantee

Well, low and behold to my shock, my favorite libertarian magazine, Reason, had an article out about the Cato Institute (a libertarian think-tank, if you’re not familiar) hosting a discussion about the pros and cons of a Basic Income Guarantee (BIG) from the federal government.

In particular, there’s this article from the Cato Institute, “The Pragmatic Libertarian Case for a Basic Income Guarantee.”

He starts out by saying:

I will argue that a BIG, even if it is not ideal from a libertarian perspective, is significantly better on libertarian grounds than our current welfare state, and has a much higher likelihood of being achieved in a world in which most people reject libertarian views.

I particularly am fond of this as a starting point: 1.) The status quo sucks, so if we have to accept a government safety net existing, here is a better alternative. 2.) Most people do want a government safety net, so this alternative while not wholly libertarian is enough so for us and less so for those that are largely opposed to libertarian policy solutions.

Under BIG, it would literally be giving people straight up money. No strings attached, no directive to spend it on this or that. Here’s your check for the year. And there have been studies I’m familiar with that show promise in terms of giving poor people straight up money rather than other schemes or “telling them” to spend it a certain way. This has a libertarian flavor, if you recognize it: Libertarians would argue that people are better at spending their own money than someone else directing it or “planning” it out.

He also makes sure to suggest rightly that no libertarian would support BIG in addition to the current welfare state, as that would defeat the purpose and just cost us more money. It would have to replace the current system for libertarians to favor it. Harder said than done, surely.

Some libertarian-leaning economists have suggested a constitutional amendment would be necessary and would look like this:

Henceforth, federal, state, and local governments shall make no law nor establish any program that provides benefits to some citizens but not to others. All programs currently providing such benefits are to be terminated. The funds formerly allocated to them are to be used instead to provide every citizen with a cash grant beginning at age twenty-one and continuing until death. The annual value of the cash grant at the program’s outset is to be $10,000.

I’m not going to run through all of this here, but his 4 reasons (in short) why libertarians should favor it:

  • Less bureaucracy. Over 126 federal programs creates a lot of red tape that poor people may not be well-versed in navigating or even knowing that the program exists.
  • Costs less. Depends on the implementation plan proposed, but just looking at it in conjunction with the above would suggest that.
  • Less-rent seeking. Think special interests, some benefiting when others aren’t and so on. BIG is a (and I like this) a general policy, standardized for everyone.
  • Less paternalistic. A lot of different eligibility requirements and such make the current welfare system conditional. This wouldn’t be.

Again, he’s coming at this quite pragmatically, which I like since libertarians are constantly accosted for being Utopians and idealistic:

From this perspective, the question of social welfare policy becomes less an exercise in ideal theory and more a problem of comparative institutional analysis. The question is not whether a BIG is a perfectly libertarian policy in every way, but whether it is more libertarian than the other realistically available policy alternatives. I believe that the considerations examined above provide us with very strong reason for believing that it is.

Obviously, most are not libertarians, so it’s not as if you need convincing from that angle. But I’m curious what people think about this. I’m certainly intrigued by the idea.

If you want a less libertarian-y angle, here’s a Vox article recently about the same subject.

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