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May 11, 2005

More on Safety Nets

Timothy Carter's latest on Basic Income Guarantees continues this dialog nicely. He notes that "it is possible that a basic income will have a downward effect on high-wage jobs." He also notes that "A basic income might make it possible for more people to take the time necessary to gain the skills and education needed to do high-end jobs, and make it easier to leave dull and repetitive work."

I'm not entirely troubled by the "egalitarian" implications of his views. If labor is able to "take the time" (presumably through education and training) to develop its skills to compete for better-paying jobs, thereby lowering wages at the higher end, that's not such a bad thing. Presumably, labor creates value, and if more people develop themselves to a higher and better use, we all benefit.

The risk, of course, is that the guaranteed basic income creates a "slothful" class...people who simply subsist on their basic income check.

The other major risk is that basic income comes in addition to the alphabet soup of government agencies. It's entirely possible that taxes and spending could be lowered and government "safety net" functions abolished in exchange for basic income. So, even for higher-wage jobs, net take home pay could conceivably remain roughly the same, or even increase, as overall productivity increased. Unnecessary government meddling in the peaceful economy always leads to less wealth, by definition. I'd argue that it does for more than a majority of citizens, though I acknowledge that that's hard to prove.

I'm very open to such a quid pro quo -- basic income in exchange for lower taxing and spending.

My real fear is that the basic income would be additive, not a substitute. That tends to be the way of Washington. Realpolitick and history indicate that strong tendency. Until I see that the basic income could be a substitute, I'm not saluting.

-Robert Capozzi





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