America’s democratic socialists often look to countries like Finland, Denmark and Norway as the shining example of what we could be. This is firmly met with cries of impossibility by the economically conservative right. They believe universal health care, a basic income and other policies of a “welfare state,” don’t jive with our capitalist ideals and self-image as a land of liberty and equality. I disagree.
First and foremost, it is important to know that the policies being put into place in Finland are experimental, and arguments for and against it are likely to change as data is compiled and analyzed. Additionally, the scale of the experiment will not cause a taxations strain on Finland large enough to be measured and compared to the cost of similar policies in the US. However, the hypothesis as it stands — that a basic income would reduce the incentive traps found in current welfare systems — is based on sound political theory and careful analysis of the potential causes of incentive traps.
The theoretical arguments for and against a basic income are crucial for understanding the pros and cons of enacting it as policy. Anthony Painter, the director of policy and strategy for the Royal Society for the encouragement of Arts, Manufactures and Commerce in the UK, wrote a paper titled, “Creative citizen, creative state: The principled and pragmatic case for a Universal Basic Income,” which is one of many studies to find that universal basic income would be a significant improvement on the welfare state and crucial for a future where growing technological improvement could cause critical unemployment levels.
Painter suggests, “If you want to incentivise work at every level of income then Basic Income is simply the best system.” If people are not worried about where their next meal is coming from, they will be free to pursue work they find rewarding and that will have a positive impact on the community. It would allow citizens who do not currently participate in civic duties due to financial and time restraints to be able to do so. People may also work in order to have extra spending money for luxury items or entertainment. Basically, people would be able to better regulate their time spent working, participating in civic life and pursuing happiness as a citizen.
The average monthly cost of living for a single adult with no children in the US is roughly 2,370 dollars according to data agreed upon by the Economic Policy Institute, Bureau of Labor Statistics, BLS, American Community Survey and United States Department of Labor. For a married couple with four children (the highest number of people per household that cost-of-living calculators tabulate) that number is 6,908 dollars per month. If a basic income was distributed based on household size and was allotted based on the cost-of-living in their state or urban center, the payout per household would exist somewhere within that scale.
Granted, that is a steep rise from the 900 dollars a month that a family of four currently receives in food stamps, and so the rate of taxation would rise as well. However, having a basic income for every household would allow for getting rid of food stamps as well as other welfare programs such as Social Security, Medicare, Medicaid, Supplemental Security Income, housing subsidies, agricultural subsidies and corporate welfare.
In 2010, the US government spent 927 billion dollars on welfare programs outside of Social Security and Medicare. In 2014, 888 billion was paid for Social Security alone and the combined spending on Medicare and Medicaid was over one trillion dollars. These cuts combined with a reduction in military spending and a small increase in sales tax could create a feasible starting point for the government to implement payments of percentage of the cost of living per household.
Large-scale reforms to such big bureaucratic systems is an extraordinarily difficult task that will require the collaboration of the largest think tanks in the US. However with the looming failure of the Social Security system, it is arguably past time for reform.
The other common argument against a basic income is that it is perceived as incongruent with American ideals. However, liberty and equality would both be bolstered by a common ability of all Americans to provide for their needs. The ingenuity of American capitalism would not be hampered by the process, since people who want to work and have ambition to do so will be even more capable. In fact, a basic income could be a safety net for many people in an uncertain future when robots can be programmed to do many of the menial labor jobs that currently require a human touch. A basic income would be a spectacular solution for an innovative American future.