It is widely believed that not only is the welfare state here to stay, but that it is a muddled, confusing mess, riddled with inefficiencies. It is widely believed that these inefficiencies make the welfare state unstable, and so, lest we end up with no welfare state at all, free marketeers ought to spend their time dreaming up ways to increase its stability.
A currently fashionable suggestion for doing this is the Basic Income. The idea goes under various names (Negative Income Tax, Citizen’s Income, etc), but the essential point is always the same: everyone should be guaranteed a certain amount of money as a reward for being alive. If, for example, society decides a man should have a minimum income of £30,000 a year, anyone earning £20,000 would receive £10,000 from somewhere, anyone earning £10,000 would receive £20,000 from somewhere, and so on, and so on.
According to its proponents the Basic Income would greatly simplify the current welfare system and improve its efficiency by replacing all existing benefits. And this is very important because calling for an extra form of redistribution on top of the existing ones might be unpopular, possibly even illiberal. The likelihood of a Basic Income actually replacing all existing benefits does not matter. What does matter is that the Basic Income is a free market policy that can be safely advocated in public, and doing so makes a fellow much more likeable than advocating the unhampered market simpliciter.
To ward off accusations of economic illiteracy, chronic naïveté regarding human nature, or plain old leftism, free market supporters of the Basic Income are keen to stress that it should be kept at a level that is low enough to discourage what used to be known as the “undeserving poor” from living comfortably on it. (If a man is guaranteed a good income at public expense no matter what, why would he lift a finger?) Whether or not this is politically feasible is irrelevant; it is a nice idea, and that is what counts.
There is, however, a downside to rehabilitating the notion of the “undeserving poor”: the “deserving poor” are right there alongside them. There are people who, through no fault of their own, are unable to work. The severely disabled, the emotionally disturbed, the multi-limb amputee war veterans, etc, etc. What decent person would want to see these poor souls live uncomfortable lives? Such a position would be politically impossible. Those who occupy this category of “deserving poor” will most likely need a great deal more money to live comfortably on than the poor who are “undeserving”.
The Basic Income must, for political reasons, be set high enough for the “deserving poor” to live comfortably on. As such, it must be set high enough for the “undeserving poor” to live more than comfortably on, serving as an incentive for the creation of more “undeserving poor”. One might think this would cause more consternation than it does.
Google+ Rocco Bogpaper