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All posts by Dan Whalen,
Providence, RI (resume)

Friday, June 14, 2013

A right to "income"? What do you think?

Economystified reader Robert L. sent this video to me the other day.  I thought you readers might find it interesting.

Now, I don't know much about this petition, or the likeliness of it ever going anywhere.  I actually don't know any more about this than what is explained in this video.

But even if this never gets off the ground, it makes a valuable thought experiment.  Should "income" be a right?   Are we entitled to a particular level of spending power?  Why or why not?

Watch this video.  My comments are below.


Ok, here's my immediate thoughts...

In a way, govts already do do this.  By guaranteeing their citizens 12 years of education, a fixed price for stamps, 24/7 police/fire/emergency medical services, a public defender per indigent defendant, etc., govts guarantee us a minimum standard of living.

You might not think of that as "income" per se.  But, presumably, the guaranteed level of income mentioned in the video is intended for buying exactly these kinds of essentials - the petition-starters probably aren't looking to guarantee you an income so you can buy collectable plates, you know?

You might think "Hey, at least the video's system is a simple and direct," right?  Instead of trying to build institutions/infrastructure for govts to deliver healthcare, legal services and the like, why not just redirect that public spending money into people's pockets, and let the markets sort everything out?  I guess that's part of the scheme's appeal.

When the video narrator says "transfers for social services" would be used to pay for this (appx 1:53), that's fancy talk for "scrapping some programs and just giving out the money we would have spent on them anyway."

Here's the problem with that: not all markets function well when left to their own devises.  Health insurance, utilities, used cars to mention a few.  (In fact, when I did my Econ Masters, we had a required class just on market failures).

There are some markets that function best when NOT run by a private firm.  The guy in the video proposes paying for the scheme by giving out cash repurposed from dropped govt programs.  Some of these dropped programs undoubtedly would have been more economically efficient than the alternative market solutions.

WHATS MORE: how do you handle someone with an unstable income?  Lets say you live in a nation that guarantees incomes of $20,000.  You're an artist whose income is based entirely on how many pieces you manage to sell.  Some years are better than others.

Will you need a govt supplement this year?  Will you not?  If I make less than $20,000, will they pay me for my missed income at the end of the year, after I've already gone passed due on my bills and rent?  Or will they give me my $20,000 on Jan. 1, and expect me to return what I may have been overpaid?  Either way, it sounds tricky to administer.

What I'm saying is - I like what they're getting at, and I get the appeal.  But once you get into the details, I'm less convinced.

But I want to know what you think, Economystified reader!  Thoughts, opinions, comments on the video?  Should income be a basic right?  Share your ideas in the comments below, we all want to hear them!

3 comments:

  1. From a purely philosophical standpoint, it does sound silly & idealistic until you realize how many programs (as you point out) already to this -- and you don't even bother to mention the ways we directly transfer dollars, like unemployment. Even Krugman seemed to come out in favor of this broad petition recently: http://nyti.ms/19B1aII

    Personally, I'm skeptical of labeling a lot of things a basic human right that requires redistribution, and just not infringing on others. You have a fundamental right to be able to have things, but not a right to be given things. It may be a good idea to have redistribution programs, and be morally correct, but I don't think that means it's a fundamental human right.

    As for the proposed policy change, there's lots of reasons to be doubtful. You make a great point about how it's more efficient to provide many things. From a policy of view, this would sweep away the complexity of each EU members' programs and simply replace it with an EU wide one -- that means transferring a large amount of money & power from members to the EU, and also means even more money going from places like Germany to places like Greece. Does how we think about unemployment insurance require revamping? Absolutely. Could many EU members benefit from simplifying their programs? Probably. But this idea isn't yet fully baked, and I'm not sure it ever will be.

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  2. Woah Woah Woah!
    At one minute into the piece, the narrator leaps off the page of this important post-WWII era UN treaty and hangs a left (haha pun!) into some self-deliniated "dignified existence".

    According to this: http://www.easpd.eu/LinkClick.aspx?fileticket=4A2F4C7078436F44665A633D&tabid=2575&language=en-US&stats=false "Social and health services are of great economic relevance: they employ about 11% of the total European workforce".

    In 2010, 16.4% of the total EU population (80 mil) live below the poverty threshold - www.inequalitywatch.eu

    The most important proposition of this plan would be to clean up the bloated social service delivery network. If we estimate (guess) that 10% of the resources associated with "social and health services" are the costs of delivering the redundant social programs that would be cut, how much cash are we really talking about? I doubt it even comes close to letting 80 million people become "Artists, volunteers, and parents" like the video proposes. Let alone the employees of that former social delivery network who now could also become "Artists, volunteers, and parents"

    These proposed cost savings and income streams are valid. Tax the rich, tax what strangles us, and eliminate waste. By all means we must embrace the tenets of the UDHR but understand it for what it is. Section 25 is a FLOOR, not a ladder.

    I am a retailer by trade and from my perspective, money only buys dignity on paper. Welfare checks, on the other hand, too often buy glittery purple resin dragons, dream catchers, and ash trays.

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  3. I think this is silly, if not dangerous. The last five years of politics in the US and having my own livelihood extremely tied to federal research agencies, like NSF and NASA, means I am incredibly skeptical every time anyone says 'we'll cut some stupid government programs, it'll be fine!', without laying out what those programs are and why cutting them is okay...

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