It was supposed to be better by now—maybe not all the way better, but definitely better than it is. With the unemployment rate still nearly 7 percent and more than 46 million Americans living below the poverty line, the recovery that was supposed to follow the Great Recession has been slow, frustrating, and increasingly worrisome.
It’s a problem that has bedeviled the country’s leading economists and its most powerful policy makers. But explain the whole mess to an 8-year-old, and you might hear a solution that will sound laughably obvious: Why not just give everyone some money? That way, even poor people could afford to feed their families and pay rent.
If that feels naive in its simplicity, prepare to be surprised. The notion of a government paying its people just for being alive has a name—“guaranteed basic income”—and has recently been making headway as a legitimate policy proposal in countries all over the world.
Activists in Europe, most notably in Switzerland, have succeeded at injecting the idea into mainstream political debate. A recent poll showed that it has the support of nearly half of Canadians. The president of Cyprus says he’ll launch a limited version of the scheme this summer. Brazil has been giving direct cash transfers to poor families ever since passing a basic income law in 2004; pilot programs have in recent years been carried out in India and Namibia.
In the United States, the idea of handing out unconditional government allowances is seen, understandably, as a nonstarter, despite enjoying some recent buzz among policy wonks. If nothing else, in today’s political environment, it just sounds too much like a socialist fantasy. But the idea has a deep legacy in the United States that almost uniquely stitches together figures on the left and right: Its prominent supporters have included Martin Luther King Jr. and John Kenneth Galbraith, and a version initially suggested by free-market economist Milton Friedman nearly became law under President Nixon. Recently, conservatives like Veronique de Rugy, a senior research fellow at George Mason University’s Mercatus Center, and Charles Murray, author of “The Bell Curve” and a scholar at the American Enterprise Institute, have stepped forward to support the idea; it’s also been embraced by the “Occupy”-affiliated academic David Graeber.
“You usually don’t have people from different ends of the political spectrum getting on board with the same sort of program,” said Brian Steensland, an associate professor of sociology at Indiana University and the author of the book “The Failed Welfare Revolution,” about how basic income went from being a marginal academic idea to a congressional bill and back again. “There’s just something in there that’s really appealing for people from a whole range of intellectual, philosophical, and economic perspectives.”
For pragmatists on the left, cash payments to all would be the fastest way to eradicate poverty, by making sure everyone, no matter their circumstances, has enough money to live on. For the utopian-minded, it holds the promise of a liberation from work—a way to make sure that the next John Lennon doesn’t have to waste all his time lifting boxes in a warehouse. For conservatives, it is a tool for rebuilding the bonds of civil society, putting people’s fortunes back in their own hands, and wiping out the messy, piecemeal, nanny-state safety net in one swoop.
At the moment, the idea is widely seen as too radical a departure from the status quo. Working out the mechanics would be a nightmare, and even that 8-year-old might suspect—rightly—that some people would just give up working. But even if the idea isn’t politically feasible in the short term, its proponents see it as the kind of deep-seated rethinking that may soon be needed to face a problem that doesn’t have an easy solution in our current system: that as technology, outsourcing, and other structural shifts transform our economy, it’s becoming increasingly clear that national prosperity does not necessarily mean there are enough good jobs for everyone who needs one.
In that light, the viability of a solution like the guaranteed basic income—and whether it can be made palatable to Americans for whom work ethic is a prized national value—ends up coming down less to politics than to the fundamental question of how we see the role of work both in the lives of individuals and in society as a whole.
America’s modern safety net is a complex machine, estimated to cost almost a trillion dollars a year, which operates on the premise that there are those who deserve help from the government and those who don’t. Unemployment benefits only go to people who can prove they’re looking for work; children’s health insurance is free only if their family income stays below a certain level. The goal, understandably, is for assistance to be temporary and limited to the people who really need it. But the real effect, many say, is an expensive tangle that subjects the neediest people to the most bureaucratic headaches, while tethering their lives to the requirements of government programs.
The idea of a guaranteed basic income throws all that out the window, replacing it with one straightforward policy that applies to everyone equally. Of course, not all basic income activists imagine the program working the same way. The most important argument is between those on the left, who generally believe that cash payments should be incorporated into the safety net we already have, and those on the right, who tend to argue they should just replace the entire welfare state. Beyond that, proposed plans have varied widely in their details. Charles Murray, in his book-length defense of the basic income, “In Our Hands,” suggests dismantling the welfare state and instead paying every citizen over 21 years of age $10,000 per year. Yale Law School professors Bruce Ackerman and Anne Alstott argue for one lump sum payment of $80,000 to be distributed to everyone on their 21st birthday. Others call for deciding on a particular income as a floor, and then using the tax system to make sure everyone takes home at least that much.
Though the concept of the state distributing money directly to its citizens has been around for centuries, in America the concept truly ripened during the 1960s.
This was not because of ’60s idealism, but because government economists looked out at the country and saw something terrifying. For the first time in history, they realized, job growth wasn’t keeping pace with the growing economy, meaning that there were segments of society where people couldn’t get work even as companies prospered.
This phenomenon, known as “structural unemployment,” combined with a fear about certain kinds of jobs being rendered obsolete by technology, led President Kennedy’s economic advisers to bring the notion of the guaranteed income to the table. It began to circulate in Washington policy circles in the form of a so-called Negative Income Tax — a term coined by Milton Friedman in his 1962 book, “Capitalism and Freedom.”
By the time Nixon and George McGovern were competing for the presidency in 1972, as Brian Steensland describes in his book, both the Democrats and the Republicans were floating versions of a basic income. McGovern advocated for a so-called Demogrant that would essentially drop a yearly gift of $1,000—not a full salary; more like $7,000 today—into the lap of every American. By that point, more than 1,000 economists had called on the federal government to adopt some kind of income guarantee immediately.
Despite all this momentum — even Donald Rumsfeld, who became director of the Office of Economic Opportunity when Nixon was elected, was a supporter — the idea ran aground after it was brought to Congress in the form of the Family Assistance Plan. It was voted down in committee, with some Democratic senators protesting that it wasn’t generous enough and others fearing it would disrupt the agricultural economy in the South.
According to Steven Pressman, an economist at Monmouth University in New Jersey and the co-editor of a 2005 book on the basic income guarantee, the idea suffered another blow in that period, when it was given a field test: a series of extraordinary social science experiments conducted between 1968 and 1980 in a number of US states, including New Jersey, Pennsylvania, North Carolina, and Colorado. In randomized trials, some households got unconditional cash transfers; others were assigned to “control groups” that did not.
The results confirmed the suspicions of skeptics: People who got the money worked less. Specifically, a small but significant percentage of secondary earners, typically women, reduced their working hours or dropped out of the labor force entirely. On top of that, the results showed that married couples who received cash transfers were more likely to get divorced.
“These two outcomes killed the idea,” said Belgian philosopher and political economist Philippe Van Parijs, one of the world’s most prominent advocates of a guaranteed basic income and a former visiting professor at Harvard. Ever since, Van Parijs said, the debate over how to end poverty in America has proceeded as if the option of a basic income simply didn’t exist.
In 2014, APPROACHING FIVE YEARS after the Great Recession technically ended, the problems the basic income scheme was supposed to solve in the ’70s have returned to the forefront: America’s gross domestic product is ticking up, and the stock market is booming—but millions of people are persistently, unfixably unemployed. As MIT professors Erik Brynjolfsson and Andrew McAfee argue in their new book, “The Second Machine Age,” this will get even more extreme with time, as computers get better at doing jobs long reserved for people.
Between those shifts, and the mounting size of the safety net—add the ballooning cost of Medicare and Social Security to the government programs of the ’70s—some thinkers now believe we need to do more than wait out the post-recession hangover: Instead, we need a wholesale rethinking of government benefits.
“At some point, we are going to be spending such a ridiculous amount of money on [the welfare state] that it will become ridiculous to everyone,” Murray said. “Right now it’s already ridiculous to people on the right. How can we have ‘X’ trillions of dollars in transfer payments and still have 15 percent of the population below the poverty line? It’s idiotic. Well, at some point it will also become idiotic to people on the left, and so, that’s what I see as the opportunity, ultimately, for a grand compromise.”
That grand compromise, he explained, will involve the libertarian right saying, “we’ll give you on the left big government in terms of the amount of money we spend on people, if you will give us small government in terms of the ability of the government to screw around with people’s lives.”
“I don’t know when it’s going to happen,” Murray said. “But we are a lot closer to that point in 2014 than we were when I published the book [eight years ago.]”
Graeber, an anarchist and an anthropologist at the London School of Economics, sees a similar breaking point coming: “The free-market guys have been on this dogged campaign to convince people that any sort of visionary politics is only going to lead to the Gulag....But of course the system’s about to fall apart, as the people running it increasingly recognize.” The fact that even conservatives like Murray are coming around to the basic income idea, he said, means “they’re trying to grab onto it, because they know something’s gotta happen.”
Whether the American people could ever embrace some version of a guaranteed basic income may come down to how they feel about the results of those experiments from 40 years ago—the ones that seemed to show that people who get free government money tend to work less and get divorced more. While those outcomes were widely seen at the time as dooming the whole idea, some basic income proponents believed that view got it backward. The economist James Tobin, for one, a Nobel laureate who wrote the first technical paper on how a basic income would work, wondered why it had been seen as a negative thing that women, possibly stuck in marriages out of economic dependence, had been given the means to leave their husbands. And as Van Parijs remembers Tobin saying to him before his death in 2002, “If some people, for a period, want to make their own life easier by avoiding the double shift and getting up at 5 o’clock in the morning, why shouldn’t it be welcomed? Does it not make for a more flourishing life?”
The future of the basic income in the United States will depend on whether there’s room, politically, to discuss that question. It’s an article of faith in America that work is a positive value: full employment, full time, with no such thing as a free lunch. The basic income may be, as Martin Luther King Jr. suggested in his final book, a more moral and humane way than our current welfare system to share the fruits of a democracy. But it also requires a radical shift in thinking: by guaranteeing people money without requiring them to do anything in exchange, we decouple their value in society from their ability to do a job.
To some advocates of the basic income policy, this is an idea we have to start getting used to. Jobs, they suggest, are disappearing not just because of a temporary recession, but because technology is making it increasingly easy to build an economy with fewer laborers, thus driving the earning power of less skilled workers below the poverty level. This amounts to a looming disaster, the argument goes, unless we as a society commit to making sure everyone has enough to survive regardless of their employment status.
Put another way, the fact that humankind has advanced to the point where we need so much less human labor to maintain the same level of productivity can be seen as a positive, as long as we can let go of the belief that a full-time job is a prerequisite for a complete, meaningful life. If we live in a nation that can afford it, say the most utopian of the basic income thinkers, shouldn’t we give people the option of working less, or at least prevent them from having to scramble to stay alive?
For people who have never received a handout, who draw their dignity and identity from the work they do every day, that might sound like an unthinkable stretch. For others, it sounds like a solution.Leon Neyfakh is the staff writer for Ideas. E-mail email@example.com.
Correction: Because of a reporting error, an earlier version of this article misstated the year George McGovern ran against Richard Nixon for president.