A National Assured Basic Income Will Poison the Well

On a steamy night in Tampa, Florida, during the 2012 Republican National Convention, a few of us were having drinks with some of the conventioneers at a local watering hole when a rather odd topic came up. Some Democrat complaints about Mitt Romney were blaring on the television – I don’t recall the specific issue – and the idea of additional federal entitlement programs came up as a way of “leveling the playing field” against the super duper rich fat cats, as represented by the nascent GOP nominee. One of our ad hoc drinking buddies scoffed in a gruff tone and, with tongue planted in cheek said, “Why don’t we just pay everyone to stay home and watch television all day?”

This may sound like the makings of a good joke in conservative circles, but it’s not entirely unheard of. I first noted real world suggestions of this last year when Switzerland was toying with the idea of providing a $2,800 per month assured income to all of its citizens, whether they worked or not.  This is not an unknown theory, particularly in nations with nationalized oil companies and rich mineral resources.

The other place you run into a parallel to this sort of utopian concept is probably best exemplified in the movie Star Trek: First Contact.  In one scene, Captain Jean-Luc Picard has traveled to the past and is explaining to a lost and confused local woman that the crew does not get paid because, in the future, there is no money. No money? No, he explains. In the future, people work cooperatively to better themselves and the world, not for personal gain.

It’s a wonderful idea, isn’t it? But clearly one destined to remain on the fiction shelves for those of us who reside in a 21st century capitalist society. Or is it? CNN recently published an op-ed from David Wheeler who’s gotten a whiff of this idea and, having smelled what the Swiss are cooking, seems to think this is just the recipe for what’s ailing America as it faces the bugaboo of “income inequality.”

A monthly cash payment to every American, no questions asked, would solve several of our most daunting challenges. It's called a basic income, and it's cheaper and much more effective than our current malfunctioning safety net, which costs nearly $1 trillion per year.

The United States is already experimenting with a variation of basic income, even though most people don't realize it. Alaska has a small version, called a Permanent Fund Dividend, which is incredibly popular and made the state one of the most economically equal places in America. Importantly, Alaskans don't consider it "redistribution," but rather "joint ownership."

Of course, all government programs have imperfections, and the basic income idea has an obvious one: There will still be people incapable of functioning in daily life—people who will spend their money before paying for basic necessities. What should be done about these "moochers"?

It’s in some ways admirable that Wheeler takes time out in the course of his ponderings on a more perfect union to wonder if there might be some flaws with this plan. But looking at this from the capitalist perspective, he seems to be ignoring a few of the truly massive flies in this particular ointment. The first of these comes with the attempt to somehow conflate Alaska’s Permanent Fund Dividend with the idea of a socialist state handing out paychecks for free.

Alaska and certain Nordic socialist interests have a few things in common here, but not what the author supposes. First, much like some European North Sea entities, Alaska is dealing with a miniscule population when compared to other large states. More to the point, the state government enjoys a peculiar benefit similar in nature. No, Alaska is not a socialist state, but they do control vast natural resources which outside companies extract and process. These entrepreneurs pay a fee directly to the state for mineral exploration rights and it adds up to a tidy sum. What Alaska is doing is not offering any form of guaranteed basic wage. They are more in line with a very prosperous company engaged in a practice known as profit sharing. (As an aside, I don’t know if any American companies actually do that anymore. Those of you casting about with a confused look on your faces can either Google the term or ask your parents.)