Creeping Conservatism: the Guaranteed Minimum Income

What’s supposedly progressive Dylan Matthews at the supposedly progressive Vox doing pushing an idea favored by Hayek, Milton Friedman, and Richard Nixon?

Of course, the devil is in the details. It matters a lot how minimal the income really is, how fast it phases out, and (crucially) how much of the rest of the income-maintenance and social-services structure it replaces. It’s an idea with the defects of its virtues: Insofar as it displaces direct services, it saves overhead expense and avoids subjecting recipients to bureaucratic meddling in their lives. That’s good or bad depending on how great the expense is, how much fraud results, and how much meddling turns out to be useful. It gives recipients maximum flexibility in how and when to spend their money, which is good or bad depending on the recipients’ capacities for foresight and self-command. At the level of political economy, the question is whether the superior performance of the system would give redistributive policies a political edge sufficient to compensate for the loss of support from provider interests.

For those – including progressives – who think the virtues obviously trump the defects, here’s the thought-experiment: Would you replace public education with unrestricted cash payments to families with school-aged children?

But if you think, as I do, that most of what’s wrong with poor people is that they don’t have enough money, and that many of what look from the outside like behavioral pathologies are actually the predictable consequences of scarcity and insecurity, and despair, as I do, of the prospects for changing the distribution of market incomes enough to manage rising inequality, then the guaranteed-income idea looks very, very attractive. The problem then is to get as large a base and as gentle a phase-down as possible, and – this is the hard part – to discern what specific services need to be delivered alongside the cash. Seems pretty clear to me that housing, home heating, and food mostly shouldn’t get specific subsidies or direct provision, while education and health care should. But there’s lots of crucial detail to be worked out: even with a relatively generous income guarantee, I suspect there would be a need for direct housing provision to people who otherwise would be homeless victims of severe mental illness or substance use disorder. (Day care is an interesting liminal case; so is disability insurance, which could be replaced by a cash income not conditional on disability – likely to lead to substantially improved health outcomes – plus direct services or subsidies to help people deal with the consequences of disability other than difficulty in earning a living.)

The other key progressive goal should be keeping the income-support system national, to protect the poor people of, e.g., Mississippi from the hostility of state governments doing the bidding of bigoted majorities and exploitative employers whose business model is based on employees with no alternative to poorly-paid work but starvation or theft. That would have the side-effect of reducing one perverse impact of the current system, which ties poor people to high-cost-of-living areas where the social safety net tends to be less frayed. A family barely scraping by in Section 8 housing in the Bronx could live rather comfortably in Arkansas if it could cash out the value of that housing subsidy as part of a national income guarantee.

I have no idea whether Matthews is right that a guaranteed income is poised to become a mainstream political issue. But it’s a nice possibility to think about.

[Cross-posed at The Reality-Based Community]

Mark Kleiman

Mark Kleiman is a professor of public policy at the New York University Marron Institute.