This makes Finland’s move toward instituting a universal basic income (UBI)—often referred to by economists as a negative income tax—all the more refreshing. The negative income tax is often associated with the free-market economist Milton Friedman, who defended it with passion and flair in the 1970s.
This year, the Finnish government hopes to begin granting every adult citizen a monthly allowance of €800 (roughly $900). Whether rich or poor, each citizen will be free to use the money as he or she sees fit. The idea is that people are responsible for their actions. If someone decides to spend their €800 on vodka, that is their decision, and has nothing to do with the government. In return for the UBI, however, the public accepts the elimination of most welfare services. Currently, the Finnish government offers a variety of income-based assistance programs for everything from housing to children’s education to property insulation. Axing these programs should free up enough public resources to finance the UBI. The bureaucracy that currently governs welfare payments will disappear. There will no longer be any need to ask for government help, nor to fill out forms or wait for the competent authorities to examine each dossier to determine eligibility.
.. Remarkably, every major Finnish political party has signed on. The Left is cheered by the socialistic idea of government-assistance-for-all. The Right looks forward to the unprecedented drop in bureaucratic control over citizens, an unheard-of extension of freedom of choice, and an unconditional restitution of part of citizens’ taxes.
.. The Finnish government is expecting the negative income tax to have a beneficial effect on employment and growth. Regardless of age, the underqualified will be more willing to accept poorly paid jobs, knowing they will continue to receive their UBI. By the same token, employers will be more willing to hire and fire, as the UBI will act as a social damper. As national wealth figures always depend on the number of citizens in the labor market, Finland is hoping for a clear growth spurt. The allowance may also limit the influx of migrants if the government decides to grant the UBI only to citizens and legal residents.
It’s Payback Time for Women
Basic income proposals are sprouting up again, from the right as well as the left. Charles Murray of the American Enterprise Institute thinks a guaranteed income could replace the welfare state.
.. That’s why some members of the Silicon Valley elite, better known for their contempt for government, advocate all-inclusive, no-strings-attached cash grants.
.. THIS is all very nice, skeptics say, but the U.B.I. still represents a moral hazard. Give people money for nothing, and the lazy will grow lazier and the rest of us will be bankrupted.
But that does not appear to be the case. On the contrary: The U.B.I. gives workers less reason to loll about at home than do perversely disincentivizing policies like the one whereby a dollar earned is a dollar cut from a welfare check.
.. Basic-income experiments have shown that recipients make greater use of medical services and break the law less often than nonrecipients.
Enslave the robots and free the poor
The economist Robert Gordon, doyen of the skeptics, has noted that the average growth of U.S. output per worker was 2.3 percent a year between 1891 and 1972. Thereafter, it only matched that rate briefly, between 1996 and 2004. It was just 1.4 percent a year between 1972 and 1996 and 1.3 percent between 2004 and 2012.
.. An ancient Roman would have understood the way of life of the United States of 1840 fairly well. He would have found that of 1940 beyond his imagination.
.. The collapse in child mortality is surely the single most beneficial social change of the past two centuries. It is not only a great good in itself; it also liberated women from the burden, trauma, and danger of frequent pregnancies. The jump in high school graduation rates—from less than ten percent of young people in 1900 to roughly 80 percent by 1970—was a central driver of twentieth-century economic growth.
.. Yet except for the upward blip between 1996 and 2004, we are still—to adapt the Nobel laureate Robert Solow’s celebrated words of 1987—seeing the information technology age “everywhere but in the productivity statistics.”
The American economy has enjoyed . . . low-hanging fruit since at least the seventeenth century, whether it be free land, . . . immigrant labor, or powerful new technologies. Yet during the last 40 years, that low-hanging fruit started disappearing, and we started pretending it was still there. We have failed to recognise that we are at a technological plateau and the trees are more bare than we would like to think. That’s it. That is what has gone wrong.
.. Raising productivity in manufacturing matters far less now that it generates only about an eighth of total U.S. GDP. Raising productivity in caring for the young, the infirm, the helpless, and the elderly is hard, if not impossible.
.. In their book The Second Machine Age, Brynjolfsson and McAfee offer as a parallel the story of the inventor of chess, who asked to be rewarded with one grain of rice on the first square of his board, two on the second, four on the third, and so forth. Manageable in size on the first half of the board, the reward reaches mountainous proportions toward the end of the second. Humanity’s reward from Moore’s law—the relentless doubling of the number of transistors on a computer chip every two years or so—will, they argue, grow similarly.
.. Yes, it is possible to imagine driverless cars. But this would be a far smaller advance than were cars themselves.
.. The idea that a small minority should overwhelmingly benefit from new technologies should be reconsidered.
.. It is also possible that the ultimate result might be a tiny minority of huge winners and a vast number of losers. But such an outcome would be a choice, not a destiny. Techno-feudalism is unnecessary. Above all, technology itself does not dictate the outcomes. Economic and political institutions do. If the ones we have do not give the results we want, we will need to change them.