The concept of an unconditional minimum income is one that has fascinated me for quite some time. Particularly, I have been finding myself stumbling across different shades of the idea on a fairly regular basis lately. Hayek, back in 1944, had already argued in favor of a weak form of such an arrangement. Milton Friedman’s Earned Income Tax Credit, though in its current form tied to actual employment and thus hardly unconditional (appart from phasing out as income rises), points in a somewhat similar direction. When even reading about what seem to be related concepts on Mankiw’s (post of Nov. 18th) and Sumner’s blogs I knew it was time to write down some of my thoughts on it.
But first I decided to get through a creatively named book by an author named Karl Reitter I picked up at this year’s Elevate Festival. And while it proved to be considerably less informative than I had hoped (I’d like to assume this speaks to my vast knowledge of the issue and unmatched level of intelligence, but am rather inclined to think this would be megaloamanic and nothing else), the author pleasently surprised me by only occasionally going off on the typical rants against the “neoliberal economic system” I have come to expect from similar publications. In its purest form, an unconditional minimum income is exactly what it says it is: a concept that ensures a certain level of income to any and all persons living in a country, without any strings attached. Anyone under 18 could receive a reduced level of the transfer, but that’s pretty much it. Ideally, one would scrap all forms of often distorting social programs and replace them with such a system in a way that turns out to be neutral in terms of direct budgetary impact. Let’s get down to the details.