Tuesday, December 17, 2013

Libertarianism and the Basic Income (Part One)



I have recently become interested in the case for an unconditional basic income (UBI). In large part, this has been prompted by an increasing fascination with the phenomenon of technological unemployment and its future progression. Some argue that increasing levels of technological unemployment, and the associated capital-labour income inequality that comes with this, would be best solved by something like the UBI. This strikes me as a prima facie plausible argument.

In addition to this recent interest, I also have a long-standing fascination with libertarian political theory. I would not consider myself to be a libertarian — I don’t really have any strong political convictions of which I am consciously aware. I am, however, attracted to certain aspects of it, in particular its concern for non-coercion and its presumption in favour of decriminalisation.

On the face of it, proposals for the UBI would seem to be deeply incompatible with libertarian political theory. If there is one thing libertarians agree on, it is that forcible redistribution of income is unjust and impermissible. To the extent that the UBI requires this — and it certainly seems to require this — it cannot be grounded in a libertarian political theory.

Or so it would seem. But in a recent(ish) edition of the journal Basic Income Studies some well-known libertarians argued that it might be possible to reconcile libertarianism with the UBI. The arguments require some careful elaboration and outside-the-box thinking, to be sure, but it is still possible. Over the next few posts, I want to share some of these arguments. As it happens, I don’t actually have access to the journal, so I’m working solely from contributions that I could find in the public domain. Furthermore, several of the contributors to the journal critiqued the UBI from a libertarian perspective. I’m not going to focus on those contributions here; I am only focusing on those who think the UBI might be compatible with libertarianism.

I am going to break the series down into three parts. In the remainder of this part, I’ll look at three things. First, I’ll look at the UBI proposal itself. Second, I’ll describe some of the different forms of libertarianism and outline the different moral grounds on which they can be defended. And third, I’ll explain in more detail why UBI and libertarianism seem to be so incompatible.

In subsequent entries, I’ll look at two libertarian arguments in favour of the UBI. The first, coming from Matt Zwolinski, works from a classical liberal foundation; the second, coming from Peter Vallentyne, adopts a predominantly left-libertarian slant. (Note: I did also read Dan Moseley’s article from the same journal, which makes a Lockean case for the UBI, but decided not to include it in this series. Moseley’s piece seemed a little disjointed to me, and many of his most important insights are repeated by Vallentyne, hence my reason for focusing solely on the latter.)


1. What is a Universal Basic Income?
The UBI is a (somewhat) radical proposal for reforming the way in which welfare payments are made. Following the work of Daniel Raventos we can characterise the proposal in the following manner:

Unconditional Basic Income: An income that is unconditionally granted to all members of a social group on an individual basis, without means test or work requirement. It is a form of minimum income guarantee that differs from those that now exist in three important ways:
It is paid to individuals rather than households;
It is paid irrespective of income from other sources
It is paid without requiring the performance of any work or the willingness to accept a job if offered.

This is a general characterisation. There are a number of key desiderata that we will need to settle before a UBI like this can be implemented in practice. We will need to decide exactly who is entitled to the payment. The general characterisation says “all members of a social group”, but this will typically exclude children and may exclude (though this is more controversial) non-citizens. We will need to decide who pays the income. The obvious candidate would be the state, but technically any public institution could do the job. We will also need to decide how often the income is paid. One of the main differences between the UBI and the stakeholder grant proposal is that the former is paid at semi-regular intervals, whereas the latter is a one-off payment at a certain point in an individual’s life. Proponents of the UBI will need to decide on the payment schedule. Finally, we will need to decide how it will be funded. Some kind of tax-and-transfer scheme would be the most obvious, but what exactly should be taxed? As we shall see, the answer to this final question is particularly important to libertarians.

Many people view the UBI as an unrealistic and impractical proposal, particularly when they first come across it. But quite a bit of work has been done on how it could be work, how its negative incentive effects may be less than you might think, and on its lower administrative and bureaucratic burdens when compared to traditional selective forms of welfare payment.

A UBI currently exists in the state of Alaska. It has been paid since 1982 to all residents of the state (with certain restrictions). The fund through which it is paid was established in 1976 and derives most of its income from the state’s oil industry. The amount paid per annum is quite low, hovering between $800 and $2000 for the past 25 years. A more radical UBI will be put before the Swiss people in the near future. It proposes that $2800 dollars be paid to each citizen per month. This amounts to approximately 42% of the GDP per capita in that country.


2. What is libertarianism and how can it be justified?
This is a tricky question. As with any long-standing political philosophy, “libertarianism” has come to denote a broad, often fractious, group of political theories. To make things more manageable, we’re going to have to indulge some stipulation and strategic indifference in this series (for example, the libertarian-socialist school of thought will not be addressed at all). This can be done by following Zwolinski’s lead.

Zwolinski argues that libertarianism is a family of theories, generally committed to four things: (i) the primary importance of negative liberty rights (i.e. right to be left alone); (ii) the existence of strong property rights; (iii) the efficacy of free markets; and (iv) the dangers of a paternalistic state. There are two major branches of contemporary libertarian theory:

Right Libertarianism: Acknowledges the importance of negative liberty rights and property rights, promotes free market exchanges, tries to minimise the role of the state, and has no deep concerns about equality/egalitarianism. (Note: Zwolinski prefers the term “market libertarianism” as he thinks libertarianism has little to do with traditional right wing political theories.)
Left Libertarianism: Acknowledges the importance of all the same things as right libertarianism but adds in a concern for equality/egalitarianism.

Extreme versions of right libertarianism, such as those defended by Michael Huemer (LINK), would completely reject the existence of the state and all its associated forms of coercion (taxation, imprisonment etc.). Since the UBI would seem to require coercive policies of some sort, it would be ruled out by all such theories (unless, per impossibile, everyone voluntarily consented to a UBI). Hence, in the remainder of this series the focus will be on the more moderate forms of libertarianism, i.e. the ones that accept some type of coercive state.

Libertarianism can be defended in a number of ways. These include:

The Deontological Defence: This is probably the most common philosophical defence of libertarianism. It presumes the existence of strong negative liberty and property rights, and argues that any coercive policy must be justified in relation to these rights. This results in a limited role for the state, perhaps only in ensuring these rights are protected. The theoretical grounding for the rights themselves can vary, from natural law to contractarianism.
The Consequentialist Defence: This is the most popular defence of libertarianism among economists. It argues that a libertarian political framework, including property rights and a robust free market, is justified on the grounds that it achieves the best consequences for all. This is usually cashed out in terms of overall levels of well-being or economic efficiency.
The Common Sense Defence: I hesitate to include this here since its pedigree is less well-established than the other two defences. This is, however, the defence adopted by Michael Huemer in his recent book The Problem of Political Authority. It does not presuppose any overarching normative theory. Instead, it adopts a range of common sense moral principles (often a blend of consequentialism and deontologism) and argues that these principles lead us to libertarianism.

The consequentialist defence of libertarianism is probably most comfortable with the UBI proposal. This is not surprising given that consequentialist theories prioritise ends over means. Nevertheless, the deontological defence may also have a place for the UBI proposal. We’re going to exploring this possibility in later entries.


3. Why is it difficult to reconcile libertarianism with the UBI?
As mentioned in the introduction, at first glance libertarianism and UBI would seem to be deeply incompatible. Now that we understand both the UBI and libertarianism a little better, we can sketch the incompatibility argument in more detail. To do this, we’ll work with the now-classic Nozickian defence of libertarianism.

The Nozickian defence is deontological in nature. It works from the presumption that individuals have property rights in themselves and in the fruits of their own labour. This entitles them to use, transfer or destroy their property as they see fit, provided that doing so does not violate anyone else’s negative and property rights. Prima facie, this means that any coercive policy — i.e. any policy that restricts and individual’s negative and property rights — is unjustified unless it is necessary to protect those rights. From this foundation only a minimal (“nightwatchman”) state can legitimately grow. The only form of taxation that can be legitimately raised by such a state is that which is necessary to enforce everybody’s property rights. The problem with the UBI is that it would seem to require a coercive tax-and-transfer policy that goes beyond what is strictly necessary for the enforcement of property rights.

This gives us the following Nozickian argument against the UBI:


  • (1) The state is only legitimately entitled to coercively tax individuals to the extent that is necessary to protect their negative and property rights.
  • (2) The UBI proposal would require a significant, coercive tax-and-transfer policy that would go beyond what is strictly necessary to protect negative and property rights.
  • (3) Therefore, the UBI is an illegitimate exercise of state power.


This Nozickian argument is far from perfect. Premise (2), in particular, would seem vulnerable to empirical refutation. Maybe the UBI would be less coercive than existing policies, and maybe it is necessary in order to protect rights? Nevertheless, one can see the appeal of the argument to the libertarian mindset: UBI is an expansive and radical form of tax-and-transfer, which is anathema to any negative rights fetishist.

The strategy of the two authors I am going to look at is to reject the Nozickian argument. This is on the grounds that it doesn’t give us the full picture: there are other versions of libertarianism out there that are more open to the UBI. In particular, there are classical liberal and left libertarian versions that might provide fertile grounds for a defence of the UBI. We’ll consider these possibilities over the next two posts, starting with classical liberalism in part two.

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