Writing about “Libertarian Fantasies,” Paul Krugman explains that the libertarian view of society “bears little resemblance to reality.” Krugman continues:
Mike Konczal takes on a specific example: the currently trendy idea among libertarians that we can make things much better by replacing the welfare state with a basic guaranteed income. As Mike says, this notion rests on the belief that the welfare state is a crazily complicated mess of inefficient programs, and that simplification would save enough money to pay for universal grants that are neither means-tested nor conditional on misfortune. But the reality is nothing like that. The great bulk of welfare-state spending comes from a handful of major programs, and these programs are fairly efficient, with low administrative costs.
What, libertarians, just like Green Party Candidate Howie Hawkins, favor a guaranteed income? It sounded too good to be true. However, it wasn’t.
The proposal came from the Cato Institute–a cause for suspicion–with an article titled “The Pragmatic Libertarian Case for a Basic Income Guarantee” by Matt Zwolinski dated August 4, 2014. About the “Basic Income Guarantee (BIG), Zwolinski writes:
First, they (Big Proposals) involve a cash grant with no strings attached. Unlike other welfare programs which encourage or require recipients to consume certain specific kinds of good – such as medical care housing, or food – a BIG simply gives people cash, and leaves them free to spend it, or save it, in whatever way they choose.
Second, a BIG is an unconditional grant for which every citizen (or at least every adult citizen) is eligible. It is not means-tested; checks are issued to poor and rich alike (though on some proposals payments to the rich will be partially or fully recaptured through the tax system). Beneficiaries do not have to pass a drug test or demonstrate that they are willing to work. If you’re alive, and a citizen, you get a check. Period.
This didn’t sound bad, so why were Krugman and Konczal upset? The other shoe falls in the next paragraph; Zwolinski continues:
No libertarian would wish for a BIG as an addition to the currently existing welfare state. But what about as a replacement for it?
Thus the cost of BIG would be the loss of Social Security, Medicare, Medicaid, SNAP, TANF, and every other social safety net program that currently exists. That may sound good to Libertarians, but what about the bottom line? Would everyone be better off? Would women, would children?
Cash grants to solve poverty aren’t necessarily a bad idea, but not as a substitute for existing programs.
- Social security, funded by the payroll tax, has worked well for decades reducing poverty among the 99 percent. I would not give it up for a cash grant.
- Medicare pays hospital bills and, to an extent, drug costs. I would not give it up for a cash grant.
Cash grants would often require us to decide between medicine and food. There is no guarantee that cash grants, whatever the amount, would keep up with living expenses including medical costs.
Paul Krugman concludes:
… libertarianism does not offer a workable policy agenda …. if we should somehow end up with libertarian government, it would quickly find itself unable to fulfill any of its promises …. So no, we aren’t about to have a libertarian moment. And that’s a good thing.
© William Hungerford – August 2014