Brief History of Basic Income
Before reaching its final version as an “unconditional basic income,” the idea of a universal minimum income guaranteed by the state emerged centuries ago. There are actually three different historical roots of the concept of basic income. First, the idea of a minimum wage first emerged at the beginning of the sixteenth century. Later, the allocation of an unconditional one-time grant emerged at the end of the eighteenth century, while the combination of the two, the (unconditional) basic income, was first articulated in the middle of the nineteenth century (BIEN, 2020).
Although the origin of the concept is often attributed to Sir Thomas More’s Utopia, Juan Luis Vives (1492–1540) is now known as the original intellectual of basic income. In his work On Assistance to the Poor, published in 1526, Vives proposed to provide a certain minimum public assistance for everyone living within the municipality boundaries. According to Vives, this public assistance should be given to poor people only if they were willing to work. While not successful, Vives’ work inspired the emergence of The English Poor Laws in 1587–98. In the eighteenth century, the idea of reducing poverty again came to the fore amidst the French Revolution. The Marquis de Concordet (1743–1794) proposed an idea that he called a “basic endowment.” Later, Thomas Paine (1737–1809) suggested that the earth is the common property of the human race and every owner who cultivates land has a rent debt to society. This “ground-rent” must be paid to every person upon turning 21 (Standing, 2017).
Charles Fourier (1772–1837), an early utopian socialist, argued that basic human rights such as hunting, fishing, and letting one’s cattle graze were violated by civilization and that people should be provided with a “subsistence allowance” in exchange for their direct access to natural resources. Another utopian socialist Joseph Charlier (1816–1896) objected to Fourier’s subsistence allowance on the grounds that the state could interfere too much. Instead, he suggested calculating a “regional dividend” by calculating the rent of all real estate and paying this to every citizen. On the other hand, John Stuart Mill (1806–1873), in his Principles of Economy, supports Fourier’s proposal, but adds that private property and inheritance can coexist with a subsistence allowance. According to Mills, first, a certain subsistence is distributed to each member of the society from the total production. The remaining surplus can be distributed between labor, capital, and talent at predetermined rates (History, BIEN).
In his book Roads to Freedom (2013), British thinker Bertrand Russell (1872–1970) brought renewed attention to basic income by proposing it as a means to social justice. He argued that everyone should be paid a certain minimum income and that after completing an education, work should be voluntary rather than required for membership in society. In the 1960s, the American economist Robert Theobald (1929–1999) predicted that in the future, increasing automation will replace many jobs, and therefore, a basic income by the state will be inevitable for all. Another form of basic income was the famous “negative income tax” introduced by Nobel Prize–winning economist Milton Friedman (1912–2006) in his book Capitalism and Freedom (2009). President Richard Nixon even proposed to replace many federal welfare programs with a negative income tax (Hughes, 2020). Several government-funded basic income experiments were conducted both in the USA and Canada in the 1960s and 1970s. As a result of growing interest in the idea, in 1986, basic income supporters founded the Basic Income European Network (BIEN, 2020) in Belgium. Today, BIEN is known as the Basic Income Earth Network and continues to conduct research and organize meetings on basic income (BIEN, 2020).
Interest in basic income fizzled in the USA as early pilot data suggested an increase in divorce among recipients. Decades later, researchers discovered that this was a calculation error, but the damage had already been done (Marinescu, 2017a, b). However, since the 2000s, UBI has regained momentum due to increased inequality, the growth of automation and artificial intelligence, and the COVID-19 pandemic. Most recently, Andrew Yang’s 2020 candidacy for the American presidency, with a campaign focus on basic income, introduced UBI into mainstream political discourse. Basic income pilots are once again launching around the world and consistently associate UBI with decreased poverty, little to no change in employment, increased school enrollment and attendance among the children of recipients, more positive family interactions, and improved mental and physical health (Hasdell, 2020).
What Do Americans Think About Basic Income?
Although the popularity of basic income has been on the rise in recent years, American opinion continues to be divided. According to a 2017 Gallup poll, 52% of American adults are against UBI while 48% support it (Freeland, 2019). A more recent survey conducted by the Pew Research Center produced similar results. When American adults were asked if they would support a UBI of $1000 per month provided by the federal government for all adult citizens, whether or not they work, 54% opposed the proposal (Gilberstadt, 2020). Another poll by Zogby Strategies (2017) found that 40% would be in favor of UBI while 35% would be against. In this poll, 25% of people remained undecided. Similar results were demonstrated by the IPSOS (2017) international survey, while 49% of Americans supported UBI, 26% were opposed, and 25% were undecided.
Age, race, gender, education, income level, and political opinion are all important factors that influence one’s opinion regarding UBI (Gilberstadt, 2020). People under 30 report strong support for UBI with 67% in favor (33% against); however, this rate drops dramatically among those 65 and older: only 26% support UBI while a majority (72%) are against it. Another study supports this trend: 41% of those under 53 (the sample age) favor UBI compared to only 33% of those over 53 (Freeland, 2019). When it comes to race, a majority of Black (73%) and Latinx (63%) adults are in favor of basic income, compared to only 35% of White adults (Gilberstadt, 2020). Additionally, women tend to be more supportive (40%) of UBI than men (35%). Education level of people also seems to be influential on people’s opinion. People with bachelor’s degrees are more likely to be against UBI (46% against) than those with less education (37% against) (Freeland, 2019). Further, people with lower incomes are more supportive of UBI (63% in favor compared to 31% among higher income households).
Perhaps the most fundamental trend is related to one’s placement on the political spectrum. There is strong opposition (78%) to an unconditional, universal cash transfer of $1000/month among Republicans while the majority of Democrats (66%) are supportive of this proposal. However, the results from both parties also vary according to age, race, and income level. Although most Republicans in all age groups oppose UBI, 41% of Republicans aged 18 to 34 favor it. We also see the same trend among Democrats: adults 18 to 34 show much higher support than older people. Moreover, income level seems to be highly influential for both parties. Forty-three percent of Republicans with low incomes favor UBI, while support sharply decreases to 17% for middle income groups and 8% for higher income Republicans. While there is a similar trend among Democrats, overall support for UBI is much higher. We also see racial differences among Democrats. Again, the majority of Black and Hispanic Democrats support UBI (77% and 70%, respectively), compared to 61% of White Democrats (Gilberstadt, 2020).
Understanding the Assumptions
When we look at the possible reasons why people might oppose UBI, especially a majority of Republicans, we find some general assumptions as follows: “Cash transfers would make people lazy and dependent” or “People would spend money on alcohol, tobacco or ‘bad habits’” (Thompson, 2018), despite a significant body of evidence to the contrary (Hasdell, 2020; Marinescu, 2017a, 2017b). It is therefore worthwhile to trace the roots of these political tropes, beginning with two central ideologies: Protestantism and capitalism. Together they lay the foundations of political thought that has shaped American society for centuries.
Max Weber once famously claimed that western capitalism could only emerge thanks to Protestant ethics and values, specifically the Calvinist doctrine of asceticism and predestination (Crossman, 2019). In the early church, the Catholic idea that we could earn our place in heaven through good work was shared among Christians but was later rejected with the birth of Protestantism. For Protestants, salvation was predestined and it was possible to perceive those who were elected by simply observing their way of life. The two important marks to watch were the person's hard work and frugality. In this regard, the qualifications of hard work, frugality, and discipline were attributed to being chosen. Weber argued that these attributions, values, and eventually the associated mindset created space for capitalism to thrive in the West.
Then, with the rise of capitalism and classic economy theories, reason was emphasized for one’s means to survive, i.e., the degree to which one exerts personal effort and uses the guidance of his own reason determines whether he thrives or fails. In other words, there were no structural flaws, only individuals’ mistakes (Rand, 1967). These conditions set the foundation for the emergence of a new sort of ethos which would later be called the “American Dream.” The message of these ideals was clear: no matter where or in which conditions you were born, each individual has the right and freedom to seek prosperity and happiness. With its emphasis on hard work and dedication, this dream promised the prescription to achieve financial success and high positions in society.
This emphasis on personal responsibility crossed the political aisle with the rise of neoliberalism in the 1980s and became the central approach toward social policies (Jansson, 2014). In the neoliberal agenda, welfare policies including cash transfers are criticized as going against core American values by promoting laziness and dependency. Classical economic theories and neoliberalism argue that each individual is responsible for their own life and must work hard to earn their positions in life (Goeury, 2016). If they do not act rationally and fail to take care of themselves, this could be only due to their own wrongdoing. “Handouts” and benefits therefore diminish incentives to work, reward laziness, and ultimately create dependency on the state (Hamilton, 2016). From this perspective, people are discouraged from taking control of their own lives, which is unfair to those who persevere and work hard since they are the ones who carry the extra burdens of other people’s failure.
In addition, it is argued that when people (especially the poor) receive unconditional money, they use it for negative purchases like alcohol and tobacco since, through their failures in the capitalist market, they have proven their incapacity for rational decision-making (FAO, 2016). Moreover, conservative philosophy claims that children who grow up with parents who do not earn what they have will later embody this idleness as a social norm in adulthood. Then, they will become the next recipients of social programs, creating the “culture of dependency” (Hanna, 2019). But do these assumptions actually present reality? Are they supported by evidence or do they exist as political mythology?
What Does the Evidence Actually Say?
One of the most important advantages of UBI is that it bypasses the substitution effect, which means people do not lose money when they start to earn more as in most conditional welfare programs. In this way, it creates a potentially strong incentive for work and greater earnings, which has born out over 60 years of cash transfer pilot data (Marinescu, 2017a, 2017b). A Stanford University cross-synthesis of reviews (Hasdell, 2020) found that across sixteen systematic reviews of international basic income pilots, there is little to no impact on the employment outcomes of recipients. It should be noted that none of these pilots meets the exact UBI conditions discussed before, which are universal, unconditional, individual, regular, and paid in cash. However, they still provide some vital insights for a possible future with a true UBI.
Beginning in the 1960–1970s, Negative Income Tax (NIT) experiment with more than 10,000 participants in seven states (monthly amounts ranging from $1,453 to $4,037 for a family of four in 2013 dollars) discovered a slightly negative impact on working hours, but the impact was found to be statistically insignificant (Burtless, 1986; Robins, 1985). Often, when work does decline, it is replaced by increased caregiving tasks (Hasdell, 2020). In the NIT trials, the largest reductions of work efforts were seen among single mothers (Widerquist, 2005).
In the 1990s, the North Carolina Eastern Band of Cherokees’ Casino Dividend, which provided unconditional cash transfers to 16,000 tribe members ($4,000–$6,000 per year), had no labor supply effect over the ten-year period of examination (Akee et al., 2010). But a much more interesting result was revealed in the casino dividend study: The children who received casino payments were less likely to consume alcohol or cannabis when they became adults. Moreover, significant reductions were observed in smoking and obesity as well as decreases in drug-dealing activities among youth recipients (Marinescu, 2017a, 2017b). An analysis of the Alaska Permanent Fund, in which every eligible citizen of Alaska receives annual oil dividends, also demonstrates little to no effect on work (Jones & Marinescu, 2020).
A 2012 pilot program in Madhya Pradesh, India, gave 127 households 300 rupees per month for every adult and 150 rupees per month for every child. The pilot revealed stunning outcomes in terms of basic income’s impact on alcohol consumption and work. First, a positive economic effect was found in terms of a higher level of work, productive labor, earned incomes, and assets. Regarding consumption behavior, basic income did not increase alcohol consumption; on the contrary, it actually decreased the average amount spent on alcohol! Recipients explained that before the experiment, there was not enough work, and therefore, men spent their time sitting and drinking. Whereas with basic income, they became busier as they used the money for production, and in doing so, they had less time for vices. Furthermore, a survey four years after the Madhya Pradesh experiment found that 54% said their drinking decreased and one-third said it remained the same while a small percentage said it increased (Davala et al., 2017). Finally, a recent experiment in Finland also found no impact on paid employment. However, the recipients reported better overall health and economic well-being (“Results of Finland’s basic income experiment,” 2020).
Longer and permanent experiments are needed with the exact conditions of UBI (especially universality) to understand its true impact at the micro and macro levels. For example, would behavioral responses to basic income be different if recipients knew the policy would be made permanent? Furthermore, how would the macroeconomy be affected if everyone had an extra $1000 monthly? A model conducted by the Roosevelt Institute predicts that basic income would grow the economy, reduce unemployment, and increase wages without increasing inflation (Nikiforos et al., 2017).
Still, the assumptions that basic income results in laziness and negative consumption behaviors persist despite a growing body of evidence to the contrary. In order to build the case for larger experiments of unconditional cash transfers, it may be useful to understand what exactly recipients would do with such a benefit. We have seen that basic income does not lead to an increase in negative spending, but how would Americans spend a no-strings-attached monthly benefit? Conversely, how do Americans think others would spend it? Little to no previous research explores these questions. This latter question will be useful to better understand the political barriers facing UBI advocates.