Friday, November 3, 2017

John Kay and Mary Bonsu on UBI

Paying everyone a basic income is not a realistic or fairer way to tackle poverty by John Kay at

Frankly I prefer what Yves said. It is brief. It is clear. It presents specific objections that sound right to me. But John Kay tells an interesting tale. Here is part of it:
What goes around comes around, and Atkinson and Meade were themselves reprising a debate which had occurred 30 years before. At that earlier time, the two sides were represented by Lady Juliet Rhys Williams, the architect of social dividend, and Sir William Beveridge. Each had devised their schemes in reaction to the injustices of the 1930s

The Beveridge view was encapsulated in what he called social insurance. The idea was to eliminate poverty by eliminating the causes of poverty. The state should organise insurance against the contingencies of misfortune, such as disability, unemployment, sickness and old age. Beveridge envisaged that these benefits would be supplemented by minimal social support for the few people who fell through the cracks

In the Rhys Williams vision ... poverty was the result of low incomes, and would be eliminated by ensuring that nobody had low incomes.

Beveridge was an economist, and had some idea how the economy works. Rhys Williams was concerned for people's welfare but obviously had no idea how the economy works.

I'm making assumptions here. I don't know anything about either Rhys Williams or Beveridge. But I see how people are, these days. There are a lot of people these days who are concerned for people's welfare but have no idea how the economy works. They seem to think they don't need to know how the economy works because you can just pass a law and that's the end of it. But it doesn't work like that.

Take a familiar example: raising the minimum wage. I can't say I'm against it because I would certainly like to see less disparity between rich and poor than we have today. And because I'm not altogether heartless. And no better solution is ever presented. But I can say raising the minimum wage does not solve the problem.

Raising the minimum wage may temporarily relieve some of the stress that low income creates, but it does not solve the problem that creates low income. See the difference?

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