June 15, 2016

June 15, 2016 | Commentary on Economy, Minimum Wage

Idea, Politics of Basic Income Aren't New

A minimum income for everyone above a certain age, often called a basic income, is back in vogue. Several major magazines and prominent thinkers from different philosophical backgrounds say a basic income is necessary in an age where robots will replace all jobs. Others call for a basic income to replace the current welfare system.

The idea of a minimum income isn’t new. Even the term “minimum income” is found somewhat regularly in publications dating to the late 19th century. The terms “basic income” and “universal basic income” are only the more recent branding of this old idea.

The politics of a minimum income (universal or means-tested) also isn’t new. Towards the end of 18th century and into the early 19th century, wheat prices fell, which hit rural areas in Britain particularly hard. The country was also entering a particularly turbulent period of the Industrial Revolution and undergoing unprecedented changes. The nature of work was drastically changing, economic growth wasn’t equally distributed, and real wages for many workers wouldn’t begin rising until later in the century.

It was during this time that a number of parishes (local governments) adopted a means-tested minimum income under the old Poor Laws system. It came under fire by utilitarians in the Royal Commissioners Report on the Poor Laws in 1834 for increasing the population, poverty and spending, as well as reducing the incentive to work among the poor.

The minimum income was later attacked by Karl Marx and Friedrich Engels for supplementing rural wages while increasing the profits of farmers (who formed the English aristocracy). Even Tocqueville wrote that the old Poor Laws created sense of entitlement with disastrous consequences: “The number of illegitimate children and criminals grows rapidly and continuously, the indigent population is limitless, the spirit of foresight and saving becomes more and more alien to the poor.”

About the Author

Paul Winfree Director, Thomas A Roe Institute for Economic Policy Studies and Richard F. Aster Fellow
Thomas A. Roe Institute for Economic Policy Studies

Originally published in The Washington Times