With the lockdown orders around the world, many people find themselves in forced idleness. How will we use our public resources to help the least well-off? Given what we have been seeing recently, it is likely that we may repeat many of the mistakes of the past – excluding many people, making the process distasteful to the applicants, and worry that any help we provide to the least well-off will make them lazy. This is not a time to get selective, I argue. It might rather be time to consider a basic income guarantee or a negative income tax.
The English utilitarian Jeremy Bentham once maintained that most people benefitting from the English Poor Laws were lazy. “In this country,” he wrote, “under the existing poor laws, every man has a right to be maintained, in the character of a pauper, at the public charge: under which right he is in fact, with a very few exceptions, (amounting not to one perhaps in fifty,) maintained in idleness.” Such a rhetoric has been a leitmotiv of poverty alleviation debates. In 1870, for instance, the Charity Organisation Society insisted that the relief system should be made “as distasteful as possible to the applicants” by insisting, say, on a labour test. Only the “deserving poor” should be helped. More than one hundred years later, this message was still being approvingly quoted by libertarians like Murray Rothbard. Simplifying greatly, welfare benefits putatively encourage laziness, and poverty alleviation is consequently not to be understood as a reciprocal relationship among different parties – it is rather an institutional protection of idleness.
Today, with the lockdown orders around the world, many people find themselves in forced idleness. The Covid-19 pandemic has left tens of millions of people unemployed and stranded at home. With a global recession guaranteed, growing credit stress, and price inflation, it is clear that many countries will need to spend a considerable share of their public resources to help the least well-off. How will we do that? Will we make the process as distasteful as possible? Will we try to cut off those who putatively do not deserve this help? Or will we worry that any such help will incite laziness? It seems so. We may indeed repeat many of the foolish mistakes of the past.
For example, in the United States, Republican Senators Tim Scott, Lindsey Graham, and Ben Sasse recently went over the Benthamite rhetoric, almost word for word, as they opposed supercharged unemployment benefits – if the benefits are raised for four months by $600, they claimed, then some people with low-paying jobs will make more money by not working, which will encourage idleness. In Canada, on the other hand, by the end of March, about a third of the estimated unemployed people were left out of the Employment Insurance program or the new Canada Emergency Response Benefit. Of course, if one was unemployed before the crisis, one gets nothing from the new fund, though it is virtually impossible to find a job now. These are unfortunately not isolated cases – getting some financial help to get through this crisis can be a harrowing experience.
Leaving aside the intractable problems that would accompany any attempt to pick up those who are indeed “deserving” of help right now, we must grasp how dire the economic situation of many people is. Emergency unemployment benefits are not enough. This is not a time to get selective. It is hard to know exactly how the coronavirus crisis affects different people financially, and why some people find themselves unemployed or unable to work. We cannot invade the private life of all those who would receive state assistance as we may have done before. We should wash away any fear we may have about lazy Malibu surfers leading a life of self-indulgence, or 22-year-old living at home with their parents and consuming more than their fair share of public resources.
It might rather be time to consider a basic income guarantee or a negative income tax. Though he endorsed the latter scheme, Milton Friedman is known for criticizing the American social security program, saying that it is a “large scale invasion into the personal lives of a large fraction of the nation without, so far as I can see, any justification that is at all persuasive”. One could now easily argue that many schemes of poverty alleviation are indeed invading the personal lives of the people without any persuasive justification. For instance, one could now refrain from working simply not to expose one’s grandmother living in the same house. This is not idleness, but common decency. Not helping that person is not smart government, but indecent. Even the greatest champions of market capitalism like Frank Knight or Friedrich Hayek argued that “every member of society has a right to live at some minimum standard, at the expense of society as a whole”, and that there is “a floor below which nobody need to descend.” This floor should not be conditional on your willingness to work, especially when there is no such work for most people during this pandemic.
Jeremy Bentham, “Outline of a Work Entitled Pauper Management Improved”, in The Work of Jeremy Bentham Vol. VIII, Edinburg, William Tait, 1843.
Milton Friedman, Capitalism and Freedom, Chicago, University of Chicago Press, 2002.
Friedrich Hayek, Law, Legislation and Liberty, London, Routledge, 2013.
Frank H. Knight, Freedom and Reform, Indianapolis, Liberty Press, 1982.
Murray Rothbard, For a New Liberty: The Libertarian Manifesto, New York, Collier Books, 1978.