UBI Once Again

I see that the idea of a universal basic income (UBI) is regaining some interest (Porter 2025, Ferguson 2024, Kelly 2023, Partington 2020). I wrote a column on this subject a few years ago (Bartlett 2013) and think the perspective is still valid. Rather than summarize it, I will just reprint it. I have listed only the references I used in the original article. I will have more to say in a future post.

In October [2013], Swiss voters submitted sufficient signatures to put an initiative on the ballot that would pay every citizen of Switzerland $2,800 per month, no strings attached (Lowrey 2013). Similar efforts are under way throughout Europe. And there is growing talk of establishing a basic income for Americans as well. Interestingly, support comes mainly from those on the political right, including libertarians.

The recent debate was kicked off in an April 30, 2012, post, by Jessica M. Flanigan of the University of Richmond, who said all libertarians should support a universal basic income on the grounds of social justice. Professor Flanigan, a self-described anarchist, opposes a system of property rights “that causes innocent people to starve.”

She cited a paper by the philosopher Matt Zwolinski of the University of San Diego in the December 2011 issue of the journal Basic Income Studies, which also contained other papers by libertarians supporting the basic income concept. While acknowledging that most libertarians would reject explicit redistribution of income, he pointed to several libertarians, including the economists F.A. Hayek and Milton Friedman, who favored the idea of a basic universal income.

Friedman’s argument appeared in his 1962 book, Capitalism and Freedom, based on lectures given in 1956, and was called a negative income tax. His view was that the concept of progressivity ought to work in both directions and would be based on the existing tax code. Thus if the standard deduction and personal exemption exceeded one’s gross income, one would receive a subsidy equal to what would have been paid if one had comparable positive taxable income.

In 1965, Sargent Shriver, director of the Office of Economic Opportunity, recommended to President Lyndon Johnson that he support Friedman’s idea of a negative income tax (Loftus 1965). Friedman provided illustrative figures to The New York Times (1965) showing how his plan would work. The maximum benefit would be $1,500 per year for someone with zero gross income, which would be about $11,500 in today’s dollars.

Ultimately, Johnson rejected the negative income tax but appointed a commission that later recommended one (New York Times 1969). Johnson also supported an experiment by the Department of Health, Education and Welfare that would run small pilot negative income tax programs in various cities and states to see how people responded.

The negative income tax was revived by President Richard Nixon in an August 1969 (Nixon 1969a, 1969b) proposal called the family assistance plan that had been developed by Daniel Patrick Moynihan. The New York Times columnist James Reston (1969) called it a “remarkably progressive welfare policy.”

Ironically, it was liberals who killed the Nixon effort, because they didn’t believe it was liberal enough. Although many conservatives also opposed the Nixon plan, enough Republicans supported it to have been successful if the bulk of congressional liberals also supported it. Although the family assistance plan passed the House of Representatives in April 1970 (Weaver 1970a), it eventually died in the Senate Finance Committee, where both liberals and conservatives opposed it (Weaver 1970b).

In 1978, the negative income tax received a critical blow when reports from the government experiments came in and showed that the impact on work effort was more severe than had been anticipated, with work hours by those receiving government grants falling sharply. Mr. Moynihan, by then a United States senator from New York, was forced to admit failure (New York Times 1978).

Nevertheless, the following year, the economist F.A. Hayek endorsed a universal basic income in Volume 3 of his book, Law, Legislation and Liberty:

The assurance of a certain minimum income for everyone, or a sort of floor below which nobody need fall even when he is unable to provide for himself, appears not only to be a wholly legitimate protection against a risk common to all, but a necessary part of the Great Society in which the individual no longer has specific claims on the members of the particular small group into which he was born. (p. 55)

In 2006, the conservative scholar Charles Murray published In Our Hands: A Plan to Replace the Welfare State, which advocated a universal grant of $10,000 per year in lieu of the existing welfare system, including Social Security and Medicare.

Most recently, Matthew Feeney of Reason, the libertarian magazine, wrote favorably about the Swiss proposal in a Nov. 26 [2013] post. As a complete replacement for the existing welfare system, he thought it had merit and might even save money. He was especially critical of the paternalism of the current welfare system and the denial of autonomy to those living in poverty.

“Instead of treating those who, often through no fault of their own, have fallen on hard times, like children who are incapable of making the right choices about the food they eat or the drugs they may or may not choose to take, why not just give them cash?” Mr. Feeney asked.

Feeney cited Thomas Paine in support of his proposal. In Paine’s 1797 pamphlet, “Agrarian Justice,” he advocated a social insurance system for young and old, financed by a 10 percent tax on inherited property. Paine would have given everyone 15 pounds at age 21 and 10 pounds per year to everyone at least age 50 for life.

These are significant sums. It is difficult to calculate, but with the Measuring Worth calculator, 15 pounds in 1797 would be equivalent to approximately $17,500 today.

One purpose of giving young people a grant was in compensation for the loss of their natural inheritance in land, which had been seized by the state and given or sold to particular individuals for their exclusive use.

The libertarian economist David Friedman (2013), son of Milton Friedman, and Professor Zwolinski (2013), the philosopher, have both expressed sympathy for Paine’s idea that everyone today suffers from past injustices in terms of property rights. A universal income might be an appropriate reparations payment, they say.

Of course, not all libertarians agree with this recent interest in a guaranteed income. The Bloomberg columnist Megan McArdle notes the earlier problems with work effort identified in the negative income tax experiments. She also questions how immigrants would be treated and how politicians would react to stories about people blowing their checks on cigarettes and booze.

These are valid concerns. But it is worth remembering that we already have considerable experience with the basic income payment in Alaska. Since 1976, it has had a permanent fund to collect revenues from oil production and invest them, paying out an annual dividend to all state residents.

References

Bartlett, Bruce. 2013. “Rethinking the Idea of a Basic Income for All.” New York Times (December 10).

Feeney, Matthew. 2013. “Scrap the Welfare State and Give People Free Money.” Reason (November 26).

Ferguson, Donna. 2024. “Money for Nothing: Is Universal Basic Income About to Transform Society?” The Guardian (July 14).

Flanigan, Jessica. 2012. “BHL’s & UBIs.” Bleeding Heart Libertarians (April 30).

Friedman, David. 2013. “Libertarian Arguments for Income Distribution.” davidfriedman.blogspot.com (December 6).

Hayek, F.A. 1979. Law, Legislation and Liberty, vol. 3, The Political Order of a Free People. University of Chicago Press.

Kelly, Philippa. 2023. “AI Is Coming for Our Jobs! Could Universal Basic Income Be the Solution?” The Guardian (November 16).

Loftus, Joseph A. 1965. “Tax Aid to Poor Urged by Shriver; Payments Would be Based on Lag in Income Level.” New York Times (December 15).

Lowrey, Annie. 2013. “Switzerland’s Proposal to Pay People for Being Alive.” New York Times Magazine (November 12).

McArdle, Megan. 2013. “Four Reasons a Guaranteed Income Won’t Work.” Bloomberg (December 4).

Murray, Charles A. 2006. In Our Hands: A Plan to Replace the Welfare State. AEI Press.

New York Times. 1965. “Under Negative Tax, Poor Would Get Cash.” New York Times (December 19).

New York Times. 1969. “Excerpts From Report of the President’s Panel on Income Maintenance Programs.” New York Times (November 13).

New York Times. 1978. “Moynihan Says Recent Studies Raise Doubts About ‘Negative Income Tax’ Proposals.” New York Times (November 16).

Nixon, Richard. 1969a. “Address to the Nation on Domestic Programs.” American Presidency Project (August 8).

Nixon, Richard. 1969b. “Special Message to the Congress on Reform of the Nation’s Welfare System.” American Presidency Project (August 11).

Paine, Thomas. 1797. Agrarian Justice.

Partington, Richard. 2020. “COVID Job Losses Lead MPs to Call for Trials of Universal Basic Income.” The Guardian (October 31).

Porter, Eduardo. 2025. “Why Universal Basic Income Still Can’t Meet the Challenges of an AI Economy.” The Guardian (December 15).

Reston, James. 1969. “President Nixon, Poverty and Peace.” New York Times (August 10).

Weaver, Warren, Jr. 1970a. “President’s Welfare Plan Passes House, 243 to 155.” New York Times (April 17).

Weaver, Warren, Jr. 1970b. “Welfare Reform Is Again Rejected by Senate Panel.” New York Times (November 21).

Zwolinski, Matt. 2010. “Classical Liberalism and the Basic Income.” Social Science Research Network (September 9).

Zwolinski, Matt. 2013. “The Libertarian Case for a Basic Income.” Libertarianism.org (December 5).