September 3, 2007

Friedman’s Negative Income Tax

Filed under: Economics, Friedman, Politics — duncan @ 7:57 pm

A friend once said that everyone who studies economics becomes right wing. I hope to avoid that fate. But, at the same time, I want to be open to the possibility of conversion. I want to give the forces of evil a fair hearing. So I’m reading Friedman; and, having trogged through his attacks on socialised health care, the federal reserve, public housing, etc, I reach the other side of the coin: the negative income tax. It turns out that Friedman’s slash and burn approach to welfare is counterbalanced by his advocacy of a guaranteed minimum income. I’ve been doing some googling, and have to lot to read. There seem to be various cogent objections. (The puniness of Friedman’s proposed tax credits, for one. The administrative nightmares exemplified by Brown’s U.K. tax credits, for another). Still, it’s given me pause. Seen in the right light, it looks like a wonderful idea.

And now here’s an interview with the Belgian political philosopher Philippe Van Parjis, who is, apparently, the leading advocate of unconditional basic income. His proposals are rather more leftist than Friedman’s; he’s a sort of pro-capitalist Marxist, if that makes any sense. I obviously ought to read his books; but, for now, I particularly enjoyed this passage:

“When I first set about putting the arguments for basic income… I found I was confronted first and foremost not by technical, administrative and economic arguments, but by moral ones. The main moral objection was that basic income would be giving people something for nothing, and that it amounted to systematic legitimation of free riding on the part of the idlers at the expense of the hard workers. And so that forced me to spell out why, fundamentally, I thought this was such a good and fair idea.”

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