income redistribution

How To Be Sure That Everyone Has a Minimum Income

Nov 15, 2013 • Behavioral Economics, Businesses, Demand, Supply, and Markets, Economic Debates, Economic History, Economic Thinkers, Government, Households, Labor, Lifestyle, Macroeconomic Measurement, Money and Monetary Policy, Regulation, Thinking Economically • 346 Views    No Comments

Four decades ago, in a rural Manitoba community, Canada experimented with cash grants to low income families. Called MINCOME, the program provided for different cash payments based on the household’s proximity to the poverty level. The grant was conditional. Earning more meant receiving less.

Now, a group in Switzerland is pushing for a similar initiative but without the income cut-off. Instead everyone would get a monthly allowance of 2,500 Swiss Francs ($2,800.00). The Swiss Parliament will vote on the “basic income” proposal but has not scheduled a date.

You can see the group that supports the initiative dumping 15 tons of gold coins (400,000 Swiss Francs) in Bern at the Parliament building:

The Canadian experiment and the Swiss proposal took me to Adam Smith. In Smith’s first major book, The Theory of Moral Sentiments (1759), he combined specific observations about human nature with more general conclusions about the composition of a just society.  A just society, Smith theorized, inspires virtuous individual behavior.  The virtuous individual was the foundation from which he built his description of a good society.  His definition of virtuous behavior included pursuing honest profits.

Being sure to name the tradeoffs, deciding how much income redistribution you support might start with your vision of the “just society.”

Sources and Resources: H/T to a thought provoking NY Times Magazine article by Annie Lowrey that took me to Tyler Cowen’s analysis of “basic income” issues and a Reuters presentation of the basics for the Swiss vote. You might also want to check out alternative redistribution policies like Alaska’s Permanent Fund Dividend and Norway’s Pension Fund and, at econlife, the impact of 19th century Georgia land grants.

Related Posts

« »