Comparative Political Economy and Guaranteed Basic Income (BIG)

When I was at the IHS seminar Scholarship and a Free Society this summer, I was privileged enough to talk a while with Adam Martin and Pete Boettke about basic income.  Adam directed me to a paper he at Pete had written for Basic Income Studies in a special edition they did for libertarians.  After being assigned a project this weekend that involved starting my lit review for my dissertation (very preliminary), I grabbed it from the website (aside: so happy to have access to journals again!!).

A great read, their argument boils down to two major themes: 1) government is not a black box and 2) as a consequence civil society or the market may be better at providing the Basic Income intervention.  Comparative political economy rests on the work Austrian and Public Choice economics.  It uses a critical evaluation of "the rules of the game" in the political, market, and civil spheres and how well each solves the problem of limited knowledge and the problems of incentives.  In other words, are institutions in each realm set up so that knowledge problems can be solved through coordination and that even when people act like assholes, their efforts will minimally hurt society at large.

I won't go into detail on their argument, other than to say that I find one convincing and the other less so.  Where Boettke and Martin are most enlightening is where they discuss the problems of actually enacting Basic Income legislation.  Given what the legislative process looks like, the bill would never become enacted as a policy-maker set out.  In the 70s, it was only introduced after a work requirement was put on.  Politicians logroll, horsetrade, and buy each other off in ways that can pollute the bill.  One the bill is passed (in whatever form), transfer payments are by nature prone to capture by political entrepreneurs.

These arguments are difficult to refute.  They also exemplify how social theorists generally treat favored policies as happening exactly as planned.  If we were to take into account what politics actually looks like ("politics without romance" in Buchanan and Tullock's words), there would be alternately depressing or tedious sections appended to every policy article.

I find their arguments less convincing on solving the knowledge problem.  They oddly conclude that a basic income does not address the knowledge problem as well as those in the private sphere.  I believe that consumers, once financially empowered with the funds for a basic income, would be able to solve knowledge problems on the front end of social welfare transactions.  They would be able to pay for services, housing, food, and everything else as they see fit, instead of central planners.  Instead of providing for sprawling, overlapping bureaucracies to determine allocations for services on the backend, people would be permitted to direct funding to organizations (state or private, civil or market) that can more intelligently helping the poor.  Furthermore, I think that a basic income may actually provide a more fertile marketplace for social entrepreneurs, as people will be able to pay nominal sums for supplementary, individualized services.

I recommend the article for anyone interested in how libertarianism can be arrived at through political economic reasoning, as it does an excellent job of explaining how liberals arrive at the conclusions for a minimal state by examining how the political process works.  I still have a lot to work out before my dissertation, but it will be hard to think about a basic income without these insights in mind.