Does free, basic income build character?

Social experiments in Ontario and Finland test the idea that a minimal guaranteed paycheck can uplift and sustain people’s livelihood. Such tests may provide insight on the source of ‘self-efficacious’ attributes of character.

The Monitor's View

 This summer, the government of Ontario begins a social experiment that will put the character of some 4,000 people to the test. The Canadian province will give as much as $16,989 (Canadian; US$12,616) a year to selected low-income individuals, whether or not they are working or on government assistance. Over three years, the recipients will be tracked to see if they have squandered the free money or, as Ontario Premier Kathleen Wynne hopes, they “get ahead and stay ahead.”

The experiment is similar to a pilot program launched in Finland earlier this year. That plan is giving about $7,200 annually to 2,000 unemployed people but taking them off normal government assistance. Even if they do find work, recipients keep receiving the cash payments.

These are two of the boldest attempts yet to move toward a much bigger idea called universal basic income, or the government providing a guaranteed financial floor to everyone regardless of their personal wealth.

The idea of an unconditional safety net, which has been proposed for centuries, has lately gained popularity among some liberals and conservatives. Those on the left see it as a way to allow workers to survive the loss of their jobs to automation, help reduce income inequality, and provide stability for people to start a business or get retrained. Those on the right hope it might end a complex welfare system that often encourages a degrading dependency on taxpayer revenue.

Much of the advocacy for the idea has come from high-tech celebrities. Last week, for example, Facebook founder and chief executive officer Mark Zuckerberg told the graduating class at Harvard University, “We should explore ideas like universal basic income to make sure that everyone has a cushion to try new ideas.”

Last June, Switzerland considered a full-fledged plan of about $2,500 a month for everyone– not a only those who are jobless or on state aid. Yet in a referendum, nearly 80 percent of Swiss voters rejected it. By one estimate, the plan would have cost 30 percent of gross domestic product. Yet more important, many worried about the potential effects on people’s work ethic and self-reliance.

The question of character keeps rising in the debate over universal basic income. If given minimal financial security, would people still be willing to find a greater purpose in work or other activities that contribute to society? Or would they become inward-looking and lazy?

In a recent TED Talk, Rutger Bregman, a Dutch historian and an advocate of basic income, argued that such plans would curb many bad habits of the poor. “Poverty is not a lack of character. Poverty is a lack of cash,” he said. He quotes economist Joseph Hanlon: “You can’t pull yourself up by your bootstraps if you have no boots.”

Others are more nuanced. In a new book, “Basic Income: A Radical Proposal for a Free Society and a Sane Economy,” Belgian academics Philippe Van Parijs and Yannick Vanderborght explore all sides of the arguments but contend that any basic income plan must be universal. Otherwise, giving money only to the poor or jobless will turn them “into a class of permanent welfare claimants.” And to avoid a backlash against the higher taxes needed to pay for a basic income, they suggest each individual in the United States receive $1,163 per month. That is about a quarter of the average per capita income and, by their estimate, would still provide an incentive to find work.

In the US, a political debate over people’s character in relation to government programs often divides Republicans and Democrats. Can ethics and morals be tested, nudged, or molded by force of law or bureaucratic incentives? Or is it more influenced by family, peers, media, or religion?

In a new paper from the Brookings Institution, liberal scholars Richard Reeves and Dimitrios Halikias argue that “questions of character have moved front and center in US politics.” Developing “self-efficacious” attributes of character are vital for social opportunity and to “live under your own steam.”

“The research is clear enough that a great many valuable soft skills, including persistence, attentive listening, and social competence, can indeed be shaped and nurtured by parents, teachers, and others,” they write.

“Character goes well beyond the rational response to economic and political incentives. Character relies on norms, not paternalistic nudges; it is cultivated through culture and role models, not directly engineered by technocratic government policy.”

And the authors add: “A humane, liberal society is one in which men and women possess the discipline, self-command, and personal autonomy needed to live with a sense of purpose and direction.”

As different governments test out the feasibility of a guaranteed basic income, the question must be answered: Will such schemes reduce character or enhance it?