Finland announced today they would try something called a “basic income guarantee” with a small portion of their population. About 2000 people will receive a basic income of just over $500 per month. Finland has a movement to extend this to the entire country, this is intended to be a first step.
I first learned the concept of the basic income guarantee, (or “BIG”) at the Eastern Economic Conference about 12 years ago. At one point I found myself in the BIG presentation, one of the more well-attended sessions at over 100 people. If you have never attended an academic conference, 100 people in a room is a massive crowd. My friend’s highly technical presentation (the reason I was there) had 30 people, and he was ecstatic.
As a trained engineer, I’m rather adept at mathematics. I could not believe I was in a whole room of economists who could not figure out that the worldwide basic income guarantee they were advocating would mathematically reduce the entire first world, including U.S., Europe and Japan to a subsistence level income. Even if it were desirable from a human standpoint, mathematically it is a ridiculous notion.
But from a human standpoint it is not desirable. The advocates of this concept believe they will relieve the experimental subjects of the worry of supporting themselves, thereby unleashing their potential, their creatively and total pleasure in their life. Nice utopian thought, right?
Unfortunately this will be accomplishing the exact opposite. The field of evolutionary psychology tells us we are most satisfied when we are doing what our instincts have told us will help us survive, thrive, procreate and continue. These are instincts that have developed over millions of years and include everything from scratching and pooping, to running for our lives when there is danger, to loving and wanting the best for our children.
(Incidentally, this leads to a nifty philosophy for the “meaning of life,” one that will make you smile and say “of course.” If you think you see it, send me an email at firstname.lastname@example.org.)
One set of instincts that runs about 80% of our lives nowadays (since there are no saber-toothed cats to avoid and food isn’t much an issue anymore in first world countries). This instinct can be paraphrased as “competition for mates and resources.” Human beings are actually wired for competition, and must strive to improved and progress. Resources handed out to a human without cost, not only have little value, but actually cause more stress since in such a case competitive instinct was never satisfied. You will find many examples of kids of the rich and famous undergoing a complete self destruction because they have everything except a reason to exist.
Finland is a largely homogeneous nation, with a history of good work ethic. If a basic income guarantee could work anywhere it would be Finland. But it will not. The laws of economics and psychology are clear – whatever you subsidize you get more of. What WILL happen if they continue the program is more peope will accept the basic income and drop out of a productive life.
National productivity will fall, cooperation and team work will disintegrate, the less glamorous jobs like trash collection or paper shuffler will go undone. People will learn to be satisfied at this lower level of existence. Competition will continue, but in more destructive ways.
Drug use will rise, crime rates will rise, suicide rates will rise.
This is what happens to human beings when they no longer have to strive to improve themselves, where “competition for mates and resources” has been short circuited.
But Finland is not alone in thinking human nature will change if you only give people free stuff.
The American system of welfare has locked generations of single mothers into the welfare cycle, where having children is merely a means to get more government subsidies. Often their daughter’s only skill is following in their mothers’ footsteps, having babies they can not support, and continuing the welfare cycle. And their sons learn they have no role in raising children, which supports the cycle.
The city of Washington D.C. actually decided to pay criminals to not commit crimes. This rare gem of a project caused huge problems, and of course did not reduce crime overall. In fact, if they were to expand the program, they would find kids committing major crimes just to get on the program.
I only hope the people in Finland who are running this experiment are honest about the result.