The government in Finland is starting an experiment, and it could make for an interesting story as it progresses.  The experiment involves giving 2,000 citizens of the country a guaranteed basic income.

The participants will receive 560 euros per month (about $590 currently), and they will get the money regardless of their changing circumstances.  The experiment will run for an initial period of two years.

The participants were selected at random, but to initially qualify, the person had to be receiving some form of unemployment benefits or income subsidy.  The participants will receive this basic income instead of the subsidies, but they are allowed to find work without losing the basic income.

I wrote about this previously when the Swiss voted down a referendum that would have implemented a basic guaranteed income for all the people of Switzerland.

This isn’t just a proposal amongst socialists.  There are actually libertarian leaning people who favor this idea.  While I think it is wrong, it is understandable based on the idea of incentives.

The reason the Finns are trying out this experiment is because it is easy to conclude that paying out unemployment benefits discourages people from getting work.  In a relatively free market economy, work is available for most anyone who is not severely disabled.  But if someone is getting paid unemployment, they aren’t going to find a low-paying job that barely exceeds the unemployment check.

The Finnish government officials think that giving a basic income will get people to find work and will actually be less of a drain on the welfare system.  If the people are working, from the government’s perspective, at least they are paying taxes.

But what if this experiment “works”?  What if it does incentivize more people to find work?  Does that mean the government will give a basic income to everyone, or just newly unemployed people?  You could see that it would result in a lot more people seeking to be fired from their job.  Therefore, you would have to conclude that every citizen would get the guaranteed basic income.

The next question is whether all of the rest of the welfare state can be repealed.  This is highly doubtful.  Even with a basic income, you will always have some people with extraordinary needs.

(Don’t get me wrong here.  From a libertarian perspective, there should be no basic income or government welfare.  Any welfare should be funded through voluntary charity.  I am just writing this based on the perspective of the welfare statists.)

This is why libertarians should not endorse a guaranteed basic income.  It is not the lesser of evils.  You will not get rid of the rest of the welfare state.  It would be naive to think so.

This is also the reason that this idea will probably not be expanded.  It is not coming to the United States.  Most Americans wouldn’t go for it.  But most politicians wouldn’t go for it either.  If you eliminate the rest of the welfare state, then that would eliminate the lobbyists and special interests if we are to believe that the rest of the welfare state would go away.  The politicians and bureaucrats thrive on the system of special interests.

I consider this idea of a basic guaranteed income as analogous to school vouchers.  I am against both ideas because it is still theft (a transfer of wealth).  But I can’t even support either one as the lesser of evils because things would evolve from what is originally promised.

In the case of school vouchers, any private school that accepted them would all of a sudden be subject to a lot of government rules that go with the vouchers.  The rules and curriculum requirements would get worse over time.  Private schooling would be destroyed.

In the case of a guaranteed basic income, maybe a lot of the rest of the welfare state would go away at first.  But then the lobbyists and special interest would be right back at it trying to get little handouts for the groups with extra special needs.

So while I don’t think this idea is going to take off in the United States, I also don’t think libertarians should encourage or promote the idea.  It may incentivize more people to work, but it will also ultimately expand the welfare state even bigger.