According to this recent article on Yahoo Finance (and other similar articles), Finland’s experiment with a universal basic income (UBI) shows promising results for those pushing the idea on a broader scale.

I have written before on the idea of a universal basic income.  There are even a few libertarians and libertarian-leaning people out there who support the idea, if it is coupled with reduced government welfare in other areas.  After all, it is more effective and efficient for welfare money to go directly to the recipients instead of going through a bureaucracy that takes a large portion of administrative costs and does not always work effectively for the welfare recipient.

Of course, there are a few major problems here.  The first problem is that a UBI is still antithetical to the idea of non-aggression and property rights.  But even on more pragmatic grounds, any libertarian should know that no program works out the way it is originally stated.  It would be incredibly naïve to think that all of the other welfare will just go away.  It is even more naïve to think that the special interests and their lobbyists would just walk away quietly.

We know that much of the political left supports the idea of a UBI.  But they are not usually talking about getting rid of the rest of the welfare state.

Now the left will try to claim some victory with this little experiment from Finland, where a small number of people were given a fixed amount of money from the government, but did not receive certain other welfare benefits.

Now the results are coming in, at least according to the reports of the Labour Institute for Economic Research.  The people who received a UBI generally felt happier and less stressed. They also tended to feel more in control of their lives and had more trust in society, although not to a great degree.

According to the preliminary reports, the UBI did not have much impact on the amount of work that the recipients picked up as compared to the control group.  The question of employment has been one of the biggest points of contention in the arguments for and against the UBI.

Let’s say that these initial reports are correct.  Does that mean that all of Finland should adopt a universal basic income? Does it mean that the United States should follow and adopt a UBI?  After all, according to the reports so far, people seem to feel happier and less stressed.

The Problem with Socialism, According to Thatcher

Margaret Thatcher once said that the problem with socialism is that eventually you run out of other people’s money.

Of course, there are many problems with socialism, both in terms of morality and prosperity. But Thatcher’s point was nonetheless hitting an important point.  We live in a world of limited resources, despite what Alexandria Ocasio-Cortez and Bernie Sanders may think (or their followers).

The fact that this article and many other similar stories are touting the positive results of this experiment in Finland is a testament to the economic idiocy that is present in our society.

When people are given free money, of course they feel healthier and less stressed. Welcome to planet Earth!

Even if you compare them to other people on welfare, it is still obvious that they will tend to be happier.  I would rather be given money with no strings attached than have to jump through a bunch of hoops and then receive certain things that may be equal to that same amount of money. I would rather receive $100 than a pair of shoes worth $100.  If I really want the shoes, I can always just use the money to buy them anyway.

So maybe this seems like a good argument for the UBI.  You just give people the money directly instead of making them fill out forms and then give them certain benefits in place of money.

Here is the problem. They are talking about a UBI for the entire population, which will be paid for by the entire population.

If you have a group of 1,000 people, and 10 of those people get a one-month vacation at a nice resort paid for by the other 990 people, then those 10 people will be quite happy with the arrangement, assuming they have no guilt in getting the vacation paid for by the others.  But what happens when all 1,000 people want to take a one-month vacation that will be paid for by those same 1,000 people?

When the UBI recipients are a small experimental group receiving free money (stolen money) from everyone else, it is easy to see how they are healthier and less stressed. When they are forced to help pay for everyone else’s UBI, then I suspect that stress may come back.

The UBI, just like all other government programs, only serves to misallocate resources. It may take up fewer administrative costs from the bureaucracies, but it is still a misallocation.  It discourages savings and capital investment.  Living standards will be worse than they otherwise would have been.

We know the saying: There ain’t no such thing as a free lunch.  It’s not exactly true, as this small group in Finland got a free lunch for two years.  The problem is that somebody else had to pay for the lunch.

When a whole country tries to get a free lunch, everyone ends up paying more for lunch, and they end up getting mush on their plates.