Would an 'unconditional basic wage' work?

There is an expectation among some that simplification of the welfare state, through a process of rolling all subsidies into one basic income program, could deliver significant cost savings and bring rationality to subsidy design.

For liberals such as Buchanan, a basic income system was justified to prevent politicians and bureaucrats from implementing discriminatory spending arrangements, which benefit some people at the expense of others thus violating political generality norms.

There is little doubt that the existing welfare state is administratively unwieldy, fiscally unsustainable and ensnares people in poverty traps due to high effective marginal tax rates, but there is no guarantee that the basic income would necessarily resolve these problems.

Over a century of experience across the Western world consistently illustrates that the fiscal size and scope of the welfare state has grown enormously, as rival politicians seek to outbid each other for votes by partitioning the general electorate into new constituencies.

This process, coupled by the incessant demands of interest groups for policy favouritism, has inevitably led to a proliferation of different welfare programs for different groups, such as the unemployed, families, people with disabilities, war widows, and so on.

Introducing a basic income would not quell or override these practical, yet endemic, features of modern political life.

It is unlikely that the concentrated beneficiaries of existing welfare subsidies would support the abolition of their favoured programs, and even if a basic income scheme was successfully implemented the interest groups would quickly seek to undermine the generic application of the basic income.

For example, there would be immense pressure placed upon politicians to apply differential subsidy loadings on top of the basic income level, assisting those groups deemed to be needier than others.

Compounding these distributional conflicts is the prospect that even a modest basic income could significantly reduce labour supply, as some people elect to abstain from work, either in part or as a whole, in response to a ʻno questions askedʼ government payment for all adults.

Dampening labour supply following the introduction of the basic income would only further aggravate tax pressures borne by those who remain in the workforce, or choose to exercise their entrepreneurial flair to produce goods and services for others.

The application of a basic income may also hamper the financing and provision of charitable services, as people become disinclined to donate to charities in the face of an all‑round government subsidy.

The basic income proposal is a seductive idea for people of varied philosophical persuasions, but if introduced it could risk ending up as another initiative in which good intentions do not align with desirable results.