Tuesday, 28 April 2020

"The single most disastrous influence of Milton Friedman has been the UBI... More efficient, perhaps, but also far more disastrous, for the only thing that makes our present welfare system even tolerable is precisely its inefficiency." #QotD



"The single most disastrous influence of Milton Friedman has been a legacy from his old Chicagoite egalitarianism: the proposal for a guaranteed annual income to everyone through the income tax system—an idea picked up and intensified [and now known as a 'universal basic income' or UBI].... In this catastrophic scheme, Milton Friedman has once again been guided by his overwhelming desire not to remove the State from our lives, but to make the State more efficient. He looks around at the patchwork mess of local and state welfare systems, and concludes that all would be more efficient if ... everyone were guaranteed a certain income floor. 
    "More efficient, perhaps, but also far more disastrous, for the only thing that makes our present welfare system even tolerable is precisely its inefficiency, precisely the fact that in order to get on the dole one has to push one’s way through an unpleasant and chaotic tangle of welfare bureaucracy. The Friedman scheme would make the dole automatic, and thereby give everyone an automatic claim upon production....
    "The Libertarian approach to the welfare problem ... is to abolish all coercive, public welfare, and to substitute for it private charity based on the principle of encouraging self-help, bolstered also by inculcating the virtues of self-reliance and independence throughout society. 
    "But the Friedman plan, on the contrary, moves in precisely the opposite direction, for it establishes welfare payments as an automatic right, an automatic, coercive claim upon the producers. It thereby removes the stigma effect altogether, disastrously discourages productive work by steep taxation, and by establishing a guaranteed income for not working, which encourages loafing. In addition, by establishing an income floor as a coercive 'right,' it encourages welfare clients to lobby for ever-higher floors, thus continually aggravating the entire problem. But Friedman, caught in the [mainstream] Anglo-American separation of “micro” and “macro” [economics], gives very little attention to these cataclysmic effects on incentives."

         
~ Murray Rothbard, from his 1971 essay 'Milton Friedman Unravelled'
Cited in the post 'Universal Basic Income Makes Welfare More Efficient, Which Is Bad, Dummy'
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1 comment:

  1. Friedman advocated a negative income tax which entails rapid abatement of the family payment. Its progeny are family tax credits and in work tax credits.

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