Milton Friedman was an accomplished economist and libertarian. So many people find it odd that he supported Universal Basic Income (UBI). How could a libertarian – who wanted limited government control – be in favor of the government redistributing wealth?
On the surface, the ideas seem to contradict themselves… but in practice, universal basic income can add freedom back to the markets. Milton Friedman spotted a growing divide in the world and determined UBI would be a top solution – one that lowers bureaucracy.
Here are seven powerful charts that show why Universal Basic Income is inevitable.
Milton Friedman – Replace Shovels with Spoons (Universal Basic Income)
One story that’s often attributed to Milton Friedman comes from his trip to China. Upon visiting a worksite, he was shocked to see so many workers with shovels and no modern machines. When he asked why no machines, the official said it’s a jobs program. Milton Friedman then famously replied… “Why not give the workers spoons instead of shovels?”
China isn’t the only country creating inefficient job programs. Governments around the world create bogus jobs to prop up employment numbers. In the U.S., the total number of government employees is up 443% since 1940…
Over the same timeframe, the total U.S. population is up only 148%. As a result, government workers now account for 14% of all U.S. workers (based on civilian labor force). The number of people on the government payroll has grown… even as technology has replaced millions of jobs.
There are many vital government jobs. I’m not discounting the hard workers for our great nation. But as Milton Friedman points out, are all of the jobs worthwhile? Or just a way to spread wealth? If the latter, is there a more efficient way?
Milton Friedman proposed a model in 1962 with the name Negative Income Tax (similar to UBI). And since, other famous libertarians have jumped on board. Let’s take a look at a few notable names and why they’re in favor of the government handing out free money.
Libertarians Support Universal Basic Income
Milton Friedman wasn’t the only libertarian supporting universal basic income. A recent successful third party presidential candidate was Gary Johnson. He is a leader for the libertarian party and has said he’s “open” to the idea of universal basic income.
Another prominent supporter is Charles Murray. He wrote the book Losing Ground: American Social Policy 1950-1980. Here’s an insightful discussion between Charles Murray and Sam Harris…
There’s also a case for basic income stemming from the famous book Atlas Shrugged by Ayn Rand. The following excerpt comes from Atlas Nods: The Libertarian Case for a Basic Income…
As our title suggests, the libertarian Atlas should not shrug at the sight of poverty; we explain why individuals committed to libertarian first principles ought to care about providing a minimum level of material well-being for all.
Support is growing and it’s founded in a strong logical case…
Over the last decade, total welfare spending in the U.S. has almost doubled to $1.3 trillion. And that money is spent with good intentions… but, a lot of bureaucracy and waste comes with it.
Universal Basic Income could streamline welfare programs (over 80 means-tested welfare programs). It would be an unbiased system that could reduce corruption. Basic income could add some freedom back to the markets. This is a major selling point for libertarians.
History has shown time and time again the efficiency of free markets. But the current welfare system hinders free markets. Many of the programs require recipients to stay above or below certain benchmarks. The government then says how much they can spend on food, rent, etc.
The current welfare system is broken and growing at an unsustainable rate. But now thought leaders from many walks of life are drifting towards the same solution… spoons instead of shovels.
P.S. Still not convinced on basic income? Check out three powerful trends thrusting us towards a Universal Basic Income.