Why Have a Basic Minimum Income?

People around the world have advocated the idea of a basic minimum income—establishing a financial floor below which no citizen can sink and giving all citizens equity in the economy.

The question has been how to make it work in a way that’s sustainable, logical, and productive. Nations are answering that question in different ways.

This week Robert Reich gave us one possible answer—linking basic income to a royalty on patents. It’s a good idea.

For people unfamiliar with the idea of basic minimum income, I’d like to take a step back and, setting aside the macroeconomic issues that Reich addresses, answer this question:

WHY HAVE A BASIC MINIMUM INCOME?

Every citizen makes contributions to our economy—sometimes huge contributions—that the economy does not measure or reward us for. Here are just a few examples:

  • You help a friend get a job.
  • A friend shows you a business idea. You offer suggestions that help her succeed.
  • You make adjustments to how you live. As a result, our resources are preserved. Those resources are then used productively by someone else, say, a farm.
  • You’re one of over 5000 employees who get laid off. The stock surges.
  • You make something (a book, business model, song, video, cooking technique, whatever) that inspires thousands of other people to make something (copied, modeled, or inspired by your creation).
  • You work at (or start) a company that loses its competition with another company and goes out of business. Your efforts made the winning company better. (In pro sports they understand there are no winners without losers so every team gets a share of the financial rewards from TV contracts, etc.)
  • It’s been estimated that a mother contributes around $100,000 of annual value to her family—value that gets passed on to future employers of her children who benefit from all the time and attention she gave. Today she struggles to make ends meet.

I could go on all day. People who contribute the most value to our society often get paid the least.

In many ways, our economy is crude. It doesn’t reward all kinds of activities that actually make it productive. That’s partly due to its crudeness, and partly due to the manipulation of the systems that are supposed to reward us for our efforts.

So we try all kinds of things to correct for the crudeness, to make society fair and functional. But when those corrections aren’t tied to equity in the enterprise, they are equally crude. Welfare? Crude.

A basic income, when viewed and implemented as a kind of royalty on our collective prosperity, cuts to the chase. It creates a direct link between a succeeding nation and a succeeding people.

It’s wrong that all the rewards go only to a select few. It’s wrong that we never get remunerated for all the ways we help the economy and contribute to our collective prosperity. We should all have equity.

Am I leaving something out? I feel like something still needs to be said. Ah, yes.

It’s clearly self-defeating to give ourselves a passive income from an economic system that’s aggressively harming us by destroying the planet. That’s not the aim here. The real hope is that by giving everyone an equity stake in our national prosperity, we will ultimately avoid the Tragedy of the Commons which, ironically, happens when people are strictly out for themselves.

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