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More on the economics of utopia

Last week’s Shareable Insider contained a kind of miniature “economics of utopia” (but no science fiction) in the form of a couple of dot points citing recent publications on universal basic incomes, universal basic services, and universal basic assets.

The universal basic income idea has become a reasonably well-known over the past few years but Shareable draws attention to the the findings of a recent trial conducted in Stockton, California. The trial chose 125 random residents of poor neighbourhoods to receive $500 per month for two years, beginning in 2019 and finishing this year. According to the project’s web site, the guaranteed income (as it calls the programme) reduced the volatility of participants’ month-to-month income; improved participants’ health; improved participants’ sense of self-determination; and increased the employment rate of participants as compared to a control group.

The first three points might not be very surprising. The last, however, flies in the face of conventional wisdom that welfare payments reduce the incentive to work. The web site explains that, with the payment covering basic needs like food and utilities, participants were better able to set goals and take risks than they had been while struggling to make ends meet at all. (I’ve also heard anecdotal reports that the special COVID-19 welfare payments in Australia enabled the previously-unemployed to participate in job interviews that they previously couldn’t afford to prepare for or travel to, but I didn’t note the reference.)

Other writers prefer a universal basic services model, in which the state provides some set of services considered to be “essential”. As the synopsis of Anna Coote and Andrew Percy’s book on the subject notes, there’s arguably something odd about having the state provide education and healthcare, as it does in Australia and the UK, but not equally-essential services like housing, food, and childcare. (Of course that observation could be taken both ways—why provide healthcare and education if the state doesn’t provide food—but proponents of universal basic services are coming from a perspective in which everyone should enjoy a range of basic rights.)

Finally, a think tank known as the Institute for the Future proposes a framework they call universal basic assets, defining “a fundamental set of resources every person needs access to, from financial security and housing to healthcare and education.” The quote makes the framework sound like a combination of the universal basic income and universal basic services, but it also allows a “private assets” component that might underpin Jetsons-type futures in which everyone owns machines sufficient to meet their needs.

I won’t try to evaluate the relative advantages and disadvantages of each approach here; the links above suggest that others have written plenty on these topics already. I just note them here as other perspectives on what the economics of utopia might be like.

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