Mises Wire

To UBI or Not to UBI, That Is the Question

In recent decades, proposals for a universal basic income (UBI) have aroused a good deal of attention, but supporters of the free market have for the most part been averse to the idea. In his article “A Hayekian Case for Free Markets and a Universal Basic Income” (in Michael Cholbi and Michael Weber, eds., The Future of Work, Technology, and Basic Income [Routledge, 2020], pp. 7–26), the philosopher Matt Zwolinski has made a good case that free-market supporters should endorse a UBI, but I’m not convinced.

As Zwolinski rightly says, Murray N. Rothbard, Robert Nozick, and other libertarians oppose coercion, defined as the use or threat of force against those who haven’t violated rights. Friedrich Hayek thinks that what is wrong with coercion is that it makes a person subject to the arbitrary will of another: if you coerce me, I can’t live my life by trying to achieve my own goals but must do what you tell me to do. To prevent such domination, Hayek says, society should be governed by general rules that apply to everybody. In that case, people are free to lead their own lives, in most cases doing so by peacefully supplying others with goods or services.

A problem yet remains, according to Hayek. Some people in a free-market society can’t provide for themselves. Even if they are paid a competitive wage, the value of what they produce may not be enough to enable them to meet their minimum needs; and even worse is the situation of the old, infirm, and disabled, who cannot work at all. In this unhappy circumstance, they depend on others who may coerce them into performing degrading tasks. Those in this class should be given a minimum basic income to remedy their plight.

Zwolinski agrees but thinks Hayek doesn’t go far enough, and he contends that there are Hayekian grounds in favor of the extension he suggests. Hayek wants to limit the minimum basic income to those unable to work; if you can work but don’t want to, you don’t get the minimum basic income. Zwolinski points out that implementing Hayek’s proposal would require “means testing” recipients, a consequence Hayek not only accepts but embraces. But administering such tests requires bureaucracies, and this leads to arbitrary control over people lives, just what Hayek wants to avoid, and to the growth of government power of whose dangers he has continually warned us. A universal basic income eliminates this danger, since it is no longer up to government officials to decide who gets the money.

Zwolinski also endeavors to deflect an objection to a UBI, one which I’m sure has occurred to many readers. Even if a UBI has points in its favor, it has to be financed through taxation, which violates people’s property rights. Just as supporters of the free market would shun proposals to conscript people to care for the disabled and infirm, shouldn’t they also reject a UBI? Zwolinski ingeniously replies that nonanarchists, who accept taxation for some government functions, aren’t in a good position to cry “taxation is theft!”

Zwolinski is right that there are people who can’t “make it” on their own in a free market, but he hasn’t gotten to the heart of what is bad about their situation. As he sees it, the problem is that because they cannot generate enough income to survive, they may be subject to the arbitrary will of another, a state of affairs he deems “coercive.” That is indeed bad, but isn’t the essence of the problem that these people can’t survive without resources from others rather than the bad consequences that may ensue if these unfortunates do succeed in getting resources from people? Why extend coercion to include cases in which someone faces undesirable options but isn’t threatened with force? As Zwolinski himself points out, someone who refuses aid to another is just declining to engage in an exchange; why is this coercive?

Zwolinski’s reply is obvious. He would say (and does say) that there are cases where, because all your options are bad, you “don’t really have a choice” and you are in that sense coerced. If, for example, the owner of the only oasis in a desert refuses people access to water unless they enslave themselves to him, isn’t it reasonable to view these people as coerced? But this reply ignores the point of the objection, which is that it is not the lack of resources that is coercive but, arguably, the consequence of this lack—i.e., that someone can pressure people into doing what they strongly desire not to do. Zwolinski’s argument seems to rest on the dubious premise “If a state of affairs leads to a situation in which people can coerce others, the state of affairs is itself coercive.” I hasten to add that I don’t accept the contention that the situation where someone faces pressure to do what he abhors is coercive, but am just assuming it for the purpose of the present argument. There is a difference between circumstances that give you “no good options” and situations where others either physically compel you to do something or threaten you with such compulsion.

To this it may be answered, “What difference does it make whether you call the plight of those who cannot ‘make it’ on the market ‘coercive’ or not? They still lack the resources they need to survive.” But this ignores the dialectical situation. Zwolinski wants to say to libertarians, “You favor the use of coercion only in response to coercion, but this counts as coercion too; therefore, you should support taxation to aid these people (and, for further reasons, a UBI).” Given this thesis, the key to Zwolinski’s argument is what I have called the “dubious premise,” and if you don’t accept it, the argument fails. He is in effect saying that the state’s giving people money in order to reduce the chance that they will be subject to his extended sense of coercion should itself be taken as a response to coercion rather than as a violation of libertarian rights.

Although this doesn’t affect the substance of the argument for a UBI, a passage in Zwolinski’s article sheds light on an important controversy and in my view requires modification. He says,

For libertarians, freedom is understood in terms of abstract rights, which are themselves understood in a historical sense. And thus, for the libertarian, we can never tell simply by looking at the character of a social relationship whether it is a state of freedom or unfreedom. A man is being dragged, fighting, into a car by stronger men armed with guns. Is his freedom being infringed? That depends. Is he a criminal who is being justly arrested by the police (or, if you prefer, by the Dominant Protection Agency)? Then, despite all appearances to the contrary, the answer is no—his freedom, that is, his rights, are not being infringed. A soldier is told when to eat, when to sleep, what to wear, and who to kill by his superiors, on threat of severe punishment for disobedience. Is he free? The libertarian’s answer is, not if he signed up for it. For the libertarian, it seems that there is no set of social arrangements so oppressive, no amount of being bossed around by others that is incompatible with freedom, so long as that situation arose in the right way. Whatever arises from a just situation by just steps, is itself just. And whatever arises from a free situation by freedom-respecting steps, is itself free. (p. 10)

The controversy I have in mind involved Robert Nozick (at one point in his career) and Walter Block, on one side, and Murray Rothbard, on the other, and was about whether you can voluntarily sell yourself into slavery. It would be absurd to say that the voluntary slave remains free after the sale; the point of the sale, after all, was to enslave himself. The absurdity would be analogous to arguing that a king who voluntarily abdicates remains a king. Thus, the principle that “whatever arises from a free situation by freedom-respecting steps is itself free” is acceptable only if people have inalienable rights they can’t freely give up.

But what have Rothbardians to say about the aged and infirm? Of course these people merit help, but why bring in the state and coercion? What is the matter with voluntary assistance? If it is claimed that this would be insufficient, on what grounds?

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