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Economics professor says evidence shows basic income grants used responsibly

Roderick Benns recently interviewed Robin Boadway, a retired economics professor. Boadway studied economics at Oxford University on a Rhodes Scholarship. He has his doctorate in economics from Queen’s University in Kingston.

Benns: How did you come to be involved in this issue?

Boadway: I spent my academic career as a public finance economist studying optimal policies for achieving a just and fair society, particularly with regard to those most in need. Naturally, guaranteed annual income is one important element of redistributive policies. I was especially influenced by economists like Anthony Atkinson and Amartya Sen for whom basic income was both fair and conducive to equality of opportunity. The views of philosopher John Rawls were also influential, particularly the idea that societal outcomes owe much to luck at birth, and those of us who are luckier than others owe it to the less fortunate to share in our luck. Having spent most of my life teaching and studying the importance of a basic income guarantee, the BIG group in Kingston offered an irresistible opportunity to have some practical effect.

Benns: You’re a retired economics professor – what about basic income policy makes it a smart move for the economy?

Boadway: Poverty is wasteful, not only in terms of loss of economic value but more importantly because of loss of personal and family fulfilment. A policy of basic income for all would induce a change in social values and norms, including by recipients. It would improve self-esteem and reduce stigmatization; it would encourage and enable the disadvantaged to lead more productive lives; it would reduce anti-social behaviour; and it would help eliminate the poverty trap that is passed on from generation to generation. That should be in all our interests.

Benns: What about a basic income guarantee makes it a social justice issue?

Boadway: To me, freedom from poverty and satisfactions of basic needs are fundamental human right. They are also a prerequisite to participating meaningfully in society. As well, as I have mentioned, those of us who are more affluent than average owe our success in good part to luck rather than merit. This includes where and when we were born, our native abilities, our family backgrounds, the opportunities made available to us, and so on. We owe it to the less fortunate to share our good fortune.

Benns: The most common concern is about implementing a basic income guarantee is that too many of us would choose not to work. Why do you believe this won’t be the case?

Boadway: Evidence from guaranteed basic income experiments indicates that those who receive basic income grants do not squander it. Some use it to provide better outcomes for their children. Others use it to support improving their own skills. Very few simply become idle and live off the grant. This is not surprising. Basic income is not designed to give recipients a luxurious life. There will always be a desire to earn income over and above the basic income guarantee level in order to achieve personal and family fulfilment. Existing welfare programs are not good indicators of behaviour under a basic income. They are rife with stigmatization and impose strong penalties to work and save. To the extent that one worries about disincentive effects, it is possible to design the system so that recipients retain an incentive to undertake productive activity, including work, entrepreneurship and education. Moreover, one cannot underestimate how social norms can be influenced by a well-designed and non-intrusive basic income system.

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