Scandinavia, the Socialist Utopia™, has always been fun to watch.

Finland has just unveiled plans to pay every citizen $1,100 per month in lieu of any welfare benefits. Specifically:

The tax-free payments would replace all other benefit payments, and would be paid to all adults regardless of whether or not they receive any other income.

The “logic” behind this move is as follows: Unemployment is at record levels (ah, socialism) and the only available jobs are paying so low (ah, socialism) that if unemployed people got jobs, they’d lose their welfare benefits which would be less than their new low-paying job. Therefore, paying people $1,100 a month for no reason will “encourage more people back to work.”

Haha! Make sense? Of course not.

They call it a “national basic income.”

A survey commissioned by Kela found that close to 70 percent of the population favours the idea of a national basic income.

Hahahaha! Of course they do! “Hello sir, we’re taking a survey. Would you like $1,100 a month paid to you without you having to work or do anything else?”

Who the hell would say no to this?

The amazing part is that the goverment of Finland says, “Ah, people want free money from us. It must be a good idea then.”

Detractors caution that a basic income would remove people’s incentive to work and lead to higher unemployment

Nooooo. Ya think?

Those in favour point to previous experiments where a basic income has been successfully trialled. The Canadian town of Dauphin experimented with a basic income guarantee in the Seventies and the results – both social and economic – were largely positive.

1. If you’re only dealing with a town of 8,000 people instead of an entire country with millions of people, you can pull off all kinds of crazy shit.

2. What exactly is “largely positive?” I love how none of this is quantified.

It’s insane, but at least it’s honest. If you’re going to be hardcore socialist, be honest about it. I once said that the United States should cancel all welfare / social security / food stamps type programs, and just write a tax-free check to every adult in the US for $50,000 once a year on January 1st.

It would be a cluster-fuck, but then at least we could discuss this issue honestly, both about the type of people who receive this money and about the harm it does to the economy and long-term economic future of the nation.

18 thoughts on “Finland To Pay Their Citizens “Free” Cash

  1. “The Canadian town of Dauphin experimented with a basic income guarantee in the Seventies and the results – both social and economic – were largely positive”

    Haha! Of course! The rest of Canada was giving free money to Dauphin.
    But if you give money to everyone in the country, where is the money going to come from?

  2. Basic income is something that will have to be considered very seriously with coming automation. You seem to be dismissing it out-of-hand here. It’s a very well researched idea with a huge amount of data to back up its validity.

    Just for a quick example of why something like this will be needed, Uber wants to fully automate its fleet. So imagine that they continue to be the dominant player in the personal transport service field. Now eliminate paying all the drivers. Then eliminate paying for fuel at a fuel station and rather just recharge at a private location, and they reduce mechanical maintenance (it will be SUBSTANTIALLY reduced with EVs). So all those jobs get removed due to automation and the profits go to a very small number of people. That money is not put back into the economy (a person making 200 times the average salary doesn’t buy 200 times the food or 200 times the clothing). So you get more people on unemployment. Now scale that out to all industries (because, as you’ve also read the books, automation IS coming). You’re going to end up with a VERY small plutocracy unless something like BI is considered.

    Anyways, if you’re open-minded and want to do some research, here’s a good place to start: https://www.reddit.com/r/basicincome/wiki/index

  3. Netbug, money is always in the economy, it doesn’t need your forced altruism to dedicate it to consumption and make people’s lives better. There is something called investing, you know? That thing that many people don’t do because they can’t get around to save because Life Is So Hard These Days (TM). That thing that allows for beautiful, little earlier unfathomable products for all to enjoy.

    First you save, then employment is created. I’m starting to think that most differences of opinion in Economics are due to terrible aptness in a sizable portion of the population at establishing causality, like the “inflation lowers unemployment” mantra. Damn Neo-Keynesians…

  4. Basic income is something that will have to be considered very seriously with coming automation.

    1. People losing their jobs because of automation has been a problem for 150 years, yet we’ve handled it without paying citizens taxpayer cash. Technology changes, people lose jobs, then eventually (after some pain and readjustment) people find new jobs in brand new sectors created by the new technological need.

    2. As Shura pointed out, just because someone needs money doesn’t change the basic laws of economics. The government can only give you “free” money by stealing it at gunpoint from current or future taxpayers, via increased taxation, increased monetization (printing money and creating inflation), or increased borrowing from other countries. All three of these things damage the economy and long-term future well being of a nation, regardless of your emotions regarding “why” you feel you “need” the money.

  5. With regards to your first point, no, there aren’t going to be more jobs created. In the short term you may see an uptick in low-paying, low-skill, part-time employment, but when you can purchase a robot to do the job which will never need to sleep, never complain about working conditions, or shifts, or unionize, would you still pay for a human to do the job? And it’s not limited to those jobs either. CGPGrey created a short video outlining the reasons called “Humans Need Not Apply” which outlines this very well. Here’s the link: https://www.youtube.com/watch?v=7Pq-S557XQU

    Just because people have always had to work, doesn’t mean that is going to continue. There needs to be a decoupling of employment from income.

    With regards to hanging on to a basic “law of economics,” again, there is much missing from the equation that you are vastly oversimplifying. If it takes less people to create a service or product, then the buying power is stripped from former employees and given only to the owners/creators. Then those former employees aren’t able to purchase the products and you can see where this becomes a problem. Ford (if i recall correctly), was one of the first to actually recognize this and double his workers wages… this was not altruism; he knew that giving workers the power to purchase his (and other) products, would increase both his coffers and stimulate the economy.

    I also have a suspicion that neither of you have really looked at the models and reasoning behind this. If you have, I apologize, but you keep talking about the decline of the west; well, a big part of that is the oligarchy that has arisen.

  6. With regards to your first point, no, there aren’t going to be more jobs created. In the short term you may see an uptick in low-paying, low-skill, part-time employment, but when you can purchase a robot to do the job which will never need to sleep, never complain about working conditions, or shifts, or unionize, would you still pay for a human to do the job?

    Yes, I’ve heard this argument before, and its wrong. Everything you’re saying already happened in the late 80s to early 90s when computers became ubiquitous. Mass amounts of office workers and middle managers lost their jobs in the millions. The transition was painful. But we recovered, and by the late 90s we did quite well. The old folks retired, the non-old folks became web designers and IT nerds (yes, I’m oversimplifying; I must because this is a quick comment on a blog).

    I do agree that in the far future (2040s+) things will look very different with robots, etc, and we’ll have some economic challenges ahead. But these challenges must be met with working systems, not systems like socialism and communism that have proven over and over again to not work because of basic economic realities.

    There needs to be a decoupling of employment from income.

    Yeah, that’s called communism and that’s proven, repeatedly, to not work over time. Just because “robots” doesn’t mean communism will suddenly start to work. That’s what you’re not getting.

    And by the way, this entire argument is moot to the topic here. Finland isn’t run by robots, and they’re going hard socialist anyway. It’s stupid. And it won’t work. Because it can’t. Just watch Finland over the next 10 years and you’ll see.

  7. On a purely selfish level I’m glad Finland’s doing this. There’s a lot of people in the US pushing it, and it’ll be nice for other countries to try it out first before we make a decision on it. I doubt it’ll work (for exactly the reasons you say) but you never know.

  8. I think Netbug has a very good point which deserves a lot of consideration. While it is true that the economy adapts to respond to changes in technology, it is also true that these big changes are taking place faster every time. You were just talking in another post about it recently (about how technology advances exponentially). At some point it seems to me like the rate at which jobs are eliminated will simply be way higher that the rate at which new jobs are created.

    Self driving cars, fully automated warehouses, 3-D printing in manufacturing… all these things are right around the corner and the are going to have a huge impact in the industry and the economy in general. If we don’t address this we are going to end up with a permanently unemployed underclass problem. The sooner we look at possible solutions, the better.

  9. You’re ignoring what I just said in my last comment.

    Just because you feel the need for goverment to start paying people money without working doesn’t mean communism/socialism suddenly start to work as viable economic systems.

    The laws of economics remain the same regardless of technological growth or your feelings.

  10. “Self driving cars, fully automated warehouses, 3-D printing in manufacturing… all these things are right around the corner and the are going to have a huge impact in the industry and the economy in general. If we don’t address this we are going to end up with a permanently unemployed underclass problem. The sooner we look at possible solutions, the better.”

    Ok, well when something breaks down in the warehouses, and manufacturing plant who’s going to fix it? What about a bug in the program? Who will design these automated machines? Who will do the innovation and research?

    Automation will make some jobs easier, and many low skill jobs will of course be gone. But this is only in the short term. In the long term (say 10-15 years down the road), the net change in the number of jobs will be zero or very close to it.

  11. Somewhat off-topic, but this post makes me have to ask what’s your view on how we handle EBT cards, WIC, etc in regards to single motherhood here in the US.

    Its basically socialism under the guise of working in the best interests of the children where in reality its merely a self-perpetuating cycle that rewards irresponsible reproduction (little different than the R-strategy used by animals such as insects and smaller mammals like rats). Of course, the government also benefits from this through cuts they take through this system (as well as alimony).

    The data gathered on single motherhood and its effects (universally negative) are extensive yet I’m sure you realize Hilary will be hell bent on doubling down on the taxpayer (read: the middle class and single bachelor male). What was her nonsense quote form awhile back? “It takes a village to raise a child”?

    Would simply removing all welfare benefits for single motherhood be an easy solution or are there categories you would separate mothers into such as “Can not”s and “Won’t”s as described in your “how to handle the poor problem”? I for one, would be in favor of simply removing all welfare options for single motherhood but I do realize there are some case-by-case scenarios such as widows.

    I thought perhaps an easy way to separate the categories would be to look at the martial status of the woman before the child was born (ie. completely omitting women that bear children out of wedlock) but I quickly knew that wouldn’t work for multiple, obvious reasons.

  12. Would simply removing all welfare benefits for single motherhood be an easy solution or are there categories you would separate mothers into such as “Can not”s and “Won’t”s as described in your “how to handle the poor problem”?

    If I were designing a country from scratch, there would be no government money for single mothers ever, for any reason. Irresponsible single mothers would have to suffer (and get what they could from charity and family members) so other women wouldn’t become single mothers, and responsible single mothers (widows, etc) would be taken care of by insurance companies.

    If reforming the US, yes, we’d have to adopt a “Can’t Poor” and “Won’t Poor” system. Single mothers wanting free taxpayer cash would have to prove they deserve it *and* are working very hard to improve their financial circumstances. This would mean hardcore birth control (like a Merina IUD), being employed, zero drug use, etc.

    I thought perhaps an easy way to separate the categories would be to look at the martial status of the woman before the child was born (ie. completely omitting women that bear children out of wedlock) but I quickly knew that wouldn’t work for multiple, obvious reasons.

    Correct, that would not work. I know tons of young married couples who are cranking out kids who can’t afford them.

    Just because a woman is legally married to some low-income dumbass doesn’t mean she’s ready to start having babies. There are many more requirements. Right-wingers unfortunately don’t understand this. They think that marriage alone somehow “anoints” a woman as ready to have children. Wrong.

  13. Although I agree that this whole idea is insane, my question would be “is it more insane than the current system?”

    If it were possible to eliminate all other types of transfer payments such as welfare, social security, medicare and medicaid, public schools etc. etc. and replace them with a single monthly payment that anyone could apply for, would that system be less insane than the current one? Wouldn’t you prefer when the next “we have a right to…” discussion came up that we could simply say “fuck off, you are already have your monthly ‘being alive’ bonus.”

    And perhaps, as you say, if you have to apply for it you might need to do things to maintain it, for example, not committing crimes or not increasing the size of your family, or something like that. And perhaps we, as a society, could build in a stigma so that it was considered humiliating to be receiving this payment? “Really, you are such a loser that you need a ‘being alive’ bonus?”

    And perhaps at some stage it could be replaced by a charity where richer people contribute voluntarily. Perhaps even with a requirement that the recipient has to monthly send a hand written thank you note to one of the contributors? Or maybe go clean his bathroom?

    And then again, perhaps I need to drink some coffee and come back to reality….

  14. If it were possible to eliminate all other types of transfer payments such as welfare, social security, medicare and medicaid, public schools etc. etc. and replace them with a single monthly payment that anyone could apply for, would that system be less insane than the current one?

    No, it wouldn’t, and that’s my point. At least then people could see the flow of money. People could actually see lazy people who’ve been unemployed (BY CHOICE) for years and years get these giant checks paid for by their tax dollars.

    It’s the same as my other contention: that everyone, including corporate employees, should actually pay their taxes by writing a check instead of having it automatically withdrawn from their paychecks. Once again, they’ll actually see where the money is going, and then we can have a real conversation about it.

    And perhaps we, as a society, could build in a stigma so that it was considered humiliating to be receiving this payment? “Really, you are such a loser that you need a ‘being alive’ bonus?”

    America had that stigma years ago, and it worked. Today it’s long gone.

    perhaps at some stage it could be replaced by a charity where richer people contribute voluntarily.

    Yes, that’s a great system. This is how they ran ancient Greece (somewhat). The culture lionized rich people who voluntarily donated to the goverment. Today in the US, you’re not even allowed to donate to the goverment (they’ll refund the money back to you). Stupid.

  15. Caleb, transfer payments are invisible right now also, in fact they are the worse than invisible, they are an “entitlement”. I don’t think the basic monthly income is a good solution, I just wonder if it might be less bad than the current one.

    And BTW I totally agree with you. If the withholding system was dismantled and people had to actually pay their own taxes, big government would unwind within two years. Which, of course, is why it will never happen.

    BTW, just recently discovered your blog and bought one of your eBooks. Excellent information. I have a 14 year old son and I am thinking about the best time to expose him to this type of material. Probably after high school, but interested in your opinion on that subject.

  16. If paying everyone in Finland ~$1K a month (or would it be better to pay weekly) would help save the government money, then it might makes sense fiscally, at least to seriously consider. It could save a lot of administration costs, at least. In terms of overall governmental works to help people, it may or may not help, especially those with substance abuse problems. But it would takes away the disincentive to work. You would get the $1K either way, so you’re not being paid not to work.

    But the real question : will the net result be an expansion or contraction in the Finnish economy? Only time can truly answer that question.

    And who knows what’s best for the individual? The state or the individual? It’s a fundamental philosophical debate. In theory this allows the individual to decide. But in practice, it probably will have a lot of fine print. I’m guessing it’s at least for people only 18 and over?

    In the US, right now, the number would average out to about $600/month per person in the US (http://tinyurl.com/ng6dvxc). There’s about 320 million people and social programs are about $2.3 trillion, including social security (http://tinyurl.com/q5xpzxw) So $1K a month in a place like Finland might be a savings for the government.

    In terms of deciding who should get money, for example the can’ts and the won’ts, should the government decide? Have they been doing a good job? There will always be loopholes to get more money. Perhaps not deciding and giving everyone the same amount of money might be a way to eliminate excess government? And whatever happened to the CCC? That seemed to be a good government program, at least at the time that created still-standing, good-quality structures and much needed trees. But what about people with major medical expenses?

    I think one of the main fears of Western governments that may have caused a lot policy decisions in social programs dates back to the French Revolution, which was the beginning of many of the “modern” ways of life. It happened at about the time the US was formed. Basically, the “rich” people were taking advantage of the “poor” people through over-taxation, and bad policies, and they were pushed out of power. (check out Wikipedia’s pages on the causes of the French Revolution – http://tinyurl.com/o2urvkv). Basically, I think many governments consider the French Revolution and so consider the need to appease the masses to stay in power. It’s like how the Roman governments used to give people bread and circuses.

    And as an aside, though obviously not ideal, it seems like the only things a person needs to survive at basic level are food, shelter and medical care. Not counting medical care, a person could have shelter and food for well under $1000 a month and in many places under $600, if need be. Medical care is a whole other ball game. For someone between 20-40, premiums plus maxed out deductibles could be about $600 a month, though obviously things could be way different in some scenarios. My point is that $1000 a month would cover almost anyone’s basic food and shelter needs. Medical issues are a different story for a different day.

  17. EuroZone is crazy illogical these days.

    “We have massive unemployment, and we want to import large numbers of immigrants to do the work we don’t have.”

    “The results of Mincome in the town of Dauphin were so positive that they discontinued it and never repeated it, but now we will.”

    I wonder if this ‘experiment’ is being done to give free money to the Actual Citizens of Finland or to the New Permanent Refugees.
    And is just the beginning of what shall be done soon in other countries.

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