Cash Without Conditions

AThe proposal that a state should hand every citizen a sum of money and ask nothing in return is older than the labour market that now makes it sound urgent. Pamphleteers in the 1790s argued for a payment owed to each person as compensation for land that others had enclosed, and the idea has resurfaced in every decade since in which work appeared to be vanishing. A basic income, in the definition most researchers now use, is an unconditional payment made to every individual at fixed intervals, owing nothing to a means test and nothing to a willingness to work. The first controlled experiments ran in North America between 1968 and 1979 and were commissioned to find out whether such payments would persuade people to work less. The second wave, beginning after 2016, has mostly been designed by governments worried about insecure employment rather than about idleness. Whether findings drawn from a few thousand participants can license a permanent national scheme is what now divides the field.

BAnneli Rask, a labour economist at the Halden Institute for Social Research, has spent six years on the trial conducted in the Vantola region between 2018 and 2020, in which 2,000 people received 560 euros a month with no conditions attached. The experiment was commissioned to settle the employment question, and on that question its result was undramatic: matched against a comparison group drawn from the same register, recipients worked an average of five days a year more, a difference Rask herself calls too small to carry any weight. What the trial is now cited for is something it was never built to measure. Recipients reported markedly lower levels of psychological distress than the comparison group at both the twelve-month and the twenty-four-month interview, and the gap between the two groups widened rather than closed during the second year. Rask regards this as the finding that has survived scrutiny best, precisely because nobody had gone looking for it.

CThe result carries a boundary that Rask states far more often than those who quote her repeat it. Every participant was drawn at random from the register of people who were unemployed and claiming benefit in November 2017, because that register was the only list the administering agency was permitted to use. The trial therefore says nothing about households already in work, which is the very group on whose behalf such schemes are usually argued for. One design feature does travel further than the rest: the payment continued unaltered when a recipient found work, whereas the benefit it replaced was withdrawn as earnings rose, and Rask attributes the wellbeing result partly to the removal of that cliff edge. She has written twice that the Vantola figures should not be described as evidence about a universal payment, since nothing whatever about the trial was universal.

DTomás Iriarte, a fiscal economist at the Bellwood School of Government, does not contest the employment result and says so plainly. His objection is that an experiment and a policy are different objects. Paid to every adult at the Vantola rate, the sum would absorb about eleven per cent of national income, against the 4.3 per cent the country then spent on unemployment support, and no pilot anywhere has yet run for longer than three years. That horizon is short enough, he argues, that participants make none of the decisions a permanent income would change, such as leaving a job in order to retrain or moving to a cheaper town. Put to him directly, he concedes two things: his costings assume that no existing benefit is withdrawn, an assumption he agrees inflates the total, and his argument about behaviour cannot itself be tested until some government makes a payment permanent.

EGovernments have not waited for the argument to end. Since 2019 at least fourteen jurisdictions have announced pilots, and the announcements travel a good deal further than the results. A scheme paying a fixed sum to 125 selected parents and a scheme paying a smaller sum to everyone living in a district are reported under the same phrase, and their headline numbers are then set side by side as though they had measured one thing. Neither Rask nor Iriarte defends the practice. Both name it as the most misleading habit in the field, and both have argued that any figure quoted from a pilot ought to be published together with the rule that decided who was eligible for it. It is the rare point on which the two agree without qualification, and neither of them expects the newspapers to oblige.

FWhat is emerging is a division of labour rather than a verdict. For people whose earnings arrive irregularly, the couriers and contract workers whose income no fortnightly declaration can track, unconditional cash has no administrative rival, because any system that adjusts a payment to earnings must first establish what those earnings were. Where the aim is narrower, such as protecting a household against the cost of a long illness, targeted insurance still delivers more for each unit spent, and neither researcher disputes it. The question no pilot has yet answered is what unconditional money does to rents in a place where everybody receives it: the recipients in a trial are scattered among neighbours who receive nothing, and prices, unlike wages, are set for the street rather than for the household.