Friedrich Hayek Supported a Guaranteed Minimum Income

By James Kwak

“We shall again take for granted the availability of a system of public relief which provides a uniform minimum for all instances of proved need, so that no member of the community need be in want of food or shelter.”

That’s from The Constitution of Liberty, “definitive edition,” p. 424. Yes, it comes as part of Hayek’s argument against mandatory state unemployment insurance. But it reflects a fundamental understanding that no one should go without food or shelter, and that it is the duty of the government to ensure this minimum level of existence. “The necessity of some such arrangement in an industrial society is unquestioned,” he wrote (p. 405).

The standard that Hayek simply assumed would exist goes beyond merely keeping poor people alive. In a wealthy society, he thought it inevitable that it would become “the recognized duty of the public to provide for the extreme needs of old age, unemployment, sickness, etc.” (p. 406). On this basis, he even endorsed the idea of compulsory insurance, such as the individual mandate of the Affordable Care Act.

I’m not claiming that Hayek would have supported Obamacare — he almost certainly would have favored less government involvement than the system of state-level exchanges. But on the questions of welfare and government intervention in insurance markets, he was to the left of the entire Republican Party today.

[Also posted on Medium.]

11 responses to “Friedrich Hayek Supported a Guaranteed Minimum Income

  1. It is interesting that a universal basic income would be far less intrusive, require less regulation and less bureaucracy, would require less government, would be more humane and more intelligent than what we have now, and even anti-government Republicans who believe that people shouldn’t die in the streets are against it.

  2. I believe that a moderate standard of life should be a human right, and thus a mandated minimum income would enable discovery of a persons natural desires. If you remove the lower levels of the maslow’s hierarchy then people can work on the higher levels, and therefore improve society over all. I may piggy-back on this subject in my own blog.

  3. There’s a world of difference between straightforward assistance, like a minimum guaranteed income, to benefit the needy, and the instauration of intrusive redistribution machinery, that much benefits the redistributors. I doubt Hayek would approve of the latter.

    This is exactly the problem I am facing in my oil-cursed nation Venezuela, where 97 percent of all the nations exports goes into government coffers. Instead of handing over an oil dividend directly to the citizens like I propose, there are those who want to administer these resources in the best interests of the citizens, meaning the citizens will only get crumbles.

  4. OK, that was easy.
    It is logically agreed that the government must fund a basic income up to food and shelter … a given across the ideological spectrum.
    So, how to fund it ?
    Let me count the ways.
    Taxation.
    Debt.
    Seigniorage.

    Taxation is valid only to the point that the source is the top metric of incomes. Otherwise the re-distribution has negative social and economic effects.
    Debt should be unnecessary for a currency issuing sovereign.
    Seigniorage is the gain accruing to the government as a result of issuing the money rather than the debt to fund its obligatory income requirement.

    A Basic Income Guarantee is readily fundable through normal seigniorage gain, which policy initiative also squares with Friedman’s fiscal and monetary framework.
    Funny, that.
    For the Money System Common

  5. Rabbi M. Herzog

    HERE—-\

  6. Rabbi M. Herzog

    YOu’re gonna be my BITCH Kwak if I ever go to proxies

  7. I am not a fan of tampering with the constitution with amendments of any kind, but in the one area that it makes sense is a constitutional amendment that guarantees freedom from abject poverty as a foundation for American Citizenship.

  8. @luckyleye – good point, you would think that a “Christian” nation would have reams and centuries of data to prove it works that way…

    However, the radicalization of both, Christianity and Capitalism, took over when humanistic psychology found the GLOBAL “truth” that “greed is good”.

    Hey, and what is this “minimum”?

    As things stand today, a cluster of ambitious Las Vegas homeless with the genetic inheritance of basic know how and energy do not have any right to make their life less miserable by digging that big deep hole in the ground that would properly handle their daily elimination needs…go figure….

    It is a PREDATORY economy….and no one has the POWER or the RIGHT to stop “greed is good”.

  9. Milton Friedman supported a guaranteed minimum income too. He thought it would eliminate a hundred welfare and welfare-like laws and agencies.

  10. Indeed, just as many NGOs currently report their management costs for redistributing donations so should governments report when redistributing tax receipts from rich to poor. Unfortunately that is not in their interest.