The 5 Biggest Fallacies Of Basic Income

When it comes to their jobs, people despair about two things: 1) that even a monkey could do it, and 2) that a monkey would do it.

Or a machine. 

Fretting about disappearing job types is as old as men’s right hands, but these days it is also always a prelude to call for a basic income (BI) – the least imaginative but most dangerous solution to the latest industrial revolution (or to overpopulation, depending on how you look at it). No, it is not self-evident that machines take over. And just because I can’t imagine how life would go on it doesn’t mean it won’t.

So let’s go through the five most misleading topics that occupy 99% of the conversation about basic income.

1. No, idleness is not the problem here.


Basic income does not make people (as such) lazy. And that shouldn’t be the issue, anyway. But it’s typical how this patronising fake concern had hijacked the conversation. In fact, most discussions about BI begin and end on the topic of incentives, as if this were the main and only concern. It isn’t. But not just entry-level pub discussions cruise on this low intellectual altitude. Even academics and cities that experiment with BI test whether it promotes idleness – rather than looking into real issues.

Curiously, no one is concerned about landlords, trophy wives and shareholders living off dividends, and how they find meaning and purpose in their little lives without paid employment. No one dares to patronise aristocrats with inherited wealth either. We only allow ourselves to patronise those we see below ourselves.

Authoritarian minds allow themselves a lot of things regarding those below – that would never occur to them when they think about someone above them.

And when it comes to authoritarian thinking habits don’t feel too complacent. We all harbor a few of these thinking habits – at least when we are worried and helpless. And we all are these days. So this concern about idleness tells more about those concerned than anything else. But let’s discuss it for a moment because I know you wouldn’t let go.

Some arguments just sound logical on the surface. When you don’t give it any attention, or when you don’t have any data – but you are full of cliches and stereotypes that give you the illusion of knowledge. Keynes’ assumption that people who made a lot of money would stop working and enjoy idleness, for instance, has been widely shared – but it never happened (statistically speaking). The most successful high flyers seem to spend more and more time with money-making pursuits while the poorest seem most put off by the idea of work. This leisure time paradox illustrates the fallacy of oversimplified logic perfectly.

But when it comes to the logical way of spending one’s leisure time we simply forgot to take into account that incentives can be pressing needs as well as the pursuit of rewards. And humans, just like rats, have shown a propensity to pursue rewards and keep pressing the pedal that once gave a positive feedback. This is why people who found work and business rewarding keep overworking themselves – while people who only ever found rejection and mistreatment when attempted to fit in resort to video games to get their daily fix of success.

The bottom line is that we don’t even know ourselves – let alone others (or “the majority” or some other nonsense that we use to say the same thing). And our low opinion about everyone else has been proven to do plenty of damage already. The Swiss, for instance, have demonstrated this self-condescension when roughly 10% said they would stop working – but 30% assumed that others would.

Basic income is the poor man’s rent seeking. And like every other kinds of rent seeking, it is liable to producing the wrong incentives. But do the benefits outweigh the costs?

2. Does BI even ease existential anxiety?

The other main argument is that it would fend off economic anxiety – the type of fear that slowly boils your brain, impairs cognitive functions and makes you vote for a populist strongman. (BI on the other hand makes you vote for a redistributionist populist, which is totally fine, apparently.) So let’s set this straight.

There are people in the world who would be better off (i.e. more useful to society) if the pressure of monthly survival would be removed. There are people who wouldn’t. And there are the ones to whom it wouldn’t make any difference.

This the point where a lot of mouth power is applied to ‘figuring out’ which group is “the majority” (always this majority-obsession…). But the secret is that it doesn’t matter. Don’t design policy with a certain type of personality in mind because

1) you have no idea,

2) because it would make you a condescending idiot, and

3) because whenever you assume that people are such and such you actually create incentives to them to be like that.

And that effect is what’s certain, not the ‘majority’ people like going on about.

So it is really not the issue whether people would enjoy any psychological benefit from BI. (Especially since it would be more complex that anyone could imagine from the Starbucks sofa.) But the problem runs deeper, and as usual, people are asking the wrong question. Because…

…existential fear is just one half of the problem. The other half is being helpless. And that would only get worse.

The problem with not being needed (even for a monkey job) will not be solved by handouts. The problem of not being in control of the improvement of our own lives – of being helpless – cannot be solved by someone taking care of us. And helplessness is as great an evil as fear and economic anxiety when it comes to boiling minds – an issue that BI is meant to tackle.

I know it is hard to believe but the sense of not being in control of one’s outcomes and future contributes to populism as much as fear and existential anxiety do.

3. There is no money for it

And the discussion should end here, but it won’t. Of course not. People are made to regard the state as being able to just print money. Beware what you wish for.

According to OECD numbers and the calculations by the Economist, Hungarians would get 4500 dollars per annum if all social expenditures (apart from healthcare) went into the pot and redistributed equally and without the stupefying means testing bonanza (talking about wrong incentives). And that includes saying goodbye to the current old age pensions – that is hardly sustainable, but its removal would meet epic resistance nonetheless. So the amount wouldn’t help anyone but cripple the taxpayer anyway.

So yes, I do understand the appeal of removing means-testing and the condescending, paternalistic bureaucracy that does it to us, but it would 1) never happen and 2) it would probably not save enough to make up for a rotting economy’s incapability to pay a living basic income.

4. Basic income would put a price tag on citizenship

And make our freedom of movement even more limited.

This would be the second most devastating consequence of national BI schemes (the first one merited a separate post). It is also a great moment to realize – if you haven’t done so yet – that you are owned by your country of citizenship. A passport may be interpreted as a tool to make bureaucratic nuisances go away – but others realize that those nuisances are caused by the states themselves.

Citizenships have a very tangible monetary value (as well as branding) that can make someone’s life miserable. With BI it would become even more suffocating.

But BI will be a beautiful memento to the hard-to-grasp fact that you are controlled not just by negative tools and threats, but also by positive ones. That when they give you something for free, you also lose something. Always.

5. Politicians wouldn’t let go of redistributive power

Although some journos calculated that everyone could have a basic income in Hungary if only we stopped spending horrendous sums on the prime minister’s football obsession and erecting monstre stadiums on public money – but you can’t seriously believe that it would ever happen, right?

It would also be great if politicians could somehow do their jobs without corruption but that never happened either. We could be super rich if only public money were spent without waste – but it isn’t. And it will never be, given the nature and logic of public spending.

Which leads us to the real reason why BI would end in disaster. In the next post…

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10 thoughts on “The 5 Biggest Fallacies Of Basic Income

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  3. I like how they call the funding problem a fallacy – then provide absolutely no way to pay for Basic Income whatsoever.
    Watch for it, no one ever has a feasible plan to pay for BI. Never. It’s always utterly naive bullshit, like pretending you can just cut all social spending and that will do it (hint: that won’t even come close, you’ll need to cut all social spending and then double taxes on top of it, but the public would never in a million years allow you to double taxes overnight).


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  7. You cut your points pretty short, maybe more insightful if you were to spend more time on fleshing out the individual concerns with supportive and contrary arguments. As it is now, I don’t see much more than fearmongering in this piece.

    Also talking about fallacies must have been a stylistic choice of words, rather than trying to actually mean what fallacy means, given people don’t just randomly assume that there are no problems with rather obvious points of concern that are frequently raised in the context.

    sorry if double post, can’t figure out where exactly these comments are supposed to show up.


    • Yes, I agree with you on the brevity. But I am keeping my posts under 1000 words and this was already much longer.

      I have previously written about the pros and cons and listed 12 very convincing arguments in favour of the idea. (In Hungarian, maybe I get to it later.) But there was one devastating argument against it that cancels out all the others. That’s in the next post, I plan to complete it by Wednesday.


  8. You cut your points pretty short, maybe more insightful if you were to spend more time on fleshing out the individual concerns with supportive and contrary arguments. As it is now, I don’t see much more than fearmongering in this piece.

    Also talking about fallacies must have been a stylistic choice of words, rather than trying to actually mean what fallacy means, given people don’t just randomly assume that there are no problems with rather obvious points of concern that are frequently raised in the context.


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