Daniel Lemire's blog

, 2 min read

Toward Star Trek economics

Characters in the Star Trek universe often claim that their future Earth has abolished money. Everyone gets what he needs and nobody works for money.

Unfortunately, they never explain how it may work. Clearly, not everyone can afford to own a starship.

A more reasonable scenario is that everyone is provided a basic income. This income is probably sufficiently large that nobody has ever to worry about poverty. Many people in Switzerland think that this is a good idea. Though it sounds outrageously expensive at first, one should realize that a basic income for all makes many government programs obsolete: family allowances, welfare, unemployment benefits, housing subsidies, pensions, minimum wage, student help and so on. Many economists tell us that we can indeed afford it.

Moreover, a basic income for all has several major benefits:

  • Basic income makes it easy to start a small business or pursue your education on your own. Or work full time on your open source project for a year. Or write a book. Or take care of your sick parents. In a very real sense, it frees people.

Though welfare and unemployment programs are nice, they come with a stigma as they are granted based on hardship. It is hard to avoid the idea that you have gotten in trouble, it might be your fault. With a basic income, it is likely that it would be far more acceptable to just take a break from work for a time.

Overall, government programs tend to favor specific activities like full-time employment and full-time formal study as opposed to part-time employment, entrepreneurship or self-education. Basic income is far more neutral and let people more free to choose their own path.- Some people object that basic income would entice people to do nothing and the economy would suffer.

But let us think this through. If you have a high income, basic income changes little to your incentives. At the other end of the scale, if you are on welfare or unemployment insurance, you already have an incentive to do nothing at all until you find a suitable (full time) job. Indeed, your welfare check might be cut if you get a job… so basic income probably increases your incentives to work in that case.

What about people in between? If you are a single mother or an unskilled worker, you may indeed have a greater incentive to stop working under a basic income system. But maybe it is not a terrible thing if mothers stay with their babies. And do we really need to entice unskilled people to work? Their jobs are about to be taken over by robots in any case.