Poverty is not Euvoluntary: Basic Income Edition

The latest Cato Unbound, led by (left-handed?) friend of EE Matt Z. turns an eye to the Basic Income Guarantee. From the lead essay [emphasis removed]:

No libertarian would wish for a BIG as an addition to the currently existing welfare state. But what about as a replacement for it? Such a revolutionary overhaul of the welfare state would almost certainly require a constitutional amendment, both to insulate debate somewhat from the pleas and protests of special interests, and to make it considerably more difficult to renege on the deal afterwards.

For a basic income program to be palatable to directional libertarians (I'm inclined to prefer the term "marginal" libertarians, but let's not quibble), the replacement requirement is imperative. For more, see the KPC version here.

Zwolinski offers justifications that should appeal to just about anyone, regardless of political preferences. Please indulge me a brief consideration of his four main selling points.

1. Less bureaucracy. I don't claim to know what the optimal level of bureaucracy is. It probably ain't zero, but it's probably also a whole heck of a lot less than what it is now. Zwolinski cites overhead costs, and while I agree that those are troublesome, it's probably still small potatoes compared to the full opportunity cost of taking quite competent workers out of the productive economy and setting them to work shuffling other people's resources around. I cheer even harder for this point than does the lead essay.
2. Cheaper. Getting more for less is good (for normal or superior goods). Cheapness comports with the classical virtue of prudence. Economists like prudence.
3. Less rent-seeking. I've studied public choice economics. This is my dog whistle. There are many like it, but this one is mine. Matt even cites Buchanan. Beautiful.
4. Less paternalistic. Unfortunately, Matt doesn't cite quite enough Buchanan. One of JB's later papers made an important markets-in-everything point. If you model paternalism as a market, with both supply and demand, you should be skeptical about claims that no-strings-attached transfer payments will long stay free of paternalism.

Buchanan's insight in Afraid to be Free isn't particularly controversial. Self-discipline, like anything else valuable, is costly. Ordinary economic reasoning says that any time there's a valuable resource and the appropriate technology to harness that resource, there may well be an opportunity for specialized production and exchange. In this case, voters can organize to petition the state to restrain them from making certain decisions.

In Zwolinski's essay, he cites Charles Murray's proposed Constitutional amendment that would forever and anon banish targeted programs in favor of some version of the BIG. This amendment cannot constrain the sovereign from imposing paternalism on other margins. And it cannot and will not address an underlying demand for social control. If constituents wish the behavior of themselves and their fellows to be constrained by the state, they will find a way.

So the empirical question is whether or not the tradeoff is economically efficient. We need to ask questions like whether or not the NYC soda ban would have been more likely to stick around in a BIG world and what the costs would have been of that. It's a different analytical task, complicated by an out-of-sample general equilibrium.

The counterfactual state of the world is (probably) not one of no paternalism, but rather one of paternalism unbound. The real trick for libertarians is how to move towards a world of both lower discrimination and lower dominion. I submit to you, my dear readers, that this task is complicated by a constituency that actively seeks more of both. Underestimate their wiles at your peril.

Poverty relief is not euvoluntary. And some sort of income guarantee, be it universal transfers or workfare or whatever, is probably better than the status quo. But please don't oversell it. The pig iron law of public policy is that there are no solutions, only tradeoffs.