Why providing basic income to everyone, including the richest, makes sense

"You want to even give basic income to the rich?! That doesn't make any sense at all because they don't need it, it'll cost more, and you'll be taxing them only to give it back to them."

This a common response to the idea of providing everyone an unconditional basic income. Yes, everyone. That means that even Bill Gates will receive $1,000 per month (but it will be replacing his existing tax credits that far exceed $1,000 per month).

Why?

The Water Room Analogy

Imagine you enter a room full of 1,000 people. You are told water will soon be pumped into the room and those who cannot swim will drown. You have a limited amount of time and $20,000 to determine who can't swim, and how to prevent their imminent deaths. What is your best course of action?

Option 1: The way we do things now

Knowing all about how our current safety net system works, you decide to interview each and every person there. To do this, you hire 100 interviewers and pay them each $50, which is a quarter of your budget, leaving you with $15,000. Each interviewer is responsible for 10 people.

Everyone is asked if they can swim. Those who say they can't swim are given lessons in how to swim using virtual reality goggles and so an additional expenditure of $3,500 for 10 standalone VIVE headsets, which leaves you with $11,500. Some people feel they will be able to swim thanks to the lessons, but others worry they still won't be able to swim. These people ask for life vests.

"Give a man a life vest, and he can't drown for a day. Teach a man to swim, and he can't drown for a lifetime," is your response.

Makes sense, right?

Everyone can and should be forced to learn how to swim, right?

Meanwhile, one of the people in the room asks for $5,000 so he can buy an Aquaflyer Jetpack. He already has more than enough money to buy one himself, but he thinks it's important you subsidize half his cost, because of how important he is. He promises that if you give him the money, he will use it to show people how awesome jetpacks are, so they can want one enough to build one for themselves. This sounds like a cool idea (and you owe him a favor), so you hand over the cash.

Another person in the room says they've heard that terrorists from Mars are looking to blow up the room, so they need $5,000 to make the room Martian terrorist proof. You point out that the room is going to fill with water, which will most certainly kill more people than Martian terrorists ever have, but he convinces you that the danger is real and you must have a strong room if you are going to guarantee the freedom of those in it.

Now you have $1,500 left. Water begins to fill the room. There's panic. Some people are definitely going to die, but you have no idea who. People have been taught to virtually swim, but you don't really know if that will work. You don't know who has lied and who has been truthful. You don't know who really thinks they can swim but actually can't.

In a last ditch attempt to save lives, you buy 70 $20 life vests for $1,400 and give them to your interviewers to hand out only to those they believe absolutely can not swim, and who promise to continue their VR training and build their own boats out of thin air.

The remaining $100 you use to buy yourself a gun.

End Result 1: 100 people drown. Hundreds more get water in their lungs and develop pneumonia. 50 people with life vests are killed for their life vests, and hundreds more are beaten and bloodied in a frenzy of panic and rage. The guy you gave a water-propelled jetpack to gets stabbed with a pitchfork, and the guy who was afraid of Martians stands proud as a true defender of freedom in a room full of Earthling corpses.

Option 2: Unconditional Basic Income

You use your $20,000 to buy 1,000 life vests which are dropped from the ceiling.

Everyone grabs one...

And you're done.

Congratulations. You didn't need to hire any additional help and everyone is protected now whether they can swim or not.

As the room begins to fill with water, it becomes apparent that some people need some extra help. Some have trouble putting their vests on, but those next to them help with that. Some appear to be too heavy to be supported by just one vest, so those excellent swimmers who don't need a vest give them theirs.

It becomes apparent that in a room filling with water and full of a thousand people who all have life vests, it's really easy to determine who needs extra help and who doesn't, and others actually help them all on their own. It's almost like people who have their own safety secured are more willing to help others.

Laughter erupts. Here people were originally worried others would choose not to put on their life vests even when given them, i.e. instead trading them for cocaine, so they laugh at how silly it was to ever think people didn't want to actually keep living.

It's funny to think how anyone ever thought people couldn't just be given life vests.

End Result 2: ZERO people drown. A few people still get water in their lungs, but only a few. No one gets beaten or stabbed with a pitchfork. People are not only alive but happier. Some are especially creative and repurpose unused life vests to together build a raft. Others start entertaining each other with stories and jokes and riddles and poems.

Now, which scenario makes more sense to you?

Does it make more sense to spend a lot of time and resources making sure that only those who absolutely require help get it? Or does it make more sense to just guarantee everyone gets help and simply make adjustments after the fact?

What's more efficient? All the interviewers, interview equipment, calculations, personal judgments, and spending of resources on stuff we don't even need? Or is it more efficient to just skip all of that, and cover everyone, no questions asked?

If you were in this room and it was filling with water, what kind of help would you want?

If you were in this room and got a life vest along with everyone else, what would you do?

Unconditional basic income is an answer, but it's also a series of questions. What we would do with a basic income is a question we all need to ask ourselves.

For it's when we start asking ourselves this question, we begin to really think BIG.

The above analogy should help in understanding how flawed the idea of targeted assistance is. It creates artificially high marginal tax rates that can even exceed 100% on recipients, effectively trapping them on welfare. It also excludes those in need through type II errors (false negatives), and erodes social cohesion by artificially dividing the population along arbitrary lines. To read more about the need to replace conditional welfare with unconditional basic income, read this next.

Who am I? Read my Steemit intro post to learn more about me.

Have a question about basic income? Here's a list of links that answers frequently asked questions.

Interested in reading an entire book about basic income? Here's a BIG list of what's available out there.