It was the summer of ’69, the end of the decade that brought us flower power and Woodstock, rock ’n’ roll and Vietnam, Martin Luther King and feminism. It was a time when everything seemed possible, even a conservative president strengthening the welfare state.

In August of that year, President Nixon presented a bill providing for a modest basic income, calling it “the most significant piece of social legislation in our nation’s history.” According to Nixon, the baby boomers would do two things deemed impossible by earlier generations. Besides putting a man on the moon (which had happened the month before), their generation would also, finally, eradicate poverty.

A White House poll found 90% of all newspapers enthusiastically receptive to the plan. The Chicago Sun­Times called it “A Giant Leap Forward,” the Los Angeles Times “A bold new blue print.” The National Council of Churches was in favour, and so were the labor unions and even the corporate sector. At the White House, a telegram arrived declaring, “Two upper middle class Republicans who will pay for the program say bravo.” Pundits were even going around quoting Victor Hugo – “Nothing is stronger than an idea whose time has come.”

It seemed that the time for a basic income had well and truly arrived.

“Welfare Plan Passes House ... a Battle Won in Crusade for Reform,” head lined the New York Times on April 16, 1970. With 243 votes for and 155 against, President Nixon’s Family Assistance Plan (FAP) was approved by an overwhelming majority. Most pundits expected the plan to pass the Senate, too, with a member­ship even more progressive than that of the House of Representatives.

Richard Nixon was not the most likely candidate to pursue Thomas More’s old utopian dream, but then history sometimes has a strange sense of humour. The same man who was forced to resign after the Watergate scandal in 1974 had been on the verge, in 1969, of enacting an unconditional income for all poor families. It would have been a massive step forward in the War on Poverty, guaranteeing a family of four $1,600 a year, equivalent to roughly $10,000 in 2016.

One man began to realise where all this was heading – to a future where money was considered a basic right. Martin Anderson was an advisor to the president and vehemently opposed to the plan. Anderson greatly admired the writer Ayn Rand, whose utopia revolved around the free market, and the concept of a basic income ran counter to the ideals of small government and individual responsibility that he held dear.

So he launched an offensive.

On the same day that Nixon intended to go public with his plan, Anderson handed him a briefing. Over the weeks that followed, this six­page document, a case report about some thing that had happened in England 150 years before, did the unthinkable: It completely changed Nixon’s mind, and, in the process, changed the course of history.

The report was titled “A Short History of a ‘Family Security System’ ” and consisted almost entirely of excerpts from sociologist Karl Polanyi’s classic book The Great Transformation (1944). In the seventh chapter, Polanyi describes one of the world’s first welfare systems, known as the Speenhamland system, in early nineteenth-century England. This system bore a suspiciously close resemblance to a basic income.

Polanyi’s judgment of the system was devastating. Not only did it incite the poor to even greater idleness, damping their productivity and wages. It threatened the very found­ations of capitalism. “It introduced no less a social and economic innovation than the ‘right to live,’ ” Polanyi wrote, “and until abolished in 1834, it effectively pre­vented the establishment of a competitive labor market.” In the end, Speenhamland resulted in “the pauperization of the masses,” who, according to Polanyi, “almost lost their human shape.” A basic income introduced not a floor, he contended, but a ceiling.

At the top of the briefing presented to Nixon was a quotation by the Spanish-American writer George Santayana: “Those who cannot remember the past are condemned to repeat it.”

The president was stunned. He called on his key advisors and ordered them to get to the bottom of what had transpired in England a century and a half earlier. They pointed out that Speenhamland more resembled the social spending mess that Nixon had inherited, which actually kept people trapped in a vicious poverty cycle.

Two of Nixon’s leading advisors, the sociologist and later Senator Daniel Moynihan and the economist Milton Friedman, argued that the right to an income already existed, even if it was “a legal entitlement that society has never the less managed to stigmatize.” According to Friedman, poverty simply meant you were strapped for cash. Nothing more, nothing less.

The president changed tack and settled on a new rhetoric. Where his basic income plan had initially made almost no provision to compel people to work, he now began stressing the importance of gainful employment. And whereas the basic income debate under President Johnson had begun when experts signalled unemployment as becoming endemic, Nixon now spoke of joblessness as a “choice.” He deplored the rise of big government, even though his plan would distribute cash assistance to some thirteen million more Americans (90% of them working poor).

“Nixon was proposing a new kind of social provision to the American public,” writes the historian Brian Steensland, “but he did not offer them a new conceptual framework through which to under stand it.” Indeed, Nixon steeped his progressive ideas in conservative rhetoric.

What, we may well ask, was the president doing?

There is a brief anecdote that explains it. On August 7 of that same year, Nixon told Moynihan that he’d been reading biographies of the British prime minister Benjamin Disraeli and the states man Lord Randolph Churchill (the father of Winston). “Tory men and liberal policies,” Nixon remarked, “are what have changed the world.” The president wanted to make history. He saw himself presented with the rare, historic chance to cast out the old system, raise up millions of working poor, and win a decisive victory in the War on Poverty. In short, Nixon saw basic income as the ultimate marriage of conservative and progressive politics.

All he had to do was convince the House and Senate. To put his fellow Republicans at ease and manage concerns over the Speenhamland precedent, Nixon decided to attach an additional proviso to his bill. Basic income beneficiaries without a job would have to register with the Department of Labor. Nobody in the White House expected this stipu­lation would have much effect. “I don’t care a damn about the work requirement,” Nixon said behind closed doors. “This is the price of getting $1,600.”

The next day, the president presented his bill in a televised speech. If “welfare” had to be pack aged as “work fare” to get basic income through Congress, then so be it. What Nixon failed to foresee was that his rhetoric of fighting laziness among the poor and unemployed would ultimately turn the country against basic income and the welfare state as a whole. The conservative president who dreamed of going down in history as a progressive leader forfeited a unique opportunity to overthrow a stereo type rooted back in nineteenth­century England: the myth of the lazy poor.

To dispel this stereotype, we have to ask a simple historical question: What was the real deal with Speenhamland?

In the 1960s and 1970s, historians took another look at the Royal Commission Report on Speenhamland and discovered that much of the text had been written before any data was even collected. Of the questionnaires distri­buted, only 10% were ever filled out. Furthermore, the questions were leading, with the answer choices all fixed in advance. And almost none of the people interviewed were actual beneficiaries. The evidence, such as it was, came mostly from the local elite, and especially the clergy, whose general view was that the poor were only growing more wicked and lazy.

The Royal Commission Report, largely fabricated, supplied the underpinnings of a new, draconian Poor Law.

The investigators barely concerned themselves with analysing the data, though they did employ “an elaborate structure of appendixes to lend more weight to their ‘findings,’” two modern­day researchers note. Their approach could not have been more different than that of the rigorous experiments conducted in Canada and the U.S. in the 1960s and 1970s. Those experiments had been ground breaking and meticulous but had almost no influence at all, whereas the Royal Commission Report was based on bogus science yet still managed to redirect President Nixon’s course of action 150 years later.

More recent research has revealed that the Speenhamland system was actually a success.

Now and then politicians are accused of taking too little interest in the past. In this case, however, Nixon was perhaps taking too much. Even a century and a half after the fatal report, the Speenhamland myth was still alive and kicking. When Nixon’s bill foundered in the Senate, conservative thinkers began lambasting the welfare state, using the very same misguided arguments applied back in 1834.

“This bill represents the most extensive, expensive, and expansive welfare legislation ever handled,” one Republican senator said. Most vehemently opposed, however, were the Democrats. They felt the FAP didn’t go far enough, and pushed for an even higher basic income. After months of being batted back and forth between the Senate and the White House, the bill was finally canned.

In the following year, Nixon presented a slightly tweaked proposal to Congress. Once again, the bill was accepted by the House, now as part of a larger package of reforms. This time, 288 voted in favour, 132 against. In his 1971 State of the Union address, Nixon considered his plan to “place a floor under the income of every family with children in America” the most important item of legislation on his agenda.

But once again, the bill foundered in the Senate. Not until 1978 was the plan for a basic income shelved once and for all.

This is an extract from Rutger Bregman’s Utopia For Realists (Bloomsbury; $21.99). Out now.