Note: This article presents an argument for basic income. It’s an argument I have not yet heard anyone else make. There are no appeals to emotion — only rationality and logic are necessary to see the value of a basic income.

I have an inappropriate amount of affection for my slow cooker. This thing is awesome. I can put in some meat and veggies, turn it on, and then walk away. Seven hours later, I’ve got dinner waiting for me. As much as it possible for a man to love an appliance, I love this thing.

It even comes with a sidekick!

It cost us $20.

That’s incredible to me. I could spend years working to make something like this. The end result wouldn't be nearly as good, and it would cost me a lot more. That the modern system of markets and international trade allow me to buy this slow cooker for just $20 is nothing short of incredible.

A large number of different people had to come together, in concert, and produce this thing. They did so by coordinating their activity using a system of prices and markets.

On my shoe cabinet, there are two metal hooks that I bought at a hardware store for $7. I will use these hooks to hang my daughter’s swing, which I bought for $17. I picked up that swing from the store, using a car that’s worth around $7,000. The relative prices of the hooks, the swing, the car and the slow cooker are all the result of a complex equilibrium-seeking process encoding millions of variables.

I think these systems are remarkable in what they allow us to have. I don’t think these systems are perfect. My ability to hold these two statements in my head seems to put me in a very small group. Some people will say we should get rid of markets and prices and that whole business. I have a hard time taking that argument seriously. Every single thing we interact with is insanely complex and requires enormous amounts of labor.

I don’t think anyone would object to me arguing that the car is hundreds of times more valuable than the slow cooker. The car takes a lot more work to make.

What people object to are claims like “Alice is worth a hundred million dollars, and Bob person is only worth a hundred dollars. That means Alice is worth a hundred million times as much as Bob.”

Some people will defend this imbalance and argue that what Bob is doing isn’t as important to the global economy as what Alice does. Essentially, they are arguing that these prices are correct, and if we don’t like them, then it’s our feelings against cold hard reality.

What Exactly Is Being Measured?

The problem with saying “get over your feelings, prices are measuring reality and that’s that” is that the reality being measured is — feelings.

That’s right, feelings! Prices are, ostenbily, measurements of what human beings value. What we want. What we feel good about. What gives us utility. Pull up any economics textbook, and they’ll tell you that utility is “the amount of good feeling” from consuming a good or service. Prices are supposed to measure utility.

Prices are supposed to be encodings of information about the utility of an object, and its relative scarcity. If I do some action that produces $10 worth of output, what I’m doing, supposedly, is adding “$10 worth of good feeling” to the world. That’s really all it is.

Markets and trade are ways of moving good feeling around, and, ideally, creating more good feeling. When we talk about economic growth, and measure it in terms of dollars, what we are talking about, ostensibly, is a net total increase in the amount of good feeling in the world.

All Measurement Systems Have Error

If you’ve ever built a measuring device, you know how hard it is to get them right. Even things as simple as thermometers and scales have valid operating ranges, and margins of error.

So if a device as simple as a ruler has some amount of error in it, we should expect “the giant system of international finance that controls and shapes the contours of our lives” — to also have some amount of error in it.

It isn’t hard at all to find the errors.

There are some really simple examples of where our system doesn’t work. For example, if I mow my lawn, and you mow your lawn, according to current models, no value has been created. But if I pay you $10 to mow my lawn, and you pay me $10 to mow yours, now we’ve “created $20 worth of economic activity” — according to the models we use to govern almost every aspect of human existence. This is insane. And that’s not even the worst of it.

I think the current economic system — which does not have a basic income — dramatically undervalues all kinds of things humans do. The reason is that our current model says human beings aren’t doing anything valuable unless they are paid.

Without a basic income, the tiniest amount of money changing hands is valued infinitely more than years of free labor. Divide any number by zero, and you get infinity. That means the $5.00 someone spends to buy a pack of virtual gems in angry birds is valued infinitely more than the hundreds of hours that parents put into raising their children every day.

This is a recipe for a sick society.

Basic Incomes Put a Lower Limit on Human Value

Adding a basic income puts a floor on the value of any human activity.

Suppose we have basic income of $10,000 USD per year. Every person gets this much, regardless of what they do with their time. That rate works out to $1.14 an hour, 24 hours a day. This basic income changes price structures so that all activities done by humans are valued more, because they aren’t constantly being compared to zero.

The current model, without a basic income, says, “A person geting 8 hours of sleep a night is worth $0. ”

With a basic income, the model says “A person getting 8 hours of sleep at night is worth ~$9.” Now, $9 sounds low. It probably is low — but $9 is closer to accurate than $0, which is how things stand now.

Would people do wasteful things with their time, and still get paid? Yes, they would. They are doing that now. The difference is that, with a basic income, we’d stop our economy from saying that the worthless things people have done which get them paid (Donald Trump’s Real Estate School comes to mind) are infinitely more valuable than the many, many valuable things people do for free.

I think markets are awesome. I think free, voluntary interactions are the ideal way to structure society. I don’t think we have a system like that now, because the absence of a basic income in our economy throws out necessary information.

One other benefit of a basic income is that it prevents the system from being so heavily biased towards the current status quo. To earn money, you have to please somebody that has it. This requirement sets up a feedback loop of increased centralization of power — but this is a topic for another essay. Now I need to get some sleep, so I can be a better father tomorrow. Even if nobody is paying me to do so.

If you liked this article, check out my book on amazon!