Milton Friedman on Guaranteed Income / Negative Income Tax / Basic Income


This is Milton Friedman. The Nobel Prize winning libertarian economist… …who adamantly opposed big government. The government is too big. It’s becoming our master instead of our servant. We’ve got to redact against it and cut it down to size. So it may come as a surprise… …to learn that Milton Friedman… …proposed a government program… …to guarantee everyone a minimum income. In my book “Capitalism and Freedom”… I propose something called a negative income tax… …essentially a minimum income. How could a free market capitalist like Milton Friedman… …propose essentially the same idea… …as a democratic socialist like MLK? “A guaranteed minimum income for all people…” “…and for all families of our country.” So many dollars a week or a month… …and they would get it in weekly or monthly payments. 1. Freedom I agree that as a moral principle those of
us who are paying taxes to provide subsidies for others have every moral right to say what
it shall be used for. If we want to say we’ll give you money only if you use it to buy toothpaste and not for anything else. , that’s our right. But I think we are very unwise to exercise it. I think we would be wiser… …and more truly charitable… …and do both them and ourselves more good… …to tell them to use it to buy what
they will. The people who get on welfare… …lose their human independence. They become subject to the dictates… …and whims of their welfare supervisor… …who tell them whether they can live here or there… …what they may do with their lives. They’re treated like children. …by requiring them to come before e government official… and be told that you may spend X dollars on rent… …Y dollars on food, etc… …and then be given a handout. They would be far better off if we just gave them the money and let them spend it. Because in doing so… …we not only give them more help immediately… …we will strengthen their responsibility. Milton Friedman understand individuals
know best how to spend money… …for their own sake… …than any government bureaucrat. The fundamental idea is that people should be free to choose. 2. Cut Government Bureaucracy We have too many separate individual programs. Welfare in the U.S. is a complex maze… …of 126 separate anti-poverty programs. The result: monumental government spending. Much of it wasted. Little of it going to the people… …whom we would like to see helped. Now what it seems to me you aught to do… is to give people money… …instead of a whole lot of separate little baffles… …and get rid of the bureaucracy that is involved in all these programs. 3. Enable Work You could have a program that would be far
superior to the present structure in that it would help people who are poor because they are poor. It would help them in a way which would retain an incentive for them to work. Many of the current welfare programs punish people for working. If you take a job and increase your income… …you lose your benefits. Maybe a job comes up that looks better than welfare. …but they’re afraid to take it. Because if they lose it after a few months… …it may be six month or nine months before they can get back onto welfare. A guaranteed income removes that disincentive to work… …and allows everyone to earn more without being penalized. They can earn an extra $100 or $200 and be better off. With a guaranteed income it always pays to work. It would mean we could each of us take advantage of opportunities that opened up without fearing
that by some chance if we lost our jobs… …it would be a long time before we could get back on assistance. 4. Equality It treats everybody the same way… …and there’s none of this unfortunate discrimination among people. Friedman wrote: In other words, a program
that is guaranteed to all citizens, is preferable to the current programs that divide us up
into subcategories. It’s a system which would have the effect
of eliminating the separation of a society into those who receive and those who pay. A separation that tends to destroy the whole social fabric. There was no freedom to work and spend as
you choose in the Soviet Union. With a guaranteed income the profit motive remains intact and everyone is still free to earn as much more as they’re willing to
work for. So what do you think of a guaranteed income? If it’s had so much support all through American history… Why don’t we have it yet? Why don’t governments learn? Because governments never learn. Only people learn.




Comments
  1. Always so excited for your next videos Matt! Yessss! Keep on creating, the discussion spreading far and wide with your help. ♥

  2. Too many government bureaucrat jobs would be lost. You'll never get something like this because it reduces the amount of the political elite.

  3. Can't understand why this isn't more popular. There is zero need for all these accountants and big government programs. Get rid of welfare, have one "progressive tax" capped at 50. boom

  4. no doubt that guaranteed income is better than any other form of welfare, but after a certain point what is the difference between giving everyone these scraps of paper with socially constructed value, and just letting robotics take its coarse and allowing prices to fall to where manufacturers have to adopt a more and more charitable business model in order to compete?

    obviously when you put a bunch of money in the hands of consumers , the first thing that happens is going to be inflation, and if you give more money to people each time to counteract that inflation you're just going to get more inflation, and the bulk of tangible wealth will continue to flow up to the top. yes, you can keep fighting against it, but these fixed amount incomes are exactly the things that inflation takes wealth from, and those that own property, or the means of production is where inflation gives wealth to. if you have gradual deflation instead, you'd see the opposite. you'd also see savings get incentivized above consumerism, and needing to appeal more to people in order to stay profitable at all. as far as spending power, lets get rid of minimum wage and give actual charities the ability to pay its volunteers, and ensure there will be plenty of easy jobs even in the fully automated economy. also get rid of business licensing bureaucracy and make it feasible for people to take out a loan and buy their own machines and sell their own products.

  5. Because:
     – under capitalism long term price of labor will tend to gravitate to long term replacement cost of labor, that is it is fixed to living and reproduction cost of human beings. If taxpayers provide some of that cost even to the employed persons then that will allow capitalist to cut veges / cost of labor and that will in turn increase profit margins ad lest in shot to medium terms. In another words it represents direct subsidy to capitalist employer by reducing their labor costs.

    – if benefit are payed in cash to millions of individuals the each of those individuals will have to individually "negotiate" market price of whatever good and service they need. This gives advantage to monopolistic and oligopoly providers of goods and services and allow them to price gouge more effectively. If state itself is negotiating a price it has advantage as monopolistic buyer controlling large part of demand for given good and service, and thus is in position to negotiate lower price, and thus is able to provide more services for less money.

    – fools and their many are soon parted, and people provided with raw cash are more lucrative marks for predatory and dishonest businesses then the people that are provided by actual commodities they need and will directly use

    – people that do not need any help will receive same amount of help as people in great need. So for example some Wall Street speculator will receive same check as widowed mother of 3 children with medical condition. This is obviously grossly inefficient, there are many people with living conditions, wealth and income that dont require any help by the taxpayer, it is inefficient to give them anything. Friedman likes that inefficiency because it would allow government to fire public servants that are employed to administer more complex but also more efficient and sensible system of welfare allocation.

  6. No he did not advocate for it. The context was the lesser evil, if the state insist on going that route.

  7. Sorry folks, he was NOT for Guaranteed income. He was for a "Negative Income Tax." Not even REMOTELY the same.

  8. Because he was a Chicago school economist who cared more about mainstream acceptance than what is economically and morally right.

  9. Look up Rothbard's views on UBI.
    Also look up My Two Cents' videos on the subject. UBI is a terrible idea.

  10. "Suppose one accepts, as I do, this line of reasoning as justifying governmental action to alleviate poverty; to set, as it were, a floor under the standard of life of every person in the community." – Milton Friedman

    "Poverty: A Direct Approach" (1964)
    https://miltonfriedman.hoover.org/friedman_images/Collections/2016c21/1964ContextMagazine.pdf?fbclid=IwAR2aEYjJWnNkc60BrEotMsvTymKBGjkavly5Zk_3bb-NFlnWLHKfwde5i5U

  11. Part of the Solution: Universal Basic Income of $1500 per month? We can always add policies to hone in on those segments of society abominably affected by the ugly history of our country. “Bernie Sanders town hall answer on reparations disappoints. But should it?” (16:15) https://www.youtube.com/watch?v=8DnR8ShKvDQ …

  12. #Yang2020 #UBI #AndewYang
    This video is really really good.
    Is there a chance one can be done on Frederick Hayek who like Friedman also supported UBI?

  13. If not a ubi than the negative income tax is my second choice for this issue . It still baffles me how some people believe that ubi or negative income tax is communism. Anyone who doesn't believe that ubi or negative income tax is the right thing to do is absolutely 100% fcking INSANE.

  14. How would this be paid for? USA is already $23 trillion dollars in debt. We can't afford more enormous generous entitlement programs. The government should balance the budget and then run a surplus, and it should provide for the common defense. It should not get involved in much more. Limited government is ideal. No new taxes. No higher tax rates. Gridlock is good.

  15. What many people listening to this will fail to understand is that his proposals are nothing even REMOTELY similar to what the current Democrat candidates are proposing. He's talking about this REPLACING all other welfare programs. He wasn't saying he recommended this….just that he recommended it over the current welfare programs because they're disasters.

  16. WTF! I can’t believe you’re trying to make a positive video on Milton fucking Friedman when his entire objective with the UBI is to privatize everything! You economic illiterate. You think this is a left wing idea? You don’t even know anything about Milton Friedman

  17. This is NOT Yang's "value added tax" contingent on big tech. Friedman's was still a welfare program for those below a certain wage. Yang wants to give all 330 million citizens 18 and over $1000 a month. Congrats for being born. A wee bit different. Guess what happens when the next president takes office and decides to take all that money back. Craaaaaaash. Creating a society where citizens are more and more and more dependent on the institution is not only bound to eventually fail when the ideological pendulum swings the other way, but opens the door to tyranny. Control of the masses baby. Hey I'd like a grand a month for free. But it's not good widespread policy.

  18. I believe there are at LEAST two caveats to Friedman's support of a basic income (UBI) negative income tax or whatever you'd like to call it. He meant it only for the destitute and the indigent and he fully intended it to REPLACE all our other poverty programs. Since these are so well entrenched and so hard to be rid of, there is no way that UBI is possible. Simply adding it on top of all our other handouts will cripple the United States economy long term. Even Alan Greenspan came out and said our entitlement state is going to kill long term growth because of an aging population. The government knows this… ergo the gentle push toward assisted suicide legislation and other such legislation will grow louder in the near future.

  19. YANG2020! Andrew Yang, a dem running for president, wants UBI lets all get behind him! Check him out. Yang2020.com

  20. Ok so there are a lot of problems here.

    1: MF never supported a UBI

    2: MF supported REPLACING current welfare with a NIT, not a UBI, ever…

    3: A NIT reduces as you make more and ultimately you end up not getting anything from the Government… Yang's UBI is the polar opposite.

    4: MF wanted no welfare and no NIT, it was simply a less expensive way to do welfare for tax payers. Yang's UBI is a huge burden for everyone.

    5: Yang's UBI would cause massive inflation. Demand Pull and Cost Push inflation don't requite more spending, not that it matters because Yang will be printing over a trillion a year no matter what. After the UBi he could easily break into 2 trillion in printing a year.

    6: Yang's UBI is not tethered to profits going up and down, a recession means vastly less revenues from his VAT tax…. hello printing =D

    7: NIT was for less than 10% of the population, Yang's UBI is for almost the entire population. NIT shrinks on payouts as you make more, Yang keep over spending as it adjusts to nothing.

    8: Yang's UBI is stacked on other welfare programs as they are optional… sooooo…. they are still there.

    9: MF's NIT would cost about 1/1000th of Yang's UBI if not far less than that because it's nothing like Yang's UBI.

    10: MF has a formula to how NIT pays out, Yang literally made up the really really complex metric to find how payouts work while sleeping.

    Stop putting words in dead peoples mouths. Yes, you used video and to someone that knows nothing about MF, like you… it looks legit, but notice you end up "explaining" what MF said as well as you chop up his words with editing out how he details his plan. You simply let him say a few words then add in all yours… Not the same thing.

    Yang is a con man appealing to the lazy and the greedy.

  21. You guys might want to actually do some research outside of listening to Yang and Yang supporters. https://www.thirdway.org/memo/five-problems-with-universal-basic-income

  22. This video deals fairly with the supply side of Negative Income Tax (or Universal Basic Income – UBI) but it provides no information as to return side (money coming back to the government). I checked on the cost of universal basic income for all Americans and in 2019 dollars, the cost would be approximately $3.8 Trillion Dollars per year. Because the government has NO MONEY until they take it from taxpayers first, how is this economically feasible? Even if most people use the money for education, job training, and self-improvement (which they won't), how do we nearly triple our tax revenue to pay for year two? Many people will argue that this (thousand dollars per month per household) will essentially replace our welfare, SNAP (food stamps), and other entitlement programs, saving us about $90 billion per year in benefit cost. Then you have to factor in jobs lost in H&W at the rate of about 65% with another $3 Billion saved in employment cost and infrastructure reduction. We're still not there yet. The point is, even if the tax liabilities per worker more than doubled, it still would not pay for the NIT or UBI program. Most Americans would just work to pay taxes and collect that $1000 check each month. Now factor in illegal migration because we can't leave those people out in the NO WELFARE WONDERLAND without basic living assistance! Then you're going to have a certain base population that will use that $1000 stipend each month for drugs, or TVs, or a car, or travel to see the in-laws, and they still won't be feeding their kids or improving their lives. Ergo, we still need SNAP and Temporary Assistance to Needy Families – TANF. So far, not one of the test programs has been successful: not in Finland, not in Canada, nor anyplace else. In no case (with the exception of the Alaskan Oil Dividend to Residents) has the cost/benefit worked out. Be careful what you ask for…

  23. This is not what Milton Friedman said you dishonest twat! You should be ashamed of yourself and you idiots that believed this should be ashamed as well!

  24. This overall makes a lot of sense. Finally a libertarian I like and not some other: EVERYONE'S OUT FOR THEMSELVES. Screw helping each other.
    I didn't know about Milton Friedman. Thank you Matt.

  25. You're misleading. Either you didn't listen to a full talk about the negative income tax or you're lying.
    Go listen to the full talk!

  26. Milton Friedman was NOT in favor of universal basic income, in principle… He was NOT in favor of ANY government handout program with the exception of the negative income tax which is essentially a mechanism to transition poor people from the current welfare program… But once enough people were off welfare he wanted to eliminate the negative income tax all together… He says it himself

  27. The Godfather of Libertarian Conservative Economics,
    The Late Milton Friedman Lays Out Perfectly 
    The Case for Guarnteed Minimum Income.
    He states it exactly the way I see it. With robotics, cheap labor abroad,
    more people-fewer jobs, this MUST be the way to solve the problem 
    and at the same time eliminate the class/race jealousy struggle that keeps Have-Nots fighting with other Have-Nots just so the few Haves can divide the power of the many.

  28. No UBI without a total repeal, on the Federal level, of ALL welfare. And the total privatization of Social Security.

  29. I think everyone is missing the point that Mr. Friedman was arguing for UBI INSTEAD of the welfare state they implemented, NOT in addition to. This is a very important distinction.

  30. I am a student of Milton Friedman. I quote him often. But like Reagan (whom I also admire), and disagreed strongly with his 1986 amnesty for illegal aliens, I strongly disagree with Friedman's tinkering with the concept of Universal Basic Income. It is a solution without a problem: we are not a poor country with people starving to death. We are the wealthiest country on the planet and have the highest functioning economic system in history where everyone has access to an income if they choose to work for it. The problem with Friedman's argument is he is making an academic case: if "ALL OTHER BENEFITS WERE ELIMINATED, THEN A UNIVERSAL BASIC INCOME MAKES SENSE." Read that again. That means you impose a universal basic income and ELIMINATE welfare. ELIMINATE food stamps. ELIMINATE medicaid. ELIMINATE Aid to Dependent children. ELIMINATE student loan guarantees (and most certainly NOT cancel student loan debt). No college tuition subsidies. No federal scholarship grants. NOTHING! Just "Here's a check" every month…spend it how you like. He's making an academic argument. He is saying give people cash, let them spend it how they choose, but with a corresponding ELIMINATION of the Federal Government welfare state. If they spend their check on drugs and by the 3rd day of the month are walking the streets without food, shelter, etc. and are breaking into cars to get cash to buy food? Well, that's what they choose: government has no responsibility to take care of those people. Which is never going to happen. Friedman's argument is a spending an efficiency argument: one vs. the other…NOT BOTH. Think about it: there is no free lunch.

  31. Uh, children, you are not paying attention to the other part of Friedman's argument. He is making a spending efficiency agreement. He is arguing guaranteed minimum income TO REPLACE GOVERNMENT WELFARE SPENDING. Not in addition to it. He is saying giving a check to poor people is more efficient that having a bureaucracy manage a welfare state. So, the poor get a check, but you ELIMINATE all welfare benefits. Eliminate Aid to Dependent Children. ELIMINATE food stamps. ELIMINATE medicaid. ELIMINATE federal housing. ELIMINATE college tuition subsides & student loan guarantees. And ELIMINATION of all the federal government departments and bureaucracies that support them. A massive reduction in federal employees. A massive contraction of the size and scope of the Federal Government. He is arguing GMI as a REPLACEMENT for the welfare state, not in addition to it. He is simply saying it is a more efficient method.

  32. Just to chime in on that last clip, Paul vs Paul… the reason why we didn't bail out the people and instead we bailed out the financial institutions (TARP money) was very simple: the financial institutions paid back the funds plus interest. The US government saved the banks AND ALSO PROFITED OFF OF THEM. A bailout to the people would've been a straight-up giveaway… either highly inflationary or deficit busting. I doubt individuals would've accepted an arrangement where they had to pay $150k back in 5 years plus interest. A calculation was made that the banks were having a balance sheet problem but not as much a cashflow problem. The right call was made, but it was just politically unpopular.

  33. I like the idea as he proposes it but I feel like if it were implemented in the real world today it would be put on top of all the welfare spending we already do and there would probably be extra money added on to people for arbitrary characteristics and we would still have democrats complaining because some people can afford private jers while the poor only have their basic needs met without having to work.

  34. I'm fine with making Google, Facebook, Twitter, and Amazon pay for this. I think most people on the Left anf the Right hate these fucking Corporations that rule our lives at this point.

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