Editor's introduction: The basic-income debate.

• Author: Munger, Michael
• Position: Editorial

A number of scholars--surprisingly for some of them, given their classical liberal leanings--have recently "come out" in favor of a basic-income guarantee (BIG). And of course various forms of basic-income or negative income tax have been behind the scenes in policy debates for decades (e.g., Friedman [1962] 2002; see Murray 2006 for an overview).

The origins of what we now think of as a BIG are obscure. One clear antecedent is in the French Republican tradition, especially Thomas Paine drawing on Jean-Jacques Rousseau's idea of property. In The Second Discourse, Rousseau famously claimed: "The first man, who, after enclosing a piece of ground, took it into his head to say, 'This is mine,' and found people simple enough to believe him, was the true founder of civil society. How many crimes, how many wars, how many murders, how many misfortunes and horrors, would that man have saved the human species, who pulling up the stakes or filling up the ditches should have cried to his fellows: Be sure not to listen to this imposter; you are lost, if you forget that the fruits of the earth belong equally to us all, and the earth itself to nobody!" (1754).

One could stop well short of "the earth itself [belongs] to nobody!" in considering the ownership of the revenues deriving from harvesting, mining, or collecting natural resources. If the "earth itself' is unowned, then common-pool problems would cause the collapse of the resource itself and fail to give accurate signals through prices about the resource's opportunity cost.

A "solution" that a number of people settled on was some form of compensation for resource use. For some, the focus was narrowly on land as the key resource, requiring a tax on land rent (George [1879] 1935). More interesting, for purposes of situating the BIG historically, is Thomas Paine's 1795 pamphlet Agrarian Justice, in which he advocated not just a tax on land but also the use of that revenue to fund a universal "ground rent" payment.

[T]he earth, in its natural, cultivated state was, and ever would have continued to be, the common property of the human race.... But the earth in its natural state, as before said, is capable of supporting but a small number of inhabitants compared with what it is capable of doing in a cultivated state. And as it is impossible to separate the improvement made by cultivation from the earth itself, upon which that improvement is made, the idea of landed property arose from that parable...