Germany Discusses Free Money For Everybody

The front page of my Zeit has a nice title: "The Dream of Money Without Work." It’s a3-page special feature in the business section about the idea of a guaranteed minimum income for every citizen of Germany, provided without any conditions. You need not prove any sort of need or fulfill any conditions — you just get a check in the mail. The idea has support among unlikely political bedfellows.

Tory "father-state" conservatives on the right, such as the CDU President of Thuringia Dieter Althaus, want to peg the basic income at under 700 Euro per month and call it something warm, fuzzy, and patriotically Christian-sounding: Solidarisches Buergergeld (citizen-money of solidarity!). The theory is that you’ll save enough money by abolishing the costly state bureacracy that administers current welfare schemes to finance the additional amounts necessary. Left parties are also interested, although they would put the monthly sum higher and call it a Grundeinkommen (basic income).

Götz Werner, super-rich founder of the dm chain of drug supermarkets, is traveling the country propagandizing his version, which envisions payments as high as 1500 Euro monthly (which he concedes to be a "distant goal"). His primary motivation is to free humans from the compulsion to work, so that they can satisfy the artistic, literary, or humanitarian drives that really make their lives worth living. Werner is a follower of anthroposophy,  sort of German-language "spiritual science" founded by an Austrian philosopher in the early 20th-century (think a German version of Scientology, with its own schools and complex mythology).

The idea, its backers insist, is not crazy. It’s based on a original concept developed by a Belgian social reformer in the 1840s, and its most prominent 20th-century backer was the libertarian Nobel-prize winning economist Milton Friedman, who called it a "negative income tax." Yes, the State should mitigate the misery of the worst-off he concedes; but it should do so in a way that creates the least government interference in citizens’ lives. According to the idea’s supporters, people will still work even if their basic needs are covered, because humans have an in-born drive to engage in meaningful activity. The nastiest, worst-paid jobs — like toilet attendant, dishwasher, or migrant farm worker — will probably go unfilled, unless employers offer significantly more money to induce people to do them. (In America, these jobs are filled largely by immigrant labor).

But hold on! Some of you are sputtering — is that really realistic? Will people still go to work when they get enough money free to live on from the state? If not, then the state’s tax revenues will decrease, and paying the minimum income will no longer be feasible. Even German supporters of the idea admit that it’s "risky and filled with uncertainties." Gary Burtless, an American economist who participated in studies of the basic minimum income in U.S. cities in the 1970s found that men actually did decrease the amount of work they did when they got a guaranteed minimum income, women decreased it even further, and students most of all. He concluded the idea wasn’t workable, even though he was supportive at first.

I’m not sure what I think of the idea, since I’m one of those lucky people who’s got a job I would happily do even if I didn’t need the money. However, I find it reassuring to live in a country in which the idea is at least taken seriously, and discussed openly.

6 thoughts on “Germany Discusses Free Money For Everybody

  1. I think there are two big differences between the 1840s or even the 1970s and now: TV and the Internet. With 1,500 or even 700 Euros a month, I can spend my life watching soaps in the morning, take a quick afternoon nap, then switch to the “Buffy” episodes I downloaded from the Internet and still have time enough in the evening to go online and slaughter my friends in “Quake”. There is just too much free entertainment around these days for this to work.

  2. > Werner is a follower of anthroposophy, sort of German-language “spiritual science” founded by an
    > Austrian philosopher in the early 20th-century (think a German version of Scientology, with its own
    > schools and complex mythology).

    Anthroposophy dabbled with biologism (and racism!) shortly after its inception. World-domination and “sea orgs” to enforce it are not among its goals, nor is brainwashing of adherents and harassment of critics and apostates (by lawyers or criminals). Thus, the comparison is not entirely accurate.

    > However, I find it reassuring to live in a country in which the idea is at least taken seriously,
    > and discussed openly.

    I trust your compatriotes not to tar and feather you, should you try to discuss that across the pond. I reckon that Gary Burtless didn’t get hurt.

  3. An idea that certainly has quite appealing aspects to it: just think of the relief of living without an Arbeits- and Sozialamt, and other public institutions you could get rid of in an instant. But knowing that this is Germany where easy ideas are always killed by endless discussions about exceptions to exceptions, we should sadly accept that it won’t happen.

  4. You mischaracterized Milton Friedman here. Friedman believed that people always knew what was in their own best interest. Friedman’s idea of the “negative income tax” idea was to remove one of the perverse incentives of the welfare system, that is, paying people not to work and penalzing (by stripping them of their benefits) if they do.

    The concept was that a certain minimum income threshold would be set. If a person made less than the threshold, a part (key word here) of the difference would be given to that person. As the person’s salary approached the threshold, the portion would get smaller. Once the person reached the threshold, they would get nothing as benefits and pay nothing in taxes. After passing the threshold, they would start to pay taxes.

    Friedman believed that people on welfare made a rational decision for fear of losing their guaranteed benefits. If they couldn’t keep a job, it would take six months to a year to get back on the welfare rolls. Therefore, the rational decision was to not try to get off welfare.

  5. scott, thats the same argument people used for prohibition — that when ____ (fill in the blank: drugs, tv, fun, money, sex…) is readily available, no one will work. NONSENSE! sure its _possible_ to make a system based on greed and other base animal instincts — its been proven to work — but why not try to build a society based on the best of our human qualities instead of the worst. it wont be perfect, but at least its something i for one am willing to get behind and work for.

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