Charles Murray’s In Our Hands – Left or Right?

by Harry on June 1, 2006

So, are you ready for a rave review of Charles Murray’s latest book, In Our Hands, on Crooked Timber (yes, that Charles Murray)? Its a book that just about anyone interested in policy ideas ought to be read; I recommend it highly and without reservation. There, that’s that out of the way.

So here goes. Before writing about it I did a quick google search, and was glad to see it being attacked by some of his colleagues on the right; it confirmed my sense that there’s a lot of good stuff in it, and that the wool is not being pulled over my eyes. More than that, I found that some of the criticisms seemed dead on as comments, but not as criticisms. One blogger points out that whereas “flat tax” reform builds in a constituency that will always press to keep taxes as low as possible, a universal basic income grant of the kind Murray proposes builds in a constituency that will always pressure to make the benefit as large as possible. That sounds right, and good, to me. Liberals also attack it, but my sense of all those criticisms is that they are simply ad hominem. I’ll suggest a way to avoid ad hominem responses later. But, I’m running ahead of myself.

The central proposal is for a basic income grant of $10,000 per year for every citizen aged 21 and above.

There are two catches. The first is that everyone must spend $3000 of that grant on a basic health care package, which insurance companies will be forced to offer to everyone at that price with no exclusions for pre-existing conditions, age, etc (the sum $3000 is negotiable for Murray — what is not negotiable is that there should be a residual grant of $7000, so that if the insurance costs more the grant would be more). The second is that all other government welfare programs (including TANF, Social Security, Medicare, etc, and all corporate welfare but not spending on genuine R&D or compulsory public schooling) would be abolished to pay for the grant.

You can imagine why he wants to abolish all other welfare programs; he thinks they are extremely inefficient (not just in the sense that they are highly bureaucratized but also in that they constitute a very expensive way of addressing the problems they are designed to address) and in many cases constitute undue government interference in the lives of the beneficiaries. Why not just abolish them, and leave it at that, then? He does, in fact, say that he would prefer to do that than to institute an unconditional basic income grant, but thinks both that this would be unfeasible and that there is a strong (though evidently not decisive) moral reason to do some redistribution:

To the extent that inequality of wealth is grounded in the way people freely choose to conduct their lives I do not find it troubling…. in a free society these choices are made voluntarily , with psychic rewards balanced against monetary rewards. Income inequality is accordingly large. So what?

Inequality of wealth grounded in unequal abilities is different. For most of us the luck of the draw cuts several ways — one person is not handsome, but is smart; another is not as smart but is industrious; still another is not as industrious, but is charming. This kind of inequality is enriching….But some portion of the population gets the short end of the stick on several dimensions. As the number of dimensions grows, so does the punishment for being unlucky.

Some of you will recognize that Murray holds a version of what political philosophers have come to call luck egalitarianism. The unconditional basic income grant is a non-stigmatizing and non-paternalistic (if imprecise) way of recognizing and repairing this unfair inequality.

The book is a beautifully written defense of this simple proposal, arguing that it will have benign effects on poverty alleviation, marriage, family life, and work-life balance and, unusually, putting some figures on the proposal. If his figures are right then not only would the static-state consequences reduce poverty, but they would also reduce inequality.

I’ve several comments to make, if in a scattered way.

First, and most glaringly, it is surprising that Murray makes no reference at all to the mostly left-wing academics who have developed and defended the unconditional basic income grant over the past 20 years or so — I’d be especially miffed if I were, say, Philippe Van Parijs. I’d be even more miffed that no-one commenting on the book seems to know that the idea has been around for years. This is a case of the left having the ideas, and the right adopting and selling them. Even Lexington seems blissfully ignorant that lots of ink has been spilled about this. (You might take a look at this discussion in which Steve Burton first says “The reactionary left of today simply has nothing to compare with this man. And no plan half so cunning” and then, in comments, claims to have no interest in who came up with the plan — if he thinks that Murray is so brilliant then presumably he thinks the socialists and liberals who came up with the plan are pretty smart too). I doubt that Murray is unaware of the ancestry of his proposal, and have a suspicion that he suppressed it precisely because he wanted to speak truth to power — in other words he is addressing the right, not the left (certainly the book reads that way) and does not want to prejudice them against him (in fact, he claims Friedman’s negative income tax as the main ancestor of his proposal, and makes perfectly sensible public choice type objections to it, enhancing the sense that this is addressed to the right rather than the left). Liberal commentators who reject Murray’s proposal out of hand should ask themselves if they would have the same reaction if it had been made by a group of respected left-wing academics — and then read Real Freedom For All, The Civic Minimum, or The Stakeholder Society (Ackerman and Alstott’s proposal is structurally different from the others, but it’s not clear how different it would be in practice. For a great book comparing basic income grants with capital of stakeholder grants see Redesigning Distribution; if none of the other books assure you that the left has thought all this stuff through, this one will).

More substantively, there are obvious transitional problems, and these become more obvious as his discussion proceeds. Some of the commentary focuses on these, but to do so is unfair; Murray isn’t offering this as something that will be done here independent of thinking about transitional costs and how they can be managed. Any worthwhile reform faces these problems.
Second, I’d like to see the reform amended in various ways.

i) Murray contemplates forced savings for retirement but, in the end, decides against (remember social security has been abolished, but everyone will have $7000 a year in retirement, and adequate health insurance). I’d argue for a compromise; force everyone to save $2,000 per annum for retirement till their 31, both to deal with the myopia of youth and instill the saving habit.

ii) Nothing is provided for health insurance for children; I’d argue for basic primary care for all children.

iii) it seems to me that he doesn’t have adequate provision for the very seriously disabled. His confidence that voluntary associations would revive under his proposal may be well-placed (he draws extensively on David Beito’s interesting book From Mutual Aid to the Welfare State: Fraternal Societies and Social Services), but I’m too skeptical to take comfort; something more needs to be said about this.

Next, I think anyone reading the book will have the same experience as me; objections arise in your head, and although Murray addresses almost every one of them, calmly and sensibly, you can’t help feeling that there is a fair amount of conjecture, and it is easy to counter-conjecture. This is one of several reasons that liberal commentators have rejected it out of hand (other reasons perhaps including in some cases complete lack of intellectual seriousness). Murray goes to great lengths to explain how it is that the basic income grant transforms the incentives in the so-called underclass so that there would be a great deal less out-of-wedlock birth to younger women in that class; the effects he claims would be good, and I’m inclined to agree that the social environment (which includes the tax-benefit system) produces the behavior he deplores, but because of the lag between changes in social structure and changes in behavior, I worry that the effects would be a long time coming, and might be deflected by other changes. There is no discussion of the possibility that the value of the grant will be eroded because of the effects of the grant on the price of various goods that lower-income people buy.

My own particular worry concerned the effects on fertility and child welfare (because, as is probably no surprise to regular readers, I am obsessively pro-natalist). Nobody receives the grant until they are 21, so, in particular, no child benefit is built in. Murray explains that this will increase the economic penalty for mothers under 21 and, he hopes, increase the pressure from all sides on teenagers (especially poor teenagers) not to have children. He also points out that the grant increases the incentive for teenaged boys to refrain from having children. The grant establishes a known source of income which is immediately accessible to the state, from which child support payments can be garnished; although a 17 year old father does not yet receive the grant, he can begin to owe the payments, and they can be deducted with interest from his grant at a later stage.

But, he argues, the grant should encourage married couples over 21 to have children, or at least remove one important barrier to their having children early in their lives together, by increasing quite considerably the resources available to them at that early stage in their lives, and providing a floor below which they know they will not fall: “it seems a sure bet that births to low-income and working class married couples will go up”. The grant doesn’t do much (in my view) to address the low fertility of high-earning couples, the barriers to fertility of whom are more complicated than mere financial issues, and, in fact, if Murray is right that it will alleviate policy it might even lower the fertility rate for higher income couples by raising the cost of childcare.

I’m more or less persuaded by all this, but, as with many claims in the book, I’m ready to be dissuaded by clever counter-conjecture.

One final substantive comment; Murray is very attentive to the paternalism and perverse incentives built into benefit policy but says almost nothing about the same when it is built into tax policy. The mortgage interest deduction is the most striking feature. Its main effect is probably to raise house prices, thus benefiting first occupants, but its aim is to encourage home ownership. Why? If there are good reasons to own homes people will do it; if not they won’t. But it’s not the only oddity in the tax code (to put it mildly); the childcare deduction provides an incentive for people to pay other people to look after their children rather than doing it themselves; the education deduction provides an incentive for people to invest in higher education rather than other ways of developing their human capital (which might, in some cases, be more efficient)…etc. I can’t see the rationale for abolishing Pell grants but leaving in place the tax deduction for tuition fees. I understand that some libertarians see all deductions as good because they think that taxes should be lower tout court, and in practical politics that makes sense (I disagree with them, being a fan of taxes), but Murray can’t take that tack; given the ambitiousness of his own reform proposal he should just argue for lowering taxes across the board, and abolishing the complex system of deductions.

The title of this post asks “right or left”? Perhaps that’s not a fair question or even, for many of our readers, an important one. In evaluating a reform it’s often worth asking whether, discounting transition costs, you think the world of the reform (once stably and securely implemented) would be better than the status quo. As someone on the left, I ask four basic questions of a proposed reform:

1) Can it be sustained over time, once it has been implemented securely?
2) Will it reduce inequality in a meaningful way?
3) If the answer to 2) is “yes”, is the extent to which it reduces inequality worth whatever the cost is in terms of basic liberties, a sense of community, and other important values?
4) What dynamic does it set in motion?

I think the answer to each of the first 3 questions is yes (the third is easy because Murray’s plan involves no cost in terms of other important values, contrary to David Gordon’s rather silly assertion that it compromises liberty). The fourth is harder. Here I am with David Gordon and with the blogger mentioned earlier; I think that the reform would set in motion an egalitarian dynamic that libertarians have very reason to fear. But also a move away from a mean-spirited and often self-defeating welfare state that liberals should welcome. So I’m inclined to place the proposal on the left. But, left or right, again, it’s a book that pretty much everyone who is seriously interested in political ideas should be reading.

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06.07.06 at 4:05 am



Kieran Healy 06.01.06 at 4:28 pm

Wow, Charles Murray a BIGger. Who’d have thought it? Looks like we might be in for a replay of the debate on Nixon’s guaranteed income proposals.


asg 06.01.06 at 4:44 pm

Kieran (sort of) beat me to it — one reason Murray may not have credited left-wing academics is that he might have drawn some inspiration from Milton Friedman, who proposed something very much along the lines of what Harry describes as his proposal in this post. Friedman first defended the idea of a guaranteed minimum income accompanied by abolition of all other welfare programs in “Capitalism and Freedom”, in 1962. So it’s not quite as simple as “the left having the ideas,” although it would obviously be unsurprising if left-wing intellectuals were also trying to popularize the idea 40 years ago (and I doubt they would have been quite as warm to the idea of getting rid of the rest of the welfare state, which both Friedman and presumably Murray see as essential to the whole enterprise).

Even more interesting from a less left point of view would be to see what else could accompany this reform in terms of health care. Were availability of insurance severed from employment status… were the abolition of Medicare to ease upward price pressures… well, then, we might not even need a requirement to purchase insurance, although we might need something equally “targeted” so as to reduce free riding.


Brett Bellmore 06.01.06 at 4:44 pm

I fail to see what is so evidently silly about David Gordon’s concerns. Maybe you don’t *mind* seeing libery compromised in some respects, but the plan unquestionably DOES compromise liberty, in numerous ways.

Unavoidably so: It’s a plan for the government to address a problem, and fundamentally, the only thing government can contribute to the solution of any problem which is unavailable to the private sector, IS compromising people’s liberty in one way or another. It’s the only tool it has, that the private sector lacks.


Russell L. Carter 06.01.06 at 4:48 pm

Hooray! I’ve been arguing for this for years, it makes enormous sense for all the reasons Harry cites. There is one additional important benefit: you get to spend the year before graduate school camping on the beach and surfing, guilt free.


Sebastian Holsclaw 06.01.06 at 4:58 pm

What is his solution to politicians running on raising it every year (presumably without enough taxes to cover it)?

One of the key functions of the proposal as it stands now is that it provides (with medical care) enough money to barely subsist but not more. This is ok because it provides a safety net purpose without interfering with economic growth (as most people wouldn’t want to live off of it). This isn’t as true if the benefit gets much larger. (Peg it at $40,000 and lots of people would quit work). This is probably counterbalanced in the long run at very high levels by spurring massive inflation (if it were pegged at $100,000 we would find that $100,000 wasn’t worth much money), but it might cause weird cyclic effects if politicians tried to chase inflation with it pegged at high levels.


BigMacAttack 06.01.06 at 4:59 pm


Is liberty compromised from some ideal state or from where we are today? It seems to me to increase liberty from where we are today.

Ok so SS makes this idea impossible. Another reason to hate SS.

But for starters how about we scrap the Department of Education, HUD, and the other Social Services agencies and replace it with a check for the lowest x%.

By my very rough calculations you could provide 10,000 a year for the bottom 20% of all families and actually I think it would be higher. Education plus the current Earned Income Tax credit would equal about 130 billion or about 6500 for the lowest 20%.


Dan K 06.01.06 at 5:00 pm

I am very attracted to the simplicity, efficiency and fairness of BIG. I think the main reason no country has embraced BIG is because it is a true redistributive scheme that favours the poor, and because it reveals the true extent of subsidies to the middle class in modern welfare states (typically hidden as tax credits, or as intergenerational redistribution). Murphy’s proposal is a bit on the tight side for my liking. $10000 plus universal health care seems about right to me – Swedish students demonstrate every year that you can keep a decent living on that sum. But the principle is right.


Dan K 06.01.06 at 5:01 pm

Murphy, schmurphy. I mean Murray, of course.


ain't 06.01.06 at 5:02 pm

uh, you’re not *too* surprised, I hope, at finding Steve Burton both displaying his ignorance and taking an ill-informed pot-shot at the left, all in one sentence?

I used to read “right reason”, but, god, it was to a real Philosophy blog what Powerline is to a real legal blog–yeah, many of them have the right letters after their name, but they’re still knee-jerk yahoos.


Uncle Kvetch 06.01.06 at 5:05 pm

What is his solution to politicians running on raising it every year (presumably without enough taxes to cover it)?

Good point, Sebastian. For this scheme to be workable we’d have to be extra careful about not electing any more Republicans.


Jacob T. Levy 06.01.06 at 5:06 pm

Some overlap with points Will Wilkinson and commentators looked at a couple months ago: here.

I agree, I’d be miffed if I were van Parijs or another longtime contributor to the UBI debate…


Sebastian holsclaw 06.01.06 at 5:11 pm

“For this scheme to be workable we’d have to be extra careful about not electing any more Republicans.”

Actually I said “politicians” for a very specific reason. In US politics it excludes neither Republicans nor Democrats. Surely it isn’t your understanding that Democrats avoid raising benefits?


Dan K 06.01.06 at 5:12 pm

Sebastian, the Chinese may step up to finance the scheme – they might find expedient to let Americans consume on their dime, as long as the Americans are buying Chinese goods. That’s roughly what’s happening right now.


Micah Weinberg 06.01.06 at 5:14 pm

The likelihood that politicians would run on increasing this payment every year (and succeed) is low since this grant primarily benefits the poor.

But the general concern about the price/wage upward spiral still remains. This was touched upon briefly in the post regarding the cost of goods that these grants would be used to purchase but it may be an issue that requires more consideration.

I think that the right and left can agree that the perverse incentives of the current welfare system help no one. As a graduate student who (amusingly?) qualifies for Medicaid, I have a strong disincentive to earn more money particularly if my wife would like to have a child.


Matthew 06.01.06 at 5:15 pm

I don’t understand the healthcare calculation. Spending changes drastically with age. Medicare spending was about $6000k per person over 65 in 2005, so how would this be funded? Similarly what would a 22 year old do with 3k a year of healthcare spending?


harry b 06.01.06 at 5:24 pm

Thanks for the link Jacob.

I mention Friedman in a parenthetical comment, and Murray makes the arguments against NIT that Jacob make in the Wilkinson thread — BIG is better for those reasons (and somewhat different). Is NIT what people are referring to when they refer to him as an ancestor? I think BIG is different enough that the lefties can get some credit.


Uncle Kvetch 06.01.06 at 5:41 pm

Surely it isn’t your understanding that Democrats avoid raising benefits?

Surely not. I think the temptation to increase the benefit would be equally strong for either party. I was responding specifically to the “presumably without enough taxes to cover it” part of your question. If the past 25 years are anything to go on, were Democrats to raise benefits, they would raise taxes commensurately. Republicans would “solve” the shortfall by enacting a tax cut for those worth over $5 million and encouraging everyone else to do more shopping.


otto 06.01.06 at 6:20 pm

does Murray address any possible impact on immigration?


Sebastian Holsclaw 06.01.06 at 6:27 pm

“I was responding specifically to the “presumably without enough taxes to cover it” part of your question.”

You don’t have to argue with me that Republican deficit spending has been worse–it has. But barring the two years at the top of the the tech bubble, Democrats haven’t been all about raising taxes enough to cover for their spending either.

But let us put that aside.

My main question is what do we do about the inherent pressure to raise the amount? Some suggest that the main benefit is to poor people so there would be little pressure. I’m not sure I buy that. The main benefit is to poor people so long as the benfit is low. Bump it to $15,000 or $20,000 and it starts to be noticeable to the middle class. An inflationary spiral caused by growing benefits to 200+ million people could be rather noticeable.

The problem is to keep the benefit low enough to keep it from deforming the economy while high enough to make it a real safety net worth bothering with. And once we have abolished the other services, how do we keep them from just creeping back (similar to tax simplification issues ‘corrected’ every 15 years or so)?


Mo MacArbie 06.01.06 at 6:50 pm

As long as we’re throwing conjectures around, I’d think that inflationary pressures may be mitigated by general wage depression. Why would employers need to fund a livable wage if the government is already providing a fair chunk of it? IANAE, but I envision a world of restaurants where the servers are essentially “paid” with the opportunity to collect tips.


Brett Bellmore 06.01.06 at 7:19 pm

Bigmacattack, I must admit my opposition stems from ignorance; Please refresh my memory about all the government programs intended to replace other government programs, that didn’t end up being in ADDITION to them, instead.


Gabor 06.01.06 at 7:45 pm

On the face of it, doesn’t this sound like the “National Dividend” element of C.H.Douglas’s Social Credit (which, similarly, did not fit easily into a left-right scheme)?


Patrick S. O'Donnell 06.01.06 at 8:32 pm

‘First, and most glaringly, it is surprising that Murray makes no reference at all to the mostly left-wing academics who have developed and defended the unconditional basic income grant over the past 20 years or so—I’d be especially miffed if I were, say, Philippe Van Parijs.’

Indeed, Harry, readers should check out the website for the U.S. Basic Income Guarantee Network, which, among other things, has an excellent bibliography. You can also receive notification of the latest papers on the topic, as well as conferences, etc. See

Incidentally, in this country at least, the basic income/guaranteed annual income idea owes much (if not everything) to Richard Bellamy’s novel, Looking Backward (1888). See too Arthur E. Morgan’s biography, Edward Bellamy (New York: Columbia University Press, 1944).

For a helpful discussion of Bellamy’s ideas (i.e., a sympathetic yet critical analysis), please see ‘An Unfinished Dream,’ in Raghavan Iyer, Parapolitics: Toward the City of Man (New York: Oxford University Press, 1979; Reprint ed., Santa Barbara, CA: Concord Grove Press, 1986).


Rich Puchalsky 06.01.06 at 8:37 pm

“This is one of several reasons that liberal commentators have rejected it out of hand (other reasons perhaps including in some cases complete lack of intellectual seriousness).”

The book is, by your description, a rehash of old ideas — and you want people to consider it seriously, after _The Bell Curve_? I think that authors generally should get only one shoddily researched book that advocates racism per lifetime before they can be safely dismissed as being not likely to ever write anything worth reading.


Brandon Berg 06.01.06 at 8:58 pm

As long as we’re throwing conjectures around, I’d think that inflationary pressures may be mitigated by general wage depression. Why would employers need to fund a livable wage if the government is already providing a fair chunk of it?

I don’t see any reason why the cost of living should be a factor in determining wages, at least not in as direct a manner as you’re suggesting. Workers still try to sell their labor at the highest price they can, and employers try to buy it at the cheapest price they can. A BIG doesn’t change either of these facts. If anything, it might reduce the supply of labor (since it allows people to opt out of work altogether) and thus drive up wages.

There shouldn’t be any inflationary pressures, though—inflation is pretty much always related to an increase in the money supply. The income grants would be offset not by falling wages, but by reductions in other forms of welfare spending (e.g., Social Security) and/or higher taxes.


asg 06.01.06 at 9:28 pm

Harry – Actually, I believe Friedman has a brief discussion of BIG itself in Capitalism and Freedom, although it’s been some years since I read it. But it was only a couple of paragraphs, so the lefties definitely get credit for taking it further in years since.


djw 06.01.06 at 9:49 pm

What is his solution to politicians running on raising it every year (presumably without enough taxes to cover it)?

This is a serious problem. Also, how would this plan prevent future terrorist attacks, or heavy rain on days I forget my umbrella?

Since we’re in fantasyland anyway, index it to inflation and make it a constitutional amendment. Then, our politicians can only increase spending without increasing revenue on everything else. Problem solved.


Quiddity 06.01.06 at 10:47 pm

ERROR: “a universal basic income grant of the kind Murray proposes builds in a constituency that will always pressure to make the benefit as large as possible”

Yes, a constituency, but not one that will win elections. Is having “a constituency” all that it takes to get Harry to sign on to this proposal? There’s already a constituency that doesn’t like medicaid cuts. But we still saw Congress make cuts. So much for breezy assertions that “a constituency” is somehow a guarantee that those down-and-out will be protected.

Muarry is setting up the $10,000/yr to purchase a flat-tax situation. Then the $10K grant will be attacked as a give-away to those who don’t merit it. Don’t kid yourself.

Also, $10K/yr as a substitute for Social Security and Medicare? Subtracting out the mandatory $3K for health, we get a situation where “social security has been abolished, but everyone will have $7000 a year in retirement, and adequate health insurance”

$7K a year in retirement!?! That’s $583 a month. Who can live on that?

Re luck egalitarianism: I’ll give you luck egalitarianism. You know how? By taxing up the wazoo those who become fabulously wealthy. Most of that is luck. Not of congenital skills, but simply the randomness of life that determines great fortunes (e.g. when an executive happens to be granted stock options is more important than just about any other factor, or how one manages to navigate the social structure of a corporation). I’d reckon that for incomes up to about $250/year, compensation correlates well with talent and effort. Beyond that, it’s luck. Murray’s flat tax doesn’t recapture that randomly distributed wealth and redistribute it to the population as a whole.

Murray’s proposal, and Harry’s general approval, strikes me as completely out of touch with how the world operates.

Murray asserts that 17 year old kids are going to make economic calculations that will affect them having children. And why is it the boy who get penalized? What if the boy says the girl told him she was on the pill, and the girls denies it? Who has their annual stipend garnished then? Or what if they both were responsible, but the birth control failed? Are they still penalized?

Why stop there? Let’s extend it to lower ages. If a 5 year old disturbs the peace, be sure to garnish $100 dollars when he reaches 21. That’s sure to work. Morality (or positive behavior or whatever you want to call it) is rarely a matter of money.

This whole thing is so theoretical, it’s hard to know where to begin. But I do have one suggestion. Try it out first with animals. See how effective the threat of garnishing bananas is in keeping chimps from procreating “too soon”.


Patrick S. O'Donnell 06.01.06 at 11:02 pm

The year 1888 is some time before Milton Friedman was even born, so we hardly need concern ourselves with giving Friedman credit. And the lineage of these ideas can be found in Thomas Paine, Francois Huet and Cesar De Paepe, as well as the ‘social dividend’ notion in G.D.H. Cole’s work and later in Oskar Lange’s use of that term ‘to refer to each citizen’s contribution-independent share in society’s net profits on the use of collectively owned means of production’ (Philippe Van Parijs). A book nobody appears to be familiar with is Van Parijs’ edited volume, Arguing for Basic Income: Ethical Foundations for a Radical Reform (London: Verso, 1992). Among the contributors are Brian Barry, Robert E. Goodin, Andre Gorz, Claus Offe and Hillel Steiner.

As has been noted, Friedman and Murray are hoping to remove whatever is left of the Welfare State with their proposals, while schemes emanating from the Left side of Mirabeau’s Assembly are not designed to do this, there being sufficient warrant for social security and welfare provision even with a basic income grant.

An interesting question not raised here is the effects of initiating a basic income proposal in affluent nations that can afford it, while the bulk of the world’s peoples won’t have a seat at the table.

We might prepare for blogging commentaries such as this by having us all read a common text or work beforehand, not unlike a book club, but with the ethical and political flavor of a Swedish study circle….


DivGuy 06.01.06 at 11:03 pm

I don’t wanna be too harsh about a book I haven’t read and a post that’s clearly working through difficult and important policy questions, but I have to ask –

So, the thesis of In Our Hands is that we should –

a) destroy the entire welfare state
b) replace it with nothing more than $10,000 yearly grants to 21-year-olds

This provides no retirement security, no child health care or child welfare, no safety net for disability or other problems – in fact, no safety net whatsoever past the grant.

Harry notes all the above problems, but still finds the book interesting. I’m skeptical. It sounds to me like one interesting policy idea built out into a completely unserious policy prescription.

Given that the overall structure of his plan is terrible, and given that he’s the idiot who wrote The Bell Curve, the grant looks to me more like window dressing around a frontal assault on the idea of social democracy, rather than a good idea worth debating.

Also –

Inequality of wealth grounded in unequal abilities is different. For most of us the luck of the draw cuts several ways—one person is not handsome, but is smart; another is not as smart but is industrious; still another is not as industrious, but is charming. This kind of inequality is enriching….But some portion of the population gets the short end of the stick on several dimensions. As the number of dimensions grows, so does the punishment for being unlucky.

This is not “luck egalitarianism.” It’s just Murray’s same old racism dressed up in neutral language. He’s talking about the low IQs of other races.

Now, it does seem like he’s coming from said racism to one interesting and relatively egalitarian policy proposal. But I don’t think his position should be gussied up as outgrowth from a serious philosophical position – Murray’s a racist and he’s saying that the lesser races deserve a block grant to save them from themselves.


Sebastian Holsclaw 06.01.06 at 11:10 pm

“He’s talking about the low IQs of other races.”

Uh, no.


Patrick S. O'Donnell 06.01.06 at 11:38 pm

OK, you’ll see I’m getting a bit irritated:

Perhaps we all can agree that there’s sufficient reason to be at least presumptively suspicious of Murray’s proposal (i.e., to be view his proposal with prima facie skepticism). We dishonor the integrity, hard work, and memory of those on the Left who have been working on this guaranteed annual income idea for some time now by examining Murray’s work in detail while ignoring others whose motivations are a bit more trustworthy, to put it mildly. It reveals as well the solid entrenchment of the anti-Liberal/Left bias of the media alongside the continued success of Right-wing ‘think tanks’ and public policy institutes, not to mention the hypnotic hold neo-conservatives still exercise in elite circles. Why aren’t we discussing proposals by Van Parijs and others? There are over 2,000 books and articles listed at the U.S. Basic Income Guarantee Network website; and there’s more than a handful we might accord attention to BEFORE FAWNING OVER MURRAY’S BOOK.

It won’t do to imagine ourselves as somehow above ‘Left-Right’ arguments and polarities by taking seriously Murray’s proposal. He needs to go to the back of the line: let him speak to his colleagues on the Right, that is indeed the audience he’s crafted his arguments for. How foolish of us to bend over backwards for him when he shows nothing but contempt for the true intellectual ancestry of ideas, ideas promptly denuded for conservative consumption. And this is NOT about proprietary claims to such ideas: our time and energy is limited and precious, let’s not waste it….


Maynard Handley 06.02.06 at 12:04 am

There is a compulsory payment to insurance companies AND
there will always be $7000 left over for each recipient.

So explain to stupid old me exactly what the incentives are here to stop the insurance companies from ramping up the cost of that minimum plan from $3k to $4k to $5k, pretty much increasing by 30% per annum? Are we supposed to trust that the good old insurance companies would not take advantage of the situation to charge the guaranteed payer, the US govt, as much as they could get away with and more? We’re supposed to believe this after Medicare part D and “the govt may not negotiate for cheaper drug prices”?


Patrick S. O'Donnell 06.02.06 at 12:31 am

‘Liberals also attack it, but my sense of all those criticisms is that they are simply ad hominem.’—That may very well be, but one might keep in mind here, with Douglas Walton, that ‘the argumentum ad hominem is not always fallacious, for in some instances questions of personal conduct, character, motives, and so on are legitimate and relevant to the issue.’ Walton provides some examples in his book, Informal Logic: A Handbook for Critical Argumentation (1989), pp. 154-59.

I am not convinced Murray understands the historical rationale of the welfare state nor the perfectly justifiable ‘reasons for welfare,’ yet another reason to rely on a hermeneutics of suspicion when reading a book with the subtitle, ‘a plan to replace the welfare state.’ See, for example, the absolutely indispensable study by Robert E. Goodin, Reasons for Welfare: The Political Theory of the Welfare State (Princeton, NJ: Princeton University Press, 1988).


finnsense 06.02.06 at 12:36 am

$7,000 a month = €5,469 = €456 per month.

I can’t see how anyone could live on €456 a month and live a reasonable life. As a student in Finland I don’t think that would be possible and that’s with half prices transport, lunches and nearly free sports facilities.


fifi 06.02.06 at 1:14 am

So every molecule gets $10,000 and is sent forth to self-stimulate, is that basically right? Whither community/planning? Many of our social and economic problems arise naturally because we’re the world’s largest anti-community. Does Murray address that problem or is his solution really what it sounds like, cargo cult accounting? Because it doesn’t sound so different qualitatively from all the other spreadsheet gambits liberals have proposed to salvage our investment in a society of anomic economic agents, the returns from which continue to diminish.


Tim Worstall 06.02.06 at 4:07 am

I know that people around here aren’t all that fond of TCS Daily but there’s a two part discussion of the book:

Slightly disturbing for both of us, Harry and I, to find that we’re pretty much in agreement on the values of the scheme.

Perhaps worth noting that he also does away with corporate welfare…including the Farm Bill (hurrah!). Also, that the $3,000 insurance for medical care is a proposal, not a necessary part of The Plan.


abb1 06.02.06 at 4:47 am

I think guaranteed income is an excellent (and obvious) idea, but it does nothing to address the L-curve kind of inequality, which is the real inequality problem, IMO. Productivity gains have to be distributed among the whole society and, to maintain incentives, it has to be done at the workplace level; guaranteed income would do nothing to help here, robbery at workplace will still go on.


harry b 06.02.06 at 6:45 am

Tim — here’s another possible matter on which we’d agree (I’m just guessing); abolish all income taxes and payroll taxes and replace with a consumption tax (my version would be highly progressive, yours probably not, but the same would apply to income tax, I’d guess). Well? Maybe that’s better left for another post.


Tim Worstall 06.02.06 at 7:43 am

Depends what type of a consumption tax. If like the “Fair Tax” proposal in the US, a sales tax with rebates for the poorest, then I’m very much against it. For practical reasons (a 23% tax collected at the retail point in one lump? Way too easy for people like me to figure out how to steal a few millions here and there).

If we mean you received $x this year, saved y, then you are taxed on x-y (and the corollary, that if y is negative, then you pay the consumption tax on what you took out of your savings) then yes. That was The Economist’s plan from the mid 1980s.

Progressivity? Meh. Although I do think it outrageous that the poor pay income tax at all. Should start around the median income. If we can’t get enough from those over that to pay for the State then shrink the State.


harry b 06.02.06 at 8:07 am

yes, I meant what was in your second paragraph (and am opposed to what’s in your first para). I asked about it in a workshop on taxation at a big IPPR conference, and everyone looked at me as if I were from outer space, and then carried on as normal. Robert Frank is a big advocate of it here.


Sam Morison 06.02.06 at 8:30 am

In terms of the right-wing bone fides of the idea, no one has yet mentioned F.A. Hayek, who also (surprisingly perhaps) endorsed the notion of a guaranteed minimum income. As he famously put it in The Mirage of Social Justice, “There is no reason why in a free society government should not assure to all protection against severe deprivation in the form of an assured minimum income,or a floor below which nobody need to descend. . . . So long as such a minimum income is provided outside the market to all those who, for any reason, are unable to earn in the market an adequate maintenance, this need not lead to a restriction on freedom, or conflict with the Rule of Law.” (p. 87)


Will Wilkinson 06.02.06 at 10:04 am

I find Patrick O’Donnell’s call for reading Murray with a “hermeneutics of suspicion,” based on his not being convinced that Murray understands the historical rationale of the welfare state, pretty amusing. Patrick might wish to read Murray’s “Losing Ground: American Social Policy 1950-1980,” one of the best and most influential books ever written about the American welfare state.

I now read Patrick O’Donnell with a hermeneutics of suspicion.


theCoach 06.02.06 at 10:18 am

Having not read the book, the health care incentives seem wrong to me.
If I am an insurance provider required to provide services for everyone at the cost of $3000, and I
have to answer to shareholders, I would find the most expensive treatments, then make sure our services for them are the worst available.

Politically, it will not happen, and it would have to be airtight to consider dismantling SS.

I would say:
Do it in addition to SS.
Universal healthcare (including children) seperate from this scheme.


Patrick S. O'Donnell 06.02.06 at 11:09 am

Will Wilkinson:

Murray’s book may indeed have been ‘one of the…most influential written about the American welfare state,’ but that simply testifies to the appalling degree of ignorance on such matters in this country. That you would judge it ‘one of the best…ever written about the American welfare state’ assures me your grasp of the relevant literature is weak at best.

Goodin well took care of Murray’s arguments (and like-minded New Rightists) in the book cited above. In any case, commencing with ‘1950’ hardly amounts to an historical examination of the rationale of the welfare state: see, for example, Michael B. Katz, In The Shadow Of The Poorhouse: A Social History of Welfare in America (New York: Basic Books, 1986). See too Theda Skocpol’s Protecting Soldiers and Mothers: The Political Origins of Social Policy in the United States (Cambridge, MA: Belknap Press of Harvard University Press, 1992).

You might also benefit from intimate acquaintance with Robert E. Goodin, Bruce Headey, Ruud Muffels, and Henk-Jan Dirven, eds., The Real Worlds of Welfare Capitalism (Cambridge, UK: Cambridge University Press, 1999).

All good wishes,


Robin 06.02.06 at 11:30 am

Someone suggested meshing basic income grants and a renumeration system where capital and labor would receive shares of the value added qua shares of value added, with contracts specifying divisions of surplus as Marty Weitzman proposed long ago. It may have been James Meade somewhere in Agathopia, but I’m not sure.

Coupled in that way, it may reduce unemployment (while addressing risk aversion constraints for labor) and by framing division as a visible share of surplus issue may help egalitarianism.

There was an interesting discussion years ago in the Boston Review with Herbert A. Simon, Emma Rothschild, Edmund S. Phelps, Brian Barry, Elizabeth Anderson, Ronald Dore, Fred Block, Robert E. Goodin, Claus Offe and others responding to Van Parjis.


Patrick S. O'Donnell 06.02.06 at 12:13 pm

Thanks for the link Robin: that New Democracy Forum discussion was quite interesting, as are many of the treatments under that rubric. But 2000 = ‘years ago’?! I am getting old, and the rest of you must be rather young!


paul 06.02.06 at 12:41 pm

I stopped reading seriously somewhere around “insurance companies would be forced to offer coverage” — that part of the grant is probably the stupidest way to implement government-paid health care that anyone could think of. The idea that you can build up debt against your grant (either by fines or by private contract) does seem brilliantly contrived, though, as does the waving-away of issues with respect to minors in general.

So: from a time-allocation point of view, worth reading?


Tim Worstall 06.02.06 at 1:12 pm

Paul: Time allocation wise, yes. 127 pages before appendices.


Carlos 06.02.06 at 1:55 pm

Here’s a a good takedown of the health care proposal section. “”:url


abb1 06.02.06 at 1:59 pm

…insurance companies would be forced to offer coverage”—that part of the grant is probably the stupidest way to implement government-paid health care that anyone could think of…

Nevertheless, this is pretty much how the Swiss healthcare system works and it’s considered one of the best in the world. Here.

Sorry about the format, stupid pdf:

Insurers, which under the Health Insurance Law must register with and are monitored by the Federal Social Insurance Office (itself subordinate to the Federal Department of the Interior), are obliged to accept all applicants, thereby avoiding cream-skimming. The insured may change insurer twice per year.

Choice of Insurer: Both registered health insurance funds and private insurers are permitted to provide the compulsory
basic insurance. There are 93 registered insurance funds offering compulsory basic insurance in 2002. In 1993 there
were 207, in 1977, there were 615, in 1945, 1,151. There doubtless will be further insurer mergers. These companies,
whose membership varies in size in 2000 from 256 (Krankenkasse Unitas, Binn), to 1,129,479 (Helsana Versicherung,
Zurich), may be federal, regional (e.g. KK der Region, Goms), religious (e.g. Christlich-Soziale de Schweiz
Versicherung) or occupationally based (e.g. Betriebskrankenkasse der Chocoladefabriken Lindt + Sprungli).18,19,20 All
are run on a not-for-profit basis though under the new CBSI law this is no longer a requirement.21 Insurers group
together in Cantonal and Federal Associations to negotiate fees with service providers, represent the interests of
members, compile statistics and so forth.22 This long-standing group negotiation is likened by many to a cartel.23
Basic Benefits Package: ‘Basic’ is a real misnomer here as it implies that significant elements of healthcare must be
purchased in addition. This is not the case, indeed Zweifel among others likens the Swiss ‘basic’ package to a luxury
one in the US or Germany.24 The health insurance law defines the scope of the benefits package under compulsory
insurance. Benefits are standardised throughout the federation. The package which covers the cost of medical treatment
in the canton of residency, includes inpatient and outpatient care, care for the elderly and physically and mentally
handicapped, unlimited stays in nursing homes and hospitals, diagnosis, and so forth. Since 1999, alternative and
complementary medicine benefits are also included.25 Services covered must meet criteria of clinical effectiveness,
appropriateness and cost-effectiveness. However, these tests have only been applied to potential additions to the package, not those already included.

Premiums: Swiss premiums, which are federally regulated but not fixed, are independent of income. They are
community rated, that is, the same for every person taking out a policy with a given company in a given area,
regardless of individual risk rating. Premiums, which vary from insurer to insurer, may vary by 50% from canton to
canton, and are payable directly to the insurer on a monthly basis. The insured shop around for best premium rates.
Prior to 1996, premiums were risk-related, thus some with high risk found health insurance unaffordable.30 The cost of
insurance is now roughly £1500 per person annually.31 Patients may also opt for bonus options for no claims (as in the
German private insurance market).


bob mcmanus 06.03.06 at 12:48 am

“because topnotch CT commenter bob mcmanus joins in”

I’m sorry, I can’t stop laughing.

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