What would happen if, instead of putting the revenues from natural gas and other natural resources—which are estimated at hundreds of billions of sheqels—into the State coffers, they were paid out directly to every citizen on a monthly basis? Just for the sake of the thought experiment, imagine that you got money from the government, say NIS 3,000, every month. Would you choose to work less? Do you think most people would choose to work less? And then what would happen? Would the economy go into recession? Maybe less work would make people happier, as they would spend more free time with their families, being creative, volunteering, and working to better their community and society. Maybe this safety net would give workers more bargaining power, working conditions would improve, and so would productivity and salaries? Would that mean that difficult and dangerous jobs would be compensated properly? Would people’s disposable income actually increase, which would lead to economic growth? Maybe more people would dare to innovate and open small businesses. Maybe more artists would be able to dedicate most of their time to their art, and culture would flourish.
The insights from this thought experiment form the basis of the idea called “Basic Income.” This idea is the latest link in a centuries-old intellectual chain—representing ideas from both the right and left—that proposes various universal payments to citizens. It began with one of the American Founding Fathers, Thomas Paine, who proposed taxing the profits of private land use already in the late eighteenth century. It continued with the utopian socialist thought of the nineteenth century, which sought to free the individual from the bonds of labor and offer a universal minimum payment as the basis for subsistence. Finally, in 1962, Milton Friedman—one of the leading modern capitalist thinkers—proposed unconditional payments all citizens in an effort to minimize poverty.
Dr. Lia Ettinger and Dr. Ofer Sitbon, Shaharit Fellows who head the Economics and Society project have authored a paper that presents the ideas behind Basic Income, from the early theories of the eighteenth century to attempts to implement the idea in various places around the world. Is there room to consider implementing a basic income in Israel, too? How might it affect the social fabric and local economy?
See here for the full Basic Income paper [Hebrew].
Dr. Lia Ettinger is a Shaharit Fellow; she is the academic director of the Heschel Center, where she conducts research and mentors leadership programs.
Dr. Ofer Sitbon is a Shaharit Fellow. He is the head of the clinic on corporate responsibility at the Academic Center for Law and Business, and he is an expert on issues of law and social change.