Wednesday, January 26, 2011

Clearly Bad Social Policy?

In his Foundations of Economic Analysis (1947), Paul Samuelson wrote the following critique of the idea of a guaranteed minimum income:
Thus, we might decide that everyone should have at least a minimum income, that Society will make up the deficiency between what the less fortunate can earn and this minimum. Once this is realized by those who fall below the minimum, there is no longer an incentive for them to work at the margin, at least in pecuniary material terms. This is clearly bad social policy, not because I have a vulgar prejudice in favor of work and against leisure. On the contrary, the increases in real income in the years ahead probably will be spent in considerable degree on leisure. It is wrong because it forces the rest of society to give up leisure [emphasis added].
This was clearly an odd thing to say, not because Samuelson opposed a guaranteed minimum income. On the contrary, 21 years later Samuelson signed an economists' statement calling for just such a "clearly bad" policy (see embedded link below). The odd part comes in the last sentence, the reason for the policy's wrongness: "it forces the rest of society to give up leisure." How so?

6 comments:

  1. Could he be writing euphemistically? I've observed that my leisure, however well-earned, leaves economists inconsolable.

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  2. It's a lump, isn't it? A lump of leisure.

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  3. You bet your life, Arkady!

    "Say the secret word and win a hundred dollars." No, seriously, Arkady, send me your postal address and I'll send you a money order for $100.00. My email is lumpoflabor at gmail dot com.

    ReplyDelete
  4. Sandwichman, my passion is animal rescue. Every extra dollar I have goes into that. If you would donate that money to a shelter or rescue network, I would be thrilled.

    ReplyDelete
  5. Great! I'll send the check to the Wild ARC BC SPCA Wild Animal Rehabilitation Centre.

    ReplyDelete

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