Logic of Collective Action versus Logic of Reciprocity
Unconditional Basic Income as a collective action problem
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Abstract
The implementation of an Unconditional Basic Income (UBI) would eradicate poverty, reduce inequality, enhance welfare and help us face automatization. However, one of the main objections is that people will free ride on a UBI, making it morally unacceptable and economically unfeasible. The moral objection holds that it is unfair for anyone to receive a UBI at the expense of others who contribute to it, without being obligated to make some proportional contribution in return or be condemned otherwise. The economic objection holds that a UBI is not feasible, because rational people will stop working or attempt to evade taxes; both of which are needed to finance a UBI. Advocates of a UBI have argued that the number of free riders is expected to be limited, but they have failed to offer a theoretical framework of human behaviour which supports these arguments.
The so-called Logic of Reciprocity is such a framework. Therefore, we ask the question in this thesis ‘How can we find a solution to the collective action problem of economic feasibility of a UBI if we follow the Logic of Reciprocity? Does this model of human behaviour allow us to overcome the free rider objection of economic feasibility against a UBI?’. Subsequently, we ask the question ‘Can the moral benefits of a UBI outweigh the violation of the reciprocity principle to mitigate the moral free rider objection?’. We defend the claim that a UBI is economically feasible under high levels of trust. In addition, we defend the claim that this mitigates the weight of the moral free rider objection.
In the first chapter, we establish that a UBI faces a collective action problem of economic feasibility; a UBI is a desirable collective good which cannot be achieved through collective action due to the rational free riding behaviour not to work or pay taxes. In the second chapter, we discuss two models of human behaviour to review the underlying assumptions of the collective action problem of economic feasibility. The Logic of Collective Action supports the core assumption that humans behave rationally and will always defect. The alternative Logic of Reciprocity argues that humans are moral and emotional reciprocators who defect or cooperate based on the perceived behaviour of others. We conclude that the Logic of Reciprocity offers a more accurate prediction of human behaviour in collective action. In the third chapter, we apply the Logic of Reciprocity to the collective action problem of economic feasibility of a UBI.
We conclude that under high levels of trust, the majority of people will be motivated to be seen as good and cooperative and feel reassured that they will not be taken advantage of. Thus, the majority of people will continue to work and pay taxes upon receiving a UBI, making the implementation of a UBI economically feasible. Subsequently, we argue that, once a UBI is economically feasible, the harm caused by the limited number of free riders is minor compared to the harm caused by free riding behaviour in the absence of a UBI. We conclude that the moral benefits of a UBI outweigh the violation of the reciprocity principle, thus mitigating the moral objection. To achieve and maintain a high level of trust, we recommend a positive narrative, transparency of cooperation levels and limited social incentives targeted clearly at dedicated free riders.
Universal Basic Income (UBI), free rider argument, reciprocity principle, collective action problem, Logic of Collective Action, Logic of Reciprocity, trust
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Acknowledgements
I want to thank my thesis supervisor, Bruno Verbeek for his insight, patience and extensive feedback. I truly enjoyed our feedback sessions. I am grateful to both the teachers of the University of Amsterdam and of the University of Leiden for all the interesting and thought-provoking lectures I have been able to follow. They all showed great love for philosophy, and I enjoyed all the enthusiastic and engaging discussions I have had with them both during and after class. I would especially like to thank Gijs van Donselaar, Sine Bagatur and, again, Bruno Verbeek for strengthening and facilitating my interest in the main topics of this thesis.
I want to thank my parents for their moral support, for insisting that I would choose a study that I would above all enjoy and for giving me the possibility to study without worrying about tuition fees. I want to thank Arnoud and Juliette for all the wonderful discussions we have had on our thesis. This thesis would not have reached this level without the sharp feedback, keen insight and though-provoking discussions you both offered. I do not think I have ever enjoyed studying as much as I have done these past few months thanks to those moments. Lastly, I would like to thank Flore, who has supported me and given me feedback throughout my entire bachelor and master.
Thank you all, Rosa Tibosch
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Content
Abstract ii Acknowledgements iv Content v Introduction 11. The collective action problem of a UBI 4
1.1 The basics of a UBI 4
1.1.1 UBI 4
1.1.2 Funding and progressive taxes 5
1.2 The desirability of a UBI 6
1.2.1 Poverty 6 1.2.2 Inequality 7 1.2.3 Individual 9 1.2.4 Universal 9 1.2.5 Unconditional 10 1.2.6 Desirable 12
1.3 The rational free rider argument 12
1.3.1 Reciprocity principle 12
1.3.2 Limited free riders 14
1.3.3 Economic feasibility 16
1.4 Collective action problem 17
1.4.1 A quick introduction to collective action problems 18 1.4.2 UBI’s economic feasibility as a collective action problem 20
Conclusion 20
2. Two models of human behaviour 22
2.1 Logic of Collective Action 22
2.1.1 Common interests of collectives 22
2.1.2 Collective goods 23
2.1.3 The traditional theory 23
2.1.4 The Logic of Collective Action 24
2.2 Logic of Reciprocity 25
2.2.1 Moral reciprocators 25
2.2.2 Individual dispositions 26
2.2.3 Dynamic balances 27
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2.3 Trust & Reciprocity 29
2.3.1 Game theory 29
2.3.2 Experimental evidence 31
Conclusion 34
3. Reciprocating a UBI 35
3.1 The reciprocal road to collective action 35
3.1.1 The dynamic road 35
3.1.2 Economic feasibility 36
3.1.3 Moral weight 38
3.2 Promoting trust 39
3.2.1 Transparency 39
3.2.2 Targeted informal incentives 39
3.2.3 General formal incentives 40
3.2.4 Recommendations 41
3.3 Implications 41
Conclusion 42
Final conclusion 44
1
Introduction
Humankind has always sought to improve itself, and in many fields we are unmistakably better off today than we were dozens or hundreds of years ago (Bregman 2016). Our knowledge of medicine has increased tremendously, woman’s rights have soared and especially in certain parts of the world poverty has significantly diminished. It seems we are doing well. However, we can do even better.
Poverty has been diminished, but it still exists. Through automatization we have made many products available to many people, raising their living standards (van Parijs and Vanderborght 2017, 4–7). Although this has done wonders for those in poverty, we are reaching a point where it can have the opposite effect. Some worry automatization could make so many jobs superfluous that in the next dozen years we are faced with a steep increase in unemployment. We will need to think about how we save the unemployed from poverty and how we can allow them to make a valuable contribution to society once large parts of classic labour become superfluous.
An idea which has been gaining interest recently is the Universal Basic Income (UBI). A UBI would provide everyone with a minimum of financial security, on top of which they can work to earn more money (van Parijs and Vanderborght 2017). A UBI is a monthly payment of about 25% of GDP per capita to each individual (2017, 11). It is purely individual, meaning it is not linked to the household situation (2017, 8). It is universal, meaning it is paid to everyone instead of subjected to an income or means test. Lastly, it is unconditional, meaning you are not obligated to work or prove a willingness to work. To finance a UBI, it would have to be combined with progressive taxes (2017, 133). Examples are a higher income tax, wealth tax, inheritance tax and the taxation of natural resources.
The combination of a UBI and progressive taxes could eradicate poverty, reduce inequality and enhance welfare. A UBI eradicates poverty in the area where it is introduced, by supplying everyone with a minimum of financial security, including those who face unemployment due to the automatization of their labour (van Parijs and Vanderborght 2017, 7). Progressive taxes to fund a UBI could allow for the redistribution of money, thus reducing inequality (2017, 133). Eradicating poverty, reducing inequality and empowering people with financial security, in turn, has a strong positive impact on the welfare within a country (Raworth 2018).
The idea of a UBI is still in development and faces several objections, but it is an idea worth developing. In this thesis, we will focus on the free rider objection, and see if we can counter it. The free rider objection against a UBI consists of a moral and an economic argument. Both worry about the unconditionality of a UBI. Any rational human being would stop working or paying taxes once they receive a UBI, i.e., they would take a free ride on those who do contribute to the funding of a UBI through work and taxes. The moral argument holds that it is
2 unacceptable if someone receives a UBI but makes a disproportional small contribution or no contribution at all in return at the expense of others who do contribute (White 1997). Moreover, it strings that, due to the unconditionality of a UBI, this behaviour is allowed and, therefore, cannot be condemned. The economic argument holds that, even if a UBI were theoretically affordable, it would not be feasible, because a UBI would be over-demanded and underfunded once people do not work or pay taxes properly (van Parijs and Vanderborght 2017, 134). Advocates argue the number of free riders will be limited, but offer no supportive theoretical framework of human behaviour for this claim.
To see how we can counter these objections, we will discuss the underlying assumptions using the framework of game theory. A collective action problem occurs when collective action to achieve a collective good fails due to rational individual behaviour (Olson 2009). In this case, it would require collective action to maintain a UBI. Only when enough people work and pay taxes could a UBI be funded. However, it is rational for the individual not to contribute in such a way and instead live off a UBI funded by others who do work and pay taxes. We will question the underlying model of human behaviour, the Logic of Collective Action, which holds that people are rational free riders (2009). Thereafter, we will suggest an alternative model, the Logic of Reciprocity, which holds that people are moral and emotional reciprocators who cooperate based on the expected behaviour of others (Kahan 2002).
The aim of this thesis is to see how we can solve the collective action problem of the free rider objection of economic feasibility. To this end, we propose a theoretical framework of human behaviour, the Logic of Reciprocity. We will answer the question: ‘How can we find a solution to the collective action problem of economic feasibility of a UBI if we follow the Logic of Reciprocity? Does this model of human behaviour allow us to overcome the free rider objection of economic feasibility against a UBI?’. Subsequently, this thesis examines whether answering the free rider objection of economic feasibility allows us to mitigate the moral free rider objection. To be precise: ‘Can the moral benefits of a UBI outweigh the violation of the reciprocity principle to mitigate the moral free rider objection?’. In this thesis, we will defend the claim that the free rider objection of economic feasibility can be answered under high levels of trust. In addition, we will defend the claim that this allows us to mitigate the moral weight of the free rider argument.
In the first chapter, we detail why a UBI faces a collective action problem of economic feasibility. In the first section, we explain what a UBI is and how it is funded by, among others, progressive taxes. In the second section, we discuss why the implementation of a UBI would be a desirable collective good. In the third section, we further explain the moral and economic free rider objection. We also consider a defence against the moral argument, which holds that the moral argument can be mitigated if the number of free riders on a UBI is limited. In the fourth section, we move to the framework of game theory. Here we show that a UBI is faced
3 with a collective action problem, because it is a desirable collective good which cannot be achieved due to the rational individual behaviour to free ride. In the second chapter, this allows us to question the underlying assumptions of the free rider objection of economic feasibility. In the second chapter, we explore two models of human behaviour. The aim of this chapter is to argue why we should move from the dominant model, namely the Logic of Collective Action, to an alternative, the Logic of Reciprocity, based on findings of game theoretical, experimental evidence. This will allow us to find a possible solution to the collective action problem of economic feasibility. In the first section, we explain the Logic of Collective Action, which argues for the underlying assumption of a collective action problem that humans are rational free riders. In the second section, we explain the Logic of Reciprocity, which offers an alternative view of human behaviour. People are moral and emotional reciprocators instead of rational free riders. In the third section, we discuss game theoretical, experimental evidence which shows that the Logic of Reciprocity is a more accurate model of human behaviour in collective action.
In the third chapter, we explore the implications of applying the Logic of Reciprocity, instead of the logic of Collective Action, to the collective action problem of economic feasibility of a UBI to predict human behaviour. In the first section, we explore the possibilities of solving a collective action problem under low and high levels of trust. We find that under high levels of trust, using the Logic of Reciprocity, it is possible to solve the collective action problem. We then elaborate on how this allows us to answer the economic feasibility objection and to mitigate the moral objection. In the second section, we give a few starting recommendations on how to promote trust. In the third section, we discuss some implications of our findings for countries who wish to implement a UBI. We close off with a summary of our findings.
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1. The collective action problem of a UBI
A UBI would give every individual citizen a monthly payment from the government, regardless of their income or contribution to society (van Parijs and Vanderborght 2017, 8). Van Parijs and Vanderborght (2017) have written extensively on the benefits of such a UBI. However, there are moral and economic objections against the unconditionality of a UBI. These objections are based on the rational behaviour not to contribute to a collective good, such as a UBI, if you can get it without contributing (White 1997, 317; van Parijs and Vanderborght 2017, 134; Olson 2009).1 The fact that a UBI would be desirable, yet might not be feasible
because of rational behaviour, hints towards a collective action problem. A collective action problem takes form once a certain collective good (in this case, a UBI) cannot be realised if everyone were to behave rationally (Ross 2019, sec. 2.4). This chapter will explain why a UBI is faced with a collective action problem of economic feasibility. As such, we will first cover what a UBI is and why it is a desirable collective good. We will then explore the moral and economic free rider argument to assess how it could be rational to defect (meaning you enjoy a UBI without contributing to it). Lastly, we will explain the concept of a collective action problem to show how the rational choice to defect against a desirable UBI poses a collective action problem. In the next chapter, we will question the underlying assumptions of the collective action problem of economic feasibility, to see if we can find a potential solution for this problem.
1.1 The basics of a UBI
In their book Basic Income: A Radical Proposal for a Free Society and a Sane Economy, Van Parijs and Vanderborght (2017) offer an elaborate description of a UBI and the arguments for and against it in the fields of philosophy, politics and economics. In this section, we go over their depiction of a UBI to make sure we are grounded in a clear conception of this key concept. To do this, we examine the format and possible ways of funding a UBI, such as progressive taxes, as proposed by Van Parijs and Vanderborght (2017).
1.1.1 UBI
Let us start with the financial side of a UBI. It would consist of a monthly monetary payment (van Parijs and Vanderborght 2017, 9 & 12). Parijs and Vanderborght suggest an amount of
1 In short, everyone can use a collective good (non-excludable) and this does not diminish its value (non-rivalry). An example is a dyke, which can be used by everyone without losing its protective value.
5 about 25% of GDP per capita (2017, 11).2 This way, it can reflect the current wealth of a
country, meaning the UBI will reflect the living standards within a country and can be adjusted during economic fluctuations to remain affordable and adequate to living standards. 25% of GDP per capita is not always above the poverty line, but in many prosperous countries, it is.3
We concern ourselves here with countries with an economy strong enough for 25% of GDP per capita to cover a minimum of financial security, such as the poverty line.4 In the United
States in 2015, for instance, 25% of GDP came down to about 1163 dollars per month, while the poverty line was at 1028 dollars per month. The amount can vary per age, geographical region or even time, but it should be high and stable enough to establish a minimum of financial security (2017, 9–10). As such a UBI should not be mortgaged or taxed, because that could dissolve or lower it beyond the minimum required for financial security at a future moment.5
1.1.2 Funding and progressive taxes
This leaves the question of how a UBI will be funded. The gross cost of a UBI would be about 25% of a country’s GDP. However, to know the net cost of a UBI, we will need to look at the sources of funding for a UBI.6 For simplicity, we can divide the funding of a UBI into three
sources. Firstly, a UBI replaces some existing social benefits (van Parijs and Vanderborght 2017, 135). In other words, net government spending does not necessarily increase with the introduction of a UBI. The details of what can be replaced by a UBI are complicated, however, and beyond the scope of this thesis.7 Secondly, the introduction of a UBI is expected to reduce
the cost of support services such as health care and social care (more on this in the section on the desirability of a UBI). The savings in these departments can be spent on the funding of a UBI, meaning again that net government spending would not necessarily increase. However, it should be emphasised that a UBI can only partly replace the existing public funding or assistance (2017, 12). To prevent high financial inequality and maintain a high level of quality
2 GDP is the Gross Domestic Product of a country, which offers an insight in the size and growth rate of an economy of a country over a certain period of time (year, month). GDP per capita (latin for per head or per person) adjusts for the size of the population, which gives an estimation of the living standard. For instance a country with an average GDP and a big population has a lower GDP per capita (and thus lower living standards) than a country with an average GDP and a small population.
3 The poverty line is defined as an income level which is minimally sufficient to sustain a family’s basic needs (Shim and Siegel 1995).
4 The minimum of financial security could be higher than the poverty line. Van Parijs and Vanderborght favour a UBI as high as possible, but also note that this is politically and economically more complicated (van Parijs and Vanderborght 2017, 104). We will therefore speak of a minimum of financial security which at least covers the poverty line.
5 For instance, if a UBI is already at the poverty line and it would then be taxed, the remaining UBI would end up below the poverty line.
6 The gross cost is the initial cost. The net cost is the actual cost once benefits gained from the good (in this case the implementation of a UBI) are deducted from the initial cost.
7 An example could be people who receive benefits for being unemployed. The benefits could be partly or completely replaced by a UBI depending on the amount of benefits they received.
6 of public goods, it is still necessary to invest in health care, education, additional benefits and others. Thirdly, a UBI would be funded by progressive taxes. Van Parijs and Vanderborght suggest a 70% flat tax on income as a first possibility because most western countries with an elaborate welfare system have a focus on income tax (though none as extensive as this proposal).8 Another possibility is the taxation of natural resources. Examples are renting out
government-owned land, taxing the revenue of non-renewable government-owned natural resources or creating a fund from the revenue of those resources to aid a UBI with the dividend. One could also consider a (higher) wealth tax as suggested by both Piketty (2016) and Van Parijs and Vanderborgt, or an inheritance tax (2017, 147).
All these different possibilities of taxation can yet again be applied in different ways, at different rates and in combination with each other. Some of these possibilities, like an increased inheritance tax, might meet more resistance than other more familiar taxes, such as the income tax. Others, like the income tax, could have a more significant negative impact on the economic incentive to work. After all, once the tax on income increases, you keep less money for the hours you work. If a UBI is pitched at less than 25% of GDP per capita or if existing welfare structures are already extensive, then a more significant part of the funding might come from the first two sources of funding (van Parijs and Vanderborght 2017, 135). This could happen, for instance, when less than 25% of GDP per capita suffices for a minimum of financial security or when the existing social benefits and the cost at other departments which can be reduced were already extensive.
1.2 The desirability of a UBI
A UBI, in combination with the previously mentioned progressive taxes, as suggested by Van Parijs and Vanderborght (2017), has many benefits. In this section, we first discuss the beneficial consequences of this combination for poverty and inequality. Then we move closer to the key aspects of a UBI, namely ‘individual’, ‘universal’ and ‘unconditional’, to see how this particular format as suggested by Van Parijs and Vanderborght makes a UBI a desirable collective good for society.
1.2.1 Poverty
A UBI would eradicate poverty within the area where it is introduced by creating a floor of financial security.9 Every country has a group of people who live on the margin, even if they
have few cases of extreme poverty. The moral argument for ending poverty finds support in an extensive literature as well as in global policies. For instance, the desire to end poverty is
8 Their argumentation is more complicated and elaborate than this, but for this paper it will suffice. 9 After all, you offer everyone a monthly budget which is at its minimum above the poverty line.
7 reflected in the 17 millennium goals, as agreed upon by all the countries in the world (United Nations 2015). The goal to eradicate extreme poverty and hunger is number one.
Van Parijs and Vanderborght defend the egalitarian notion of distributive justice that resources should be distributed equally as to make sure that everyone can live his or her notion of the good life (2017, 109). Inequality should only occur due to people’s own responsibility or because it maximises the benefit of those who are worst off. A UBI would give everyone the same starting position in life, leaving them with the responsibility and freedom to use the money to pursue their notion of the good life. Above all, it would benefit the worst off by assuring them of financial security above the poverty line.
Added to this is the argument that stronger financial positions of those worse off would improve working conditions.10 Van Parijs and Vanderborght (2017) argue that especially those with a
low income lack the financial security to demand improvement of their working conditions or to take the risk of moving to a more meaningful job. On top of this, the lack of financial security impedes cognitive functions (Mani et al. 2013). The stress experienced by continuing financial uncertainty takes up a considerably large portion of one’s cognitive function, thus making it harder to make wise, long-term decisions or take coordinated action. This argument is supported by those in the economic field; much potential is currently lost on those with a low income or those even below the poverty line. They would be of more significant benefit to the economy once they practice better and more valuable jobs (Kremer et al. 2014, 90; Raworth 2018, 172–73). Thus, relieving stress by offering financial security through a UBI would strengthen the cognitive function of those with a low income and allow them to make better decisions for their financial position and to be of more significant benefit to the economy.
1.2.2 Inequality
In addition, the way a UBI is funded could have a significant impact on the financial inequality within a country, especially in combination with the uplifting effect of a UBI on the financially worst off (those with a low income or no income at all). This would result in a stronger democracy and economy, and the maintenance of social capital and national health (Raworth 2018).
A UBI could reduce inequality, but does not guarantee it. Although there would be no extreme poverty (everyone has a basic income of at least above the poverty line), the rich could still become richer and richer, resulting in high inequality. However, if the taxation mentioned in the previous section makes sure the strongest shoulders carry the heaviest burden, then a UBI could also have an important influence on the inequality within a country. A (higher) wealth
10 We will elaborate on this in the following sections. In short, financial security strengthens people’s bargaining position, which allows them to choose jobs they value and enjoy and which forces employers to improve working conditions.
8 tax as proposed by both Piketty (2016) and Van Parijs and Vanderborght (2017) would significantly influence the rich because a relatively large portion of their means comes from capital rather than income compared to the low and middle class. The economic position of the middle class and those with a low income would at the same time remain the same or improve due to a UBI, thus bringing the financially worst off, middle class and rich closer together financially (2017, 135). Several of the negative effects of high inequality on democracy, social capital and the economy could be lessened (if inequality declines) or prevented (if inequality does not further increase) by introducing a UBI in combination with such progressive taxes.
Inequality, for instance, can have a negative effect on democracy when it gives power to those with money instead of to the common voice of the people. This could lead to a plutocracy, a society where the wealthy rule (Kremer et al. 2014, 91–92; Piketty and Saez 2014; Raworth 2018). An example of this mechanism is the increasing power and influence of the wealthy through lobbying.
Inequality also has an eroding effect on social capital such as community networks, trust and norms, which in turn decreases the functionality of democracy, social stability, welfare and well-being (Raworth 2018, 172). National inequality has been found to be one of the most significant factors in a nation’s welfare (Wilkinson and Pickett 2010; Raworth 2018, 171). It profoundly influences the amount of teenage pregnancy, mental illness, drug use, obesity, prisoners, school dropouts, and community breakdown, along with lower life expectancy, lower status for women and lower levels of trust. Eroding social cohesion also fuels status competition and reduces social pressure to reduce consumption (Raworth 2018, 172). This results in ecological degradation due to higher consumption, which in turn reduces well-being. It has been argued that inequality is a part of capitalism, which is important for the economy. It motivates competition and thus stimulates the market (Raworth 2018, 172–73). If inequality is high, then that is what the market needs at that moment. However, lately, it has been argued that high inequality has a negative impact on economic growth and stability, suggesting the level of inequality does not always automatically represent the level which would benefit the economy the most (2018, 172–73). Research from IMF analysed the 25 years leading up to the Great Depression (1929) and found that rising inequality had fuelled economic instability. This, in part, resulted in a sudden crash of the economy and a lot of social damage in the form of poverty, health and more. Thus, inequality is not necessarily good for the economy or a nation’s welfare, while a reduction in inequality could have a positive effect on a nations democracy, economy and welfare.
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1.2.3 Individual
A UBI is individual in the sense that it goes to one person, instead of to a household. This has several advantages. First of all, it allows for a redistribution of power within the household; Spouses who stay at home to take care of house and children (unpaid domestic care) will have an income of their own which will make them more independent from their working spouses (Van Parijs and Vanderborght 2017, 14). Secondly, it simplifies the bureaucracy currently needed to assert who is eligible for welfare. Current means-tested schemes take many aspects into account; like the money earned or the size of the household (2017, 15).11
The idea is that cohabitation is cheaper than living alone and that people who live together, therefore, need less money to sustain themselves. Thus, whether someone is eligible for welfare depends, among other things, on how many people one lives with. However, a lot of ambiguity can arise when investigating cohabitation. Often, people partly live together before they truly move in with each other. Confirming whether people fully live together is costly, and mistakes are easily made because of the unclear boundary. As a result, it sometimes occurs that people’s privacy is violated in an attempt to affirm whether they live together. Moreover, it happens that people in a developing relationship who often sleep at the same place are considered living together, even though they themselves have not officially taken that step in their relationship. Nevertheless, they could get punished for inaccurately specifying their living conditions. Penalizing cohabitation has three negative effects. First, it causes a loneliness trap; relationships become risky because your benefits could be penalized if you are considered living together by the government. Secondly, it causes a relationship trap; once you live together, it is complicated to move out again and to quickly regain your previous level of benefits (which you will need once you move out). This, in turn, amplifies the loneliness trap, because the threshold of living together becomes higher. Mutual support, information sharing and a strong network are weakened once the social contact of cohabitation is compromised. Thirdly, it is inefficient to penalize cohabitation; scarce material resources are used more, (social) housing is less dense, and mobility is less shared. Simplifying a UBI by making it individual thus allows for higher efficiency, stronger communities and the empowerment of spouses who perform unpaid domestic care.
1.2.4 Universal
A UBI is universal in the sense that the same amount is awarded to everyone, independent of means or gender (van Parijs and Vanderborght 2017, 16).12 A UBI is therefore non-excludable
11 Means tested schemes are social benefits which are provided based on the households capital and income (means) if those are proven to be below a certain threshold.
12 As mentioned earlier, age is the only factor which could be flexible. Children might receive a lower UBI which could gradually rise (van Parijs and Vanderborght 2017, 9).
10 in the area where it is introduced because everyone gets it. It is also non-rivalry because it has been set at 25% of GDP per capita for everyone independent of the number of recipients. These two factors constitute a collective good. Thus, a UBI can be treated like a collective good.
The universality of a UBI has three advantages. First of all, again, it simplifies the current bureaucracy of current means-tested schemes. Criteria to be eligible for benefits are difficult to assert and execute (2017, 17–18). They can come at the cost of privacy, straining the recipients and requiring a large number of resources in the form of manpower and infrastructure for control (2017, 7 & 17–18). For those in need, the eligibility criteria can be an obstacle; procedures can go wrong due to ignorance of the complex welfare system or because people are ashamed to apply for benefits. A lot of this can be resolved with a universal UBI. There are few difficult criteria to be confirmed, executed and controlled. Application procedures will be minimal, and there is no shame because everyone gets it.13 Secondly, you
are free to choose the work you like, instead of having to accept whatever work you can get (2017, 18–19). People’s bargaining position is improved because a UBI gives them the financial security to move between jobs, leave a job they dislike or even refuse a job. After all, with a UBI, they will still have enough income at their disposal to provide for themselves and possibly their family, even without a job. As a result, the quality of work will rise, because employers will no longer be able to rely on workers who have no choice but to accept whatever job they can find to provide for themselves and their family. Thirdly, a universal UBI ends the poverty trap or unemployment trap, because it allows you to make money on top of your income (2017, 19). In means tested schemes, it is risky to start working. You will lose your received benefits in exchange for a job which might pay less and which could be lost just as fast, leaving you with no income (at least for the period it takes to reapply for social benefits). As mentioned before, a universal UBI gives you the security to move from, to and between jobs. A universal UBI is thus empowering, simple and increases labour quality and mobility.
1.2.5 Unconditional
A UBI is unconditional in the sense that you get it without having to make a reciprocal contribution, or showing that you are willing to do so (van Parijs and Vanderborght 2017, 21). This is also the most controversial part of a UBI, but we will get to that later. First of all, where the universality of a UBI ended the unemployment trap, the unconditionality frees people from what Van Parijs and Vanderborght (2017) call the ‘employment trap’. Normally, people are
13 Some examples of criteria of application procedures one could still think off are; being a citizen within a country’s boarders, having some way to be registered as to make it possible to transfer money to an individual, and making sure no fraud is committed by, for instance, receiving a UBI for a person who is already deceased.
11 forced to work or show a willingness to work; otherwise they are denied benefits. Van Parijs and Vanderborght (2017) offer the following examples.
Typically denied the right to the benefit are those who give up a job at their own initiative, those who are unable to prove that they are actively looking for a job, and those who decline to accept jobs or other form of “insertion” deemed suitable by their local public assistance office given their content, location, and schedule. (van Parijs and Vanderborght 2017, 21)
As mentioned before, the monthly payment empowers people’s bargaining position, because the financial security of a UBI allows them to move between jobs and because they don’t have to accept whatever job they can get (van Parijs and Vanderborght 2017, 17–19). However, none of this is possible if people are still obligated to work. People would no longer be able to refuse jobs or take the risk of moving between jobs because their ineptness to satisfy the obligation to work would deny them a UBI (and thus financial security). Employees would still be dependent on the employer, who would have a strong bargaining position because they know the employee needs to accept whatever she or he can get. For the empowerment of workers and an increase in labour quality and mobility, it is therefore necessary that a UBI is unconditional (2017, 22–23). Secondly, as the quality of jobs increases, some so-called ‘bullshit jobs’ become obsolete. In his book Bullshit Jobs, David Graeber (2018) explains how 37% of people experience their own job as having zero social use or effect. Dur and Lent (2019) found that quite some workers perceive their job as socially useless (8%) or are doubtful about its usefulness (17%). Marketing professional (21%) or economist (15%) are examples of a job where workers often experience their job as socially useless. Many workers in the public sector, on the other hand, indicated that their job was socially useful. It is precisely these jobs which the employees often perceive as socially useful, such as teachers (0,8-1,4%), firefighters (0%) or important volunteering community work, which are often underpaid and therefore become increasingly unattractive. Both studies show that most of the employees who experience their job as socially useless, find this highly unsatisfying. Of course, this is all people’s personal perception, but it does give an indication of what kind of work seems socially useful to society. The financial security of a UBI would give people the freedom to search for a job which they really enjoy (van Parijs and Vanderborght 2017, 22–23). After all, they do not have to work to sustain themselves or to be eligible for benefits. Therefore, we can assume that, under a UBI, many people would search for a more satisfying job, which they perceive as socially useful. Assuming that their perception of their jobs being socially useless is not entirely inaccurate, the positive effect would also be that there would be an increase in jobs with a clear added social value (such as teachers). Thus, the unconditionality of a UBI not only
12 enables the positive effects of a universal UBI but in addition, it could increase the number of jobs which make a socially valuable contribution to society.
1.2.6 Desirable
As we said at the beginning of this chapter, to assert whether the feasibility of a UBI poses a collective action problem, we will have to assert whether a UBI is a desirable collective good. Due to its universality (everyone receives a UBI set at 25% GDP per capita in the area where it is introduced) a UBI can be treated as a non-excludable and non-rivalry collective good. Furthermore, a UBI would eradicate poverty within the area where it is introduced by creating a floor of financial security. Several of the negative effects of high inequality on democracy, social capital and the economy could be lessened or prevented by introducing a UBI in combination with progressive taxes. We have seen that an individual, universal and obligation free UBI is empowering, simple and efficient. It enhances social capital, increases labour quality and mobility and increases valuable jobs in exchange for bullshit jobs. Thus, we conclude that a UBI is desirable for society.
1.3 The rational free rider argument
We argued why a UBI is desirable. However, several objections have been voiced against a UBI.14 For this thesis, we will focus on one of the main objections; the free rider argument,
which can be separated in a moral and an economic objection. The moral objection follows the reciprocity principle, stating a UBI “goes against a widely accepted notion of justice: it is unfair for able-bodied people to live off the labour of others.” (van Parijs and Vanderborght 2017, 99; Elster 1986, 719). The economic objection questions the feasibility of a UBI, because it expects rational people to take advantage of a UBI by either evading taxes or by not working at all. This would make it impossible to sustain a UBI. We first discuss the moral objection as voiced by White (1997), followed by a defence from Van Parijs and Vanderborght (2017). We then cover the economic objection, as discussed by Van Parijs and Vanderborght (2017).
1.3.1 Reciprocity principle
White (1997) voices the moral free rider objection that a UBI would allow the exploitation of working citizens by non-working citizens. The principle of justice violated in this exploitation objection is the reciprocity principle, which he states as follows:
14 For a survey, look at Van Parijs and Vanderborght (2017). For example, a UBI could reward a vice; idleness (2017, 99).
13 Those who willingly enjoy the economic benefits of social cooperation have a corresponding obligation to make a productive contribution, if they are so able, to the cooperative community which provides these benefits. (White 1997, 317)
In other words, if you benefit in some way from the hard work of others, then you should do something in return and not take a free ride on the effort of others. However, not everyone is equally skilled. This inequality is often considered ‘brute luck’ (White 1997, 318). If there were a direct correlation between the contribution made and the economic benefits gained, then those with the brute luck of being less skilled would be able to enjoy fewer benefits and vice versa. This would violate the equal opportunity principle of luck egalitarianism; people’s initial circumstances should be equal so the same choices lead to the same outcome (Arneson 2002, sec. 9). Therefore, ‘being able to’ should not just be about whether or not you are able to work, but also to which extent and in which way you are able to contribute (White 1997, 318). In other words, it should not be “’putting in as much as one takes out’, but rather ‘doing one’s bit’” (1997, 319). We’ll refer to these limits as ‘productive handicap’. We should also take into account what would constitute reasonable work expectations. Firstly, with more jobs being automatized, it might not be necessary for people to work a full week. This would allow them to spend time in other productive ways, such as domestic care. Secondly, one should have realistic working options concerning one’s productive handicap for there to be a need to make a minimum contribution. Based on these insights, White suggests a baseline reciprocity:
…in return for this decent minimum income each citizen has a corresponding obligation to perform a decent minimum of contributive activity, the size of this minimum varying with degree of productive handicap. (White 1997, 319)
Thus, White argues that recipients of a UBI should make a proportional reciprocal contribution. However, due to its unconditional character, a UBI does not respect this baseline reciprocity principle. Anyone who does not uphold the baseline cannot be punished through penalties such as a fine or a cut back in the received UBI. Such behaviour cannot even be condemned. After all, recipients of a UBI are obligation free when it comes to making a contribution through work or other activities. This allows for the exploitation of those who work by those who do not. In other words, because of its unconditional character, a UBI disrespects the baseline reciprocity principle; recipients are allowed not to make a contribution at the expense of others who do make a contribution and cannot be punished or condemned for doing so.
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1.3.2 Limited free riders
Van Parijs and Vanderborght, for the sake of the argument, accept that receiving a UBI without contributing yourself constitutes unfair free riding (2017, 100). However, they argue that the moral objection can be mitigated, especially compared to the moral benefits of a UBI. It is important to note that they do not refute the moral free rider objection, i.e., the reciprocity principle, but rather argue why we should still prefer the implementation of a UBI despite the violation of the reciprocity principle.
First of all, Van Parijs and Vanderborght argue that the reciprocity principle as such is outdated (2017, 100). If it is no longer needed to work to the extent that we do today due to automatization, should we still stigmatize the leisure of those who do not work or work less? White (1997) already mentions this in his moral objection, but there are many who still demand that those on welfare perform some sort of contribution, no matter how trifling.15 The increase
of bullshit jobs for those on welfare can be expected to increase with the automatization of jobs if we do not rethink our notion of the reciprocity principle. Secondly, it is expected that the number of free riders will be fairly limited (van Parijs and Vanderborght 2017, 101–2). People will no longer be stuck in the unemployment trap. Thus, those people who were willing to work but were unable to under the means-tested schemes now have the opportunity to seek work without the risk of being worse off. Experiments have also shown that the time and freedom achieved, leads to an increase in productive activities such as education, childcare and community building. Thus, the moral argument of the reciprocity principle seems to need some revision.
Moreover, a UBI also has a lot of moral benefits. If the moral benefits of a UBI outweigh the moral violation of the reciprocity principle, then it would be more just to implement a UBI than to refrain from doing so. We have already established that a UBI is a desirable collective good, but let us specifically zoom in on the moral benefits of a UBI to society. Van Parijs and Vanderborght give several arguments on why a UBI increases more justice than it violates (2017, 102). First of all, it would make sure that those who are eligible for benefits always receive them and will not wrongfully be penalized with cuts on their benefits (Tiemeijer 2016). It can be challenging to distinguish disability (mental or physical) from an unwillingness to work. As a result, it is possible under the current means-tested schemes that those who should be eligible for benefits are denied benefits or punished for wrongfully receiving benefits. Secondly, a UBI would reward those who do valuable work, such as domestic work. Fraser (1997) and Pateman (2013) even argue that many partners are free riding on the unpaid work
15 An example is the ‘participatiewet’ in the Netherlands, which expects everyone to participate in society independent of their productive handicap, if they are to be eligible for welfare benefits (Minister van Sociale Zaken en Werkgelegenheid 2003).
15 of their spouse who is staying at home. These situations would be corrected by offering everyone a UBI. Thirdly, as mentioned before, a UBI would give the most vulnerable workers a stronger bargaining position (van Parijs and Vanderborght 2017, 103). Currently, those with well-paid jobs have better working conditions because their financial strength gives them a strong bargaining position. At the same time, they can benefit from the fact that less attractive jobs are done for a low price by those with a weak bargaining position. In a way, those with well-paid jobs are also free riding on those with a weak bargaining position. The introduction of a UBI and its associated increase in bargaining power for vulnerable workers would improve working conditions and result in more fair compensation of less attractive work. All these arguments show why the moral benefits of a UBI could outweigh the moral violation of the reciprocity principle.
Some might object you cannot simply weigh the moral benefits of a UBI against the violation of the reciprocity principle because the reciprocity principle is absolute; even one violation of the reciprocity principle is still unjust and morally unacceptable. However, even within the reciprocity principle, comparisons need to be made. A UBI might allow free riding on those who work by those who do not because of its unconditionality, but the absence of a UBI allows free riding on those with a weak bargaining position and on the spouses who perform unpaid domestic care. This is also a violation of the reciprocity principle. The same argument applies; if the moral benefits of a UBI, namely the diminishing of free riding on those with a weak bargaining position and on the spouses who perform unpaid domestic care, outweigh the moral violation of free riding on a UBI, then it is more just to implement a UBI. Any advocate of the reciprocity principle who does not acknowledge this argument is therefore inconsistent. Of course, whether the moral benefits of a UBI really outweigh the violation of the reciprocity principle, depends on the number of free riders. Van Parijs and Vanderborght (2017) argue that the number of free riders on a UBI is expected to be limited, but when is the number of free riders limited to the extent that their effect is morally negligible? With or without a UBI, the reciprocity principle will be violated. What is left is to examine to what extent these violations harm people. Free riding on a UBI harms people because those who do work and pay taxes are being economically taken advantage of by those who do not work or pay taxes, namely the free riders.16 If the number of free riders is limited, then the harm caused by the
implementation of a UBI is limited. Therefore, as a threshold, we will argue that the number of free riders is limited once their impact does not harm the economic feasibility of a UBI. In the
16 Van Parijs and Vanderborght argue that about 90% of production is the result of externalities from social capital, primarily in the form of inherited knowledge, which is collectively owned (2017, 105–7). Therefore, it is fair that 90% of income ought to be equally distributed through taxes, meaning people have a right to a UBI of up to 90% and no harm is done if people live of this rightfully owned UBI without making a contribution in return. However, this argument is controversial and I will not resort to it in this thesis.
16 next section, we will consider the free rider objection of economic feasibility, which holds that the expected free riding behaviour will indeed harm the economic feasibility of a UBI. In this thesis, we will prove that this is not necessarily true and that therefore, it is possible that the moral free rider objection should be mitigated compared to the moral benefits of a UBI.
1.3.3 Economic feasibility
Besides the moral objection against a UBI, there is an economic objection against it: Is it really feasible? Even if we assume that there could theoretically be enough money through taxation for a UBI to be affordable, we are still faced with two economic problems of feasibility.1718 A
UBI could be over-demanded because too many people decide to enjoy the leisure life at the expense of too few people who actually work. The UBI could also become underfunded, because too many people try to evade the high taxes needed to sustain a UBI, meaning too few people correctly pay their taxes. These are two ways a person can free ride on a UBI with the result of a feasibility problem; even though a UBI might theoretically be affordable, it could financially be difficult to maintain due to human behaviour.
Perhaps the most significant objection often voiced, it that the demand for a UBI would be too high. A UBI covers all basic needs, and progressive taxes make work financially less rewarding. Wouldn’t any rational person decide to enjoy leisure over working? Illustrated by a surfer who lies on the beach of Malibu all day, some object that a UBI cannot possibly be maintained if too many people decide to go surfing instead of working.
Van Parijs and Vanderborght admit that the high taxes needed to fund a UBI could lead to lower economic incentives to work (2017, 134). However, a UBI also has several features which could motivate people to work. In contrast to means-tested schemes, any money you earn comes on top of your UBI. Thus, although you might make less money on average with a UBI due to progressive taxes, working does pay off. As explained before, the financial security offered by a UBI gives employees stronger bargaining positions to improve wages and working conditions. Thus, although the taxes might rise, these would be partly offset by the higher wages and the prospects of better working conditions. Lastly, work is not only about earning money. It also gives you status and identity.
Williams (2017), however, would argue that, while the upper class might take pride in their work in itself, the middle class take pride in their job because it allows them to provide for their
17 While affordability looks at whether the money exist to fund a UBI, the feasibility looks at whether it would be possible to execute a UBI even if the money did exist because of the assumption that humans are rational.
18 Earlier on we established there are several ways to fund a UBI. However, we’ve not been able to explore the actual net cost of a UBI and thus the actual height of the taxes required. For the sake of the argument, we will assume that high taxes are needed to afford a UBI. If we manage to counter the free rider arguments, we will have done so even under the condition of high taxes.
17 families. If working is no longer needed to sustain yourself, would they still give it the same status or would they lose their prime incentive to work? Of course, again, any money you earn comes on top of a UBI and would thus allow you to provide even more for your family. However, the relative lack of incentive to do so might not outweigh the fact that you could also enjoy the financial security of a UBI and enjoy leisure. Thus, for the middle class the motivation to work could be severely dampened.
The upper class would be facing a different problem. They might take pride in their work, and even with progressive taxes, they stand to lose more if they stop working. After all, even after the progressive taxes are deducted from their means or income, they are still left with a relatively large sum of money compared to the white working class. However, the fact that they earn more also means that they have to pay more taxes overall. Their working conditions or financial security will not necessarily or relevantly improve, while their net income could decline steeply (van Parijs and Vanderborght 2017, 135–37).19 Thus they experience a steep
increase in taxes, which might not be offset by the UBI they receive in return, yet it is also financially unattractive to stop working. Instead, they might be more motivated to evade taxes. If especially the middle and higher class are motivated to stop working or to evade taxes to maintain their living style, then this would be highly problematic for the funding of a UBI, which would most likely predominantly rely on these people’s taxes. Without their contribution, a UBI would become unaffordable.
1.4 Collective action problem
Is there a way a UBI can become economically feasible, subsequently bringing the moral weight of the free rider objection below the threshold? Van Parijs and Vanderborght (2017) expect humans to reciprocally contribute upon receiving a UBI, meaning the level of free riding would be limited, but they do not offer a clear explanation as to why this would be the case. Therefore, we will look at the underlying assumptions which support the objection that people will free ride. In this section, we move to the framework of game theory by analysing the free rider objection of economic feasibility of a UBI as a collective action problem. We first explain what a collective action problem is and second how our previous findings (a UBI can be treated as a collective good, and is desirable for society yet economically unfeasible because of the rational behaviour to free ride) show that a UBI is faced with a collective action problem of economic feasibility. This allows us to expose the assumptions of the free rider objection of
19 As mentioned before, the worst off and middle class gain a larger proportion of their money from income, while the rich or upper class gain a larger portion of their money from capital (such as dividend, real estate and more) (Piketty 2016). An income tax thus targets the worst off and middle class more than the wealthy, while a capital tax targets the rich more.
18 economic feasibility. In the next chapter, we discuss two models of human behaviour, which both have a different take at these underlying assumptions.
1.4.1 A quick introduction to collective action problems
The easiest way to explain a collective action problem is by explaining a prisoner’s dilemma. In a prisoner’s dilemma, two prisoners (person X and Y) have committed a crime together. They are presented with a choice: They can sell out their partner, or they can remain silent (Ross 2019, sec. 2.4). With the second option, they choose to cooperate with their partner, while with the first choice, they choose to defect from such cooperation. Their choices have consequences which range in desirability from 0 to 3, with 3 being the best personal outcome (see illustration 1). Right now, they both have to serve 2 years in prison, and this will stay this way if both remain silent (2). If one chooses to betray his/her partner, whilst their partner remains silent, he/she is free to go (3). The consequence, however, is that their partner will have to serve 10 years (0). This can happen both ways. If they both try to betray each other, then they both have to serve 5 years (1).
Illustration 1: Prisoner’s dilemma Person X and Y can either betray (defect) or remain silent (cooperate). The personal preference for the different possible outcomes is as follows:
0. You are betrayed: 10 years 1. Both betray: 5 years
2. Both remain silent: 2 years
3. Only you betray: 0 years
Now, why does this create a dilemma? First of all, we need to make clear that we assume people will behave in their own best interest, i.e., that they will follow the order of their personal preferences because this is a rational thing to do (Ross 2019; Olson 2009). This assumption will be discussed in more detail in the second chapter. Following this assumption, there are two reasons for both of the prisoners to defect. First of all, they will both attempt to get their individual highest possible outcome, namely 3. This would mean that both defect to obtain an outcome of 3. Secondly, they might fear the other one is untrustworthy and thus defect to prevent themselves from ending up in the worst possible outcome (namely, being betrayed and having to serve 10 years). Both are rational reasons to defect. However, in a situation where both defect, they both end up with an outcome of 1. If both had remained silent, they
19 would have been better off with an outcome of 2. This is the dilemma. How can a rational decision lead to a suboptimal outcome?
If we translate this to a bigger group of people, we are presented with a collective action problem as can be seen in illustration 2 below (Ross 2019, sec. 2.4). Let’s take a new example. We have a community garden. The garden could give us all great joy if everyone puts a little bit of effort into it (2). However, you could also enjoy the benefits of having a community garden without putting in any effort (3). Conversely, if someone else were to enjoy the benefits without putting in any effort, then you would have to put in a lot more effort while being taken advantage of (0). But if everyone is waiting for someone else to put in the effort, then the community garden will never be utilized (1). You’ve saved up on the effort, but missed out on the chance of enriching your surroundings.
Illustration 2: Collective action problem
A collective action problem is an N>2 Prisoner’s Dilemma, meaning the same values apply, but now more than two people are faced with the choice offered. The numbers represent the personal preference for an outcome.
A collective action problem can vary in size from a community to the state and its citizens (Olson 2009). With an increase in the size of the collective, a third reason appears why people would defect. Good behaviour is unlikely to be rewarded or appreciated, and thus, people are unlikely to cooperate as they will not be rewarded for this. On the other hand, bad behaviour is unlikely to be noticed or to get punished, which makes it more likely for people to defect. In other words, there are no external incentives to cooperate.
What collective action problems have in common is that: a) Some collective good can be achieved (2).
b) You can also achieve it without putting in the effort (3), thus ‘free riding’ on others who will have to put in more effort while being taken advantage of (0).
c) Because everyone is rational, no one will put in the effort, and the collective good will not be realized (1).
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1.4.2 UBI’s economic feasibility as a collective action problem
A UBI faces a collective action problem of economic feasibility. Although a UBI would be good for society, there are still rational reasons for people not to work or pay taxes, thus preventing a UBI from succeeding. One can object that a UBI is not economically feasible because of free riding behaviour, as Van Parijs and Vanderborght (2017) illustrated. The argument goes that, a) although a UBI (which can be treated as a collective good) is desirable, b) it would be rational for individuals to free ride on it. c) If too many people free ride (which will happen, because it’s the rational thing to do) a UBI will not be economically feasible. Thus, we would end up in the suboptimal outcome without a UBI.
Why would it be rational for individuals to free ride? Let’s look at illustration 2 again. We are currently in situation D, which, again, need not be a bad situation. It is simply a suboptimal situation. Implementing a UBI would bring us to situation A, due to its beneficial consequences discussed in section 1.2. To achieve A, enough (able-bodied) people need to contribute in a valuable and monetary way. In practice, it is possible for some not to contribute. However, if too many people decide not to contribute, then the UBI will no longer be affordable, and we will fall back to situation D. Why would too many people decide not to contribute? Personally, the best outcome would be to receive a UBI without having to contribute to it (B or C). Besides, if you were to contribute, who would say others wouldn’t free ride on your contribution? It seems unfair to work hard only so that others can enjoy their leisure. Moreover, the contribution of any individual would hardly be missed, let alone be applauded. Why then would you not give into temptation, either through increased leisure or tax evasion, to protect yourself against other free riders? If every rational person reasons like that, we would be left with too few people paying working and paying taxes. The UBI would become unaffordable, and we would end up in the suboptimal outcome of situation D where, as a result of rational human behaviour, a UBI would not be economically feasible.
Conclusion
In this chapter, we discussed that a UBI is an individual, universal and unconditional monthly payment offering a minimum of financial security, which is funded by i.a. progressive taxes. We asserted that a UBI can be treated as a desirable collective good; by eradicating poverty and reducing inequality, it would enhance social capital and have a stabilizing effect on our democracy and the economy. It would empower especially the more vulnerable workers, which would increase labour quality and mobility and which would lead to an increase of valuable jobs in exchange for bullshit jobs. Due to its simplicity (everyone gets it, universally and unconditionally) it would be far more humane and efficient relative to current cost, bureaucracy and stigmatization of welfare benefits.
21 However, the free rider argument left us with a moral and an economic objection. One could morally object, based on the reciprocity principle, that it is unfair for people to benefit from a UBI without contributing to one’s best ability in return at the expense of others (free riding). One could economically object that a UBI is not feasible: If too many people do not work or pay taxes, it will become unaffordable. The economic burden on those who do still work and pay taxes would become too high. Whether or not these objections hold, depends on the number of free riders. If this is rather low, then a UBI could be economically feasible because enough people work and pay taxes. Under those circumstances, it would also be morally acceptable, or even desirable, because the moral benefits of a UBI would outweigh the violation of the reciprocity principle.
Although Van Parijs and Vanderborght (2017) argued that the number of free riders is expected to be limited, they offered little theoretical founding to their claim. Therefore, we moved the discussion to the framework of game theory to analyse the underlying assumptions which support the free rider objection. We analysed the free rider objection of economic feasibility as a collective action problem. A UBI can be treated as a desirable collective good. However, because it is rational for every individual to enjoy a UBI without contributing, we will end up in a situation where a UBI becomes unaffordable. The assumption in this game theoretical analysis of expected behaviour in collective action is that humans will always behave rationally. This assumption is based on the human behaviour model called Logic of Collective Action by Olson (2009). In the next chapter, we will explore this Logic and an alternative; the Logic of Reciprocity by Kahan (2002).
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2. Two models of human behaviour
In this chapter, we will discuss two models of human behaviour. Olson (2009) offers the Logic of Collective Action in response to what he calls the ‘traditional theory’, which we will discuss in the first section. The traditional theory argues that humans are naturally and voluntarily drawn to collaboration. Olson, on the other hand, argues that rational people will try to obtain the result of collaboration without participating in or contributing to it themselves if contributing is not mandatory or incentivized. Kahan (2002) offers the Logic of Reciprocity in response to the Logic of Collective Action, which we will discuss in the second section. He argues that people aren’t just rationally motivated, but rather that they are morally and emotionally motivated to cooperate in a collaboration. In the third section, we reduce both models to the narrative of game theory and evaluate game theoretical experimental evidence to see which model reflects the results best. By doing so, we consider which model offers a more accurate prediction of human behaviour in collective action.
The explanation in this chapter serves as a theoretical bridge between chapter one and chapter three. In chapter one, we showed how a UBI could be seen as a collective action problem of economic feasibility. The underlying assumptions about human behaviour leading up to this conclusion are funded in the Logic of Collective Action. By opposing the foundation of these assumptions with the Logic of Reciprocity, we lay the groundwork for finding a potential solution to the collective action problem of economic feasibility in chapter three.
2.1 Logic of Collective Action
The Logic of Collective Action holds that ‘rational, self-interested individuals will not act to achieve their common or group interest’ (Olson 2009). By stating this, Olson opposed the then dominant traditional theory of collective action which presumed that people moved naturally towards collaboration, either by instinct or simply because it proved effective. In this section, we will explain how Olson comes to the conclusion that the ‘traditional theory’ is wanting. First, we will discuss the purpose of groups, namely a common interest in a collective good. Secondly, we explain the nature of collective goods. This will help clarify why Olson opposes the traditional theory, which we discuss in the third section. Lastly, we discuss Olson’s theory of collective action.
2.1.1 Common interests of collectives
In his search for an explanation of collective action, Olson begins to establish what the purpose of groups is who exercise collective behaviour (2009, 5). As an example of a group, he takes organizations, because these are the most common form of people who gather as a group to
