I have referred to a basic income many times here on Continuations so now it is time to flush out a bit more how this could ever possibly work. Many people do simple back of the envelope math like saying there are 319 million people in the US, so if you paid each of them $10K per year that would be $3.2 trillion which exceeds the annual federal tax base (which is about $2.7 trillion) and then quickly conclude that the whole thing is a lost cause.

My basic contention though is that the amounts for a basic income could be significantly less and still achieve the goals of letting local activity flourish. So with that in mind here is an experiment I would like to see: have the city of Detroit recruit up to a thousand people to one of their destitute areas with a basic income set at something like $400 per month. So the monthly cost of the experiment including some initial overhead might be $500K or $6 million for a full year. I believe the funds for that could be raised from people like myself who are interested in seeing such an experiment.

Now imagine three or four people sharing a house. They could easily afford the utility bill (unlike current situation in Detroit where almost half of households cannot even pay their water bill). As part of the experiment the city should also work to provide high speed internet at only slightly above cost in a utility model. By picking a relatively compact area this could be done wirelessly as a start to reduce the initial set up cost and time. Eventually if the experiment works the network can be expanded. There are plenty of houses in Detroit that are being either razed entirely or auctioned off in the low thousands of dollars, so housing should be the least of issues. Especially because people with a basic income would be excellent credit risks on a P2P lending platform such as Lending Club.

Here are two other components of the experiment that I think would be critical. First, there should be relatively little regulation on activity for instance to make it possible to do local farming, operate small schools, drive others around, etc. exactly the kind of activities that used to historically allow for people in communities to help each other. Second, I believe that participants for this experiment should be recruited and screened. I am not sure exactly what the right criteria would be but ideally they generate some diversity in interests and backgrounds (eg include people who already know how to renovate houses). One could think of this as a colony, not in a new geographic area but in a new social arrangement. Therefore initial recruitment is essential to increase the likelihood of success.

Would love to hear from anyone who thinks this kind of experiment would be interesting. Please also provide any and all feedback on the conditions for such an experiment that you think make sense (or don’t).