This expert says basic income can’t live up to its promise

Basic income—unconditional cash transfers to people—has been pitched as the solution to so many of our problems. Eliminating poverty, sparking entrepreneurship, empowering people to pursue their passions—it could do it all, its boosters claim.

But not everyone is so optimistic about the idea. Lindsay Tedds is an associate professor at the University of Calgary’s Department of Economics, and co-authored the book Basic Income and a Just Society: Policy Choices for Canada’s Social Safety Net. This week she sat down with us to make her case. 

The Peak: What is basic income and how would it work in practice?

Lindsay Tedds: “It's not just one thing. We sort of conceptualize it as a class of cash transfers. The idea behind it is that you want to get money into the hands of people in a less stigmatizing way. But other than that, there is a variety of different variants to it.”

What’s the main problem with a basic income in your view?

LT: “People need different things at different times of their lives. Sometimes it's income, but sometimes it's essential services. We can't dismantle essential public services in order to pay for it. And that includes legal services, affordable housing, health care, K through 12 education, and post-secondary education. There are all of these things that lead to a very functional society. And if we try to replace all of these things with just one program, a basic income, there are going to be lots of people who are left worse off.”

What does the research show about how basic income impacts entrepreneurship?

LT: “Yeah, we actually did a study on it, and there's a chapter in our book on this specific issue. And I just want to say it's complicated. We do know that the more support you have, the easier it is to take risks. But entrepreneurship is not as simple as having money. It's also about exposure. There have been some great studies that show you're more likely to be an entrepreneur if your parent’s an entrepreneur. You're more likely to be an entrepreneur if you were mentored in high school by an entrepreneur And the evidence putting all of that together would say that there are more important drivers to entrepreneurship than just having income to support them.”

The interview excerpts above have been lightly edited for clarity and length. Listen to the full conversation here.