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Hillary Clinton opposes a policy that gives people free money — here's what she gets wrong

hillary clinton
Brian Snyder/Reuters

Hillary Clinton says she isn't prepared to defend a system of government in which people receive monthly checks, no strings attached, but her reasons for opposition may be misguided.

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In a recent interview with Daniel Roth, the executive editor of LinkedIn, Clinton was asked about her stance on a radical policy idea known as "basic income."

Under basic income, everyone would receive the same amount of money in addition to their existing salaries. The goal would be to provide a social safety net that prevents people from slipping into poverty, thereby strengthening the population as a whole.

It's an idea that has swept through Europe and Silicon Valley over the last year. Most recently, President Obama hinted that a program like basic income could be quite useful (and perhaps necessary) once robotic automation replaces most of the American workforce.

But Clinton isn't "ready to go there" right now, she told Roth.

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Clinton wants to create opportunities for the disadvantaged without "just giving up and saying, 'Okay, fine ... the rest of us who are producing income, we've got to ... distribute it and you don't really have to do anything anymore.'"

The problem with that line of thinking is that basic income isn't necessarily a form of giving up, as Clinton alludes. "Giving up" suggests people must work in order to live — that society has tried everything else, so the only option left is to just give the money away.

But basic income rejects the idea that work is a necessity. If there is enough wealth to go around, people don't need to sell their labor to put food on the table (at least any more than they want to). Governments can just levy higher taxes for those at the top and distribute the extra money freely.

In any case, Clinton's argument that giving people money absolves them of working is also misguided. The evidence suggests basic income only actually absolves people of work they aren't passionate about. It also doesn't make people lazy, as some critics suggest.

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Consider the dozen-plus experiments carried out around the world in places like Kenya, India, Kuwait, and Malawi. In India, for example, a year-long program in which 6,000 people received cash transfers led to gains in nutrition, livestock, school attendance, and personal savings. In Kenya, the charity GiveDirectly has seen its cash transfers result in improved psychological health, higher incomes, and better outcomes for children.

Clinton admits the model is gaining traction.

"I know that there's been a great debate going on in the press between those who favor it, those who don't, those who are curious, asking questions," she said. "So I'm gonna keep an open mind, but right now I think that we've got to rebuild people's confidence."

As of now, the furthest she'll go is pushing for an earned income tax credit, which essentially uses a big income tax refund as a way to incentivize people living close to the poverty line to find work.

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"I was raised by a small businessman father," she said. "So I believe in individual responsibility and self-sufficiency and all the rest of it, but I also recognize how lucky I am, people like us are, because, you know, the luck of the draw."

The great promise of basic income is that someday luck will exit the equation altogether.

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