[Opinion] The 'Path of Slavery' Cast Over Nationwide Disaster Relief Payments

Professor Kim Hong-beom, Department of Economics, Gyeongsang National University

Voices from key ruling party figures calling for nationwide disaster relief payments again this spring have poured out for fifteen days since the beginning of the new year. Thanks to this, the ruling party's stance seems to have easily settled on universal payments to be made once the novel coronavirus disease (COVID-19) situation calms down. This is despite the fact that, amid the deepening K-shaped polarization, universal payments to all citizens are extremely unfair and inefficient compared to targeted payments to affected groups.

In fact, there are quite a few politicians from both ruling and opposition parties who quietly hope that this universal disaster relief payment theory will be the prologue to the era of basic income. With prolonged high unemployment and low growth compounded by COVID-19, if universal payments are implemented again, the entire country might become blinded by cash welfare. Let’s imagine a world where all citizens receive basic income support regularly, whether they work or not. A world where the state directly takes responsibility for citizens' livelihoods. Would this be sustainable? Would it be a wonderful utopia?

First, a world of basic income is unsustainable. The number of people who do nothing and just live off others will gradually increase. If a large portion of the money I earn by working goes out as taxes to support you who do not work, would I be motivated to work? You, who quit working, might have become lucky and suddenly rich by investing that money in real estate, stocks, or Bitcoin, but is there any reason why I, who work diligently and save, should not follow your example and end up a sudden pauper?

Meanwhile, guaranteeing citizens' livelihoods requires a huge and continuous financial resource. There is no government on Earth that can keep raising taxes indefinitely while the private sector gradually ceases production activities. Nor can the government recklessly increase national debt risking sovereign default. Unless the bizarre logic of Modern Monetary Theory (MMT), which claims the state can print unlimited money, is correct, the government cannot defy the world's principle that there is no free lunch.

Second, a world of basic income is not a utopia but a dreadful dystopia. Basic income is an excellent bait for the government to regulate people who do not fit its preferences in the name of the state. It is quick for the government to control citizens under the pretext of livelihood guarantees. This is why basic income and totalitarianism go hand in hand.

Plato once warned about the dysfunctions of democracy. Democratic citizens, obsessed with egalitarianism, lose the ability to distinguish right from wrong and "live indulging in momentary pleasures day by day." This is exactly the case nowadays, with public anger and despair over the existing economic order and inequality accumulating amid global crises and COVID-19. Populist politicians never miss such opportunities. They eagerly fill the shortsighted desires of the public with cash, pushing society into cash addiction. They often exacerbate social conflicts just to gain votes. All for the acquisition and maintenance of power. Meanwhile, in many countries around the world, the politicization of laws (rule by law) is causing the collapse of the rule of law. This is due to the deepening dependence of citizens on the state. In such circumstances, the idea of introducing basic income is chilling just to think about.

In the aftermath of the Great Depression, democracy and capitalism were severely damaged in the early 1940s. The 'road to serfdom' sternly warned by Friedrich Hayek, who later won the Nobel Prize in Economics, looms again before us today amid the aftermath of a great disaster. Politicians here and there beckon to all citizens. They urge to grab the meager cash and head straight to Animal Farm. What can be done? Remaining a hungry Tess is the only way for the country to survive.

[Kim Hongbeom, Professor of Economics, Gyeongsang National University]