Experiment shows that giving people money reduces psychological stress!

An article in the New Yorker trumpets the promising results of a citywide basic income experiment. A few paragraphs into the article we find this statement of the study's objectives:

The study set out to prove that a basic income could, according to the research plan, “lead to reductions in monthly income volatility and provide greater income sufficiency, which will in turn lead to reduced psychological stress and improved physical functioning.”

Of course, in our world of empiricism, we have to give money to people to see if that will lead to the hoped-for results.

Well, if your income is low, then $500/month has to lead to less volatility. I think that the math basically guarantees it. And, if your income is low, does having a guaranteed $500/month reduce your psychological stress? Let me tell you, my income is greater than the people participating in this study, and $500/month would even reduce my psychological stress!

Of course, this result comes in an economics environment which produces a Nobel Prize (actually, the The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel) for finding that:

Making the schoolwork more relevant to students, working closely with the neediest students and holding teachers accountable — by putting them on short-term contracts, for example — were more effective in countries where teachers often don’t bother showing up for work.

Another amazing result, that making schoolwork relevant and teachers accountable led to improvements. No economist in the Austrian school would have thought to bother testing for these obvious outcomes. No wonder Israel Kirzner has not received the prize!

As a final comment on the Stockton experiment, I quote Benjamin Franklin, who said:

I am for doing good to the poor, but...I think the best way of doing good to the poor, is not making them easy in poverty, but leading or driving them out of it. I observed...that the more public provisions were made for the poor, the less they provided for themselves, and of course became poorer. And, on the contrary, the less was done for them, the more they did for themselves, and became richer.

These observations were also made by Alexis de Tocqueville in his Memoir On Pauperism: Does public charity produce an idle and dependant class of society?.

Is there a place for thinking in today's economics? It seems doubtful.

Liberalism has not failed

Jonah Goldberg, conservative pundit, has written Liberalism has not failed, a response to Patrick Deneen's book, Why Liberalism Failed. While I generally have a warm spot in my heart for Goldberg, he makes an unnecessary concession:

America's troubles today are inextricably linked with the breakdown of the family, local institutions, communities, organized religion and social trust. Such deterioration is driven, at least in part, by the relentless individualistic logic of Liberalism and the market (Joseph Schumpeter made this point about markets as far back as the 1940s).

I think that is baloney. It's primarily driven by the steady elimination of consequences that teach people that they have made mistakes. This elimination has taken place primarily through government programs like unemployment insurance, Social Security, and the galaxy of welfare programs that make ill-advised behavior bearable. On top of that, the steady erosion of religion by the forces of rationality has eliminated consequences in the afterlife. These things have nothing to do with the "relentless individualistic logic of Liberalism" and everything to do with the state's increasing position as a universal problem solver.