Market Mad House

In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. Friedrich Nietzsche

My Thoughts

Is Basic Income Good for Mental Health

Basic income is a potential solution to the mental health crisis. There is limited scientific research that indicates financial security can improve mental health.

Back in the 1970s the Canadian government provided a basic income of $16,000 CAD [$12,424 USD today] to the residents of Dauphin, Manitoba. The rate of hospitalizations for mental illnessin Dauphin fell by 8.5% during the basic income experiment, Dr. Evelyn Forget of the University of Manitoba’s medical school calculated.

Forget’s analysis indicates that basic income is good for mental health, author Johann Hari claimed in a Vice Canada article, and a book called Lost Connections.[1] Hari’s claims are far from convincing but they are well worth considering.

What is the Connection between Income and Mental Illness?

Anybody who has ever been short of money knows that financial problems can lead to anxiety and other mental troubles. There are also studies that show the poor are more likely to suffer from mental problems and substance abuse.

There are extenuating factors to consider here, the more affluent often have the means to cover up their mental illness and similar problems. A wealthy executive, a tenured college professor, or a movie star can quietly can take time off from work; and go on “vacation,” if he or she feels a breakdown coming on. A single mother that works at McDonald’s has no such luxury.

Some of the “mental-illness hospitalizations” eliminated by the Dauphin basic income were undoubtedly poor people seeking a free or low-cost heated room for the winter. Dauphin is in north central Manitoba where the winters can be very unpleasant.

Likewise there is often more stigma associated with mental illness among the working class than the rich. A crazy rich man is simply eccentric, a weird working-class guy is a “dangerous nut” even if both are legally sane and completely harmless.

Affluent people; and those with health insurance, are often in a position to pay for mental health treatment or drug rehab. The factory worker or the cab driver cannot.

Other causes of mental problems and depression among the less affluent include being forced to work at a boring or unpleasant or stressful job because of limited finances. A related problem is that the working poor cannot afford to take time off from a shitty job, or tell an abusive or stupid boss to go to hell.

Are Social Services Bureaucrats causing Mental Illness?

A final cause of stress and anxiety to the poor is our social services bureaucracy. Many poor people are at the mercy of bureaucrats or computer systems that can decide to cut off vital benefits like health insurance at any time.

If benefits get cut off it can mean death or disaster for many poor families. A benefit cutoff will increase stress because it often takes days or weeks of dealing with bureaucrats and paperwork to get benefits restarted.

To make matters worse much of the benefit delivery technology is obsolete and often breaks down, meaning that people cannot receive benefits they are entitled to.[2] Many of the people at food banks and other charities are legally entitled to benefits but cannot access them because of the flawed delivery system.

Can Basic Income Fix Mental Illness

The biggest problem is that there is little or no research or data about basic income’s relationship to mental health. Such data is limited because social scientists are afraid to offend their benefactors in the social-services bureaucracies.

Something to remember is that most social scientists make their living teaching college courses to people studying to be social services bureaucrats. Research that shows simply dispensing money to the poor is the most effective solution to social problems threatens social-services bureaucrats’ jobs. It also calls all the tax money invested in the social services bureaucracy into question.

Disturbingly, Hari reported that the Canadian social-sciences establishment had the data about the Dauphin experiment for 40 years and simply ignored it. The data was about to be thrown away when Forget found and analyzed it. The Dauphin experiment was abruptly shut down in the 1970s and the results of it never properly analyzed.

Cynics will say that social services bureaucrats want high rates of problems like substance abuse and mental illness among the poor because it provides more work and money for them. Liberal and leftist politicians and journalists that want to help the poor need to rethink their relationship with the social service services bureaucracy and its enablers in academia.


Can Basic Income Lead to Better Mental Health?

Basic income would not cure all mental health problems, but it can alleviate or prevent some of them.

One benefit of basic income is that it might enable more people to seek treatment for mental health problems. Others would be able to take time off from work or school to seek treatment or simply get a rest.

Basic income would enable some people to remove themselves from situations that are bad for mental health. A person might be able to quit a lousy job, leave an abusive marriage or relationship, or move away from an obnoxious roommate if basic income was available.

There are no simple solutions for mental illness but basic income would certainly eliminate some of its causes. It would certainly be a cheaper, more efficient, and more humane way of dealing with the problem than drugging people, “psychotherapy,” or forced hospitalizations.

How Basic Income Might Work

A good proposal for basic income is found in Facebook (NASDAQ: FB) cofounder, Chris Hughes’ intelligent book Fair Shot: Rethinking Inequality and How We Earn. Hughes’ plan is to tax the rich and pay each adult that makes less than $50,000 a year a $500 month basic income.

My suggestion would be to pay every person in the United States with an individual income of under $60,000 a year $500 a month. I chose $60,000 because the median household in the USA in 2017 was $57,230 according to the U.S. Census Bureau. That means the vast majority of Americans would receive the basic income.

There would be no age limits; every individual that makes less than $60,000 a year can receive the basic income regardless of age. The basic income for children under 18 would go to their parents or legal guardians.

That would give working mothers and single moms, who are more likely to be poor more income. For example a single mother with two kids would receive $1,500 a month. A married couple with two kids would receive $2,000. It is paid on an individual basis so that stay-at-home moms would receive some income for their vital work.

Persons would apply simply by filing an income tax return, if their individual income was under $60,000 a year they would receive the basic income. Parents would get basic income for their children by listing their kids on the tax return. Some kinds of income including Social Security and veteran’s pensions would not count toward the $60,000 for basic income.

Note: I would like to see all honorably discharged veterans receive $1,000 a month in basic income as a reward for their service. That would be in addition to other veterans’ benefits.

If individuals chose not to receive the $500 a month the money would be invested in the U.S. Sovereign Wealth Fund. The Wealth Fund would invest that money, royalties from government-owned patents, royalties on oil and mineral rights, and taxes on corporate income and high-individual incomes in equities, securities, and venture capital to raise more money for the country.

Benefits of Basic Income

This system would have a number of benefits including:

  • It would enable all Americans to participate in and benefit from the capitalist economy. Many Americans are no longer benefiting from our wondrous and incredibly productive economy.


  • It would help the poor and redistribute the wealth without creating a massive welfare bureaucracy.


  • It would empower individuals because they and not social services bureaucrats would decide how to spend the money. The poor would be in charge of their money and their lives.

  • A basic income can be delivered by simple electronic funds transfer (EFT) to bank accounts like Social Security is or directly to the poor via an Apple Pay type app or Visa or MasterCard reloadable debit cards. Such systems are well proven and highly effectively.


  • Basic income would stimulate the economy by putting cash in the hands of average people that would actually spend it.


  • Basic income will reach groups left out of our economy including working-class women, rural whites, the homeless, the poor, the disabled, the mentally ill, African Americas, young people, children, and the elderly.


  • Basic income can alleviate some of the causes of mental illness including the stress and anxiety produced by the modern economy.

We must recognize that our economy creates high levels of stress, anxiety, and insecurity that can contribute to mental illness. Understanding that fact can help us deal with the economic causes of mental illness. No, basic income would not cure all mental illness but it would certainly eliminate some of it.

Conservatives should take a close look at Johann Hari’s arguments. They might be of use to many on the right including libertarians that oppose bureaucratic expansion and Second-Amendment activists trying to understand the cause of mass shootings. The mental illness caused by income inequality is breeding violence and undermining families and traditional society. It is time we realized that our economy is breeding mental illness and did something about it.

[1] See Chapter 22 of Lost Connections for a detailed version of Hari’s argument.

[2] For a good overview of the nightmare modern social services often is see Automating Inequality: How High-Tech Tools Profile, Police, and Punish the Poor by Virginia Eubanks available from Amazon.