Getting Tough or Rolling Back the State? Why Neoliberals Disagreed on a Guaranteed Minimum Income

Abstract

This article explores why neoliberals associated with the Mont Pelerin Society disagreed on the legitimacy of a guaranteed income in the 1960s and 1970s in the United States. Participants in this debate are categorized along a spectrum between “libertarians” like Milton Friedman and George Stigler, who favoured a minimum-income plan, and “paternalists” like Henry Hazlitt, who opposed one in any form. While these figures were united in their desire to roll back the welfare state, the two means they advocated to achieve this task were in stark contradiction in their assumptions. Divisions over a guaranteed income commonly reflected wider disagreements on economic methodology, consumer choice, citizenship, policing, and the moral implications of dependency. Previous analysts have tended to emphasize unity amongst neoliberals on the model of the “paternalist” paradigm. By recovering the origins of the libertarian paradigm, this article demonstrates instead that there was never an orthodox neoliberal approach to welfare reform. “What does neoliberal welfare reform do?” is shown to be a question requiring more complex answers than have been recognized in the literature.