Canada’s forgotten universal basic income experiment
According to the article, it stopped when a recession hit and it bust its budget.
Here is the actual program termination paragraph from the article for context:
However, it was abruptly stopped in 1979, a casualty of the political and economic turmoil of the mid-to late-1970s. A series of oil price shocks had led to rampant inflation and increasing levels of unemployment. This meant that by 1979, far more families in Dauphin were seeking assistance than the experiment had budgeted for, while the scheme’s payouts were rising with the inflation rate.
I remember when the cost of primary energy skyrocketed in the mid and late 70s. That was the era of "stagflation" and the use of high interest rates to quell it. We had a mortgage that was north of 15% interest rate.
So it is correct that the program was terminated because of the unintended effects of historically high interest rates and a doubling (IIRC) of energy prices.
Some other quotes from the article:
There was an 8.5% decline in hospitalisations – primarily because there were fewer alcohol-related accidents and hospitalisations due to mental health issues – and a reduction in visits to family physicians.
Joy Taylor, who was 18 and newly married when the scheme began, remembers that people had much less to worry about financially during the course of the experiment, which improved their wellbeing. Her husband was suddenly able to get a loan to open a local record store, with banks being more willing to lend money to small businesses because of the guaranteed payments.
There was also an increase in the number of adolescents completing high school. Before and after the experiment, Dauphin students – like many in rural towns across Manitoba – were less likely to finish school than those in the city of Winnipeg, with boys often leaving at 16 and getting jobs on farms or in factories. However, over the course of those four years, they were actually more likely to graduate than Winnipeg students. In 1976, 100% of Dauphin students enrolled for their final year of school.
“Very often these people were the first in their family who’d ever finished high school,” says Forget. “When Mincome came along, families decided they could support their sons in school just a little bit longer, and, in some ways, I think that’s the most exciting result because we saw that investment in human capital.”
Other families who were on the programme at the time remember that certain things were suddenly more affordable. For Eric Richardson, the youngest of six children who was aged 10 when the experiment began, the introduction of basic income meant a trip to the dentist for the first time. “Normally, you didn’t get to go until you were old enough )o pay for it yourself,” he says. “I remember it very well because I had 10 cavities and our dentist would drill your teeth without freezing.”
And when the program was ended:
But when the experiment ended in 1979, the improvements which had been seen in health and education soon returned to how things had been in 1974. Taylor remembers how many of the small businesses that had sprung up over the preceding four years began to vanish. Her husband was forced to close their shop, and the couple soon left Dauphin for good.
So I'm going to go on a limb here: if/if the prime interest rate wasn't north of 12% AND primary energy costs hadn't doubled, we would have a program that lasted long enough to have good, solid long term data on avoided social costs, etc.
With the age of renewable energy now here, we will never see an increase in the cost of energy for the rest of our lives.
I'm also pretty sure prime rates will not be jacked up into the mid double digits.
So, with the two primary reasons that were the catalyst for ending the original program no longer a concern, I would say that using the termination of this particular UBI example as proof that it doesn't work is not a valid argument.
