In his 1962 book Capitalism and Freedom, Friedman acknowledged that some form of welfare was necessary in capitalist societies and that the state would likely play a role in its provision. The trick was to imagine a very different, radically improved, and more efficient form of welfare—what Friedman’s son, David, also an economist, calls “libertarian redistributionism.”
What kind of program could help protect every citizen from destitution without granting excessive power to bureaucrats, creating disincentives to work, and clogging up the free-market economy, as the modern welfare state has done? Friedman’s answer was the negative income tax, or NIT.
Read More: City Journal: Why Not a Negative Income Tax?:
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