Rethinking a universal basic income

For many people, the time has come for a universal basic income (UBI) – a faintly radical idea with momentum and widespread support A wide range of commentators from all sides of the political spectrum have put their support behind the model. Scandinavian and Swiss social democracies have at least mooted it and there is a strong rumor Jeremy Corbyn supports it. The Dutch city of Utrecht has said they might give it a try. And now two of the most conservative cities in Canada, Calgary and Edmonton, are testing it out, along with a number of developing countries, including recently in rural India and Namibia.

The idea behind a universal basic income is quite simple: every single person receives a minimum cash income from the government. The money is unconditional, therefore not dependent on other income, and it can be freely spent.

As the swathes of pro UBI commentators have pointed out, there are many possible upsides (not to mention the positive impact on this author’s poor financial situation). The UBI would immediately reduce some poverty; it is also argued that it will empower workers by making them less dependent on income from wage labour. A UBI would eliminate, too, the many punitive aspects and related problems for the means-tested welfare benefits, and remove inefficient state bureaucracy (hello Centrelink!). Further, it would be a boon for those who do care work, predominantly women. Moreover, the UBI could help develop space and time for the innate creativity of humans and creative expression.

But can the UBI give all that is promised? I no longer think so. Indeed, the model currently proposed has the potential to strengthen racist policies, increase exploitation of migrants, escalate the environmental impacts of our current economic system, and further wealth disparity both locally and globally.

Crucially, we can already address some of the issues a UBI is seeking to resolve. We already have, for instance, a very imperfect UBI known as welfare. Why not improve this while reducing work hours? Or is the UBI simply a call for better welfare?

Welfare, as we know it, is the state’s effort to regulate the market’s negative impacts while continuing to drive consumption and grease the wheels of the market. But who says a UBI will not just grease these wheels more? In their book Inventing the future, Nick Srnicek and Alex Williams don’t identify the major problem of capitalism as its inherent inequality. For them, the problem is how to

liberate humanity from the drudgery of work, the dependence on wage labour, and submission of our lives to a boss.

But I fail to see how a UBI could do this without a wholesale overhaul of capitalism – and I’m not the only one. As Sam Kriss writes:

The result could be fully monstrous: a bloated, gluttonous ruling class engaged in limitless production, and recapturing any losses when the new peons come to spend their universal basic pittance.

A UBI system would not breathe life into new political action, notes Paulo Virno, but ‘simply confirm the paralysis’. He adds that the ‘fervent litany on the citizen’s income is equivalent to a discourse on a “more just society”. And discourses on a “more just society” we know are often the alibi of apathy or of the sly winking of petty trade.’

One of the most obvious problems that has rarely been discussed is how will it be extended to the immigrant population? And if so, will it be extended to all of them? Because if it isn’t (which seems unlikely in Australia, Scandinavia or Switzerland) then this will quickly create an underclass of migrant workers who will be forced to work for less, driving wages down across the board. Not only would such a policy produce more racist discourse and encourage a fear of migrants’ ‘stealing our money’, the UBI would aid in the further exploitation of migrant workers in rich nations.

As this past week’s media coverage has shown, one of the key problems we face today in Australia is unaffordable housing. Yet, a UBI would make the situation worse, driving more money into the hands of extortionists (that is, the rentier class) rather than setting up a situation where unoccupied housing was rented out cheaply, or perhaps funnelled into social housing or some other method to break the housing monopoly.

Currently, an average employee already shares the products of their labour with the owner of their workplace, as well as sharing their income with the state through taxes. A UBI means income would benefit not only the needy, but parasitic bankers, landowners and the many existing elite. Only those who work are producing anything of value, but under a UBI this would be reclaimed by everyone including the wealthy, aggravating the exploitation of an already exploitative system.

Historical attempts at implementations of similar programs can also be instructive. In nineteenth-century England, the Speenhamland system was an attempt to mitigate the poverty in rural England by topping up workers’ wages. Like the basic income, it introduced a social and economic innovation of a ‘right to live’ and attempted to enforce this right through a basic income tied to the price of bread. It failed, for many reasons, but chief among them was that the system allowed employers to pay below subsistence wages so workers’ income was unchanged. As Karl Polanyi wrote (hat tip to Jehu):

To later generations nothing could have been more patent than the mutual incompatibility of institutions like the wage system and the ‘right to live’, or, in other words, than the impossibility of a functioning capitalistic order as long as wages were subsidized from public funds.

Obviously this is not nineteenth-century England, though the lesson is clear: if the level of basic income is not enough to eliminate the need to work (which seems to be the case for the majority of people), workers would still need to labour for a boss, and wealth gap between the two would remain largely the same. Additionally, a UBI could depress wages since workers would require less money from their jobs to subsist. While the cost of living in this country continues to rise, the minimum wage – and welfare payments! – remain stagnant. This situation would not improve under a UBI; instead, the UBI would chip away at the current, very insufficient funds for social programs. Even former US Treasury secretary Larry Summers admitted that ‘[i]t would be hard to finance [a UBI] in a way that wouldn’t burden the programs that help the poor’.

So what would be necessary for a UBI to be more successful? First, it must be linked to other existing struggles, such as that around the reduction of working hours with no salary reduction, the fight for free health and education, investment in green infrastructure and energy, and the expansion of social policy programs. Second, it must also provide support and safety nets for migrant workers to ensure that it does not exploit migrant labour, locally and internationally.

Although it has some appeal, the UBI is a risky idea. The general effects of the reduction of labour hours are far more predictable than the universal basic income (or its dancing partner, complete automation). Such a reduction would also decrease competition for jobs.

If a stated goal of a UBI is to eliminate poverty, wouldn’t it be better to direct public funds to those needs instead of giving money to those in society who don’t need it? And instead of having the state distribute money because there aren’t enough jobs, why not reduce the number of labour hours necessary by reducing the working week, and increase compensation for women (and men) engaged in unpaid labour?

Let me add that I’m not completely dismissing the idea of a UBI, especially since it has so much mainstream attention and support, which is quite rare for left-wing economic plans. Instead, I’m saying that the UBI must continue to be debated and the idea of it refined, in order to address the brutality of our current economic system.



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