Universal Basic Income

The modern labourer, on the contrary, instead of rising with the process of industry, sinks deeper and deeper below the conditions of existence of his own class. He becomes a pauper, and pauperism develops more rapidly than population and wealth. And here it becomes evident, that the bourgeoisie is unfit any longer to be the ruling class in society, and to impose its conditions of existence upon society as an over-riding law. It is unfit to rule because it is incompetent to assure an existence to its slave within his slavery, because it cannot help letting him sink into such a state, that it has to feed him, instead of being fed by him. Society can no longer live under this bourgeoisie, in other words, its existence is no longer compatible with society.

Karl Marx The Communist Manifesto

The first thing that should be said is that Universal Basic Income [UBI] should not to be confused with Universal Credit! Rather than a single, administratively convenient state handout for a group of unfortunates who have to claim, Universal Basic Income is:

“... a regular income paid in cash to every individual member of society, irrespective of income from other sources and with no strings attached.”

According to Newsletter 4 of the Citizen's Basic Income Trust [2017, issue 3]:

“There are no different left-wing and right-wing versions … There is simply Citizen's Basic Income: an unconditional and non-withdrawable regular income for every individual.”

And again, UBI would mean “real freedom for all, not just for the rich.”

Straightaway we are in the realm of reformism: key aspects of present-day, rotten capitalist society – its money economy, classes, property ownership, profit-making, are not challenged; never mind labour as the ultimate source of all 'wealth creation'. All this is not an issue for those who think they can find a way to make the present society ‘work’ for everyone. [Or, following the title of one book, bring about ‘utopia for realists’].(!)

History of the idea …

There seems to be a standard litany of “the long history” of UBI. A typical phrase of commentators is that it: “dates as far back as Thomas More’s Utopia”. (Thomas More (1478-1535), according to Max Beer in A History of British Socialism, More is “one of the greatest figures in the history of Communism”! Even though he appears to be more of the school that communism is a nice idea but not possible in practice.) More described a republic where all things are in common, thus everybody is rich though no-one possesses anything. He doesn’t appear to mention UBI! But although More is credited with remarking that all crime would die if money perished, it’s implied, e.g. the cities have markets. Also, it’s some utopia, where “all toilsome and unclean work of the commonweal is done by bondmen, who are either prisoners duly convicted of heinous offences which in other countries are punished with death, or poor labourers from foreign lands.” Every household has two slaves! (Incidentally the Utopians don’t like wars but they do have a store of gold and silver to pay for them and are prepared to repel invasions, “or help their friends to repel invasion or to deliver any people from tyranny and … (they) declare war upon any nation who, possessing vacant land in abundance, prohibit the immigration of the surplus population of Utopia who desire to cultivate it and to form a colony there.” (quotations from Beer, pp.36-37)

We could go on with the idea’s ‘long history’ but it wouldn’t get us very far.

(e.g. Some say More wasn’t really the first UBIer, it was really a mate of his who escaped the Inquisition to Bruges and on seeing the poverty there, said no-one should die of hunger: remarkable! Other historical candidates on the UBIers list of famous advocates: Thomas Paine, who said everyone should be given £15 on their 21st birthday and £10 per year for the rest of their lives – paid for out of ground rent (i.e. tax on the rich landowners). J S Mill, JK Galbraith, Martin Luther King, or Andy Stern in Raising the Floor (post-financial crash, 2010). Also right-wingers, e.g. Milton Friedman (in order to restrict the power of the state); Richard Nixon whose bill to introduce a negative income tax failed to get through the US Senate in 1970 but which others – including Wikipedia – argue was designed to guarantee a minimum income, which is not the same as UBI. In any case, Nixon’s minimum income had strings attached which make it more akin to workfare programmes. For example, recipients must not refuse job offers or ‘suitable’ training.

Modern Proponents

The idea has gained traction since the 2007/8 financial crash and the unprecedented income inequality which has followed, especially in the advanced Western states. According to 2018 World Inequality Report, the combined income of the top 1% of the population in the USA = that of the bottom 88%. This is worse than in 1917 when 2% owned 65% of the “wealth” in the USA. (In Europe today the income of the top 1% = that of the bottom 51%.)

In Britain, Guy Standing and his book, Basic Income, How We Can Make it Happen is currently in the spotlight. Lax about what constitutes UBI; he clearly sees it as part of his support for anything to promote “social justice” and “freedom” (e.g. pp. 60-61) along with many of his “return to Old Labour ideas, such as ditching public/private financing of services. He has no vision of anything other than a (state) capitalist society and regards UBI as a possible rejoinder to “libertarians” whose aim for a “minimalist social state (would mean) that the vulnerable were bereft of hope, (and) they should not be surprised if the resentment led to some retributive justice.”[p.55] Standing is involved in the pressure group, Citizens Basic Income Trust as well as BIEN (Basic Income European Network), the European body that’s been on the go since 1986.

There is a lot of Dutch involvement in this, notably:

Philippe Van Parijs who, with Yannick Vanderboght, has written a key book: Basic Income: A Radical Proposal for a Free Society and a Sane Economy which again does not challenge capitalism and in the end simply argues that “utopia” is achievable: “Probably through a series of moves that admit change through the back door more often than through the front gate.” (He goes on to add, in the spirit of Gramsci, “...Machiavellian thinking will need to play a significant role …”) p.246_._

Other recent proponents include: French Socialist Party Presidential candidate Benoit Hamon: quite probably a response to the Mouvement Francais Pour un Revenu du Base, an offspring from the Nuit Debut movement. Rutger Bregman (Belgian) has jumped on the bandwagon with Utopia for Realists with an easy, though irritating read, off the top of his head. Its a magpie, derivative approach which has got the backs up of some of the old campaigners. (Incidentally, he apes Van Parijs on Speenhamland with an exaggerated defence of its merits as an example of implementation of universal basic income.)

Practical Proposals

All seem to agree that UBI needs to be introduced gradually. Van Parijs recommends one quarter of per capita GDP to be distributed equally. Estimates say this would mean $1,163 per month in the US; $860 in the UK and $16 in Congo. No claim is made as to whether this is enough to “get every household out of poverty”. The UK’s Citizen’s Basic Income Trust is much less generous. Issue 4 of its Newsletter in 2017 recommends that £61 per week “could be implemented almost overnight”! (c.f. Carillion Chief Exec., Richard Howson’s ‘remuneration’ of £660,000 + £28,000 ‘benefits’: Gill Plimmer in Financial Times 16th January.)

It’s worth remembering that Switzerland held a referendum on UBI in 2016 where a proposal for $30,275 (equivalent) per year paid to every citizen “regardless of work, wealth or social contribution”. This was supported by an “entrepreneur” supporter of Basic Income, Daniel Hani who has written books and made a movie, The Basic Income. The referendum failed.

There are a growing number of Basic Income pilot projects, notably in Finland where the Centre Party (in power since 2015) hope UBI would improve welfare and revive the economy partly by encouraging those on welfare back to work. Depending, what you read, the pilot involves 10,000 people (Le Monde Diplomatique), or is it 2,000 unemployed people between 25-58 years old, as The Guardian says, who receive €560 per month, tax-free for 2 years.

Other trials are ongoing or being planned: e.g. Utrecht and 10 others in the Netherlands; Italy; Glasgow and Fife and various other local authorities in Scotland. (With publications, such as Creative Citizen, Creative State to support the idea which is being propounded by some as a way to overcome “An Economy and Society Stuck in Low Gear” (report by Anthony Painter).

Apart from these pilots, the only place where there is a practical example is Alaska, where in 1976 Republican governor, Jay Hammond, set up the Alaska Permanent Fund to distribute some of the oil revenues. Every Alaskan still gets $2,000 per year, with no strings attached. Not quite Utopia.

Those For and Against?

For:

French Socialist Party Presidential candidate Benoit Hamon: quite probably a response to the Mouvement Francais Pour un Revenue du Base, an offspring from the Nuit Debut movement.

Yanis Varoufakis, Greek Minister of Finance for Syriza government, 2015: “The right to turn down a job is essential for a functioning labour market”

Silicon Valley has a number of high profile supporters, e.g. last year, Y Combinator experiment launched (Altman) $2,000 per month paid to 100 people in Oakland; eBay founder, Pierre Omidyar, set up “Give Directly” – cash to 26,000 Kenyans.

All this is guilt and fear money for projects which aim to create a floor, not a ceiling: there must be no limit to Silicon Valley fortunes.

Against:

Président Macron: “I no longer want to hear of the appeal of anything but work” – i.e. UBI is a ticket for idleness.

French unions are also against.

Here, the TUC commissioned a report from the Fabian Society! They said it could increase the number of precarious workers though their lives might be slightly less precarious. OK if funded by taxing profits. If income tax is the basis for funding UBI then “middle earners” would lose out and Fabians don’t want that. Fabians prefer Universal Credit!

Beyond the Socialist Party, the ‘Far’ Left in France tend to distrust the idea, seeing the threat of dismantling of welfare services. Here, it’s been suggested Corbyn is in favour but, like Brexit, Labour hasn’t got a clear policy.

OECD – argues a basic income based on redistribution with existing taxation would mean more ‘losers’ in France, Italy, Finland. To be meaningful, taxes would have to increase and they don’t want that. In any case they think the incentive to work would be undermined.

Why Is UBI Catching On Now?

Although all the proponents of UBI avoid any suggestion that the capital wage-labour relationship itself is what needs to be replaced, all are responding to the dire social and economic outlook, to growing ‘inequality’ and the continued prospect of ‘secular stagnation’. [1] Some are also very aware that it is only a matter of time before the next financial crash and are fearful of the social explosion that might occur if the overseers of international capital can’t come up with some kind of palliative. (Another bout of ‘quantitative easing’ – creating billions of $ of fictitious capital is unlikely, at least on the previous scale and in any case does nothing for the working class.)

So Universal Basic Income is one of a limited number of preservation options for capital in terms of a policy to keep the social peace as capitalism implodes and ‘social inequality’ increases. It’s becoming a capitalist cure-all, where the claims for the wrongs it will redress are as broad as the definition of what UBI really means. (Another option, but a one-off for a sharp crisis situation is the ‘helicopter drop’ of which the ECB’s Mario Draghi admits “the instrument is in the toolbox in case risks re-emerge”.)

UBI will be an answer to increasing structural unemployment, much of it not acknowledged in official unemployment figures. (e.g. in the UK, as the article we did on Universal Credit pointed out [2], the current unemployment rate is around 6% of the workforce – i.e. around the same level as the late-1920s – even though the official spin is that there is ‘full employment’. It’s the same in the US, where the figures are a notorious under-estimate of the real situation; where, for example, the official unemployment rate is 4.2% but where 18% of 21-30 year old men did no paid work at all last year. (In the 1980s the equivalent figure was 6%.) [See article by John Authers in Financial Times 13.1.18]

Many of the proponents of UBI are fearful that unemployment is set to become dramatically worse, with increased automation and the ‘rise of the robots’ and UBI would offset the social ‘backlash’. The prospect of self-driving vehicles, for example, threatens the livelihood of 3.5m truck drivers in the US.

On the other hand, UBI is also proffered as the solution to “under-investment” in new technology as a result of the disincentive of a plentiful supply of cheap labour, blamed for “returns not covering the costs” of investment. (Well, we can’t expect the average “entrepreneur” to understand the falling rate of profit.) It’s not clear whether the UBI proponents think it would promote the advent of new technology and the digital revolution directly because consumers could afford to pay more or that low paid work would disappear because nobody would have to do it. In any case, UBI will “unleash entrepreneurship”, will enable the survival of jobs with a high training content; will make it easier to work part-time; benefit children’s health …

Others are taking up the idea because it offers a way to preserve social peace as the crisis eats away at the ‘social fabric’: Take Edward Luce, for example writing in the Financial Times (29.5.16):

Imagine the US takes much the same course in the next ten years as it has over the last. That would mean a further corrosion of US infrastructure, continued relative decline in the quality of public education, and atrophying middle workforce skills. It would also hasten the breakaway of urban America’s most gilded enclaves, further enriching the educated elites. It could also, quite possibly, trigger a breakdown in democratic order. If you think Mr Trump’s rise is ominous, picture America after another decade like the last.

Which brings me to the remedy: a universal basic income. UBI has several plus points. It draws support from all parts of the ideological spectrum: libertarian and socialist alike. It would replace today’s messy overlap of benefits and do away with the humiliation of proving your eligibility to federal bureaucrats. Most important of all, however, it would buy a measure of social peace. Today’s stagnation may be temporary or lasting. We have no way of telling. Common sense dictates we must act as though it is here to stay_._

UBI is gaining traction amongst the capitalist class because it presents a last-ditch ploy to maintain ‘social peace’ and undermine a collective working class fight back in the economic turbulence to come. Not so much a “utopia for realists” as a dystopian reformist panacea in the face of declining ‘economic growth’, wages, services and general quality of life.

ER

The above document is an outline of an introductory talk to our Durham Open Meeting in January 2018. We have been asked to publish it as the meeting was not recorded.

Notes

[1] See leftcom.org

[2] leftcom.org

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Saturday, April 14, 2018