Monday, January 16, 2017
Show Us the Money! The (Radical) Case for UBI
by Richard King
And, now, of the world's latest experiment in Universal Basic Income, which a whole array of public figures, from Elon Musk to Yanis Varoufakis, agrees is A Bloody Good Idea.
As do I. But the fact that so many people are agreeing makes me wonder what is being agreed upon, and upon what basis the agreement has been reached. In particular: Why are right-libertarians and uberwealthy business types and even some conservatives pulling on the gloves and pads and going out to bat for an idea more usually associated with the material left? Can an idea that attracts support from Charles Murray and the American Enterprise Institute really have moral merit? I mean, can it?
I think it can, but it's important to consider the very different assumptions that are being employed in the arguments over UBI, which, in case you've just returned from a two-year yoga and ice-fishing retreat in Ittoqqortoormiit, is a scheme whereby all citizens receive an unconditional flat-rate sum from the state or other public institution. It's important because those assumptions will shape not only what kind of UBI we may get (if we're lucky enough to get one at all) but also where such a scheme might lead in terms of other redistributive arrangements. If UBI is a means to an end, what end are we aiming at?
Very different ones, obviously. I'll state, briefly, the business and conservative/right-libertarian cases for a UBI as I understand them, before outlining in a bit more detail the radical or leftwing case. I hope the latter, as well as being more persuasive, will also serve as a critique of the assumptions underlying the first two cases.
First, the business case, which seems to me to combine the stirrings of an uneasy conscience with naked (or at least semiclad) self-interest. It's interesting to note that the loudest business voices raised in favour of a UBI belong to those driving, or working within, the fourth industrial revolution, in which digital technologies and automation are steering economic change. Sam Altman (Y Combinator), Chris Hughes (Facebook), and the abovementioned Musk (Tesla) are examples. No doubt this is partly because they are all fantastically hip and progressive – down with the kids and all of that. But it is also because they recognise that as unemployment and precarity increase as a result of these massive changes in production, they may be faced, and faced quite soon, with a crisis of realisation – i.e. an inability to turn their products and services into profit. (As workers fall out of the economy, so do consumers.) That many tech "products" can now be created for close to zero marginal cost adds another, quasi-moral dimension to these calls for a UBI, as does the fact that many of those products utilise state-funded innovations such as GPS and the worldwide web. Information wants to be free, in both senses of the word, so the big tech companies must either erect barriers to it through monopolisation and rent-seeking, or find ways to monetise the information collected on their users, or both. Either way, we get the shitty end of the stick, and my sense is that a lot of the interest in UBI now emanating from the business community and Silicon Valley – forward thinkers, by definition – is rooted in an awareness of the crisis of legitimacy that could soon befall info-capitalism if this situation remains unchecked.
Which brings us, with a hop and a skip, to the conservative/right-libertarian case ...
Weird as it may seem, both F. A. Hayek and Milton Freidman were supporters of UBI, which they saw as a way to reduce government bureaucracy and streamline the working of the market. Indeed it was Freidman who evolved the idea of the so-called negative income tax, a version of UBI (kinda) whereby citizens earning less than a certain amount are paid money by the state. In Friedman's view such a scheme would free citizens from the "perverse incentives" engendered through welfare – in particular, the incentive not to work – and this line of reasoning is very close to the one employed by contemporary libertarians of the Cato Institute variety, whose calls for UBI are invariably couched in recommendations that other benefits be seriously cut or done away with. Incidentally, Finland's pilot scheme contains an element of this thinking, too. Its UBI of around €560 a month will only be given to unemployed Finns – 2000 of them, chosen at random – and will replace existing benefits. Then again, it will remain in place even if recipients manage to find work (for which they're not obliged to look) and may soon be extended to low-income groups such as freelancers, small-scale entrepreneurs and part-time workers.
It should be obvious that the business and the rightwing cases for a UBI or something similar have in common a desire to "save the system" or to make the system more "efficient" (where efficiency, of course, is defined in terms internal to the system itself). The radical case is not like that. That case derives from a different political tradition – the tradition of Condorcet and Charles Fourier, of Thomas Paine and Bertrand Russell, all of whom advocated social insurance or a guaranteed basic endowment of some kind. At its heart is a very simple idea: the idea that the world is a common treasury and that a system in which wealth is created socially and appropriated privately is an affront to our species-dignity. I'll set out the argument as clearly as I can, taking a number of points in turn.
1. Poverty reduction
The most urgent reason for adopting some form of UBI is that many people have no money, or have less of it than they need to live on, even if they're lucky enough to have a job. The kind of capitalism we've had for the last four decades has transferred risk from employers to workers, with the result that wages have stagnated across the West. Unionism has declined and insecurity has increased at the same time that inequality has grown. The coming wave of automation will likely exacerbate this situation. In their much-cited study The Future of Employment, Carl Benedikt Frey and Michael Osborne suggest that 47% of jobs – white-collar jobs as well as blue-collar ones – are susceptible to automation in the near future. The process is already underway, with factory and warehouse workers, truckies, miners, checkout operators, telemarketers and many others losing out to computers and robots. Nor is there any reason to think that the megatrends of automation, customisation and Big Data will create a stratum of skilled employment thick enough to compensate for the millions of people who will lose their jobs, or fail to find them, in the new economy. As Paul Krugman has argued, the notion that increasing information technology means more jobs for people who work in information technology is a non sequitur: the nature of that technology means that any routine task is in the firing line. (Cleaners, who have to follow explicit instructions, may well turn out to have more job security than people who write legal contracts.) The US Department of Labor has stated that 65% of primary school-aged children will end up in jobs that haven't yet been invented, which is one of the reasons educational institutions now talk about transferable skills and "job clusters". But this assumes there will be jobs when those children reach working age. That assumption is looking shakier by the day.
Though no panacea, a UBI would help address this situation. It would give people the chance to (re)train or "upskill" and increase their bargaining power in the workplace. It would also make it easier to move between jobs (assuming there are jobs to move between), to relocate, or simply take time out. It would help cover basic necessities and relieve the burden of insecurity.
2. Challenging the myth of fecklessness
Many of the arguments against UBI are predicated on a certain idea – a deeply conservative idea – of enterprise and thrift. A version of the "just-world hypothesis", this idea is that the rich are rich as a result of their own endeavour and talent and that society's poor only have themselves to blame: they are a prey to improvidence and dependency, and a UBI would only encourage fecklessness. Though rarely stated in such bald terms, this assumption is deeply embedded in our politics, coloured as it is by a thoroughgoing emphasis on personal responsibility for what (for the left) are public ills.
But the evidence does not support it. As the economist Professor Guy Standing has argued, on the basis of UBI trials in India, Namibia and other countries, there is no evidence that UBI discourages work and plenty of evidence that it reduces poverty, with all the attendant benefits that entails in terms of health and happiness. Similarly, research by MIT found "no systematic evidence that cash transfer programs discourage work". There are numerous other examples one could cite. Suffice it to say that such evidence as we have is a problem for the UBI naysayers, and that the assumptions on which they base their objections – assumptions, to reiterate, that run deep in our politics – may end up on the mat. Good.
3. Our natural inheritance
It is now impossible to live for free. Debt, hyper-consumerism and monetisation mean that human beings exist in a market whether they want to or not. It follows that those born into wealth, or are able through luck and/or effort to acquire it, are at a huge advantage to the rest of society, not least because, as Pikketty has shown, wealth grows faster than the overall economy. UBI does not redress this imbalance, but it does at least begin to address it.
Even for the radical originators of universal basic income this point was of fundamental importance. For them such schemes were a form of reimbursement for the loss of what Paine called our "natural inheritance". Left critics of UBI are right to say that it does not entail a fundamental transfer of property rights, and that a broader program of anti-trust legislation, financial regulation and so on is needed to address socioeconomic injustice. But a UBI offers reparation – a social dividend in a privatised world. Here's Standing:
Thomas Paine, a leading light in the American and French Revolutions, argued that the wealth of society is the result of collective efforts over generations and that everybody should receive an equal social dividend as a right of citizenship. Jump forward to the 21st century, and rentier income is increasingly flowing to property owners, many of whom have done little work to gain it. Universal basic income is a revolutionary solution without a blood-soaked revolution.
Looked at in this way, UBI forms a break with the kind of welfare thinking that makes a fetish of the "deserving" poor and condemns the rest to life below the breadline.
In my view, UBI should be viewed as remuneration, not security – a conception to which unconditionality and universality are central. Yes, everyone should get UBI, even the rich folks mentioned above, even Donald fricken Trump. (They'll have to pay much more in tax, so don't panic.) Birthright cannot be means tested.
4. The place of work
Modern politicians often talk as if the point of an economy is to create jobs. It isn't, any more than the point of a human body is to create droplets of sweat or calluses on your thumbs. The point of an economy is to create wealth, and computerisation and automation mean that we now exist in a world where wealth can be created more easily and more quickly than it was in the past. Accordingly, the radical case for UBI does not regard it, necessarily, as a way to help people back into paid work, but as a way to help them subsist outside the wage system. This is enormously important – psychologically and philosophically – as we move towards a situation in which the limits of growth become more and more apparent.
One doesn't need to be committed to the anti-work tradition represented by Paul Lafarge or Bertrand Russell to appreciate that advanced societies are in transition to a new kind of society in which paid work is bound to play a less significant role. As Paul Mason has argued in Postcapitalism, blowing the dust off some arguments associated with Andre Gorz, there can be no more utopias based on work. From information goods to 3D printing, we are evolving a whole range technologies that are implicitly post-capitalist. The future is here, as William Gibson has said; it just isn't evenly distributed.
That doesn't mean to say, of course, that human beings will cease to be productive. I think they'll grow more productive, not less, and that, slowly, we'll evolve a distinction between the kind of labour necessary to maintain human beings in comfort on the one hand and creative, non-algorithmic work on the other. It goes without saying that basic income also recognises implicitly the fundamental contribution made to society by unwaged primary care-givers, a sector Mason fully expects to expand as paid work diminishes and people reconnect with their communities. UBI is a step towards that end.
5. Liberty and equality
For Bertrand Russell a guaranteed income had the potential to marry two radical traditions: anarchism and socialism. I'd put it slightly differently and say that a UBI brings together two values often held to be in conflict: liberty and equality. Put simply, UBI increases both. It gives everyone the means to subsist, extending dignity to the poor and the marginalised; and it does so with the minimum of interference. As such it has the potential to transform the relationship between the individual, the economy, and the state.
... Well, that's it – the leftwing case (as I take it) for a UBI. Patchy, no doubt, but an honest try. Anyone wanting further information on UBI and the various trials conducted in its name is invited to visit the website of the Basic Income Earth Network, which as well as doing excellent work itself is invariably across the latest developments. Or you can watch this lecture by Standing, or this one by Varoufakis. I'm off to Finland. Nähdään myöhemmin!
Visit me at The Bloody Crossroads.
Posted by Richard King at 12:10 AM | Permalink