Friday, 10 March 2017

An Incredibly Simple Idea

Since Thomas More's Utopia, basic income has often been advanced as part of a wider scheme of social transformation. This hasn't done the concept any favours as it has found itself either twisted to fit a particular frame or dismissed as redundant when the larger scheme has been marginalised by history. Up to the late nineteenth century, these programmes usually centred on the redistribution of land, often through homesteading grants, or the payment of dividends arising from ground rents (e.g. Henry George's Land Value Tax). During the twentieth century, basic income was largely superseded by the debate on social insurance, which was a programmatic response to urbanisation and the vagaries of industrial capitalism, though its ethical dimension lived on in the idea of the social dividend, which was a product of the spread of democracy and the concept of human rights. The revival of interest in basic income in the twenty-first century owes much to the anticipated social transformation of two dystopian developments: environmental degradation and the rise of the robots.

This shift from a utopian to a dystopian register can be seen in the confused debates in the media, with sceptics deploying late twentieth century arguments ("we can't afford it") against twenty-first century imperatives ("we can't afford not to"). It has also led to a revival of early nineteenth or even eighteenth century rhetoric, notably the tropes of "birthright" and "commons". This has baffled establishment neoliberals who ironically remain wedded to the no less venerable language of nineteenth century marginalists. In the context of the environment, the nostalgia for a pre-industrial age is often explicit. For example, the anthropologist Jason Hickel recently advocated basic income in these terms: "The beauty of this approach is that it functions as a kind of de-enclosure. It’s like bringing back the ancient Charter of the Forest and the right of access to the commons. It restores the right to livelihood – the right of habitation. Critics of basic income often get hung up on how to fund it. But once we come to see it as linked to the commons, that problem becomes more tractable."

Hickel brings the story up to date with Alaska's Permanent Fund, a sovereign wealth fund derived from oil revenues that produces a variable dividend, typically between $1,000 and $2,000 for each state resident per annum: "The Alaska model is popular and effective, and scholars have pointed out that the same approach could be applied to other natural resources, such as forests and fisheries. It could even be applied to the air, with a carbon tax whose yields would be distributed as a dividend to all. And the upshot is that this approach helps protect commons against overuse, giving our planet some room to regenerate." One problem the Alaska model highlights is the question of eligibility: who should benefit from which resources? As Hickel puts it, "Some worry that a basic income will only increase the nativism that is spreading across the world right now. Who will qualify for the transfers? People won’t want to share with immigrants". His solution is to universalise the problem: "If the commons know no borders, why should a commons-linked income? Indeed, why should people in resource-rich nations get more than their neighbours in resource-poor ones?"

This might be morally just but it is politically impractical precisely because of variable endowment. The citizens of regions with rich natural resources have no necessary incentive to share with those inhabiting poorer regions. Why would Alaskans vote to dilute their dividend in return for a share in a negligible Arizona fund? Nation states can and do effect inter-regional monetary transfers, but this assumes a quid pro quo in the form of national public goods and benefits, from defence to welfare. Short of a world state providing common benefits to all mankind, this isn't going to happen. Even if it did, the results might well be counter-productive. Alaskans face a trade-off between the exploitation of a resource and the negative externalities this may produce locally, such as pollution. This becomes more acute the closer you are to the resource, so conversely it becomes less acute the further away you are. Local populations could find themselves over-ruled on the rate and manner of exploitation in the interests of a distant majority (e.g. as when Tories dependent on the votes of the South commit to fracking across the North). You don't have to buy the "tragedy of the commons" theory to recognise that protecting a resource from over-use is made more difficult if sovereignty is dispersed.

The risk of nativism arises because of the association of income with land, which in turn harks back to the old idea of land as the source of all value. A better approach is to treat basic income as a social dividend, not a sovereign dividend, which means that it should derive from the total output of the economy and thus primarily from the activity of the people (there are multiple factors of production but labour is ethically dominant), not from natural resources. There are four advantages to this: it reduces the likelihood of a conflict of interest with environmental protection; it means that immigrants as well as natives are contributors; it can have a progressive impact on incomes if the benefit of productivity growth accrues mainly to labour; and finally, you avoid the perversity that can arise with a hypothecated tax on a social "bad", where success in limiting use results in declining revenue and thus reduced dividends, which would hit the poorest hardest.

Among some green-tinged thinkers, the land value tax (LVT) is seen as way of both improving the stewardship of the land and of funding a basic income in the manner of Tom Paine's "agrarian justice". While this might address the problem of progressive uprating - LVT revenues should grow in line with GDP - it doesn't necessarily help the environment. Bringing vacant land into use may be a social good, but it won't necessarily reduce carbon emissions and may well increase them. It makes more sense to use an LVT to fund environmental goods in the broadest sense, which would include infrastructure, many council services (so partially or even wholly replacing business rates and the community charge) and green energy, as well as environmental protection. In other words, the LVT should reflect both the improvements to the land's value provided by public goods, such as roads and clean water, and the social costs generated by the taxpayer's use of the land, such as pollution and waste management.

The problem with schemes that link basic income to the land is that they usually hanker after a zero-growth economic order. Few green advocates see the potential of basic income in improving competition and innovation, and they often wrongly assume that industrial society is inimical to openness and generosity. For example, according to Hickel: "a basic income might defeat the scarcity mindset that has seeped so deep into our culture, freeing us from the imperatives of competition and allowing us to be more open and generous people. If extended universally, across borders, it might help instil a sense of solidarity – that we’re all in this together, and all have an equal right to the planet. It might ease the anxieties that gave us Brexit and Trump, and take the wind out of the fascist tendencies rising elsewhere in nativism that is spreading across much of the world." A radical redistribution of wealth might confirm that we "all have an equal right to the planet", but a dole that does not address existing private concentrations of capital will not. As for defeating Fascism, that may depend more on the expansion of public goods than a guaranteed income.

As basic income has become popular it has inevitably found itself being taken up by popularisers. Typical of the breed is the Dutch journalist Rutger Bregman, who combines Silicon Valley utopianism (he unselfconsciously calls basic income "an incredibly simple idea") with the listicle-sociology of Malcolm Gladwell and Freakonomics. His book, Utopia for Realists, advocates not only a basic income but a 15-hour work week and open borders, but it is coy on the mechanics of how this will come about, leaving others to fill in the gaps. For example, Andrew Anthony makes the link to automation via Elon Musk: "One reason why Musk supports a basic income is that work is likely to become much more scarce in the near future of advanced robotics and artificial intelligence – and that’s also a reason for a much reduced working week. In a way Bregman has less of a hard sell with shorter working hours. History is moving that way and has been for some time. It’s just a question of when and how we’re going to acknowledge the inevitable".

In fact, history shows that the general move towards shorter working hours in developed economies actually ran out of steam decades ago as the state (with the notable exception of France) shied away from progressive regulation. The "flexibility" of modern labour markets has instead led to greater variety (i.e. inequality), with some people struggling to secure enough hours through casual work or having to work longer hours to make ends meet. The question should be why aren't we already enjoying the 15-hour week that Keynes imagined would have arrived by now? One answer, which Bregman alludes to, is that productivity gains due to technology since the 80s have been offset by a growth in what David Graeber calls "Bullshit Jobs". A variant on this is the idea that new technologies, such as email and databases, have allowed clerical and professional workers to pad out their hours with increased "management & admin" activities. A combination of the two would go some way to explain poor productivity growth in the services sector, not to mention the wall-to-wall coverage accorded "studies" (i.e. speculation) that half of all jobs could be automated within 20 years and that white-collar roles will be particularly vulnerable as artificial intelligence matures.

Like the linking of land and basic income, the linking of basic income and technological unemployment is dubious because it tends to characterise the former as a compensation for existing social relations, not as a substitute. The issue that remains off-stage is the ownership of the capital represented by the robots and AI. This has led to Bill Gates proposing that income tax should be levied on robots as a means of ameliorating both job losses and falling tax revenues. While most orthodox economists have criticised this as a counter-productive tax on innovation, few have thought to comment on Gates's assumption that future value will arise from constant capital itself. The suggested alternatives include increased taxes on capital gains and using current tax revenues to build a sovereign wealth fund for future dividends, which takes us all the way back to Paine but with capital now occupying the role of land. The ideological continuity is a refusal to consider labour as the source of value, which allows Gates to ignore the conventional idea that technology destroys old jobs but create new ones in equal or greater number and simply accept the future redundancy of most of humanity.

The utopias of the past can be read as reversed dystopias: attempts to envisage what the world would look like shorn of contemporary ills, just as most dystopias were an extrapolation of those ills. In contrast, the current era of basic income speculation is marked by a lack of imagination, and not because contemporary ills are fewer, less damaging or without the potential for catastrophe. Given the risks associated with global warming, it is notable that today's utopias are either nostalgic forays into a pre-industrial past or ameliorative schemes that are essentially postwar social democracy without the heavy industry or excessive consumption. In other words, they seek to imagine the problem away rather than to address it. The belief seems to be that "this one simple trick" will allow us to sidestep politics altogether. The uncertainty of these schemes in their execution - what establishment pundits call their "lack of realism" - reflects an unwillingness to address social relations and in particular the ownership of historically accumulated wealth. Similarly, the idea of basic income as a compensation for redundancy is pernicious because it divorces historic labour (i.e. capital) from contemporary society. Basic income then becomes a dole at the discretion of the wealthy. What could be simpler than that?

1 comment:

  1. Herbie Destroys the Environment14 March 2017 at 17:27

    The elephant in the room with these debates is the transition to a post capitalist society, and many of the articles on this topic fail to provide this context. Which is why most of them feel like Utopian pieces in themselves and make little sense unless the reader fills in those gaps. But this often raises more questions than answers.

    It is another example of the Utopianism of the present, where society is imagined to be something it isn't!

    I doubt most of humanity will become defunct, in one positive scenario the whole idea of defunct will not make any sense and humanity will not be viewed in those scarcity framed terms and in the negative scenario the elite and middle classes will simply have more servants at their beck and call.

    I would place a big bet on the latter.