Friday, 29 December 2017

The Case Against a Basic Income

The case against a universal basic income was put yesterday by two very different thinkers. Nick Boles is a well-connected Tory who since his election to Parliament in 2010 has served as Minister for Planning and now Minister for Skills (his achievements have been negligible but he remains a fixture of various think-tanks). Daniel Zamora is an academic sociologist who has made a name for himself with a critique of Michel Foucault's attitude towards neoliberalism and the welfare state (in a nutshell: too admiring of the one and too dismissive of the other). Both are against a basic income, but for different reasons. Apart from the simple coincidence of publication, I have decided to contrast their positions because of the difference in approach it highlights between UBI sceptics of the right and the left. Beyond the issue of affordability, the right tends to resort to arguments that mix old notions of the sin of idleness with newer psychological theories of self actualisation. In contrast, left sceptics question whether UBI is truly transformative, suggesting that it may simply entrench capitalism. The one is concerned with individual salvation, the other with social revolution.

Here is Boles's case in its (apparent) entirety: "The main objection to the idea of a universal basic income is not practical but moral ... Its enthusiasts suggest that when intelligent machines make most of us redundant, we will all dispense with the idea of earning a living and find true fulfilment in writing poetry, playing music and nurturing plants. That is dangerous nonsense. Mankind is hard-wired to work. We gain satisfaction from it. It gives us a sense of identity, purpose and belonging … we should not be trying to create a world in which most people do not feel the need to work". This isn't a robust argument, not least because it fails to explain why a poet, a musician or a gardener is incapable of earning a living, or why society should tolerate the idle rich. Despite it opening assertion, it fails to explain how work is moral, probably because the traditional arguments for this (essentially biblical homilies) sound ridiculous today.

Even the argument for self-actualisation is dubious. I can achieve a sense of identity, purpose and belonging by joining a criminal gang, which would hardly be moral in the conventional sense. I can also achieve those same ends by devoting myself to unpaid charitable work, which would be conventionally moral but would require financial subsidy by the community were I not one of the otherwise idle rich. The essentialist argument, that work is part of human nature, is also demonstrably untrue. We are not hard-wired to work, we are hard-wired to survive, which is why levels of labour in pre-industrial societies tended to differ across geographies, reflecting the varying demands of local environments. Beyond achieving survival and social reproduction, we work (if under no external pressure) out of self-interest and for self-satisfaction, at which point work can look a lot like play. This means that there are always two types of work: necessary labour and surplus labour. As Marx pointed out, it is the struggle for control of the latter that drives society.

Daniel Zamora makes a more coherent case in Jacobin, first of all putting the growing interest in UBI in a historical context: "Paradoxically, then, UBI seems to be a crisis demand, brandished in moments of social retreat and austerity. As politics moves to the right and social movements go on the defensive, UBI gains ground. The more social gains seem unreachable, the more UBI makes sense. It’s what botanists would call a 'bioindicator': it indexes neoliberalism’s progress. Support for basic incomes proliferates where neoliberal reforms have been the most devastating." This is interesting because it suggests an interdependency between UBI and neoliberalism. Though the idea predates both that particular style of capitalist reasoning and its political hegemony from the 1980s onwards, it is true that modern UBI advocacy often adopts neoliberal tropes, such as personal utility and human capital (the "entrepreneur of himself", as Foucault put it). That, however, should make us cautious of accepting descriptions of UBI that ignore its history (e.g. the regular misrepresentation of Thomas Paine's concept of an endowment) or claim a special relevance because of recent technological developments (them robots).

Before making his central argument, Zamora rehearses a few of the usual criticisms of UBI. First, that "No existing economy can pay for a generous basic income without defunding everything else." This doesn't automatically follow, but the claim highlights how thinking about the funding of a UBI tends to focus on the state's fiscal position (current expenditure versus revenue) rather than the nation's accumulated wealth, and thereby ignores the power of the sovereign to radically reapportion that wealth (something it can easily do, as shown by the bank bailouts and QE after 2008). A meaningful UBI would be in addition to, not instead of, the welfare state, and that necessarily means it would be funded from national wealth rather than exclusively from current income. In effect, the state would expropriate wealth now held in land, property and equities. That might sound extreme, but it is merely retroactively implementing a sovereign wealth fund along the lines of Norway or Alaska. Alternatively, a UBI can be funded out of current taxation, but just as it should be additional to current expenditure, so that taxation should come from capital assets currently privileged by the tax regime, such as land, offshore holdings and equities (this can build a fund quite quickly - consider the rapid growth of China's SWFs).

Zamora's second conventional argument is more credible: "If UBI does take shape, current power relations will favor those who have economic power and want to profit by weakening the existing system of social protection and labor market regulations. Who will decide the monthly amount and who will dictate its terms and condition? Who do today’s power relations favor? Certainly not the worker." This is very true, but that is why the question that should be asked of a UBI scheme is not "Is this affordable?" but "How will it be initially calculated and then uprated in future?", because that will tell you where the power lies. If a state adopts a sovereign wealth fund approach, then the dividend would probably be set through a transparent calculation under democratic control. As GDP grows, the fund dividend should grow likewise (if a portion were invested abroad and produced yields higher than UK GDP, the excess could be reinvested in the fund without affecting the dividend). A tax-based approach could also be geared to GDP, which in turn would encourage tax to shift from below-average growth revenue such as income to above-average growth revenue such as property and equities, which would also be more progressive.

Unlike Boles, Zamora is alert to the issue of surplus labour and thus the importance of work time, though he sees it in terms of the distributive justice of work as much as the distributive justice of income: "That’s why a universal job guarantee and a reduction in work hours still represent the most important objectives for any left politics. Collectively reducing work time is politically and socially preferable to creating a socially segmented pool of unemployed workers, a situation that would have serious consequences for the employed. It’s not hard to imagine how this situation could foster divisions within the working class — as it already has over the last several decades". A UBI and a reduction in work hours are not mutually-exclusive, indeed the best scheme would see a portion of growth remitted as reduced time, which incidentally would be a spur to productivity. Keynes saw a progressive reduction of work hours (and by implication a UBI) as the product of growth and "the power of compound interest". Zamora is right to highlight the potential for friction between the employed and the unemployed, but in doing so he omits another character in the story.

The modern dichotomy of the working class - strivers versus skivers - is not the same as the old dichotomy of the deserving and undeserving poor, even if the characters involved appear to be the same. The latter assumed a third party, the rich, whose largesse was to be apportioned sparingly, whether through charity or taxation, as a moral judgement on the behaviour of its recipients. The newer dichotomy is a product of the welfare state and the idea that the working class, as the largest part of the population, must meet its welfare needs through the collective insurance of social security. This essentially liberal design succeeded in removing the third party from the equation, leaving an increasingly bitter struggle between workers suffering compassion fatigue and a "welfare class" (or underclass), that came into sharp focus in the 80s. It was no coincidence that this period saw the emergence of the ideological demand that insurance, for loss of income as much as health, should be optional and subject to market provision. That was the rich figuratively slamming the door as they went out.

The heart of Zamora's case against UBI is the deleterious effect it would have on the welfare state and thus working class solidarity: "The institutions workers established after World War II did more than stabilize or buffer capitalism. They constituted, in embryonic form, the elements of a truly democratic and egalitarian society, where the market would not have the central place it now occupies". There are obvious echoes of Karl Polanyi in this broad historical sweep, which Zamora further elaborates: "Isn’t the best way to fight against capitalism to limit the sphere in which it operates? Establishing a base income, by contrast, merely allows everyone to participate in the market". This is true, and it highlights why talk of UBI as "the consumer of last resort" (or its attractiveness to Internet companies seeking a universal monopoly) is essentially neoliberal, but the implied alternative of non-market exchange is both utopian and potentially even more socially divisive. Restricting some people's access to the market is not the same as restricting the scope of the market in all our lives.

Zamora's final argument is oddly Hayekian, imagining a new coordination problem arising because a UBI would undermine the price signal of wages: "Under capitalism, the division of labor is set in a brutal fashion, relegating large sectors of the population to jobs that are difficult and badly paid, but often of great value to society. A 'utopian' UBI, by contrast, simply assumes that in a society liberated from the work imperative, the spontaneous aggregation of individual desires would yield a division of labor conducive to a properly functioning society; that the desires of individuals newly freed to choose what they wish to do would spontaneously yield a perfectly functional division of labor. But this expectation is assumed rather than demonstrated." The assumption behind a UBI is that the increased power of workers to refuse shit jobs would increase wages for those jobs, achieving either a new equilibrium (closer to the work's true social value) or increased capital investment in automation. The point is less that people can choose what they wish to do (they would still be constrained by their ability and qualifications) but that they can more easily choose what they refuse to do.

Zamora is wise to reject the moralising that accompanies arguments both for and against a UBI and to concentrate on the way that New Labour-style poverty alleviation and the isolation of a segment of the working class serve capitalist interests: "Combatting poverty thus permits the inclusion of social questions on the political agenda without having to fight against inequality and the structural mechanisms that produce it ... both the Left and the Right want the 'surplus population' to be the problem, thereby supplanting those old, out-of-date, dogmatic ideas that placed exploitation at the heart of the social critique". However, this leads to a pessimism about the potential of UBI to directly address accumulated wealth and capitalist power: "It is much easier to imagine what a different form of social organization could look like on the basis of the more progressive elements within the welfare state than it is to start from abstract ideas that are quite often disconnected from the reality of workers. It’s always easy to imagine different worlds and communist societies in a theoretical and abstract way." This apparently pragmatic view puts a lot of weight on the persistence of those "progressive elements", but that seems equally abstract when faced with the reality of Universal Credit.

Ultimately, Zamora's case doesn't convince because he starts from a narrow, neoliberal definition of UBI, essentially because his professional interest is the neoliberal critique of welfare. This produces a rhetorical UBI that is parsimonious, funded from income tax, and that seeks to reduce the scope of the traditional welfare state. None of these are actually givens. A better UBI would be generous enough to effectively empower labour in negotiation with capital, would be funded from accumulated wealth, and would be additional to existing conditional welfare (it would also require a major investment in social housing). If Zamora exhibits a left pessimism, Nick Boles displays a conservative lack of imagination. The news that Silvio Berlusconi is trying to resurrect his political career by proposing a "dignity income" (a UBI of €1000 a month) does not mean that the Italian right is more developed in its thinking, but rather that it too is fitting the concept into existing political forms, in its case clientelism. The political problem for UBI in the UK is the right's continued reliance on moralising, the centre's antipathy to the welfare state, and the left's residual labourism. That the Labour party is showing an interest owes much to Corbyn and McDonnell's grounding in the marginalised, post-labourist socialism of the 1970s.


  1. Quite right. Many arguments like those of Zamora presume that you can easily politicise issues relating to welfare, but that a basic income would be set once-and-for-all in a way that would benefit capitalists and the wealthy. This is somewhat conservative and fails to recognise that the institution of welfare in the first place was not a zero-sum exercise but a series of reforms that worked in the interests of sections across the political spectrum.

    "The assumption behind a UBI is that the increased power of workers to refuse shit jobs would increase wages for those jobs, achieving either a new equilibrium (closer to the work's true social value) or increased capital investment in automation. The point is less that people can choose what they wish to do (they would still be constrained by their ability and qualifications) but that they can more easily choose what they refuse to do."

    I think this is a very important point that negates arguments about a basic income 'dividing' the working class. If the social worth and income generated by working in a 'shit job' increases, then those performing it will cease to be looked down on by other workers in currently 'prestigious' jobs, and their industrial muscle will develop giving them more self-respect and organisational potential. This can only lead to greater unity.

  2. Herbie Destroys the Environment1 January 2018 at 13:51

    Work is a funny thing, socialists talk of wage slavery but think losing a job is a disaster! Actually a capitalism that guarantees a basic income with the penalty that I will more likely lose a job I hate seems like as near to utopia as I am ever going to get! Keep sacking me and keep paying, oh yeah bring it on!

    I think it is a mistake to say for Marx there are always 2 types of work, surplus and necessary. These concepts are too closely related to class domination to say always! There is no struggle for surplus labour in classless societies. Also capitalism is a system that deliberately creates scarcity, so the very idea of necessary and surplus is ideologically charged and historically determined.

    The argument from Boles about self actualisation is a middle class bias and frankly insulting, do the Sports Direct warehouse workers wake up each day with a sense of self actualisation, do they fuck! And of course most people get more self fulfilment for the things they do outside work than they do at it, for example keeping the garden tidy, going for a walk in the country etc to infinity (there is abundant evidence that says work is the least liked task anyone has to do!). If work was fulfilling you wouldn’t have such hostility to welfare claimants, if work was so self fulfilling people would feel sorry for welfare claimants, when in fact they resent them for avoiding wage slavery! Attacks on welfare claimants are pure jealousy! I mean no would moan if a welfare claimant had not turned up to the beach for a dip!

    Boles is correct to say that reproducing conditions of existence is part of every single creature that ever existed in the universe, the thing about class domination is that it turns this natural condition into an alien and antagonistic force. This is the core critique of Marx in relation to what the worker experiences under capitalism.

    Now studies have shown that employed people are ‘happier’ than unemployed people but this isn’t because the work is self fulfilling, it is more that people come into contact with other people, so is the social aspect of engaging with others and not being lonely. And of course being unemployed has huge economic implications!

    So Boles is in a very small way correct, but even this correctness undermines his own argument, because if as he says work gives a sense of self fulfilment then this must mean that most people will choose self fulfilment and therefore basic income schemes will have little impact on the incentive to work! And who knows what incentives a basic income might create, maybe people will be motivated more to self improvement, will be more fussy when it comes to choosing which employer to work for. If the best argument against Basic income is that Sports Direct work will get even more precarious then that is no argument at all, high value companies who require skilled workers do not want precarious workers, they want highly trained happy workers! They know the high cost of low wages.

    Basic income seems to me to be a first imperfect stab to get to grips with the future, which is coming into sight faster and faster. Certainly the criticism against it look pretty weak.