Exploring Basic Income

Universal basic income is expected to be trialed across four Scottish council areas in 2018. Although the policy is welcomed by many on the left, it's also supported by right wing think tanks such as the Adam Smith Institute. Eve Livingston addresses the arguments for and against the policy from a socialist perspective...

Universal basic income (UBI) is not a new idea, but it’s one that’s gained significant traction in the UK recently following Labour shadow Chancellor John McDonnell’s endorsement of the idea last year and the announcement that 2018 will see UBI pilots carried out in the Scottish councils of Glasgow, Edinburgh, North Ayrshire and Fife.

While UBI models vary, sometimes significantly, at the concept’s core is the offer of a flat-rate regular payment to every individual regardless of employment, income or benefit entitlement. With supporters as diverse as free market economist Milton Friedman, Silicon Valley’s tech giants, the UK’s Green Parties and Scotland’s SNP, the policy should, in theory, be political gold dust with a motley crew of defenders disparate enough to ensure its protection against cuts or rollbacks. But such a broad church of support also points to just how complex and multi-faceted arguments around the policy really are.

For the left, the appeal of UBI largely lies in its potential to challenge the most basic of capitalism’s tenets: that your value as a citizen is directly connected to your contributions to the labour market. Break the link between work and pay and see previously unpaid labour – such as domestic chores, for example –  financially compensated, stigma around unemployment and benefits eradicated, and everyone given a safety net and a starting point to secure a basic standard of living and free up time and agency.

It’s undoubtedly an attractive proposition when framed in these terms, and universalism is rightly a principle defended on the left for its role in removing stigma and the erosion of social solidarity that can be engendered by means-testing.

For a left-wing UBI to be feasible though, many questions remain. The most crucial of which is the rate at which the payment is set and how the measure could be funded. Of countries which have trialled UBI already, the Netherlands set their rate at €960 p/m and Finland at €550, roughly converting as £847 and £485 respectively, both lower than a full-time job paid at the living wage. While UBI isn’t intended to replace work, there are still a significant number of people out of employment due to long-term sickness, disability or a host of other reasons, with social security existing precisely because it’s not possible to insure against most of them in a private market.

For the system to work for these people, additional payments based on circumstance are necessary – introducing means-testing once again to a system designed to be universal. Likewise, to guard against an increase in urban poverty, rates would need to be adjusted to meet housing costs that vary dramatically by city and area. In this instance, universalism could be a flaw rather than a strength.

While many options for funding UBI have been floated, not all should be automatically welcomed by the left. Some proponents have argued that UBI can be self-funding, but what this tends to look like in practice is the saving of money from other expenditure - in other words, cuts or increased taxation.

Higher taxes on wealth may be welcomed by socialists, and in combination with the tightening of tax loopholes could easily fund the policy, but the decision of where to cut or tax ultimately remains in the hands of the government implementing UBI. Where it has been piloted so far, UBI has generally been overseen by fiscally liberal governments, perhaps creating a false sense of security given UBI has plenty of supporters with entirely different motivations.

Another proposed funding model for UBI concerns a ‘robot tax’ on automation, bringing to light one of the most crucial elements underpinning the advancement of UBI in recent years: that is, the rapid growth of technology and the potential for a fourth industrial revolution with widespread job losses at the hands of automation.

That the likes of Elon Musk and Mark Zuckerberg (below) are now lining up in support of UBI should raise large questions about the ownership and control of automation: offsetting redundancies with UBI is all very well but does little to protect against a situation in which technology is privately owned by a small percentage of the wealthiest who benefit from the fruits of its labour while the general population is paid off with UBI crumbs.

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There are plenty on the left who would embrace the robot age were it to dawn alongside a suite of socialist demands, including UBI, to tackle the above concerns. Others, though, remain altogether unconvinced, arguing that automation has so far resulted less in all-out job losses than in a pool of workers in low-wage, low-skill and low-security work, often in the gig economy. Where new technologies have been embraced, they have been used instead to monitor and control human workers through electronic tracking and app-based semi-employment.

This raises another important issue for the left: that of how trade unions could be affected by the introduction of UBI. Some have put their weight behind the idea, arguing that UBI would reduce workers’ dependency on the labour market, breaking the chain in which wages are brought down by bosses threatening to replace workers with cheaper labour. More broadly, too, the time freed up as a result could see workers dedicate more resource to activism, with their UBI payments softening the financial blow of striking and allowing unions to hold out for longer.

The flip side of this, though, is that many right-wing supporters of UBI do so precisely on the understanding that it can essentially operate as a transfer of responsibility from employers to the state: why have a minimum wage when poverty pay will just be topped up by the government? Why cave to the demands of workers when they have a ready-made safety net already?

It has always been a challenge for the left that state-provided public services can operate to disempower civil society institutions. The introduction of the NHS, for example, was opposed from the left on this basis yet has turned out to be one of the most truly socialist models of healthcare across the world. It has, though, served as a useful example of the way in which public services can operate to increase the state’s powers of surveillance and punishment.

The introduction of passport checks to the NHS in the context of a ramped-up immigration ‘debate’ and accusations of “health tourism” despite evidence disproving a disproportionate drain on the NHS illustrate how a UBI contingent on citizenship could serve to worsen the situation for the most vulnerable migrants and asylum seekers.

No socialist proponent of UBI would defend this appropriation or the hollowing out of the welfare state overseen by the Conservative UK government in recent years, but for some of its right-wing supporters this is precisely its appeal. The introduction of a flat-rate payment in this argument removes and replaces existing welfare provision, essentially throwing all citizens out into the market.

UBI is championed by many on the UK left precisely because it seeks to replace an inhumane benefits system that has been reshaped beyond all pretence of fairness and equality, but UBI is only as left-wing as the government overseeing its implementation. While motive may not be a worry in Scotland specifically, reserved powers over tax and benefits could still override much of what appeals to the Scottish left about UBI.

It’s obvious why UBI appeals to many on the left, ticking about as many boxes as its possible for one policy to tick: universalism, a lessened dependency on work, a reduction in stigma, compensation for undervalued labour. Utopian demands are nothing to be ashamed of. Capitalism, though, has a tradition of appropriating these for its own ends, turning, for example, flexible working into an insecure and low-wage gig economy, and meeting the left’s demands for an accessible and simplified benefits system with the disastrous Universal Credit.

While few could argue with UBI as an abstract idea, it can’t be separated from any political context in which it would be implemented. A left-wing UBI would demand a high rate, the protection of existing welfare and labour rights, and a suite of new measures to accompany it and repel any negative impacts. While many see it as an ultimate route out of capitalism, the catch-22 may be that a left-wing UBI can only fully flourish in a society already freed from its grip.

@eve_rebecca