Great Transition Network, Discussion on UBI

October 2020

In my view, Paul Raskin gets this web discussion off on the wrong foot, when he writes: ‘Guy [Standing's] philosophical and political arguments set the right tone by mercifully staying clear of the knotty details of how a UBI might be designed’. But UBI is precisely a policy rather than a fundamental value or goal of collective action, unlike freedom, equality, wellbeing, sustainability, or whatever. It is one specific route to a value goal or goals and should be evaluated as such. I want to question the coherence of UBI as a policy strategy and to question the values which it purports to pursue.

What is UBI?

In a way, this is the central question. Guy Standing defines BI (no longer UBI) as ‘providing every legal resident of a country with an equal monthly sum of money, without conditions, as an economic right’.  This is usually qualified as a ‘modest sum’, though the original idea was ‘a basic amount on which every citizen can survive’. For example, the UK Green Party proposes ‘a guaranteed, non-means-tested income, sufficient to cover basic needs, payable to every woman, man and child legally resident in the UK’. The reliable Loughborough Minimum Income Standards research finds that a decent participatory income in the UK today would amount to some 80% of the median income or about £200 per person per week, or £10,000 per person per annum.

To my knowledge, no one, anywhere in the world, is seriously proposing a full UBI. For instance, the Citizen's Income Trust has ruled out the possibility of a Full Citizen’s Income for everyone as far too expensive. So all extant pilots, experiments and plans in the rich, developed world are for what might be called a minimal BI. This is the case for the UK Royal Society for the Arts scheme, Andy Stern’s US plan, and Philippe Van Parijs’s Euro-dividend of €200 a month.

Affordability: benefit and fiscal costs

So we must start with actual proposals. The latest UK report advocating UBI by Stewart Lansley and Howard Reed proposes an annual basic income of £60 per week (£3120 pa) for adults aged 18-65, £40 (£2080) for children and £175 (£9100) for people over 65. This would provide for example £10,400 pa for a couple with two children. The gross costs would be £300bn or about 15% of GDP. This would be partly paid for by abolishing child benefit and the state pension, but all existing means-tested benefits would be retained. In addition, the personal tax allowance would be abolished, saving £101bn. But this still leaves a shortfall of £81bn, which they propose to cover by raising income tax rates by 3p in the £ and charging national insurance contributions on all incomes rather than capping them as at present.

This radical shift would achieve certain progressive gains: according to their model, the incidence of child poverty falls from 29% to 18%. But the overall impact on poverty is small:  working age poverty falls only from 20% to 16%. Moreover, the proportion of households in the poorest decile claiming means-tested benefits would fall by a tiny amount from 76% to 70%. These are meagre rewards from a programme proposing to reorient 15% of GDP.

UBI advocates typically respond by asserting that there is plenty of money available if only it were tapped. Guy Standing in his latest book lists seven: raising tax levels to the OECD average; abolishing personal tax allowances, tax reliefs on higher pension contributions and exemptions to capital gains tax, closing tax loopholes and reducing tax avoidance, building a people’s Quantitative Easing programme, and establishing a Commons Fund financed by a Land Value Tax. I would love to see all this happen. But surely the revenues of such a fiscal revolution should not all be dispersed as a partial BI, which will still remain inadequate, fall far short of ending poverty, and leave reliance on means-testing pervasive.


‘To each according to their needs’

In the early years of the BI movement, BI was labelled ‘the capitalist road to communism’, a short cut which would obviate the need, according to Marx and Lenin, for a messy in-between stage of ‘socialism’. So let us begin with Marx’s famous definition of communism: ‘from each according to his ability; to each according to his needs’. Providing everyone with an income – if sufficient to live on - would seem a clear route to this radical goal. Indeed, providing all citizens with basic economic security is a profoundly good idea. It echoes the idea that social wealth is collectively produced and that it is unjust that owners of land and capital are able to exploit the vast bulk of citizens and lay claim to this surplus.

But BI contradicts Marx in at least two respects. First, it focuses solely on money income as the route to meeting needs. By strengthening the role of money in everyday life, UBI would privatize consumption and atomize social relations. Giving people money to spend on goods and services to meet their needs is an indirect, circuitous, and potentially self-defeating route to meeting those needs. Even contemporary welfare states comprise more than that: national health services (except in the US) and public education fulfil critical social consumption and social investment functions.  

Second, BI ignores the first part of Marx’s famous definition, ‘from each according to their ability’: the idea of a social and foundational economy to which all who are able contribute their labour and care. Such social obligations are missing from most proposals in the belief that providing a basic income will somehow call forth a range of participatory responses. From a human need perspective, participation in productive and reproductive activities, as well as contributing to collective welfare, is a crucial component of self-respect, contributes to cognitive development, and provides a site for purposeful socialisation.

Ecology, sustainability and UBI

BI has been promoted by green parties and degrowth advocates since the 1970s. Yet it is remarkable that many green supporters of BI rarely advance a specifically green or environmental case. Guy Standing devotes only two paragraphs of his 2017 book to these questions. One claim is that a BI would encourage people to shift some of their time from resource-depleting labour activities to ‘resource preserving reproductive activities’. Related to this is the claim that it would encourage shorter working hours. But there is growing evidence that dispersing money in this way would raise not lower carbon emissions.

Similarly, degrowth advocates frequently promote BI as a route, but again with little evidence. The coupling of UBI with degrowth reveals a dilemma at its heart: an expanded and fiscally more demanding state is superimposed on a shrinking economy. The pressing need will be for a radical investment strategy to attain a just transition to a sustainable economy: to decarbonise production and consumption, for climate adaptation programmes, for social consumption rather than individualised consumption.

One possible link concerns reducing emissions via carbon pricing. Recognising that this would have a regressive impact, a BI would make carbon pricing or taxation more equitable and acceptable by recycling the revenues raised to pay ‘green dividends’ to everybody. But the tax-and-compensate case has dwindled in recent years in the face of growing evidence that monetary compensation is a most inefficient way of securing a just transition to a low carbon society.

Conclusion

The overriding task today is keeping within planetary limits – addressing climate breakdown, species extinction, and other existential challenges – while at the same time shifting from a greed-driven to a need-driven economic system. The central slogan should be a ‘just transition’ from the present to a future green, equitable, and sustainable world. And this transition has to be very rapid – it must start now.

No single policy instrument can achieve this. Proponents of UBI today who recognise this always then list a series of adjunct proposals or add-ons, without which it cannot achieve its aim. But as the add-ons multiply, what becomes the role of the central thrust to achieve a UBI? UBI would divert, not augment, energies and movements for a just transition.

Many supporters see UBI as a way station to a different society: a powerful mobilising theme to bring about more radical change. There is no real-world evidence for this. The only example is the Alaska Provident Fund, which pays on average $1400 per person per year depending on oil revenues. Similar proposals have been made every few years for the last 40 years and have gone nowhere. Nor will they in the future.
 
Ian Gough

PS: What is the alternative? There is a growing movement advocating Universal Basic Services that recognises the multifarious nature of human needs and the role of collective services alongside money income, pays proper attention to planetary limits and sustainability, and argues the need for an integrated suite of policies to transform the current economic system. Perhaps this could be a topic for a future discussion?

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August 31, 2020

Dear GTN,

Should society provide all citizens with a basic income, no strings attached? The idea of a “universal basic income” (UBI), a longstanding theme in utopian social thought, is now gaining traction—and sparking controversy. Mainstream proponents may be drawn to a UBI as a policy tool for system correction, e.g., rationalizing ineffective welfare systems and adjusting labor markets in a robotized economy. But the focus for GTI is on the role of a UBI in system change.

Our September discussion—Universal Basic Income: Has the Time Come?—will critically examine the proposition that a UBI should be a central element of transformative strategies and visions. After all, advocates argue, the UBI idea strongly resonates with egalitarian ethics, basic concepts of justice, and human emancipation. Moreover, by providing economic security, the UBI could support a shift to post-consumerist values and lifestyles, thereby shrinking humanity’s ecological footprint. Still, radical UBI skeptics voice principled objections, especially concerns that such an approach would encourage individualism, erode social cohesion, and weaken class solidarity.

Guy Standing, a prominent UBI advocate-scholar, kicks off the discussion with a short essay, “ The Case for a Basic Income ” (linked here). Guy’s philosophical and political arguments sets the right tone by mercifully staying clear of the knotty details of how a UBI might be designed. I hope you’ll read this impassioned piece and use it as springboard for weighing in with your own comments.

For now, I would like to call attention to an unstated premise in Guy’s essay (and much of the basic income discourse): the tacit assumption that the natural arena for a UBI is the sovereign state. Indeed, this makes pragmatic sense since, given the undeveloped state of transnational governance, the national context is where near-term progress might be made. Nevertheless, in a deeply interdependent world, reducing the argument to the domain of the nation-state has become an atavistic basis for defending a UBI on the criteria of rights, justice, and ecology. Realistically, the case for UBI may well end up at the level of the nation, at least for now, but should begin at the level of Earthland .

The GTN discussion will go through Friday, October 9. Then, Guy will be given an opportunity to respond, and, as usual, we will assemble a public GTI Forum. I look forward to your comments both pithy and extended (but less than 1,200 words).

Over to you,
Paul Raskin