2020s >> 2020 >> no-1391-july-2020

Cooking the Books I: UBI – Useless Baseless Initiative

‘Coronavirus has united left and right on value of universal basic income’, was the headline of an article in the Times (2 June) by Philip Aldrick, its Economics Editor. This is the reform to capitalism under which the state would pay each of its citizens an unconditional minimum income.

The ‘right’ favour it to take the place of free and subsidised services provided to the poor; they want to give them instead the money to buy these services from private capitalists, The ‘left’ see it as a desirable social reform, some as a way to break the link between income and work. The Scottish First Minister, Nicola Sturgeon, has endorsed it, on behalf of the ‘centre’. Socialists are not keen on it at all.

On the face of it, giving people more money to spend seems a good idea. Who doesn’t want more money? But it won’t work, at least not as intended; for two reasons.

The first is that the payment from the state is never going to be much more than ‘basic’, something near the poverty line such as the level to which in Britain a person’s income is made up to under the Income Support scheme. This is in part because the capitalist state will want to keep the amount spent on UBI down, but also because, if the income was too high, it would undermine the economic coercion that is behind the wages system.

If people could live, even if rather sparsely, on the income there would be less pressure on them to go out and find an employer. Some advocates of the scheme say this would strengthen the low-paid workers’ bargaining position and see it as a reason why it should be introduced. But this is precisely why no capitalist government would introduce it at any level other than around the poverty line.

So, if introduced, it would only be as a tweak to the welfare or tax systems, with the basic income replacing other benefits, amounting to no more than a ‘redistribution of poverty’. The results of the Finnish experiment (tinyurl.com/y93baxxv), on which reformists placed such hopes, showed that it did bring some benefit to the unemployed who received it in that they no longer had to submit to what even the Economics Editor of the Times called ‘intrusive and dehumanising’ means testing, nor trying to find a job that wasn’t there (capitalism needs a certain level of unemployment, so there are always going to be some unemployed), nor going on useless courses about how to fill in a CV. On the other hand, those receiving it didn’t show any extra inclination to seek out a job; which was why it is not going be adopted.

The other objection to the scheme is that, as it would be paid to every citizen, whatever their situation and even if they were employed, it would be bound to have an effect on wages; it would strengthen the employers’ hand in bargaining over wages as the price of people’s working skills. Wages reflect the cost of reproducing these skills. So, if wage-workers are paid an amount by the state, the employer will not need to pay so much. This wouldn’t happen immediately but it would exert a pressure for money wages not to rise in line with the general price level. In the end, what the right hand gave the left hand would take away.

The only viable way to break the link between income and work is on the basis of the common ownership of productive resources; that will allow the principle of ‘from each according to their their ability, to each according to their needs’ to be implemented.

3 Replies to “Cooking the Books I: UBI – Useless Baseless Initiative”

  1. So you acknowledge that UBI would be ‘of some benefit to the unemployed’ and nonetheless it is ‘useless’? Even though the unemployed are a growing proportion of the working class due to automation? And wouldn’t UBI reduce the financial cost of going on strike, at least in countries where strikers are ineligible for unemployment benefits? That would strengthen the bargaining position of the employer, right?

    The SPGB says that it is not necessarily against specific reforms, which should be judged on their merits, it is only against reformism. Yet when any specific reform is discussed the assessment always turns out to be negative. Isn’t that odd? Which specific reforms does the SPGB favor?

  2. Stephen

    I dont see much wrong with the “Cooking the Books” article, to be honest. As you say yourself the article does acknowledge that “UBI would be ‘of some benefit to the unemployed’ so I am not quite sure how that ties up with your point that whenever ” any specific reform is discussed the assessment always turns out to be negative”. The expression, “useless”, as I understood it, alludes to the futility of reforms like UBI to fundamentally transform that situation of the working class in general – its exploited status and the relative poverty to which it is subjected. In that regard I think the article is spot on for the reasons given. There is no such thing as a free lunch in capitalism

    1. Robin, you and I can interpret “useless” that way, but that is not how the non-socialist reform-oriented workers whom we presumably hope to attract are going to interpret it. Taken in conjunction with the acknowledgment that UBI would benefit a large and growing section of the working class, i.e., the unemployed, it gives grist to the mill of those who say that we do not care about the suffering of real people in the here and now. There is no need for us to join the campaign for UBI — that is not our job — but nor is it necessary to ridicule it as this article does.

      What do you mean when you say that “there is no such thing as a free lunch in capitalism”? If it means that any gain from reforms is inevitably canceled out by a loss, then historically this is just not true. The National Health Service, for instance, was definitely a gain for the working class in Britain (especially at first, before it started to be whittled away). If the current protests in the US succeed in reducing (even if not eliminating) police brutality, and I think there is a good chance that they will, then that will be a marvelous gain for the working class, especially black people. There is no need to play down the importance of such gains.

      The author of the article says that UBI will not be adopted. I don’t see how he can be so sure about it. The current movement against police brutality shows how the capitalist class will concede reforms needed to head off mass protest, however much they might have preferred not to. Similar mass protests by and on behalf of the unemployed may well lie ahead, possibly with slogans like UBI.

      Two more points I would like to make for a more positive assessment of UBI. First, it would be of even more benefit to the unemployed here in the US than in the UK, because here it is harder to get unemployment benefit (you have to prove that you did not leave your last job of your own free will) and there are strict time limits to the period over which you can draw it (6 months–2 years). Second, unlike existing welfare provisions, which apply only to people in special circumstances, e.g., the disabled, UBI is in principle universal. It would establish for the first time the right of everyone, simply as a human being, to means of subsistence (however meager). In that way it would recognize a rationale opposed to that of the wages system. It would not be socialism, far from it, but it would point in the direction of socialism. That is one reason why it meets with such resistance from the capitalist class.

      The debate about UBI has the potential to bring socialism into view. But to do that its benefits must first be properly acknowledged. This article does not even try to do that.

      We have a choice of two approaches toward movements for social reform. We can view them as threats and try to persuade their supporters that they cannot achieve their goals and that even if they could it would make little difference. We have been doing that for many years and the results are not very impressive. Or we can welcome these movements as better than nothing, better than passive submission – at least people are protesting about something! – and encourage their supporters to look further ahead and think about the connections between their goals and socialism. That would perhaps be more productive.

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