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Let’s Talk About UBI.

The idea of a Universal Basic Income (UBI) has been around for a long time, with such luminaries as Thomas Paine, Sir Thomas More, Bertrand Russell and Martin Luther King among its proponents. There have been a number of experiments in places as diverse as Finland, India and Namibia so there is a lot of fact to back up the underlying principle and we may have reached the point to consider it an idea whose time has come. The idea is very simple, you calculate the minimum amount necessary to enable a decent, if basic, life and you give that sum to every citizen. That is it. There is no need for food banks any more, everyone can afford enough to eat. Nobody is forced to stay in a horrendous job because they would have nothing if they left. People may choose to take on a low paying job to earn a bit more, but that is under their control; they will not lose out because of any extra that they earn. Employers, hopefully, will be forced to provide better wages and conditions, because a major part of their hold over the workforce has gone. Anyone who wants to start their own business, or indulge their creativity is free to do so without worrying if they will starve.

This all sounds very utopian and, of course, it is not that simple. As an idea it has support from both political left and right, though the two sides do look at it rather differently. One clear difference is that from the right wing point of view it is a way of bolstering the economy by making sure everybody can continue to consume. It is an economic policy that provides an indirect path to transfer public money via consumer spending into the hands of the capitalists in the form of profit. It helps to maintain that flow when the direct path through banks and speculators becomes politically difficult because of the backlash of potential civil unrest. Any additional cost is reduced or eliminated by cuts to the welfare budget. It can also enable the payment of wages that are much less than any reasonable minimum level. It has been of particular interest to the big tech companies in silicon valley who foresee a future where they make robots which make gadgets which nobody can afford to buy.

In the left wing view, UBI as a policy is not a solution to any economic problem. It would undoubtedly have an economic impact, but it is a major plank in a policy designed to tackle the social, moral and ethical problems of poverty and alienation. Poverty is a global pandemic that has been raging for millenia. The death toll is staggering and it remains perhaps the biggest single factor in death and serious illness, both physical and mental. Very few societies have managed to eliminate it though many politicians pretend that is one of their intentions. Even major religions preach that its inevitability has to be accepted, “the poor you will always have with you.”

Alienation occurs when you try to target support solely to those in financial need. Many people are too proud to accept what they see as charity. The means test that is an essential part of targeting automatically creates “others”. Recipients will be treated differently: they will face discrimination in housing, employment, health and education. Children are victimised if their parents are seen as unable to support them without state assistance. Right wing media and politicians see them as fair game., they will be called “scroungers” in the media and to their face. Landlords will not rent to them, or only the worst accommodation that nobody else wants. This often leads to the formation of ghettos, “benefits street.” On top of all this targeting does not even save money; the bureaucracy necessary to carry out the testing and deal with anomalies and appeals is extremely expensive. Attempts to save money by moving the bureaucracy to private companies have proved disastrous.

There are other policies with similar objectives. I do not want to call them “alternatives” because they are not mutually exclusive. They tackle slightly different parts of the problem in different ways. I will mention them briefly here, since they are not the main subject of this post and deserve posts of their own. The first is UBS, “Universal Basic Services”; here the basic services necessary for existence, such as energy, transport, communications and basic housing are supplied free. If you want more than the basic, then you must pay for it but everyone should be able to survive with no, or at least very little money. Some may see this as somewhat Utopian, a sort of “Star Trek” ideal, but it is feasible and attractive in many ways. I remain dubious about how well such a policy tackles the alienation problem and I would look for it more as part of a larger strategy to move towards a more egalitarian, cashless society. This could clearly be a nice ideal to work towards, but it is a long way off as yet.

The other policy is the JG (Job Guarantee), which is very much favoured by proponents of MMT (Modern Monetary Theory). Here the government acts as an employer of last resort; everyone who wants a job and is unable to get one should be able to find work with the government at a decent living wage; the sort of jobs often quoted as appropriate would be “green” jobs cleaning up the environment and in the care sector. This is another attractive proposition, but it leaves a substantial number of people who are unable to work, or who do not want such jobs, to be cared for by a traditional style welfare system. It’s proponents generally have little to say about the amount of time and effort to set up the infrastructure and management hierarchies for what is potentially a huge number of employees, let alone dealing with Health and Safety issues, unionisation and settling disputes. This would also impact heavily on workers in the current lower paid private sector which would need to have large pay increases in order to compete; that would of course be a very good thing, but it is difficult to see the businesses involved just rolling over and taking it. They would fight it through the courts and use their parliamentary stooges to oppose it all the way.

To sum up, UBI is a simple and effective way to put money into the economy in a way that means a large proportion of it will be spent, creating demand and thus stimulating supply. It has wide support from all parts of the political spectrum, however different sides look at it, and would use it in different ways. The right sees it is a way to bolster consumerism, especially at a time of falling employment, and allow reductions in welfare. The left sees it as lifting people out of poverty and allowing for greater freedom for those seeking work, and greater security for those who do not work. A left wing UBI policy would also involve progressive taxes on wealth and income as a major effort towards redistribution, enhanced welfare support based on need and a shift of power from employers to employed. A right wing UBI policy would involve cuts to welfare and the minimum wage as part of a move towards a low wage, low job security economy. UBI does not preclude other policies such as UBS and JG, indeed they could all three form part of a powerful left wing economic policy.

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