Would A Universal Basic Income Strengthen or Shred the Social Safety Net?
Debating the merits—and dangers—of instituting a universal basic income in the U.S.
UP FOR DEBATE | JULY ISSUE | June 9, 2016
This is the first in a new series, Up for Debate, in which experts debate some of the most important issues within the Left today.
Here’s a novel idea for how to end poverty: Give everyone more money. That might sound like a fantasy, but support for a universal basic income (UBI) is gaining steam. It’s been debated everywhere from policy journals to Vice and the New York Times, and it’s on the ballot or in pilot programs in several European countries.
The basic concept is simple: The government doles out a modest amount of cash that establishes an income floor for everyone, whether or not they’re working. The details beyond that can vary. A basic income can be distributed to everyone regardless of how much they make (the “universal” piece), or it can be given only to those whose income falls below a certain threshold.
One’s gut reaction to this proposal might be suspicion—if something sounds too good to be true, it probably is, right? Indeed, proposals for a UBI are sometimes proffered as part of an austerity agenda. Some on the libertarian Right see the measure as a convenient way to gut welfare and shrink the state, leaving UBI recipients with the “freedom” to spend their check how they like, but little else in the way of public assistance. In 1969, the idea was floated by none other than Richard Nixon as a replacement for Aid to Families with Dependent Children.
But the growing popularity of UBI also holds enormous potential for progressives. Many on the Left see it as a way to significantly reduce poverty and help free people from crappy, low-paying jobs—not to replace other social welfare spending, but to add to it.
UBI is not merely hypothetical; it already exists in some forms. The state of Alaska already has a program similar to a UBI, in the form of a fund that pays dividends from state oil revenues to all Alaskan citizens. (In 2015, every Alaskan who wasn’t a convicted or imprisoned felon and had lived in the state for at least one full calendar year received a check for a cool $2,072.) And a new, privately-funded pilot program in Oakland—the first in the U.S. since the 1970s—was recently announced.
The proposal has gained even more momentum abroad. Finland is conducting a UBI pilot project in which some citizens will receive €800 a month this year, in exchange for the elimination of most of its welfare services. Brazil has been debating UBI since the 1980s, and the social democratic Workers Party instituted the “Bolsa Familiar,” which gives direct cash transfers to the poor while also mandating increased education, in 2003.
Is now the right time to push for a UBI? And what should it look like? We posed these questions to Shannon Ikebe, a Ph.D. student in sociology at the University of California-Berkeley who studies social democracy and labor movements in Europe, and Jesse Myerson, a leftist activist in New York City who has written extensively about UBI.
Shannon: The rise of serious economic and political discussion about UBI in recent years presents a great opportunity for the Left. That discussion offers us a rare opportunity to positively articulate the kind of society we want, rather than playing defense against neoliberalism and austerity. The best kind of UBI would be set at a level high enough to provide a livable income without wage labor. That could empower us to work less, win better working conditions or even stop wage labor altogether.
But freedom from what Karl Marx called the “dull compulsion of economic relations” is not an easy one to achieve. Basic income below the livable level, as is the case with many UBI proposals on the table in various countries now, does not have that crucial emancipatory effect. And it is unclear whether a UBI would be better than demanding the expansion of free, high-quality social services—especially considering that the implementation of a basic income could even be used to justify cuts on the other parts of the welfare state, as conservative proponents of basic income advocate.
It is not simply a matter of making sure that we advocate for the better kinds of basic income and oppose worse ones. With a weak working class, the most likely form of basic income to be implemented is a regressive one, regardless of the intent of leftist support for UBI.
Legislative or referendum victory for basic income on its own is unlikely to ward off a distorted implementation. If basic income is effective enough to radically shift the relationship between workers and employers, capitalists would move to modify it in their favor. As historian Ellen Meiksins Wood has demonstrated, the fundamental characteristic of capitalism is people’s dependence on the market for their livelihood, upon which capital’s ability to exploit workers and make a profit depends. Therefore, basic income at the livable level should be considered as part of the larger emancipatory political vision of “from each according to his abilities, to each according to his needs,” rather than a single-issue campaign. Its realization—or even small steps towards it—is impossible without massive and sustained mobilizations by the 99%.
Jesse: I’m glad Shannon mentioned Ellen Meiksins Wood’s economic framework. She noted that, in its earliest stages, capitalism required cutting off peasants from their means of subsistence: land. The masses were then forced to submit to the job market’s imperatives to earn a living—above all, the imperative to compete. This gives capitalism its “laws of motion”: Capitalism “can and must … constantly impose its imperatives on new territories and new spheres of life.” The primary socialist goal, then, must be to provide an exit from the job market. A UBI can help do that.
Shannon doubts that a UBI alone is up to the task. Pavlina Tcherneva, an economist at Bard College, describes herself as sympathetic to the motivation behind a “pure” basic income, but concerned that it sabotages itself macroeconomically. Imagine millions of people dropping out of the labor force (thus depleting supply) just as millions of people join the consumer base (thus increasing demand): Prices would ascend, meaning the basic income would no longer purchase the load of goods and services it was intended to.
A job guarantee, Tcherneva says, can provide universal material security without threatening hyperinflation by growing in a downturn, when inflation is extremely unlikely, and shrinking in an upswing, when inflation is likelier, and by maintaining a base wage not competitive with the private sector. A job guarantee would provide its own mechanism for limiting inflation—unlike a basic income.
But we shouldn’t allow our worries about broader policy changes to paralyze us from pushing for a UBI now. Winning a UBI at a lower-than-subsistence level wouldn’t be as bad as Shannon suggests. Policy blogger Matt Bruenig points out that a $3,000 basic annual income could cut the U.S. poverty rate in half. All told, that would require an expenditure of $930 billion, or roughly 5.7 percent of GDP. As long as this program did not lead directly to an erosion of the existing welfare state—the conservative proposal that Shannon mentions—such a “partial” UBI program alone should still serve to tighten labor markets, reduce dependency on market income and enhance leisure. In other words, it would do a great deal to expand freedom and dignity for U.S. workers.
I favor an approach to Wood’s conundrum that pairs a job guarantee with a basic income (and, of course, a whole suite of expanded social welfare policies). But now is the time for us to push for a UBI, even if other social welfare policies are currently out of reach.
Shannon: A $3,000 basic income for all, without reduction of the existing welfare state, on its own would be a positive development. Basic income, combined with a jobs guarantee, would clearly be a qualitative leap toward a better society. But policy proposals do not operate in a vacuum. The key question is how a certain proposal would develop in a given political context.
In that light, basic income carries a risk that is not applicable to other demands for expansive social policy: It can very easily be used as the basis to reduce the existing welfare state. While no ambitious social policy demand can avoid the risk of getting financed at the expense of other worthy programs, basic income is distinctive in the sense that its very enaction can be seen to reduce the need for other programs. This is not the case with, for example, free higher education, childcare or healthcare.
Indeed, there are numerous neoliberals, from the late economist Milton Friedman to right-wing public intellectual Charles Murray, who advocate for basic income precisely for these reasons. Enacting a UBI that is palatable to such cretins of the Right would be terrible.
Kathleen Wynne, the Liberal Premier of Ontario, Canada, is a proponent of one of the likeliest basic income schemes today. She is no Friedmanite. But centrists like her are framing UBI as a reallocation of existing welfare spending rather than its expansion. She may be right that basic income is still an improvement on the dismal status quo of the liberal welfare state—the “universal” piece of a universal income makes it more politically secure and less stigmatizing than “means-tested” measures like welfare for poor people. But everything depends on the exact version that gets implemented, and that depends on the outcome of political struggle.
In most parts of the world today—perhaps especially in the United States—the Left is probably not strong enough to steer a UBI in the emancipatory, rather than the neoliberal direction. It could therefore be better conceived as a longer-term goal, whose victory should be pushed for when the subordinated classes are much stronger and better organized than they are now. In the meantime, the demand for shorter working hours would strengthen such capacities and deal with unemployment at the same time.
The Swiss campaigners for basic income at the livable level have run a fantastic campaign. Their question of “what would you do if your income were taken care of?” helps us boldly imagine what our lives could be like in an alternative society. But the question also misses that capitalism is the main barrier to a society free from such worries. Addressing the politics of consumption without the politics of production is not a promising strategy, because what is to be consumed must be produced first. I hope that we will someday win basic income at the livable level, as part of the post-capitalist future. But there are simply no shortcuts to emancipation.
Jesse: Shannon is right that the greatest hope we have of ensuring that a socialist version of a UBI, rather than its libertarian contender, eventually becomes policy will be the organization, militancy and political power of the working class. We also agree that the Left is not strong enough at the moment to win that battle. However, when he says that we should therefore subordinate a UBI in our demands until the time is right, he loses me.
This line of argumentation is a less-egregious cousin to Hillary Clinton’s criticism of Bernie Sanders’ advocacy for single payer healthcare, which holds that if the government isn’t good enough to pass a good agenda, the solution isn’t to improve the government but to worsen the agenda. Obviously, Shannon is not against improving the government, but his critique resembles Clinton’s in missing the importance of aiming high.
Premature demands are useful for coalescing a political constituency around a cogent vision. Focusing only on the next increment, rather than several steps down the road, raises the question: “An increment toward what?” By contrast, demanding bold policies that are unlikely to soon come to fruition impresses a vision of a larger goal, a good life for which to strive, a “compass point.” If that vision is vivid and beautiful enough, it will have the power to seduce people to struggle for it. Thus, demands such as a basic income are themselves organizing tools.
“She’s on the horizon,” the great Uraguayan writer and leftist Eduardo Galeano once wrote of utopia. “I go two steps, she moves two steps away. I walk 10 steps and the horizon runs 10 steps ahead. No matter how much I walk, I’ll never reach her. What good is utopia? That’s what: It’s good for walking.” Why push for UBI now? Because it’s good for walking.
From the July 2016 Issue | purchase a copy