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jumpin’ on the ubi bandwagon

August 9, 2012

Many on both the left and the right in the US have been lamenting the chronically high unemployment rates that have plagued most of the country since the 2008 financial crisis, and both have championed the need for more, better paying jobs as a corrective (mainly disagreeing about which is best way to promote job growth, raising or lowering taxes); but I think the idea of a universal basic income should really be put at the forefront of the conversation, particularly on the part of the left.

Of course, the idea of a guaranteed basic income isn’t anything new (e.g., in his 1797 pamphlet, Agrarian Justice, Thomas Paine proposed the idea of a basic income guarantee for all US citizens as compensation for “loss of his or her natural inheritance, by the introduction of the system of landed property”), but it’s an idea that seems all but absent from the majority of current discussions about ways to address the economic effects of the latest the crisis, such as chronically high unemployment, the large percentage of underemployed workers having difficulty making ends meet, and record foreclosure rates, as well as things like 30 years of stagnant wages for 90% of US workers, the general increase in work hours of already overworked workers, growing inequality at home and abroad, and a host of other pressing socio-economic issues that concern the working class as a whole.

And while the idea of providing such a guaranteed income in the midst of a global economic downturn might seem counterintuitive, it’s not as crazy or as unfeasible as it may initially sound. A lot of people — both past and present, from the left and the right, and for various reasons — have made some fairly persuasive arguments for why we should seriously consider it in some form, and I’m inclined to agree, particularly because of its potential to empower workers, decommodify labour-power by helping free workers from absolute dependence on wage labour for subsistence, and enlarge the nonmarket social economy.

The two biggest (and the most legitimate) criticisms of a universal basic income are that it’ll have a negative effect on the incentive to work (as if human beings are inherently lazy) and that it’d be impossible to fund. In regard to the first, I agree with Peter Frase that the critics’ screams of “but nobody would do any work!” are just silly, who argues in his blog post “Do They Owe Us a Living?” that:

For one thing, at least in the short run, most people would want to make more than the guaranteed minimum, and so would continue to work. For another thing, it’s clear that people do various jobs for lots of different reasons that don’t have to do with money, and some kinds of work would get more popular if people didn’t have to worry about having the money to meet their basic needs. Some jobs really are enjoyable, in other words, and people would do them for free if they could. Other kinds of work give their returns by conferring status–for example, for all but the most famous artists, making art is more about gaining recognition than making money.

One appealing aspect of a basic income is that it would start to sort out the distinctions between the different kinds of labor outlined above. If some jobs start being things people do as hobbies, then great! If some jobs disappear, and we don’t miss them, then great! If you have to pay people more to make them take crappy jobs, great! Which isn’t to say that basic income is a one-shot magic solution to all the problems of capitalism (although for the argument that it could be, check out a weird and provocative article called “The Capitalist Road to Communism”). Indeed, he best thing about a guaranteed income is that it stands a pretty good chance of provoking major economic disruption and social crisis–that’s what makes it a “non-reformist reform.”

And if problems do arise, it’s not like they’re unsolvable. As he continues:

In a world with a guaranteed income, it could very well turn out that there are some things that just aren’t getting done. It’s not clear that you’d be able to find enough people to clean office bathrooms or work the night shift at 7-11 if they had access to a basic income, no matter what you paid them. Some people invoke the above scenario as an argument against the basic income, but let me emphasize that this is a problem I would love to have. Once it becomes clear what kind of work is both desired and undersupplied, we can have a political struggle about how that work will get done. By offering special rewards (i.e. “material incentives”)? By creating some kind of national service requirement in exchange for the basic income (you have to go clean toilets or work the night shift once a month, say)? By finding clever new ways to automate these jobs? Or by deciding we can really do without some things we thought we “needed”? I can’t predict in advance what the solution would be. And I don’t have to. That’s really the most important point I want to make here. I think the lesson of history is that momentous social change never happens because someone came up with a detailed plan for the future, won people over to it, and then implemented it. The chaos of real people making their own history always overwhelms such neat plans.

Another reason I think this criticism fails is that the job market is already overcrowded, and many people are unemployed or underemployed. So instead of trying to create more jobs simply to stimulate growth, many of which may be are useless or counterproductive, having people able to drop out but still contribute to the economy as consumers (as limited as they’re spending power may be on such a relatively small sum), would actually help the economy stabilize. Moreover, if a large portion of these people really are lazy, as critics contend, it may actually be better not to have them working, opening these jobs up to more motivated and meticulous individuals.

In regard to the second criticism, that it’s be impossible to fund, I’d argue there are multiple ways to make this possible, especially if the universal basic income itself was large enough to make things like Social Security redundant, thereby replacing them and taking over the funds reserved for these programs. Some additional funding sources include things like capital gains taxes, income taxes, inheritance taxes, land and natural resource taxes, luxury taxes, sales taxes, wealth taxes (e.g., property tax), pollution taxes, tariffs, Tobin tax, value added taxes, elimination of certain tax deductions, etc. And as Philippe Van Parijs points out in “A Basic Income for All“:

A wide range of existing benefits can be abolished or reduced once a UBI is in place. And for most people of working age, the basic income and the increased taxes (most likely in the form of an abolition of exemptions and of low tax rates for the lowest income brackets) required to pay for it will largely offset each other. In a country such as the United States, which has developed a reasonably effective revenue collection system, what matters is not the gross cost but its distributive impact–which could easily work out the same for a UBI or an NIT.

He notes that estimates of the net budgetary cost of various universal basic income (UBI) and negative income tax (NIT) schemes have been made in both Europe and the US, and as one example, the negative income tax scheme proposed by Block and Manza in the US, which would raise all base incomes to at least 90% of the poverty line, would cost about $60 billion annually (at least in mid-1990s dollars). In comparison, this year’s defense budget alone is close to $700 billion, which is more than Britain, Canada, China, France, Germany, India, Japan, and Russia combined, accounting for a whopping 40% of total global arms spending. I’m fairly certain the military could spare a measly $60 billion and still remain competitive globally, which would go a long way towards funding. And to all the anti-taxation advocates who feel that taxes are stealing and are vehemently against taxation of any kind, I’d simply offer the words of Benjamin Franklin to Roger Morris for their consideration:

The Remissness of our People in Paying Taxes is highly blameable; the Unwillingness to pay them is still more so. I see, in some Resolutions of Town Meetings, a Remonstrance against giving Congress a Power to take, as they call it, the People’s Money out of their Pockets, tho’ only to pay the Interest and Principal of Debts duly contracted. They seem to mistake the Point. Money, justly due from the People, is their Creditors’ Money, and no longer the Money of the People, who, if they withold it, should be compell’d to pay by some Law.

All Property, indeed, except the Savage’s temporary Cabin, his Bow, his Matchcoat, and other little Acquisitions, absolutely necessary for his Subsistence, seems to me to be the Creature of public Convention. Hence the Public has the Right of Regulating Descents, and all other Conveyances of Property, and even of limiting the Quantity and the Uses of it. All the Property that is necessary to a Man, for the Conservation of the Individual and the Propagation of the Species, is his natural Right, which none can justly deprive him of: But all Property superfluous to such purposes is the Property of the Publick, who, by their Laws, have created it, and who may therefore by other Laws dispose of it, whenever the Welfare of the Publick shall demand such Disposition. He that does not like civil Society on these Terms, let him retire and live among Savages. He can have no right to the benefits of Society, who will not pay his Club towards the Support of it.


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