Status Quo? Basic Income? No!

Recently I was interviewed on the Dead Pundits Society podcast about Basic Income. In the run-up to the interview a number of listeners had submitted questions about Basic Income. Some of these questions were skeptical of the critical appraisal of Basic Income which myself and others have put forward. While I touch on some of these questions in the interview, I think it is worthwhile to flesh out my answers because the so frequently come up.

1) How does Basic Income, differ from other social programs? What makes Basic Income different than winning other reforms or social benefits?

I bump up against this question all too often, so it is worth being clear. Basic Income, especially a Universal Basic Income (UBI) with a high dollar amount, is not like other social programs because it deals directly with the functioning of the capitalist labour market. Childcare, healthcare, education, socialized housing should indeed be understood as form of a social wage, that can, if robustly implemented, reduce the need for workers to enter the labour market to sell their potential to work to reproduce their lives.

These programs are important and necessary where they exist, but they are not inherently a direct challenge to the DNA of capitalist labour markets. Even with these social reforms, under capitalism the working class is still required to enter the labour market.

What distinguishes Basic Income as an idea, at least for some on the Left, is that it seeks to radically upend capitalist labour markets directly. It aims to provide the basic necessities of life to the working class not through collective social programs or collective social ownership, but through state wages. The progressive version of this means that workers will have ability to subsist outside of the labour market within a capitalist economic social structure. Workers will enter the labour market when they feel like it, not when they are compelled to. And if employers want to hire people they will need to radically improve working conditions and pay to entice workers back into the workplace.

The conceptual problems with this perspective are glaring. Capitalism first and foremost requires a functioning labour market in order to make profits (i.e. having a ready supply of workers who are willing to be exploited). The entire history of capitalism can be seen through the lens of trying to find and stabilize labour markets. Thom Workman and Geoffrey McCormick, who I quoted in a earlier piece, express this well:

The fact that workers — even those who are fond of their jobs — sell their labour power to employers out of necessity is the bottom-line reality that must be preserved through social policy. The cultivation of genuine alternatives for working people, perhaps in the form of alternative communities tied to the land (history abounds with such experiments) or in the form of legislation guaranteeing annual incomes which permit families to live modestly but with greater dignity, would have the effect of undermining capitalism by undermining its coercive labour supply.

Social policy which seeks to undermine the smooth functioning of labour markets will be met with fierce resistance. Hence healthcare, education etc, while certainly resisted by capitalists — especially those with sectoral interests — do not in themselves destabilize (in certain cases they enhance the functioning of) capitalist labour markets. They are reforms which can exist within the capitalist horizon (and even then they are constantly under attack).

Perhaps the closest comparable social reform to Basic Income in terms of impact on the functioning of the labour market is Unemployment/Employment Insurance. The Unemployment Insurance (UI) program was first adopted in 1940 in Canada, initially it was an extremely modest program. By the early 1970s the program was dramatically improved and the coverage of UI was upwards of 80 percent of unemployed (at generous rates by today’s standards) by the mid 1970s. Almost immediately the program was subjected  to reforms which aimed at reducing this high rate of coverage (legislative attacks on the program occurred from 1976 onwards), as it was understood a robust UI created an inflexible labour market for employers.

The economic crisis in the early 1990s, which saw a dramatic rise in the unemployment rate in Canada, was the pretext for a major assault on the program. The program was renamed Employment Insurance, insurable earnings were cut back to 55 percent and the rate of coverage fell to 60 percent and then to less than a third of unemployed workers by the end of the 1990s (throughout the 1990s as the number of unemployed crept up the percentage of workers without coverage increased). The program was subject to further cuts, restrictions and government raids of its funds (which also occurred under the Liberals) through the Harper years.

What is important to note is that the gains of the UI program were subjected to a massive sustained assault because it fundamentally challenged the workings of the capitalist labour market and thus capitalist’s profits. The initial reforms were only possible because of a massive surge in the class struggle across the country — strike activity in Canada peaked in the 1970s. To somehow think that we can simply tilt the balance towards the working class through a social policy that alters the basic functioning of the labour market in a period of low-class struggle is to misread the nature of the state, the balance of class forces and the basic mechanics of capitalism. There is no tricking capitalists into providing what amounts to an unlimited strike fund to all workers. There  is no policy end-run around the realities of capitalism and the nature of the state.

In short, other social reforms like healthcare, education are not quite like Basic Income. Those social reforms aim to collectivize and decommodify social services. They are a threat to profits, but not to the functioning of the labour market. Basic Income, from a progressive standpoint, aims to fundamentally alter the workings of capitalism, by completely disrupting capitalist labour markets while keeping capitalist social relations in tact. There is no skirting around it, this idea is totally unrealizable.

2) By focusing on the finances of programs like Basic Income, the expenditures and revenues required, aren’t you in effect mirroring right-wing talking points about economic possibilities?

If we are talking about a reform, we should be clear what that reform is, how it would work effectively, and what it will take to achieve it. Understanding its cost, not just outlining the expenditures, helps us to understand what it will politically take to fight for it. If a reform is say for a UBI of $40,000 a year for Canadians above 18, you are looking at a front loaded cost of $1.1 trillion, roughly four-times the size of the entire federal budget. Calculating the cost helps us understand this reform is not achievable within the current political and economic conditions.

Likewise having a UBI of $1,000 a year for people over 18 comes with a more modest $29 billion price tag in new spending (roughly 14 percent of the entire federal budget). Costing this reform not only allows us to see what it takes to achieve it, but whether achieving that reform is even worth it. A UBI of $1,000 is surely more achievable than a UBI $30,000 or even $40,000, but at a cost of $29 billion it is by any measure a terrible use of resources to address inequality and poverty. For instance, with that money we could create a robust national housing strategy, a pharmacare program, and a national childcare program.

In short, costing reforms allows us to weigh and debate their strategic potential. Are they winnable? What impact will they have? What kind of forces will need to be marshalled to achieve this reform? And is this the best use of our political and economic resources?

We should not of course limit ourselves to economic calculations alone. Budgets are fundamentally about choices, or as Joseph Schumpeter noted, “the budget is the skeleton of the state, stripped of all misleading ideologies.” We can radically imagine reconfiguring how the economy works and for whom. But a strategy of building radical power via the fight for reforms requires us to outline how those reforms can actually work. The struggle for reforms is about strengthening the fighting capacity of the working class, raising its political expectations, and giving people a practical lesson of collective political action getting the goods.

3) Just because the Right supports a version of the Basic Income doesn’t make it bad. Why should we cede the ground of Basic Income to reactionary forces?

On the face of it I agree. Just because a political foe supports a version of a position you have does not automatically make it wrong. This has never been my main criticism of Basic Income. However, it is wrong to simply ignore that the right-wing also has designs on this social policy.

Support of Basic Income by some on the right-wing is long-standing. The idea is that Basic Income can be effectively used to dismantle existing social programs by folding them into a Basic Income program. Citizens, instead of having access to strong social supports, will be cut a cheque by the state and then purchase social services on the market. Basic Income has gained increasing support amongst the new generation of tech moguls like Elon Musk and Mark Zuckerberg.

The most recent polling in Ontario shows SME business owners to be far and away the strongest bloc of supporters for the idea in that province (it was also offered up by the Ontario Chamber of Commerce as alternative to raising the minimum wage). The reason for this is simple, employers love the idea of a Basic Income acting as a wage top-up. Instead of raising wages, employers can rely on the state to provide a subsidy to their low-wage employees. Under this model employers can kick wage demands over to the state, which ultimately reduces the potential power of workers in the workplace and helps obfuscate the relationship between wages and work, between workers and the boss.

Basic Income is being tested in places like Finland, Ontario and India. These tests are not conducted by the Left, but are being rolled out by right-wing governments backed by social policy laboratories of the ruling class. Mentioning the right-wing support for the idea is not to muddy the waters, but to paint a clear picture of the real dangers of this idea. Basic Income is in many way an ideal mechanism to launch an attack on social programs, and to marketize social services. The idea that the same political and economic conditions which have given rise to the neoliberal assault on social programs can somehow lead to a different outcome via a new social policy rests on a misreading of the political terrain and on backwards notion of social change.

Advocates of Basic Income on the Left ideas of social transformation thoroughly scrub the state of any class perspective and make into a neutral terrain of social policy. Social struggle is reduced to a function of proper social policy. The political and economic elites, our ruling class, are likewise turned into a passive force. This removal of politics from the calculation of Basic Income would be a profound folly, which we cannot afford to commit.

4) Why do you fetishize work? The current system is broken. What is your alternative?

There is a tendency within the basic income debate to reduce all criticism of the idea to a defence of the status quo. So let me be clear, the status quo is broken and work sucks. The existing welfare state is in shambles, the treatment of those on the margins of society is revolting and the injustice and exploitation is rampant in the workplace.

The question becomes if not Basic Income than what? Well, sadly I think there are no easy answers. In Ontario I support the $15 and Fairness campaign‘s effort to raise the floor of working standards (raising the minimum wage, improving scheduling, paid leave days etc.). This campaign shows what is possible when we aim to mobilize from the grassroots around a set of ambitious, yet achievable, reforms that actually speaks to and involve the broader working class.

Building the capacity and militancy of the working class, writ large, to demand and fight for more will be key in the struggle to fight for a broader social transformation which seeks to treat all people with dignity and respect. In Ontario, Ontario Works and Ontario Disability Support Program, have seen deep and sustained cuts. Supporting the Ontario Coalition Against Poverty’s campaign to raise the rates is one obvious way in which we can counter the indignity of the current system.

There is no shortage of ideas about how to improve people’s lives in the here and now, from raising welfare rates, to increasing working standards, to expanding social programs (and coverage) in areas such as education, healthcare, housing and childcare. The question is not one of social policy, but of political capacity, strategy and theory.

For some, Basic Income speaks to a real humane desire to not let people live in poverty in the midst of such abundance. While noble, where I think this reform falls flat is that it willfully ignores the political and economic realities of capitalism as it is. Instead of accommodating our utopias within the horizons of market relations, we should aim to understand how capitalism actually operates in order to put forth a vision and strategies which seek to smash it.






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