Universal Basic Income Won’t Work

We don’t have the political power to see it through

Universal Basic Income (UBI) — the idea that every citizen should get a ‘salary’ no matter what it is they’re doing (or not doing) — is one that has been around for decades. Its first major wind was in the ’60s with advocates like Milton Freidman and Richard Nixon. Recently, ‘pilot’ studies in several countries saw a controlled group of individuals receive a basic income and the results have been positive all across the board. People in the pilot reported to be happier and healthier and were able to pursue education, spend much-needed money on child care, or change their jobs without the fear associated with quitting before you find something else.

Advocates have claimed that these pilots show the way forward, with such results why would anyone speak against Basic Income?

Others (myself included), see the results in a more cynical light. The idea that having more money has led to more fulfilling and satisfying lives is hardly a revelation. Controlled pilots which hold other variables steady also don’t present a good indication of how the broader economy would react to the introduction of a UBI.

Beyond these technicalities though, solid opposition to UBI is grounded in concepts of political power and the ability to realise a truly revolutionary change in the redistribution of wealth.

The arguments surrounding UBI

There are generally two schools of thought on the necessity of UBI. The first is concerned with efficiency. Benefits programs, as they stand, are cumbersome, confusing, and bureaucratic. They eat up government resources and most of the times don’t even have the results the programs intend. Setting up a UBI will free up resources and get rid of any hurdles recipients may face.

Most who support UBI as a tool for efficiency are wary about UBI becoming a disincentive to work. Thus, UBI will need to be at a level adequate enough to fight poverty, create cost savings in government, and not have a significant impact on the labour market. In simpler terms, it will need to be low.

The progressive case for UBI, on the other hand, cares none about a disincentive to work. Proponents for it rightfully claim that if the incentive to work is the fear of poverty and homelessness then we have already submitted to tyranny! This is not to mention the amazing gains in production we have been able to or will achieve with the advent of AI and automation. Thus, any UBI introduced will need to be comprehensive and enough to cover the basic needs (food and shelter) of all citizens. It will then be up to them how they would like to engage with society and the workforce. Progressive arguments for UBI also maintain that the introduction of UBI should not come at the cost of other social safety nets. This is to make sure that people with different needs still get the support and resource they need.

Surrounding these two main arguments are cases for a means-tested basic income, one that is not universal but afforded to those who are unemployed. There are also several economic models arguing for and against UBI from a financial feasibility point of view as well as a healthy debate on who is to be included in the universality of basic income.

There is also the argument against any form of basic income presenting it as a form of ‘free money’. Interestingly, these critiques, built on the idea that we should work to earn a living, have no problem leaving out of their equation the role which capital has to play and the fact that those who inherit wealth or own property can get away without doing a days work while earning on the backs of renters and debtors. It would seem that getting ‘free money’ is only bad if you’re poor.

The problems with UBI

The progressive case for UBI is definitely a strong one. As output levels increase it is only fair that the profit from this increase is shared to elevate the economic standing of all and counter the accumulation of wealth and economic stratification that it would otherwise incur.

However, a progressive UBI will also act as an unlimited strike fund (a comparison I heard being used by Ontario Coalition Against Poverty leader John Clarke who has written extensively against UBI). Citizens with no need to work will have significant leverage and bargaining power against employers. Any economist will be quick to point out that this will be disastrous for business. Employers will simply relocate to countries where they are not burdened with such entitlements. Without a strong producing base and a population focused on nothing but consumption, UBI will be unsustainable and the economy will crash.

This is something the government would surely want to avoid. To do so, and based on the competitive nature of capitalism, it will need to pit itself against the idea of a progressive UBI no matter how popular it is. This is not unusual, historically, governments have always, and will continue to, support economic needs over progressive social and justice-oriented movements.

With the case of a progressive UBI off the table, we are now, by default, looking at the introduction of an ‘efficiency’ model of UBI. That is a UBI model that would look to replace current social safety nets with a low UBI that does not interfere with the labour market.

Many would argue that even though this is not an ideal scenario, it is still better than not having UBI at all! Providing a UBI will empower many to make better and more fulfilling decisions it would also save people from dealing with the inefficient, bureaucratic, and often degrading way in which benefits are delivered today. For example, even if a UBI may be low, it might still be enough to allow me to pick a lower paying job that aligns better with my interests or work fewer hours.

This sounds great on an individual level, but on the macro level, this dynamic will help depress wages and pave the way for an even lower paid and exploitable workforce. This, coupled with the dominance of neo-liberal thinking in the economic sphere — the thinking that already sees the cutting of social welfare programs and other government functions in favour of encouraging business growth — means that it is the most vulnerable in our communities who will be hit the hardest by the implementation of an ‘efficiency’ based UBI. In this way, the ‘flexibility’ that we are promised under UBI is no different than the flexibility we have now. We can have it as long as we are willing to take a pay cut.

As for the argument against degrading benefits systems found today. It is exactly this sort of efficiency thinking that has led to the degrading way benefits are tested for and implemented.

The Economic Struggle will always be a Struggle

I want to be clear here that I am not arguing against the idea of a progressive UBI. As an idea, it is definitely a desirable one and it does possess emancipatory qualities. But asking for what amounts to an unlimited strike fund is to ask for the destruction of capitalism altogether. This is not something that I am opposed to, but to think that it will be delivered through the benevolence of our elected leaders or the praiseworthiness of an idea is utopic.

We need but to look at history to understand this. Every gain in the economic struggle for emancipation — the labour struggle, has been exactly that, a struggle. The 8 hour work week, the weekend, paid days off, pension schemes, the abolition of child labour, maternity leave, minimum wage, all of these things that we now take for granted were accomplished by protracted and organized collective struggle, by building real political power, not because they were cool and feasible ideas.

There is a reason why huge industrialists such as Elon Musk, Mark Zuckerberg and Richard Branson — millionaires whos businesses survive on government subsidies, tax cuts, and poor employment standards are advocating for the implementation of UBI. They understand that it can only be implemented in a way that will benefit them and that there will never be a capitalist path to the end or curtailment of capitalism.

Instead of being caught up in idealistic fevers we should be fighting along proven historical lines for a reduction of work hours, the reinstatement and expansion of benefits, greater democracy in the workplace, and for the protection of unions. In short, we should be fighting against the employing class, not for them.