Jan 022017

Basic Income:

Progressive Dreams Meet Neoliberal Realities

John Clarke

Up until now, the concept of Basic Income (BI) has enjoyed a greater history of being proposed than of being implemented. We may well be approaching a period, however, when this changes. The Ontario Government is holding consultations on setting up a BI pilot project. The Legislature in another Canadian Province, Prince Edward Island, has agreed to test out a version of BI. Pilot projects are also impending in Finland, the Netherlands and Scotland.

Raise the Rates

Basic Income has been suggested in an exceptionally wide range of forms, often with completely different objectives in mind. In fact, we can draw a line between the models that are concerned with improving lives and raising living standards and those that are focused on intensifying the capacity for capitalist exploitation. Among those in the ‘progressive’ category there is considerable diversity. There’s the ‘universal demogrant’ that provides an income to everyone and the concept of a ‘negative income tax’ involving some level of means test. BI proposals come from liberal quarters that are responsibly redistributive, reduce poverty and inequality and ease up on bureaucratic intrusion. The above mentioned proposal for an Ontario pilot project would be part of this camp. Then there are the models that have more radical, transformative objectives in mind. These suggest that BI could be used to take from employers the power of economic coercion itself by severing the link between work and income. Often such ideas are tied to the notion of preparing for sweeping technological displacement and a ‘workless future’ by providing secure, adequate and unconditional income. Given the vast extent to which forms of unpaid labour are performed by women in this society, it is hardly surprising that there are also feminist arguments for BI.

I have to say that the one really common thread that I see running through all of the notions of a progressive BI is that they pay great attention to explaining how nice their systems would be but give little if any thought to the concrete prospects of implementation. Before looking further at these deficiencies and proposing an alternative approach, it might be useful to consider more seriously the neoliberal version that is hanging like a sword over all our heads.

Neoliberal Version

The deeply reactionary ideas of Charles Murray have extended to some very sinister proposals for BI. There are two basic elements that shape his system. Firstly, the universal payment, after the compulsory purchase of private health insurance, is set at the dreadfully low amount of $10,000 a year. Secondly, he is utterly insistent that all other systems of provision must be dismantled as a BI is put in place. Canada’s right wing Fraser Institute, recently used its blog to stress the same points as Murray, making clear that the level of provision must not interfere with the supply of low waged workers.

If governments today, as they intensify the neoliberal agenda, are starting to consider the possibilities of BI, I see three factors at work. Firstly, there is the not unimportant issue of legitimacy. Particularly because they are being provided with a generous amount of ‘progressive’ cover, they are able to present their deliberations on BI as a responsible weighing of the common good. The Ontario Liberals stand out as international champions in this regard. Their BI pilot project consultations, have enabled them to put in place yet another round of fake dialogue, with the empty promise of a “better way” diverting attention as they push people even deeper into poverty. The World Bank and the IMF have been worrying out loud about the backlash against their austerity agenda and its devastating impacts. That IMF economists are themselves musing about BI, is perhaps significant in this regard. It advances their agenda but can be dressed up to look progressive. It may be the best thing for the institutions of global capitalism since the myth of ‘poverty reduction’.

The second element of BI that I think is of interest to the architects of neoliberalism is that it can fine tune economic coercion as they create an ever more elastic workforce based on the most precarious forms of employment. The income support systems that emerged out of the Poor Law tradition, stressed intense restrictions and moral policing. Along with horribly inadequate benefit levels, this has been very useful in driving people into low waged work to an unprecedented extent. It may, however, be time to rethink this to a degree. If people are moving between poverty wages and poverty level benefits more frequently in a precarious job market, perhaps they can be more effectively prodded into the worst jobs with less intrusive benefit systems. A less rule bound delivery of poverty income, that gives people a chance of retaining their housing, may be needed to keep them job ready. Linked to this, of course, is the huge boost to the employers of a BI system that constitutes a form of wage top up. Provided the payment is meagre, it will not impede the flow of low paid workers but it will mean that their employers receive a subsidy that absolves them from having to pay living wages or come under pressure to increase the amount they do provide.

Thirdly, the great advantage of neoliberal BI is that the inadequate and dwindling payment it provides turns those who receive it into customers in the marketplace. In my opinion, BI would be far from the best way to strengthen the social infrastructure at any time but in the context of an intensifying agenda of austerity and privatization, it is a recipe for disaster. It’s really about the commodification of social provision. Your payment may actually be less conditional and somewhat larger but, as you shop through the privatized remains of the social infrastructure, with inadequate means and very few rights, you are dramatically worse off. That, in my view, is what is being prepared by those who will actually implement a system of BI and the hopes and wishes to the contrary of its progressive advocates don’t count for very much.

Progressive Dreams

I said previously that proposals for redistributive or transformative models of BI are generally marked by a tendency to focus on the desirability of what is being advanced while paying much less attention to actual prospects for implementation. I’ve yet to see, quite bluntly, any serious attempt to assess what stands in the way of a progressive BI and what can be done to bring it into existence. It simply isn’t enough to explain how just and fair a given model would be if it could be adopted. In order to credibly advance BI as the solution, there are some questions that must be settled.

Firstly, income support systems came into being because, while employers welcome an oversupply of labour and the desperation that comes with it as something that boosts their bargaining power, the total abandonment of the jobless creates social unrest. Some measure of income support, provided as a reluctant concession, has proved to be necessary. However, the systems of provision that have been put in place have always been as inadequate as possible so as to undermine employer strength as little as possible. A widely delivered or even universal adequate payment would greatly tilt that balance back the other way. What reason is there to think that this is likely to be implemented?

Secondly, over the last several decades, concessions made during the post war years have been taken back. Trade unions have been weakened, workers’ rights undermined and low waged work has increased considerably. The degrading of income support systems has been central to creating the climate of desperation needed to achieve this. Not only have benefits for the unemployed been attacked but other systems, especially for disabled people have been undermined so as to generate a scramble for the worst jobs. This has led to a shift in the balance of forces in society and we are fighting a largely defensive struggle. Given this very unfavourable situation, in which unions and movements are not in the ascendancy, how can it be supposed that those profiting from the present situation are likely to accept a measure of redistributive social reform that is at least as sweeping as anything put in place during the post war boom? What is the plan to make this happen?

Thirdly, as right wing governments and political parties directly linked to the most reactionary business interests consider BI and set up pilot projects that provide meagre payments and focus on how to ensure people on social benefits become low waged workers, what reason is there to imagine that a progressive BI, rather than the neoliberal variant, is being cooked up?

Regardless of these issues, it is sometimes asserted that an adequate system of provision must be put in place simply because we are moving toward a “workless future.” In such a society, it is suggested, masses of people who have been displaced will have to be provided for and the capitalists will have to think like Elon Musk, of Tesla Motors and support BI because it is the only sensible and rational solution. To imagine such responsible provision for the future is to place undue faith in a system based on the making of profit. If they won’t stop building pipelines in the face of environmental catastrophe, there’s little reason to expect them to worry too much about sensible solutions to technological displacement. There simply is no post-capitalist capitalism and no social policy innovation that is going to bring it about.

At a recent panel on Basic Income that I spoke at, the moderator posed a challenge. She accepted that BI might not be a way forward but asked, if that were so, what “bold vision” could be advanced in its place. It’s a fair question but a realistic appraisal of what we are up against is still obligatory, even if that has some sobering aspects to it. The great problem that we have is that the neoliberal years have done a lot of damage. The level of exploitation has been increased and working class movements have been weakened. While what we demand and aspire to is very important, the bigger question is what we can win. What’s disturbing about the left wing turn to BI is that is seems to think there is a social policy end run around the realities of neoliberalism and the need to resist it. There is no such thing.

British Labour Party and BI

With very good reason, there has been considerable excitement internationally around the Jeremy Corbyn leadership in the British Labour Party. His close ally, Shadow Chancellor, John McDonnell, has been paying some attention to adopting BI, as part of a platform that would express a break with the austerity consensus. McDonnell, from a position on the left of a major social democratic party, raises the possibility of a ‘best case scenario’ for progressive BI. For that very reason, the question is posed of whether the ‘bold vision’ I spoke of should be framed around the universal payment concept or devoted to other objectives.

Basic Income, when all is said and done, is a vision for nothing more than the means to be a customer in an unjust society that decides what is for sale.

In my opinion, if we are to consider goals we set and demands we put forward in the face of neoliberalism, that are based on the needs of workers and communities and create the conditions for challenging capitalism itself, we sell ourselves well short if we settle for something so limited and inherently conservative as the universal payment. BI, when all is said and done, is a vision for nothing more than the means to be a customer in an unjust society that decides what is for sale. How much bolder and more meaningful to fight for free, massively expanded and fully accessible systems of healthcare and public transportation? How much better to focus on the creation of social housing and try to expand it so that, not only the poorest, but most working class people enjoy its benefits? There is universal child care and vast array of important community services to pay attention to. Moreover, we can work to wrest as much power as possible out of the hands of the mandarins of state bureaucracy and fight to increase the control working class people exercise over the public services they rely on. When it comes to existing systems of income support, we should not for a moment accept their poverty level benefits, bureaucratic intrusion and forms of moral policing steeped in racism and sexism. There is a fight to be taken forward for living income, full entitlement and programs that meet the real needs of unemployed, poor and disabled people, as opposed to the present ‘rituals of degradation’ they embody. At every point, let’s try to ensure that these expanded services are not paid for by other working class people but by forcing the corporations, banks and those who own them to pay by increasing their tax burden and imposing levies on their wealth.

The struggle to expand and improve public services would have to, of course, be linked to workers’ struggles for living wages, workplace rights and real compensation for injured workers. Beyond this, let’s challenge as much as we can the ‘business decisions’ that deplete resources, pollute and threaten us with ecological disaster.

I am suggesting that our movements need to challenge, rather than come to terms with, the neoliberal order and the capitalist system that has produced it. For all its claims to be a sweeping measure, the notion of progressive BI is a futile attempt to make peace with that system. In reality, even that compromise is not available. The model of BI that governments are working on in their social policy laboratories will not ‘end the tyranny of the labour market’ but render it more dreadful. The agenda of austerity and privatization requires a system of income support that renders people as powerless and desperate as possible in the face of exploitation and that won’t change if it is relabelled as ‘Basic Income’. •

John Clarke is an organizer with the Ontario Coalition Against Poverty (OCAP).


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 Posted by at 21:14

  6 Responses to “The potential reality of basic income schemes”

  1. I am against BI as it is a statist concept. The state is an instrument that is used by the financial/political elite to milk the wealth producing classes and BI will just reinforce and streamline that process. Statists see the world from a left/right dichotomy and miss entirely its real purpose i.e. the wealth stripping of the productive classes. Wealth stripping results from higher taxes from the better off producers and asset stripping of the poor which in turn makes them more dependent on the taxes of others. A better solution would be the implementation of dynasty funds which are held by individual family dynasties and the income generated from them used when needed to defray the costs of welfare for individuals within a family dynasty. Dynasty funds would be called “rolling dynasty trusts” in trust law and would be funded (if any individual so wishes) by pensions savings into the dynasty fund. Instead of buying an annuity an indididual simply takes the income generated by the fund and passes on the capital to his heirs dynasty funds on death. Currently the annuity is simply a means for the financial classes to asset strip the wealth producers and ensure they stay poor.

    Under this system the people who produce the wealth keep the wealth and protect their descendants from the banker controlled state and other wealth producers from claims being made against them.

  2. Perhaps Universal Credit is the step towards Basic Income but then Basic Income is not means tested.
    Does Universal Credit exist to encourage zero hour contracts with small top ups to those that lack job security?

    Does this not remove the incentive to ensure that employers pay the living wage?

    Disabled people who were on lower rate ESA are or are being transferred onto UC. This makes scrutiny of our tax directly linked to HMRC transparent!

    This makes sure that the poor pay their taxes!

    But what about the rich? Perhaps to ensure that they pay their taxes they should also be paid Basic Income using the Universal Credit scheme. This means that their hourly income can come under scrutiny and the tax that they pay can contribute to a Basic Income for all. They will not suffer as they will also receive their basic income – Anything they earn above that they can keep after they have paid their taxes.

  3. Segal has written a plan for a basic income pilot project for Ontario, which he expects will go ahead next year. The plan proposes that those aged 18 to 65, who are living under the low-income poverty line in Ontario, earn a basic income of at least $1,320 a month. PEOPLE WITH DISABILITIES WOULD RECEIVE $500 MORE. [emphasis mine to highlight the inequity of next year’s ESA WRAG cuts in Britain]

    Segal said in the pilot a random selection of welfare and disability payment recipients would be selected, along with some whole communities. In that way the impact on individuals and whole communities could be tracked.

    Excerpted from: ‘A rare opportunity’ for basic income pilot project on P.E.I. – Prince Edward Island – CBC News http://www.cbc.ca/news/canada/prince-edward-island/pei-basic-income-high-segal-1.3863517.

  4. BI should be universal for every Canadian citizen over the age of 18, and be based on the cost of living in different areas in the country; ie. the cost of living in Nunavut is much higher than elsewhere.

  5. So, it is possible to struggle for expanded and improved public services, a ‘living income’ and an end to the moral policing of welfare systems, but not to struggle for a basic income which provides all these things – because that, allegedly, means making peace with neo-liberalism. Certainly we should examine the Ontario proposals, and any others that come up, critically. Certainly we should be aware of BI-like proposals from the libertarian right, like Murray’s (which is worse even than John Clarke says being based on household, not individual, incomes). But I remain confused as to why, in the class struggle over welfare, we must rigorously exclude any version of universality from our alternative vision. I fail to understand why supporting the principle of BI necessarily involves abandoning struggles for social housing and free social care. Why isn’t any other system of reformed welfare provision we might advocate for also “nothing more than the means to be a customer in an unjust society that decides what is for sale”. There is no post capitalist capitalism as John rigorously points out but apparently reforms within capitalism are still possible; just not this one. So why is BI so uniquely wrong? Why does every tentative BI proposal require such comprehensive denunciation (this is by no means the first attempt to corrall such an unruly idea). One answer I am driven to, perhaps in an excess of cynicism perhaps not, is that opposition to BI reflects the class interests of those elements of the left who work, critically of course, in or around the sections of the state involved in welfare provision (interest declared – so did I until recently). Anyway, just a thought.

    • Having written the article, I don’t want to take liberties by wading in on the discussion too many times. However, Richard raises some important points that I think I need to answer. Firstly, on the question of why I think it’s valid to try to defend and improve present public services while I reject BI. It is a question of how best to take up defensive struggles and even win some reforms within capitalism. The ideas I put forward at the end of the piece were meant to suggest how we could shape demands and campaigns and were also in response to John McDonnell’s favourable view of BI. I’m very aware of the fact that winning victories under the neoliberal order is very tough and keeping what you’ve won even tougher. Even with much more powerful unions and social movements in place or a Corbyn Government with a greatly improved PLP, I would say that a new Keynesian Golden Age is not possible. So, I wasn’t trying to smuggle in my own brand of ‘post capitalist capitalism.’ However, I was pointing to the kinds of places we could draw lines and win victories and I do think that the universal payment is a notion that, in practice, serves the interests of neoliberal attack rather than any progressive alternatives. It’s not just, as Richard suggests, that there are some fringe ‘BI-like proposals from the libertarian right’ that we should be aware of but can dismiss. Guy Standing of the Basic Income Earth Network (BIEN) just did an interview with CBC Radio (see link below). Standing advances all his rosy notions of ’emancipatory’ BI and candidly admits that he is in contact with the right wing Finnish Government and those behind the Ontario pilot. He helped to create the model in India that Modi is picking up on and he tells us that he will soon be off to Davos because the world’s richest and most evil bastards want to hear about BI at their annual gathering. The grandees of global capitalism are looking very seriously at BI and I think this is for the reasons I set out. It provides them with a measure of legitimacy. It, as Standing puts it, ‘removes disincentives to low wage work’. It also, provides a payment that can be used to replace public services. As the Finnish Government tests BI, it is also privatising the Country’s employment services.

      Finally and quickly, our organisation is not linked to any interests around welfare provision that Richard speaks of, except in that we fight those systems, so that’s not what’s motivating us in this debate. In any event, I propose we work for secure benefit systems without the scrutiny and regulation that exists at present. If this meant some functions carried out within the welfare state systems came to an end, there are a lot more useful things for these workers to be doing and no one needs to lose their job.


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