A Robust or Ambitious Universal Basic Income: An Impossible Dream for Some Among the Social-democratic Left

Introduction

Simran Dhunna and David Bush have written an article that criticizes moves towards a universal basic income (see https://springmag.ca/against-the-market-we-can-do-better-than-basic-income).

In a previous post (The Strawman of a Minimal Universal Basic Income by the Social-democratic Left in Toronto), I pointed out how unethical and dishonest Dhunna and Bush were in their critique of a policy of universal basic income (UBI) since they, for the most part, assume that such a UBI would involve at best a minimum and definitely inadequate level of income for Canadian citizens. There is, however, one exception.

The International Labour Organization and the Principle of a Universal Basic Income (UBI)

There is one situation in which they acknowledge a possible more generous UBI–when they refer to the costs of such a program in relation to GDP analyzed by the International Labour Organization (ILO). Thus, they write:

If our demand consists of a UBI of $24,000 per year for Canadians aged 18 and over, we are looking at a front-loaded cost of $696 billion every year. This is roughly double the current national deficit (approximately $350 billion), or put another way, 40% of Canada’s GDP (for reference, the country’s overall health spending makes up 11.6% of our GDP). A UBI at a lower level of $1,000 per year for people aged 18 and over comes with a more modest $29 billion price tag — roughly 14 percent of the entire federal budget pre-pandemic. On the other hand, a targeted basic income through a negative income tax set at $21,810 (if you are earning below that amount, you would receive a cheque that boosts you to that level) would, according to one study, cost roughly $177 billion a year (the latest Basic Income Canada Network study puts the cost somewhere between $134 to $187 billion). 

In 2018, a study published by the International Labour Organization calculated the costs of a UBI in 130 countries that would raise everyone above the poverty line, and concluded it would on average cost between 20 to 30 percent of GDP. This is a staggering annual cost for one program that, in many countries, is near or even greater than all other government expenditures combined in many countries. 

Let us take a look at the 2018 International Labour Organization report (the ILO itself is a social-democratic organization and hence is itself a reformist organization that assumes the legitimacy of the employer-employee relation–but that only in passing). From Isabel Ortiz et al (2018)., Universal Basic Income Proposals in Light of ILO Standards: Key Issues and Global Costing, page 18:

A meaningful amount of UBI benefits is generally found to be fiscally infeasible (OECD, 2017a; Tanner, 2015; Van Parijs and Vanderborght, 2017). Thus, if governments were to consider the introduction of a UBI at adequate UBI benefit levels that could have a significant impact on the reduction of poverty and inequality, they would need to explore new financing sources.

Proposals include an increase in existing taxes, for example, income, inheritance, capital, corporate, or value added taxes, or the imposition of new taxes on natural resource revenues, financial transactions or robots (Reed and Lansley, 2016). Others have proposed the abolishment of existing tax-free allowances or the taxation of the UBI alongside other incomes to reduce the cost and make it more targeted to low income earners (see OECD, 2017a); such a tax claw back approach would have similar effects to a negative income tax model 13 – care should be taken with the diminished redistributive effect of some financing proposals.

Given that UBI is proposed to redress growing inequalities caused by corporate globalization and new forms of work, it should be redistributive. UBI should not be financed by regressive methods such as taxing households or depriving them from other social benefits, as this UBI policy would give to households with one hand what it would take away with the other.

The ILO discusses three possible scenarios. Page 22:

Scenario 1 assumes the introduction of a UBI set at the level of the poverty line. 

Here social assistance funds are generally replaced by UBI; social insurance schemes are slightly reduced as UBI compensates for a small percentage of this category. Private insurance schemes (for example, private pensions) remain the same. Employers’ contributions do not decrease in this scenario. The conclusion (page 23): 

… the main winners are the majority of citizens in a country. … the majority of the population – are the net winners, a reason why this UBI scenario would reduce inequality.

The second scenario (page 23)

sketches out the introduction of UBI in exchange for cuts in employers’ contributions to social security systems.

Here the conclusion is different: 

 The net losers would be the large majority of people in formal employment who would lose the
higher levels of protection of public social security systems, including low and the middle classes. … From the point of view of financing, the net winners would be corporations….

The third scenario (the scenario generally assumed by Dhunna and Bush) 

presents the most radical neoliberal proposal, the introduction of UBI with the complete abolition of public social insurance.

The conclusion is even more negative than that of the second scenario (page 24): 

In this scenario virtually everybody is a net loser; the poorest will not receive anymore social assistance at the poverty line level; the low and middle classes, before covered by a better social protection system, now they will lose their accumulated social protection benefits.

Unlike Dhunna and Bush, the general conclusion of the ILO is–it all depends on the specific scenario proposed whether UBI will reduce inequality (in income) and benefit more most citizens than currently (page 26):

As outlined earlier, some UBI proposals are in accordance with ILO Conventions and Recommendations, and others are not.

Some scenarios could function to reduce levels of income inequality: 

Indeed, UBI could be the most radical form of the income component of a national social protection floor, an important tool for the advancement of inclusive development and social justice. UBI on its own cannot be considered a panacea to existing and future income security and social protection challenges, but can potentially help to close coverage gaps and provide a basic level of income security.

As I argued in a previous post (A Basic Income Versus the Expansion of Public Services? Part One: Critique of the Social-democratic Idea that the Expansion of Public Services is Socialist), there is no reason why we should not struggle simultaneously for a robust UBI and an expanded welfare state.

It should be noted, however, that Dhunna and Bush, despite their own distorted presentation of the ILO’s position on the UBI, implicitly use the ILO as a standard for their own social-democratic and reformist aims; why else do they reference the ILO study to justify their conclusions?

They do not, however, question the ILO standards. ILO, though, assumes the legitimacy of the continued existence of a market for workers and hence fails to consider how a struggle for achieving a universal basic income could constitute a means by which to initiate the undermining of a market for workers. Thus, the ILO states (page 29):

Effective labour market institutions are necessary to ensure decent work for all in a
rapidly changing environment.

Since “labour market institutions” involve working for an employer, and working for an employer involves being treated as a thing or means for obtaining more money (the private sector) or as a means for purposes over which workers have little say in their daily lives in the public sector (see The Money Circuit of Capital), the ILO does not consider a scenario where workers seek a UBI, in addition to other social insurance schemes, that threatens the existence of the market for workers or “labour market institutions.” The exclusion of such a scenario reflects the social-democratic nature of the ILO. 

The Public Service International (PSI) and the Principle of a Universal Basic Income (UBI)

Dhunna and Bush refer to a 2019 report by the Public Services Alliance:

In 2019, Public Service International (PSI) released a wide-ranging report assessing UBI pilots and experiments globally, as well as academic literature. The report concluded that, “making cash payments to individuals to increase their purchasing power in a free-market economy is not a viable route to solving problems caused or exacerbated by neoliberal market economics.”

That document contains, ironically, to the following principle (page 3):

At the heart of the critique of UBIs contained in this brief is the failure of the most basic principle of progressive tax and expenditure, which can be summarised as “from each according to their ability, to each according to their need”.

This interpretation of the principle is typical of the social-democratic view: it looks at the problem from the point of view of distribution and consumption of already produced commodities and not according to the process by which such commodities were produced (see A Basic Income Versus the Expansion of Public Services? Part One: Critique of the Social-democratic Idea that the Expansion of Public Services is Socialist). Employers can exploit and oppress workers, and then, for social democrats, employers can be taxed and some of the revenue can be shifted to those who either cannot find employment with a particular employer or are incapable of working for a particular employer. It is more like a compensatory model than a model that permits people to control their own lives in the totality of their lives: production, distribution and income. 

Let us take a look at this document in more detail. Anna Coote and Edanur Yazici, the authors of this report, refer to the ILO report outlined above in relation to costs, implying that it would cost too much (pages 8-9). However, as has been shown, the ILO concludes that a more robust (though by no means sufficient) UBI could be viable even within a capitalist setting, depending on how it was financed.

On page 10, the authors conclude:

It is a lazy utopian remedy that fails to address issues of class, economic ownership and the productive capacity of the economy.

If a robust UBI begins to question the legitimacy of the market for workers and therefore the legitimacy of the class power of employers, it does indeed address the issues of “class, economic ownership and the productive capacity of the economy.” The authors, however, nowhere question the legitimacy of the class power of employers; they assume its continued existence. 

On pages 11-12, they make the following assertion:

UBI alone cannot build long-term economic self-sufficiency. Small injections of cash, even if regular and unconditional, will not be enough. People must also be able to control what happens to them, to have structures for shared decision-making and access to essential resources.

Since the nature of the kind of society in which we live is that workers and the unemployed are not ‘economically self-sufficient’–if they were, there would not be a market for workers (a so-called labour market). As for ‘people having to be able to control what happens to them,” working for an employer, whether in a unionized setting or not necessarily involves a loss of “control” over “what happens to them” (see for example The Radical Left Needs to Call into Question Existing Social Institutions at Every Opportunity, Part One or Employers as Dictators, Part One and , more generally, The Money Circuit of Capital ).

Although unions limit somewhat the power of employers and hence are to be supported as defensive organizations, they also often function as ideologues of employers by claiming to create conditions of fairness at work when that work is characterized by exploitation and oppression (see Reform Versus Abolition of the Police, Part Six: Unions and the Police). Management rights clauses in Canadian collective agreements, furthermore, explicitly express the lack of control of workers over their work and working conditions (see, for example, Management Rights, Part One: Private Sector Collective Agreement, British Columbia), and even when such a clause does not exist in a collective agreement, it is implied. 

On page 12, Coote and Yazici write: 

If emancipation is the goal, not just ‘inclusion’ or reduction of poverty, UBI is not the answer. If cash payments become the preferred tool for social protection, there is a serious risk of crowding out efforts to build collaborative, sustainable services and infrastructure – and setting a pattern for future development that promotes commodification rather than emancipation.

What then is the answer if the aim is the abolition of the class power of employers and classes in general? How are we to question the power of employers without taking risks? Of course, employers could try to use UBI to dismantle public services–and to counter such a move would require organization and class struggle–as would the maintenance of public services. However, fighting for a robust universal basic income that breaks the link between needs and work does point towards a new kind of society–a society where access to expanded basic needs (since what is basic is itself variable as our capacity to produce our lives changes) do not require us to subordinate our lives to the power of any particular employer. 

The authors do not take seriously the goal of emancipation. If they did, they would at least mention the goal of abolishing the power of employers as a class. Indeed, they implicitly reject such a goal since they advocate for an enhanced welfare state or enhanced welfare capitalism–like Dhunna and Bush. From page 13 :

It is necessary and possible to raise funds to bring greater security, opportunity and power to all people, but the money needed to pay for an adequate UBI scheme would be better spent on reforming social protection systems, and building more and better quality public services.

There is little here that addresses challenging the class power of employers and the abolition of classes; it is a question of reforming capitalism in order “to bring greater security, opportunity and power to all people”–an impossible goal since the general nature of capitalism is to bring insecurity to many while providing security to a dwindling minority–by exploiting and oppressing workers, citizens and migrants. 

The priority for Coote and Yazici is to focus their energies on reforming the class power of employers, not abolishing it (page 13):

The campaign for UBI threatens to divert political energies – as well as funds – from more important causes.

It is necessary and possible to raise funds to bring greater security, opportunity and power to all people, but the money needed to pay for an adequate UBI scheme would be better spent on reforming social protection systems, and building more and better quality public services.

I guess that emancipation from the power of employers is not a very important cause–for social democrats. Indeed, it is likely that for for Dhunna and Bush, for the ILO, for Coote and Yazici and for Public Services International, the goal is not really socialism or the abolition of classes but a humanized form of capitalism, or enhanced welfare capitalism, or capitalism with a human face (see  A Basic Income Versus the Expansion of Public Services? Part One: Critique of the Social-democratic Idea that the Expansion of Public Services is Socialist ). 

Paying Lip-Service to a Radical Position

There is a very slight recognition of more radical positions that support the idea of a UBI, such as the late David Graeber’s advocacy of such a proposal. They write (page 20): 

Contemporary political theorists such as David Graeber see UBI allowing people to escape from ‘bullshit jobs

They then have a brief section that refers to “radical transformation” (page 21): 

RADICAL TRANSFORMATION

For some of its progressive advocates, UBI is part of a vision of a new social settlement where poverty is eliminated, where everyone has a secure income, where unpaid work is valued on par with paid work, and where inequalities are history. For UK Green Party leaders Jonathan Bartley and Caroline Lucas, it is an “exciting idea because it will help us form a clearer idea of what constitutes welfare, good work and human flourishing, and it would help us towards a more balanced economy which acknowledges what is truly ‘productive’ in its broader sense’”.11 UBI is rarely seen as the only lever to achieve these goals: it is usually envisaged as running alongside a range of progressive reforms as well as more and better public services.

The UK Green Party’s aim in adopting a UBI is not, however, to challenge the existence of the power of employers as a class but at best to restrict such power. Thus, on page 51 of the UK Green Party Manifesto (2019), we read:

Reviewing current employment law to close loopholes that allow employers in the gig economy (where workers are offered freelance work or short-term contracts only) to deny gig workers key rights. We will ensure that gig economy workers always receive at least the current minimum wage, and have job security, sick leave, holiday pay and pension provision.

On the same page, we read further: 

Requiring all employers, no matter their size, to legally recognise any union chosen by their workforce to represent them.

On page 52:

We will support employers to explore four day working weeks in their workplace, driving up productivity as well as boosting the wellbeing of staff.

There is no evidence in the UK Green Party’s manifesto that it propose using the UBI as a means by which to challenge the power of employers as a class; it, like the British Labour Party, seeks to reform the employer-employee relation and not overturn it. Hence, Coote’s and Yazici’s reference to the UK Green Party as radical is similar to some social democrats here in Toronto, who refer to social reforms that do not involve challenging the basic social relations characteristic of a society dominated by a class of employers (such as a market for workers, or a “labour market.”) (see the seven-part series of critiques, beginning with What’s Left, Toronto? Part One).

Coote and Yazici’s extremely brief mention of David Graeber’s Bullshit Jobs: A Theory fails to even address Graeber’s critique of the employer-employee relation as such. From that work:

The modern morality of “You’re on my time; I’m not paying you to lounge around” is very different. It is the indignity of a man who feels he’s being robbed. A worker’s time is not his own; it belongs to the person who bought it. Insofar as an employee is not working, she is stealing something for which the employer paid good money (or, anyway, has promised to pay good money for at the end of the week). By this moral logic, it’s not that idleness is dangerous. Idleness is theft.

This is important to underline because the idea that one person’s time can belong to someone else is actually quite peculiar. Most human societies that have ever existed would never have conceived of such a thing. As the great classicist Moses Finley pointed out: if an ancient Greek or Roman saw a potter, he could imagine buying his pots. He could also imagine buying the potter—slavery was a familiar institution in the ancient world. But he would have simply been baffled by the notion that he might buy the potter’s time. As Finley observes, any such notion would have to involve two conceptual leaps which even the most sophisticated Roman legal theorists found difficult: First, to think of the potter’s capacity to work, his “labor-power,” as a thing that was distinct from the potter himself, and second, to devise some way to pour that capacity out, as it were, into uniform temporal containers—hours, days, work shifts—that could then be purchased, using cash.17 To the average Athenian or Roman, such ideas would have likely seemed weird, exotic, even mystical. How could you buy time? Time is an abstraction!18 The closest he would have likely been able to come would be the idea of renting the potter as a slave for a certain limited time period —a day, for instance—during which time the potter would, like any slave, be obliged to do whatever his master ordered. But for this very reason, he would probably find it impossible to locate a potter willing to enter into such an arrangement. To be a slave, to be forced to surrender one’s free will and become the mere instrument of another, even temporarily, was considered the most degrading thing that could possibly befall a human being.19

As a result, the overwhelming majority of examples of wage labor that we do encounter in the ancient world are of people who are already slaves: a slave potter might indeed arrange with his master to work in a ceramics factory, sending half the wages to his master and keeping the rest for himself.20 Slaves might occasionally do free contract work as well—say, working as porters at the docks. Free men and women would not. And this remained true until fairly recently: wage labor, when it did occur in the Middle Ages, was typical of commercial port cities such as Venice, or Malacca, or Zanzibar, where it was carried out almost entirely by unfree labor.21

So how did we get to the situation we see today, where it’s considered perfectly natural for free citizens of democratic countries to rent themselves out in this way, or for a boss to become indignant if employees are not working every moment of “his” time?

Like Dhunna and Bush, Coote and Yazici do not question how we got to that situation today, nor do they question what can be done about abolishing such a situation and having workers control their own lives again. What both assume is that–the employer-employee relation is eternal and must always be regulated–but not abolished.

Their reference to class struggle, by contrast, does not have as its aim the abolition of the class power of employers and with it the working class as a class and therefore the abolition of all classes; their aim, rather, is to perpetuate class struggle–a never ending process that perpetuates a more humanized but still nevertheless capitalist society.

Their critique of UBI is, then, motivated by their implicit assumption that a socialist society is not really achievable. They do not say that, but they imply it. Alternatively, they define socialism as merely capitalism with an enhanced welfare state and protective measures. Thus, it is interesting to note that Dhunna and Bush refer to labour laws without criticizing their adequacy (whereas they do criticize the inadequacy of a minimalist UBI–almost the only form of UBI they recognize):

We stand to lose much more than we have to gain under a basic income regime doled out by the ruling class. Our energy and money is better spent waging struggle directly to strengthen labour laws and access to unionization for all, to build more power at the point of production — the source of worker power. 

Labour laws that protect workers or extend certain rights certainly should be supported and struggled for, but they are defensive in nature, not offensive. What of labour laws that protect managerial rights? (See for example Management Rights, Part Nine: Is A Collective Agreement that Involves Management Rights and the Exploitation of Workers a Fair Contract?). Can labour laws defend the interests of workers to oppose the very existence of the class of employers? Can labour laws eliminate the exploitation of workers? (For an example of the calculation of the rate of exploitation of workers, see The Rate of Exploitation of the Workers of Rogers Communications Inc., One of the Largest Private Employers in Toronto).   Can they eliminate the oppression of workers? (For discussion of the oppression of workers both during the general time when they work for employers, see Employers as Dictators, Part One and The Rate of Exploitation of Magna International Inc., One of the Largest Private Employers in Toronto, Part Two, Or: Intensified Oppression and Exploitation). 

Conclusion

This is the last post that critically looks at the specific article written by Dhunna and Bush. In the series, I have shown that the writers assume that only a minimum basic income is what is possible under existing conditions–an incorrect assumption. Furthermore, I have also shown that they often distort the references that they use by claiming that their references show that a basic income is unfeasible–when in fact their references show that only certain kinds of basic income are unfeasible whereas other kinds are feasible. 

Ultimately, Dhunna and Bush aim for an enhanced welfare state–with regulation of employers rather than the abolition of employers–and the related economic, social and political structures. 

Their criticism of universal basic income is invalid.

I will take up in future posts further criticisms of a social democrat who defend welfare reforms while simultaneously opposing basic income. Specifically, my future target will be the radical social democrat here in Toronto, John Clarke. 

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