John Clarke, former major organizer for the Ontario Coalition Against Poverty (OCAP), recently posted the following on Facebook:
John Clarke
53m ·
I confess that, though I have done a lot of work on trying to draw out the harmful role of basic income, I hadn’t properly considered how this applies to the Global South. This is a really useful look at how the proliferation of the cash transfer reinforces the neoliberal global order.
I must admit that I am disappointed in Clarke’s post; on a number of occasions, I have tried to argue that the struggle for a robust (not an impoverished) basic income (in conjunction with continued defense of public services–whatever their limitations–could form a focus for struggles that go beyond a society dominated by the class power of employers and the associated economic, political and social structures (see for example Basic Income, Decent Wages and John Clarke’s Radicalism: A Tale of Social-Democratic or Social-Reformist Deja Vu).
Social-democratic Definition of Poverty Based on the Level of Income
He provides an article to justify his opposition to basic income. The first problem with the article is with the definition of poverty as solely a question of level of income; undoubtedly the level of income does has something to do with the issue of poverty–from the consumption side. It ignores the issue from the side of production and the dependence of workers on a wage and hence their dependence onf the class of employers.
I have provided arguments against the limited definition of poverty according to income elsewhere (see for example “Capitalism needs economic coercion for its job market to function” (Ontario Coalition Against Poverty: OCAP)).
The article does refer to basic income programs instituted in Brazil and South Africa to alleviate poverty defined by income–which apparently worked to a certain extent:
In Brazil, President Luiz Inácio Lula da Silva’s program Bolsa Familia, which has provided conditional monetary aid to more than 20 million families, helped to cut extreme poverty by almost 60 percent. South Africa went through a similar transition after the fall of apartheid. While in 1994, only 2.4 million households received cash grants, 20 years later, more than half were covered by monetary transfers.
The article then points to some limitations of these programs:
But even these apparent success stories have their limits. By focusing on increasing the spending power of the poor rather than on transforming the economies in which they live, the “cash transfer revolution” has expanded the grip of the market on the globe rather than curtailing it. And by doing so, it has displaced more ambitious projects of development to address poverty by creating better jobs and providing public education, free health care or proper sanitary infrastructures.
Note the limited nature of the “solution.” Rather than aiming to abolish the class power of employers, at best, the solution would be carbon copy of the modern welfare state as it exists in say, Canada, or perhaps even in the Scandanavian countries. “Better jobs:” what does that mean? Do not unionized workers at Air Canadas, exploited as they are, have “good jobs” according to the social-democratic left? (See for example The Rate of Exploitation of Workers at Air Canada, One of the Largest Private Employers in Canada). As for public education, I have pointed out that grades in schools and the curriculum often function to oppress students in public schools (see The Expansion of Public Services Versus a Basic Income, Part Two: How the Social-democratic Left Ignore the Oppressive Nature of Public Services: Part One: Oppressive Educational Services). “Free health care” in a capitalist context also is subject to many limitations, such as oppressive and exploitative practices (see for example Health Care: Socialist versus Capitalist Nationalization).
I have nothing to say abour “proper sanitary infrastructures” since I have not studied the issue. Garbage pick-up in residential homes in Guatemala is private. Clean tap water does not exist. Air pollution exists (but then so too does it exist in Toronto–although less so).
The article then refers to the period before the domination of neoliberalism–where poverty was supposed to be addressed through industrial development via, for example, state-led enterprises:
Until the late 1970s, post-colonial leaders didn’t prioritize poverty reduction directly. Instead, they focused on economic growth through state-led industrialization. “The poor nations cannot overcome their poverty,” Tanzanian President Julius Nyerere claimed in front of an American audience at Howard University in 1977, “without industrialization.” In India, Jawaharlal Nehru had famously argued in “The Discovery of India” that “the rapid industrialization of India is essential to relieve the pressure on land, to combat poverty and raise standards of living.”
It was clear for these leaders that without a strong state to manufacture capital goods domestically, the Global South would never catch up with more developed nations, and this undermined the ability to deliver welfare programs. Economists saw poverty as the product of the unequal trade relations between the North and the South rather than just about internal deficiencies of the countries themselves.
The article presents state-led industrialization as something purely positive–and not involving, on the one hand, the exploitation of workers and, on the other, the diversion from attempting to overcome such exploitation through organized class struggle.
One final point. The article refers to a 164-page document that allegedly shows that the supplementary income received by some who lived in poverty (of course, defined by level of income) did not translate into an improved quality of life. The article says this about the findings of the document:
A recent study following the economic crash during the pandemic showed that $2,000 checks helped people in the short term; they were able to pay bills and buy food and fuel. But such direct payments did not translate into significant health or psychological well-being or into poverty reduction.
Let us briefly take a look at this document (December 1, 2022, Ania Jaroszewicz, Jon Jachimowicz, Oliver Hauser , and Julian Jamison, “How Effective Is (More) Money? Randomizing Unconditional Cash Transfer Amounts in the US,” AEA RCT Registry, page 50:
This paper reported on a randomized controlled trial that provided people experiencing poverty during the height of the COVID-19 pandemic with nothing, $500, or $2,000. The data reveal that participants spent the cash windfall fairly quickly, with increased expenditures dwindling down the UCTs [unconditional cash transfers] within a matter of weeks. Surprisingly, the increase in expenditures did not translate to positive differences in the pre-registered financial, psychological, cognitive capacity, and health survey outcomes, neither between the Control and cash groups, nor between the two cash groups. If anything, the results show that, relative to the Control group, cash groups reported worse financial, psychological, and health (but not cognitive capacity) outcomes for our prespecified analyses. However, it is important to note that, once we account for attrition, we cannot generally reject a null effect of cash on any of the indices. At the same time, while the true effect is very unlikely to be meaningfully positive, our data is consistent with a range of negative effect sizes, some more meaningful in magnitude than others. To the extent that there were negative effects on any of the survey items, they appear to primarily be concentrated among the subjectively-measured outcomes; the difference between cash and non-cash groups on more objectively-measured survey outcomes more closely approximates a null. The lack of positive effects of (more) cash on survey outcomes stands at odds with the predictions of both experts and laypeople, who predicted (i) substantial positive effects of receiving any cash (0.16 to 0.65 SDs [standard deviations] depending on the cash amount, outcome, and time period) and (ii) that these effects would be larger for participants receiving $2,000 than those receiving $500.
What accounted for the lack of differences? Page 51:
… the data seem most consistent with the notion that the windfall was insuffcient to address participants’ needs, which in turn generated feelings of distress. We found that, relative to the Control group, cash groups experienced greater stress in deciding how to spend money, were more likely to think about money, and were more aware of both their own needs and those of their friends and family|all of which statistically mediated
the effects of the treatment on the primary survey outcomes.
The authors of the document propose a combination of basic income with welfare measures. Page 53:
A different approach to supporting low-income households might therefore be to couple cash transfers with other (potentially more cost-effective) resources, such as investments at the community level or connecting recipients to other external services|resources that could help to alleviate some of these unintended psychological burdens of receiving a windfall. This would be consistent with the “cash-plus” or “graduation” approach, which argues that combining cash with other resources and services can be more effective than providing cash alone (Berge, Bjorvatn and Tungodden, 2015; Chowdhury et al., 2017; Roelen et al., 2017; Sedlmayr, Shah and Sulaiman, 2020; Field and Maffoli, 2021; Little et al., 2021; Banerjee et al., 2022; Bossuroy et al., 2022). Alternatively, supporting low-income households only through other means like in-kind benefits and/or more structural change may in some cases also be an effcient use of resources. Future work conducting
cost-benefit analyses on these alternatives could help provide a clearer picture.
Finally, it is important to note that even if insufficiently large cash windfalls produce null or negative effects on subjective well-being, the benefits of UCT programs may still outweigh the costs. This may be particularly true if one considers (positive) externalities on others, such as the recipients’ children or friends, and/or the recipients’ preferences (Liscow and Pershing, 2022).
The article’s conclusion concerning the document does not stand up to scrutiny.
In any case, as the document indicates, their study is subject to the limitations of the context: COVID. From page 51:
Our findings should be interpreted in light of several caveats. In particular, it is unclear to
what extent our study is generalizable, given that, as just mentioned, it was conducted during a particularly challenging economic and public health crisis (the COVID-19 pandemic) and with a sample of low-income participants particularly affected by it. Nevertheless, we believe our findings raise important questions|and begin to provide some answers|on poverty alleviation and the basic functioning of cash transfers.
I will leave the issue there. To my mind, articles that rely on social-democratic or social-reformist definitions of poverty, that fail to question solutions that fall well within the continued class power of employers and that refer to documents that are subject to many limitations (political and contextual) hardly point towards an argument against basic income.
Marxist Definition of Poverty Based on the Need to Work for an Employer
As I implied above, the definition of poverty that restricts it to a level of income below the poverty line independently of the class issue of the nature of economic dependence of workers and continued economic coercion of workers is inadequate. Nowhere does Clarke point out the limitations of such a definition. His opposition to basic income seems to have little basis except from the point of view of social democrats or social reformers.
However, if the purpose of basic income were to–free people from dependence on a particular employer? To push for such independence? Obviously, such a goal is idealistic under the conditions of a society characterized by the class power of employers–but realistic as a goal that points beyond such class power.
I hardly idealize basic income, of course. The point is to free ourselves from the grips of the class power of employers, and the fight for a robust basic income may serve that end–as may the struggle for enhanced public services and democratization of such services; the two struggles need not be mutually exclusive.
The Abolitionary 