Beware of a Future Without Basic Income

By Shawn Vulliez

On April 22, Rankandfile.ca published a piece by Michal Rozworski titled, “Beware of Basic Income.” His principal claim is that we should be cautious around the premise of a guaranteed income for all citizens because of the challenge such a policy might pose to existing social programs in Ontario’s low-tax, austerity driven regime. There are a number of problems with these claims, so let’s take a look at Rozworski’s arguments.

The piece begins by stating, “Wouldn’t it be great to get a cheque every month just for being you? This is the sweet, fuzzy vision the Ontario and federal Liberals are counting on to sell their latest idea, a basic income.” The problem with this set-up is that a Basic Income (BI) is not simply, “the Liberal’s latest idea.” Nor is BI, as a policy, coming from an ivory tower as a, “gift from the top down.” This proposal came to Liberals by the way of a grassroots initiative at their latest federal convention, spearheaded by BI advocates within the party. It is worth mentioning that BI has found a home in many of Canada’s political parties. Since 2013, the Green Party, the NDP, and even the Communist Party of Canada have all adopted some degree of support for the idea, which reflects the decentralized and member-driven push for its’ adoption. Rather than the conspiracy to gut social programs that Rozworksi posits, this widespread inclusion in party platforms is because of the dedicated work of a global movement of people talking to one another, agitating within political parties, and spreading information online. basicincome

As Rozworski correctly suggests, good ideas done poorly can turn out bad. But rather than throw out the baby with the bathwater, let’s look and criticize specific implementations. There is no contradiction if we simultaneously raise a brow at the constraints and motives of the Liberals, while cheering on Basic Income as a concept. If so, we can move forward by pushing for better implementations, rather than settling for the shrinking neoliberal welfare state provisions that we all recognize are insufficient to meet the cost of living.

The spectrum of Basic Income thought

To show why Basic Income is a liberatory and timely idea with roots in the left, we should provide a little historical context beyond Milton Friedman, the only figure that Michal mentions.
Basic Income has its roots in the Geogist tradition of social justice—specifically the premise that the natural world is the common property of all citizens and cannot be claimed by private groups. The American revolutionary and early abolitionist Thomas Paine advocated for the program (which he called “The Citizen’s Dividend”) to be paid for by taxes on land, inheritances, and the development of natural resources. These types of taxes were focused on targeting income derived from monopoly and legal privilege.

The advantages of BI over traditional welfare systems are agreed upon by the majority of the BI community. First, by eliminating means testing we stop the wasteful practice of making the poor prove that they are poor and trying to find work. Second, we allow those receiving BI to earn a decent amount of money without having their BI clawed back (unlike welfare). Third, we increase social assistance rates, which are currently falling behind the cost of living. Finally, with BI as a federal program, claimants would be able to move across Canada without re-applying for benefits. This has radical possibilities for new municipal movements.

In recent years, Basic Income has been called “absolutely essential” by former Syriza finance minister Yanis Varoufakis. The feminist economist Ailsa McKay even called it “a tool for promoting gender-neutral citizenship rights”, and the Marxist theorist Erik Olin Wright has said that BI “is a means of transforming capitalism into a socialist system.”

Basic Income is a compromise by design, and those free market fundamentalists who have traditionally opposed the welfare state in all forms are now willing to make major concessions. The ground floor of the discourse has shifted.

There are three main proposals for how to fund this program. First, closing loopholes and increasing taxes on the rich and multinationals. Second, the Georgist option of increasing taxes on unearned income such as land rents, inheritances, and resource levies. And third, the neoliberal option: budget cuts in other sectors. Rodworski is right to criticize the neoliberal trajectory as insufficient, but misunderstands the degree that Basic Income, by design, challenges neoliberal thinking.

Basic Income and neoliberalism are contradictory programs

Ronald Reagan campaigned on anti-welfare populism, spreading the idea that “welfare queens” were taking advantage of the system. During this time, taxes were cut on the richest earners due to the misguided principles of “supply side economics.” In this trickle-down theory of the world economy, giving large tax breaks to the rich would make everyone wealthy. The result over the next 35 years was just the opposite: increasing poverty and income disparity.

As global neoliberal hegemony was solidified, the ruling dogma was “hand ups, not handouts.” The idea was that by giving poor people money you would make them lazy, entitled, and they would refuse to work. Evidence from BI experiments, however, suggest otherwise.

In Dauphin, Manitoba starting in 1974, the Canadian government executed a trial run of what they called “Mincome.” The pilot program was scrapped before it was allowed to run its course in 1978. But University of Manitoba professor Evelyn Forget analyzed raw data in 2010 and found the evidence to directly refute the neoliberal “welfare queen” narrative. Not only did hospital visits and mental health issues seem to decrease during the trial, but the only employed people who chose to work less due to the program were single mothers and students.

In a sense, Basic Income can succeed by reshaping the narrative. Bipartisan support shows that we could be entering a political paradigm where one’s basic living conditions are not moralistically contingent on wage labour. We may experience a cultural shift from the Protestant work ethic (work for work’s sake) to an ethic that values leisure time, meaningful personal freedom, and mental wellness over aimless ‘productivity.’ This is what Pekka Himanen called “the hacker ethic”, and it may be within our grasp.

There are major strands of BI ideology that stand directly in contrast with neoliberalism: the premise that the government is responsible for eradicating poverty by putting money directly into the hands of the poor. Basic Income, as a philosophy and as a policy, makes possible the emergence of a post-work political movement, and one that challenges private ownership of resources.

The fears that Rozworski lists—a lack of political will for progressive taxation, austerity budgets, and privatization—are legitimate. However, these concerns exist outside the dominant Basic Income discourse. It is critical that BI supporters challenge assumptions that the policy is about advancing a neoliberal agenda.

BI: A Trojan Horse?

Rozworski paints a frightening picture of Basic Income gone wrong. His worry is that the left and labour movements could put their energy into supporting a program that turns out to be a Trojan Horse. The Basic Income movement at its worst, he claims, would be a total privatization of state support for hospitals, schools, the energy sector, childcare, social housing, and so on. This would mean replacing our current system with a dystopic world in which one’s right to a basic amount of money is used as an excuse to further the commodification of otherwise public services and roll back hard-won gains for workers.

What I find problematic about this premise is the notion that neoliberals need an excuse to call for privatization when all evidence shows the contrary. I find it disingenuous to say that a socialized income distribution scheme like BI does not do enough to confront the logic of markets, yet a socialized healthcare or education distribution system does. Ultimately, doctors are paid wages, medicine is a commodity, and medical patents and prices create barriers to treatment. This all exists within the single-payer model we call public health care.

Providing the basic money to keep people fed and clothed would give them the time and opportunity to build these spaces for decommodification and the collective goods that Rozworski is calling for. One of the many insidious ways that neoliberal ideology triumphs over other social movements is that far too many people are too busy making ends meet to exert the time and energy that activism requires. Basic Income would remove these shackles and give people free time and relief from the anxiety of needing to constantly fight for more public services. In doing so, BI could strike a critical blow against systemic political stagnation—and create the landscape that gives rise to lasting social and economic justice.

Of course BI is not enough to create this change alone. We need to fight for better wages, a shorter work week, electoral reform, an end to the drug war, and against a number of other injustices. It is important to remember these are not zero-sum problems, and these struggles exist alongside one another. A liberatory basic income and better wages are both worth fighting for.

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4 thoughts on “Beware of a Future Without Basic Income

  1. Appreciate this rebuttal. An important point for me is “hospital visits and mental health issues seem to decrease” in the Manitoba trial. If this is supported by further trials, then it is all by itself enough reason for me to support the idea.

  2. I’m genuinely very happy to see this debated openly; it’s such an important debate to have on the left as these ideas start to congeal into concrete policy proposals. Here’s some quick comments I made on Facebook initially.

    My biggest issue is that this piece stays mainly at the level of ideology. I don’t see capital in any mood to make major concessions or the rise of a “hacker ethic” as some decontextualized thing ready to take it on. Capital is too busy flailing and trying to figure out how to get the post-70s accumulation regime back on track. If anything that is an opening for struggle but not some kind of extended goodwill. The post-crisis policies of monetary easing have largely restored the streams of income and redistributed wealth upwards to the top to the top via inflating asset prices (see for example, the recent and dismal reports on what happened to Black working and middle class wealth tied up in housing in the US since the crisis; or what’s happening to housing in Vancouver).

    I agree that in theory UBI can be counterposed to neoliberal values to some extent, but that isn’t what’s on offer. Even a real eradication of welfare means-testing isn’t on offer because any realistic BI instituted by the Liberals would be means-tested and likely applied only to those currently on or just above the cut-off for welfare. This comes right out of the funding argument, which this article doesn’t touch. At best, a Liberal “BI” would be a rationalization of existing welfare programs—like “free tuition” is a rationalization of existing low-income student aid. (That could be good but only if it went along with higher rates and less administration of welfare, at which point it wouldn’t really be BI but better welfare—definitely something worth fighting for given today’s cruel rates and eligibility criteria.)

    Finally, I wholeheartedly agree that our public healthcare system could be decommodified further but it is precisely because of the current political environment that I would rather empower healthcare workers and users to fight for that directly rather than mediated through the kind of BI currently on offer. Social battles are not zero-sum for sure, but we are too weak to be fighting hard on all fronts, especially those where the powerful are actively trying to circumvent our interests.

  3. Stephen Stillwell

    Reply

    If you will please consider this expansion of the spectrum of thought; that the interest on sovereign debt be used to fund a global basic income.

    https://en.m.wikipedia.org/wiki/User:Tralfamadoran777

    All the current taxation and social support questions will still need to be resolved at the state and local levels, but the limited basic income system could function independent of government involvement.

  4. Whenever I see another promotion for Basic Income (usually referred to in social policy literature as Guaranteed Annual Income – GAI), I have to wonder at inattention to the other side of this idea. If we think a guarantee of annual income will solve the minimum requirements for life, why don’t we also discuss how to guarantee the maximum costs we will face?

    Stated another way, why do we demand GAI and not demand maximum caps on interest, rent, mortgages, groceries, transportation and so forth?

    We already have experience in Canada with this problem, beside the Manitoba experiments (one of which, the Interlake GAI project, is not mentioned, in part due to astonishing negligence in record retention by the government of the time. The Dauphin project was bad enough, but Interlake GAI project documents basically disappeared without a trace, it seems.)

    Beside Manitoba, we also have GAI of a sort for seniors. Old Age Security, Guaranteed Income Supplement and Canada Pension Plan, give incomes (adequate or not) that are guaranteed. Each time these programs increase their payments, landlords merely raise the rent (often by more than the pension increase); public transit raises the fare; stores hike grocery prices; service fees go up.

    See what I mean? Without a ceiling on prices, a floor on income means nothing. Nada. Zilch. Mots (that’s the Cree word).

    May I also extend the history behind GAI? The first recorded GAI was instituted in the Parish of Speenhamland in Britain beginning in 1795. It guaranteed each person a ration based on a loaf of bread. So many people in a family, so many loaves of bread per week.

    Aha!, cried the landlords and masters. If the parish gives over bread, we will just deduct that value from the pay we give the workers. Dozens of neighbouring parishes adopted the scheme – and promptly went broke. The program was abandoned after a few years because the rich shirked off their responsibilities when they saw someone else would pick them up. There wasn’t enough tax money (well, really, tithes) to fund the program.

    Richard Nixon, of all people, also had a GAI program in the 1970s. “Nixon’s little Speenhamland”, it was called in a professional social policy journal. It folded quite swiftly, more for political than mathematical reasons.

    So, really GAI is yet another scheme to try to manage capitalism by tinkering with its funding in a sort of minor way that won’t work. it doesn’t add up. It takes tax money from those who pay and transfers it to everyone, without any upper limit on costs it is intended to cover.

    The GAI tale has a certain resemblance to the apocryphal story about giving (guaranteeing) your child a cell phone with no way to control who gets dialed and how much the bill will be at the end of the month. That’s out of your control.

    Me, I would endorse GAI if it was matched with Price Controls. (Place emoticon here).

    Ken Collier
    Mission, BC

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