Universal Basic Income and the promises and perils of a leisured economy

‘From each according to his abilities, to each according to his needs’ (Karl Marx, Critique of the Gotha Program)

Introduction

Until recently few people would have heard of Universal Basic Income (UBI), despite the idea having been around for more than 200 years.1 Although it has gone under various names and had various proposed formats (such as basic endowment and negative taxation2) they are all basically the same proposal: that every single person should receive a fixed stipend from the state, regardless of wealth or need, and then be able to choose whether to exist on this or to top it up by working. Its attractiveness is its simplicity – cutting through the complications of means testing – and its ethical appeal to the equal worthiness of human life that has garnered support not just from the left, for whom the appeal is obvious, but across the political spectrum. There is, though, a pragmatic reason for the growing interest in UBI: real concern that the effects of labour outsourcing and automation are having on the continuing existence of many jobs in developed economies, and the political fallout that may arise (some will say it has already begun) as a result, is beginning to be taken seriously.

Like all grand ideas, especially those that unite opinion across a wide spectrum, there are also voices that raise pertinent objections from various perspectives. One is around cost and effectiveness. Some maintain that it is affordable3 and the only thing lacking is the political will to implement it, others that if it were to be set at a rate that would be effective it would be unaffordable4 and, moreover, if it were set at a rate lower than this boundary of effectiveness, poorer households would be worse off than they are under existing benefits system. There is also resistance to the idea of well-off individuals, in no need of financial support, receiving it of right as a bonus, despite this being the point – that it is given universally, regardless of circumstances. Another area of contention is around socio-ethical and psychological issues. Advocates5 of the UBI say that it will free people from anxiety in the face of job loss or being chained to a waged job, allowing them to be creative: to dedicate themselves to art or music, say, or to engage in voluntary work, while others may choose to start their own businesses; thus, it has the potential to reinvigorate culture and even the economy. Opponents6, though, state that it will create a disincentive to work, even undermining the work ethic of entire nations.

I am not placed to judge the economic merits of this idea. Those who are interested can follow up the sources cited in the endnotes. Nor am I qualified to express more than an opinion on the possible psycho-social implications; there are around a dozen medium-size pilot schemes7 of UBI taking place worldwide at present, and the outcome of those will have some bearing on whether individual countries decide to implement them on a larger scale. However, they will have to overcome political obstacles, even if they are roundly endorsed at the experimental level. My purpose in this essay is to critically evaluate the viability of UBI as a social policy and advance a philosophical argument that work constitutes one important aspect of our human value and that a work-free, or ‘leisured’ economy risks diminishing that value, to the extent that we should be wary of the radical restructuring of human society entailed by UBI.

The periodic recurrence of the idea

The fact that UBI has been around for a long time but never been implemented suggests that it is a periodic response to economic crises that tends to fade once the particular crisis has passed. In this case I am not just referring to economic crises like the financial crash of 2008, which has many precursors, but the economic threat implied to individuals’ means of support by new technologies. Today it is the advent of Artificial Intelligence and robots through which many of the jobs we take for granted today may disappear, but this threat has been a real feature of the economic landscape over the past two centuries. The spread of new industrial centres in England in the eighteenth century, driven by steam power, created an enormous dislocation of the population from rural to urban areas. Much the same happened in America in the 1920s and 1930s and is happening today in China. The eventual outcome, in every case, has been increased prosperity (granted that that does not take into account the tally of human misery in the process, or the sacrifice of those who did not live to see the benefits). Moreover, work has never disappeared; only specific types of work have become extinct, to be replaced by jobs required by a new economic infrastructure.

Nevertheless, like the story of the boy who cried wolf, this does not mean that the threat of the extinction of work per se is not a real one this time or the next time. Predictions that the era of free market capitalism, and the social relations that this entailed, are over are not to be lightly dismissed, if indeed the very idea of work on which capitalism has been predicated is headed for oblivion. While it can be argued that the free market has successfully adapted to a largely service, finance and consumer economy, it could be countered that moving the agricultural and industrial jobs – that is, the jobs that ensure that we are fed and have things to buy and sell – offshore to more economically advantageous environments in the developing world, where labour costs are much lower, has condemned us to living in a virtual economy, running on extended credit. Certainly, the size of the deficits in post-industrial nations suggests that this might be the case. If that is so, when there are no more developing countries to which to relocate industries or outsource our agriculture, that might precipitate the end of capitalism.8

Such is, of course, pure speculation. I find more persuasive the argument that the free market is a spontaneously arising feature of every human society, from the simplest to the most complex, because it is human nature to trade, both for necessities and for luxuries. And trade both necessitates, as a precondition, and involves, as a consequence, work of some form or other. That is not to say that the free market principle has not been expropriated and exploited by powerful institutions, of which the capitalist (and socialist) models of economic organisation are the most recent in our historical experience. However, I believe human ingenuity, fostered through the free market, will continue to deliver technological innovation and economic advancement, of which work will always be an integral part, though the nature of work will continue to evolve, and, probably and hopefully, the economic system will evolve in the direction of greater justice and individual empowerment.

Therefore, while we cannot rule out the possibility of UBI being adopted in advanced economies, the historical precedent, and human nature itself, suggests that we are more likely to see an evolution in the type of work and types of jobs available, rather than the disappearance of work and the emergence of a purely leisured economy, though that does not rule out the emergence of a different economic system and economic relations. However, I doubt whether UBI will play a significant role in this future; in some respects, I believe it would be a dangerous and retrograde step, for reasons that I will set out below.

The nature of human value

One of the plausible moral arguments for UBI is that it appeals to our sense of fairness, that everyone should be treated equally, based on our common humanity. Though this intersects with a Rawlsian interpretation of justice ‘behind the veil’, this is not uniquely a sentiment of the secular left, but an idea deep in the anthropology of the monotheistic religions, of man as a created being possessing intrinsic value, and thus due a portion of the earth’s bounty. While I think the idea of intrinsic value is important for human societies, I do not think this is the way we think under normal circumstances; it is, rather, something we take refuge in in extremis, when the normal basis on which moral judgements are made and societies are ordered has broken down, as in natural disaster, in encountering the victim of violence or other criminal acts, or in war.

Intrinsic value makes sense in a theological context, for belief in a divine creator and sustainer, arbiter and dispenser of justice is the ultimate bulwark against chaos. The problem with intrinsic value as a secular concept is that it is essentially a static concept – that, of course, being its virtue and utility. But under normal circumstances we would want to know why something is valuable, not just that it is. This calls for a more dynamic concept of value, one in which the value of something is determined in a relationship between a valued object and a valuing subject, in which both the subject and object have conditions attached to them. From this perspective, intrinsic value can be seen to be a terminal, peripheral or extreme type of value, which sees value as only inherent in the object completely independent of the subject.

When the object under consideration is a member of human society, specifically a player in the economic order of society, this means that the economic value (which I am not claiming, by the way, is the only measure of human worth, just the relevant one in this context) is also established in a relationship, between what society, represented by an employer (of whatever type), needs and what an employee has to offer. From this point of view, no form of government support can ever, or should ever, be more than a transient solution to real financial need, not a permanent state instituted to fix a hypothetical problem. This is what existing systems of income support already accomplish in the real world, albeit imperfectly.

Like all arguments that are deductively arrived at, there is a danger of a reductio ad absurdam. If we were to state that there are no circumstances under which people are valued, and thereby economically supported, outside of their economic contribution, this would be the logic of the workhouse or the concentration camp. In developed economies we do not let people starve and we try to ensure that, as far as possible, people have the means to attain the basic requirements of life, such as health, education and employment. What concerns me is that this could merely be a contingent state of affairs resting on tenuous philosophical foundations (such as intrinsic value, which could be eliminated by the progressive secularization of society), rather than having a sound economic rationale supported by a more plausible theory of value.

The most obvious resolution of this issue is that developed economies invest in potential economic value as well as exploit actual/realised economic value, investing – through policy, education, the health services, professional training and guidance and, if necessary, income support – in those who are not presently economically viable, which does not undermine the premise that economic value is established in an economic relationship. Both historically and at present, bringing formerly marginalised groups, such as women and the disabled into the workforce, correlates strongly with economic development.  However, establishing that there is a strong case for investing for potential, where the norm is to be economically active, is not the same case being made for UBI, in which the assumed norm is to be economically inactive and where economic activity is a choice rather than a necessity. In some sense, this seems to be establishing that humans have no economic value and that they are therefore superfluous to the economic system, which would be a dangerous idea in the hands of a totalitarian state.

The presumption of freedom and development

I mentioned in the introduction that one of the arguments raised against UBI is that it would discourage initiative. This is yet to be proved; projections from the effects of existing benefits could be misleading, as UBI would be given to those over a range of very different social and economic circumstances, rather than targeted at specific groups in society, such as the unemployed and disabled, who will consist of a proportionately larger percentage of individuals experiencing severe obstacles to employment than the general population. My criticism of UBI is not that it necessarily discourages individual initiative, but that its wholesale implementation in a country risks arresting social, political and economic development. I think one of the reasons that UBI has supporters on both the left and right is that sizeable segments of both political persuasions believe in static visions of society: the left in a socialist utopia that will never exist and the right in a golden age that never existed. I believe they see in UBI at least an opportunity, and perhaps a tool, to realise their vision.

Both static and dynamic visions of society grapple with human nature, and any nations seeking to embody these visions would have to meet the requirements and desires of their populations and utilise their talents. The problem is that how people define their needs is relative to the broader social expectations, and they have the nature of escalating once a certain basic level is met (take health care in the NHS as an example), until they become indistinguishable from desires. It could be argued that advanced automation will remove the cap on our wants (being infinitely adjustable upwards) and the requirement for any productive skills, and that our lives can be geared towards leisure – and production only to satisfy aesthetic desires (rather than fulfilling basic needs). It is interesting in this regard that Elon Musk and Marc Zuckerberg, two of the most powerful tech innovators, are public supporters of UBI.9 They have been at the forefront of the technological revolution that is changing the nature of work and making many of the jobs we do today redundant.

The examples of Musk and Zuckerberg and their ilk illustrate one of the paradoxes of the advocates and supporters. These innovators have taken advantage of the opportunities of their socio-economic environment, the scientific, technological, educational and cultural vectors of their time and fashioned new possibilities for the rest of us to interact socially, intellectually, commercially and romantically (and, yes, erotically), yet in supporting UBI they implicitly assume the next generation are to be condemned to a life of consumption and leisure, rather than working to create their own technological miracles. Although I would not want to dismiss genuinely held humanitarian fears, part of the resolution of the paradox may be that the Silicon Valley luminaries see their role as quasi-messianic, as ushering in the end of work and leading us into the land of milk and honey, represented by the leisured economy of UBI, rather than as particularly fortunate exemplars of the principle that work can be empowering and transformative. They have perhaps unintentionally fallen into an eschatological vision of the future of human society as static, as terminal, whereas all experience suggests that it is dynamic and endlessly evolving. UBI could potentially lock us into a static form of society in which there is no development, or – even worse – one in which development is entirely out of our hands and in the hands instead of autonomous technology.

These diverging visions, of static and dynamic societies, engage with human nature in diametrically opposite ways, the static by attempting to limit the needs and suppress the desires of their populations and the dynamic by being shaped by them. One of the reasons for caution regarding UBI is that it can only be administered by the state. Some, admittedly, see the state having a lighter touch in administering UBI than is the case for means-tested benefits, and support it for that reason. I do not think we should be so blasé. Until now, our relation to the state in democracies is fundamentally one of tolerating its power over our lives for the benefits it brings; however, in theory at least, we are free agents who have the power to hold it to account and limit its authority in certain regards. The basis of that freedom in law is property and the means to support oneself. If these would become the sole monopoly of the state, we would be relinquishing the last vestiges of legal autonomy; essentially, every person would become a vassal of the state.

The verdict

While the future is open, and the challenges posed by AI, automation and the limits of capitalism are not to be underestimated, I think that UBI is unlikely to become the prevalent economic mode, and nor do I think we will settle on a sustainable model for its widespread, yet alone ‘universal’ implementation. The experiments are ongoing and we should take heed of the economic, social and psychological outcomes of those trials. Until now, though, there has not been an economic case established, as all the existing programmes have required an enormous investment with no predicted economic output, the financial equivalent of nuclear fusion. Moreover, the purported technology, which is supposed to put us out of work and, at the same time, generate the wealth to support our lives, has not yet arrived, and I suspect, also rather like nuclear fusion, it will prove to be permanently just around the next corner.

Apart from the practicalities, I think there are philosophical and ethical objections to UBI. In every society, from the most primitive to the present, humans have been economically active; in fact human nature defines what the economy means. I do not believe that the financial transaction can be separated from human economic activity, in other words, that there exists an ‘economy’ apart from human economic activity. The financial transaction is the expression of an economic value which is determined in a relationship of trust between economic agents, one offering goods, skills and services and the other paying for them. I would go as far as to say, were this separation to be possible, it would negate the economic value of human lives and diminish human value overall and, therefore, should be resisted at all costs.

The discussion around UBI raises legitimate issues around the quality of life, as many people – particularly young people – work in poorly-paid jobs with no security and few prospects of advancement. Even for those in secure work, there is the prospect of a lifetime of “wage slavery”. There are no easy answers; pointing out that workers today live and work under better conditions than those of previous generations does little to allay the sense for many that life is unfair, because we invariably compare ourselves with others whose circumstances we consider more favourable. One of the more positive outcomes of the 2008 global economic downturn is the number of people who have started their own businesses, and it may be that while this may not presage the next wave of innovation (this is more likely to arise initially from government funding of research in universities and industries such as defence), it demonstrates a willingness of people to be more flexible, perhaps accept a simpler life, and a desire to be more in control of their economic fortune.

I expect rather than the abrupt collapse of capitalism, there will be a transition to a new form of economy marked by advanced technology, superabundant information and a free market in which the autonomous economic agent will be empowered. Work does not make us free, but it shapes our freedom, and is the basis for almost everything else we do that is valuable. I consider that UBI will always be a recurring but peripheral phenomenon in this future.

 

NOTES & SOURCES

  1. Thomas Paine (1737-1809), one of the founding fathers of the United States and the author of The Rights of Man (1791) was an advocate of ‘basic endowment’.
  1. The Republican president Richard Nixon proposed a UBI scheme, called ‘negative taxation’ in the 1970’s. However, it was rejected by Democrats on the basis that the proposed rate was set too low to offer sufficient support.
  2. Affordable
  1. Unaffordable
  1. Supporters
  1. Opponents
  1. Ashifa Kassam (24 April 2017), ‘Ontario plans to launch universal basic income trial run this summer’; The Guardian (online) at: https://www.theguardian.com/world/2017/apr/24/canada-basic-income-trial-ontario-summer
  2. Paul Mason (2015), PostCapitalism: A Guide to Our Future. London: Allen Lane.
  3. Jathan Sadowski (22 June 2016), ‘Why Silicon Valley is embracing universal basic income’; The Guardian (online) at: https://www.theguardian.com/technology/2016/jun/22/silicon-valley-universal-basic-income-y-combinator
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