Universal Basic Income

It is not responding well to the steady rise in income inequality since the 1970s. It is also wholly unprepared for the tsunami of job losses that are coming courtesy of what Martin Ford calls in his eponymous book, The Rise of the Robots.

We are past the stage where tinkering with the current system makes sense. We have all watched governments furiously sewing patches on holes in our jumble of income support programs in response to COVID 19. Does this not force any thoughtful person to consider that crisis or no crisis, there were pressing antecedent problems in this support system that have nothing to do with a pandemic response?

This post is dear to my heart. I have become an aging radical —- an odd evolution for a former moderate conservative with libertarian leanings. My goal is to persuade you that a complex subject has a simple essence and that fairness requires that we attack income inequality, the poverty trap, and lousy jobs in a whole new way.

“The family of six woke up in a cramped studio apartment in a neighborhood not far from downtown Houston, and spent five minutes together before breaking apart for the day.  … The mother, Josefa, headed in for a shift at Burger King.  The father, Luis, nursed an injury that has cost him precious hours on the job.  The kids got out from school.  The mother headed for her second job at a Mexican restaurant. One of the older daughters went to clock in at Raising Cane, a chicken shack on a bustling commercial street. Her sister decided to take a rare day off to catch up on schoolwork. The girl working got off at  9 p.m., her mother, an hour later. Someone in the household was working nearly every waking hour of the day. It was always like that.” 

“Back in the 1950s and 1960s burger-flipping gigs really were for teenagers in the summertime … As of 2013, just one-in-three fast-food workers was a teenager … A quarter were raising children.” 

– Anne Lowrey

There is a solution to this problem. It has been around for a long time, and you are about to hear a lot more about it. In the remainder of this post, I will layout the ABCs of the Guaranteed Annual Income, sometimes called a Universal Basic Income (UBI) as a policy choice that is seeming more and more logical, necessary, and fair. I will argue that a Universal Basic Income is not just a salve for technological unemployment, or a robust anti-poverty measure, or a form of social dividend, or a way to boost the earnings of the working poor, or an elegant and logical simplification of the top-heavy Welfare State. They are a means to liberation from mind-numbing drudgery — a paradigm shift that will allow millions the freedom to reject jobs that contribute nothing to personal dignity or human aspiration. Some of you may think that, in our affluent societies, fewer and fewer people are locked in this way. Not so. Trends in income distribution, sporadic support for the working poor, the decline of unions, the outsourcing of jobs, technological displacement, and the shrinkage of the middle class in recent decades tell us otherwise.

Let’s consider this further. Universal Basic Incomes are unconditional. They are not taxed back from the recipients if they gain income from other sources. UBIs are not means-tested — they are a simple right of citizenship. A sum is given to all individual citizens (not households) whether they need the money or not, creating an inviolable financial base. This universal distribution is made possible by a society’s (at least predicated) ability to produce abundance at ever-shrinking cost.

To be clear, the rich get it, and the poor get it. Under a Universal Basic Income, every individual from birth to demise will stand on a sturdy income floor with no gaps in the planks.

The two pillars of income support provided by the welfare state, as we now know it, are public assistance and social insurance—which are either means-tested or taxed-back under variable conditions. The fundamental difference between unconditional Universal Basic Income and our current conditional income support programs goes very deep. As Philippe Van Parijs states in the most thorough treatment of UBI that I have read:

“Both are relevant to the alleviation of poverty, but an unconditional basic income means far more. It does not operate at the margins of society but affects power relations at its very core. Its point is not just to soothe misery but to liberate us all.”

Let’s leave this section with a restatement. These income support programs and others like them have taken millions of people out of poverty since the 1960s. However, right now, in its aspect as the primary mechanism for income support of the poor, the welfare state has become brittle because of its sheer size and cost, its complexities, and its inconsistencies. It is now under increasing pressure from macro-trends that cannot ultimately be resisted. Robotization is one such, already touched upon — a massive displacement of wage work is already gathering steam. Another factor is globalization, which provides a worldwide market for scarce skills and puts downward pressure on the wages of everyone with widely-held qualifications. Income inequality has been increasing for decades in much of the developed world (particularly in the United States), and one can add inheritance and return on capital (money breeds money) as other factors in this unfortunate trend. Those neo-liberals who continue to mouth the mantra that all we need to do is grow our way out of poverty, do not have a case supported by the facts. Productivity per capita has somewhere between doubled and tripled since the sixties, while income inequality has continued to rise.

I first came across the concept of a Universal Basic Income in a science fiction story I read as a teenager. In this particular possible future, little or no human input was needed to provide society’s goods and many of its services — even your psychiatric consult was supplied by a sympathetic android who no doubt went ‘Hmmm… what do you mean by that?’ like any good Freudian. This society was divided into two main groups, those who were content to live on the UBI (remember the necessities of life are now so cheap that they are easily acquired with UBI purchasing power), And those who competed for the relatively few positions available that would fit our current definition of ‘jobs.’ It must be added that those living on the Universal Basic Income in this story were not, in the main idle. They had the leisure, and enough income to make personal choices about how they wished to live within reasonable limits. They still consumed, although not conspicuously. Keeping up with the Jones’ was a vanished vanity exercise, entirely out of fashion. I was intrigued by this seemingly utopian fantasy — how else would I remember the essence of a long-lost story I probably read in 1968.

Universal Basic Incomes gained a political profile in the seventies because Richard Nixon was interested in the idea. As a good conservative, he liked the fact that with one sweeping measure, one could do away with the crazy-quilt of income support programs from welfare through unemployment insurance, through seniors pensions and the immense bureaucracies that administer them. I was a Nixonite in this regard too. But these vested interests were powerful, and Nixon had other problems — the impetus for this idea flagged to re-surface occasionally without gaining much traction until recently.

Nixon’s troubles aside, many conservatives had great difficulty with the notion of providing financial support to people that had nothing to do with the productive effort they provided. But this was long before anyone was able to seriously consider that the majority of adults might not need to work at all to sustain a comfortable standard of living.

Even before the Pandemic hit, Universal Basic Incomes were gaining traction again in recent years. There have been case studies in Canada, in Finland, in Kenya, and a referendum in Switzerland. Before dealing with the positive case for UBI, I’d like to look at commonly held objections — both essentially moral objections. Interestingly, the economic case against a UBI is very weak. The heart of the matter is not, can we? It is, should we?

The moral case against Universal Basic Income comes in two broad types.  Andrew Yang, in his book ‘The War on Normal People’, points out that critics of universal basic income often espouse these two incompatible objections. First, the argument that work is vital to human self-actualization and people’s sense of themselves as valuable. Secondly, that no one will work if they don’t have to. I think one can see the problem here. If the first statement is true, then a UBI of say $1,000 a month is hardly going to put a dent in the motivation to be productive. Regardless of how we translate the word productive  in our much more jobless future, if the second premise is true, what does that say about the validity of the first statement to anyone but the overly paternalistic?

Let’s examine the first argument in more detail and recast the second by examining the fairness of people that might not work if it is not required.

The first argument against Universal Basic Income goes something like this:

Work is a positive good, and social planners should create conditions that maximize opportunities to work, and that encourages people to work. Work creates virtuous habits; it fosters discipline, thrift, and ambition; it encourages people to acquire more education. Work for compensation is indeed in the modern socio-economy, one of the chief creators of self-worth, success in the workplace, healthy competition with others is a win/win for individuals and society. For governments not to incentive work (positively or even in a mildly punitive fashion) is to reward a vice, idleness.

There are several things wrong with this argument. Without qualification, it is vacuous and even absurd. Let us grant without objection that some wage work can be good for some people some of the time. Surely any reasonable person must also grant that much of this labour brings with it none of the benefits outlined above. Many jobs are brutalizing, demeaning, soul-destroying, and the only virtuous habit this sort of job engenders is a kind of robotic punctuality fueled by the economic consequences of not showing up. This sort of indenture to lousy jobs does nothing to foster social cohesion. In fact, it is more likely to breed a sullen alienation that is dangerous to any sense of shared bonds. Has COVID 19 not shown us aspects of wage work that we would rather not think about — workers standing almost shoulder to shoulder up to their elbows in blood, wielding knives and cleavers on animal carcasses and getting sick while they put chops on our tables? The moral force here seems to me to run in the other direction — put these people out of work, stat, bring on the robots! Self-actualization has left the room — was never in the room in the first place. There is no meaningful moral statement that one can make about wage work without qualification.

Another problem is that there is an invisible term in this argument — work is good, leisure is bad …….. (for the poor.)  Bertrand Russell said somewhere, ‘the idea that the poor should have leisure has always been shocking to the rich.’ As a society, we don’t seem to direct much finger-wagging at the entitled scions of wealthy parents who spend their days bouncing between homes with climates that suit the season and working on their golf games. It seems that the wealthier you are, the more entitled you are to leisure. To say that the wealthy as a group have earned their way to this delightful situation is myopic. If a universal basic income gave lower-income people enough money so that they might walk away from jobs they hate, or even more appalling, tried to use this income to do things other than work for wages for extended periods of time, well, all hell would break loose. Some of this is a somewhat covert concern about sheer numbers. The rich are relatively few — If a large number of people at the lower end of the income spectrum had the freedom to decide not to work or to work less, what would they do with this time and this expanded freedom? Short answer — none of my damn business if society can afford it and it does not lead to violence and social disruption.

The most fundamental problem with the ‘wage work is good for you’ argument as a basis for government policy dictates, or even mildly coercive measures is that it is illiberal — has its roots in perfectionist political theory. What do I mean by perfectionist political theories? These are theories, very ancient in political philosophy, that suggest that there is a particular mold into which human clay should be shaped. This distinction is crucial because liberalism as a political theory is a kind of great rejection of these theories. Liberal thinkers turned away from theories that argued that there is a specific human purpose, a good that must be pursued by mankind in general. They said nope, there is no way to know this, we don’t see it, let individuals figure it out themselves. It is also important to understand that, although an expansive Welfare State brings with it inevitable elements of paternalism (perfectionism lite) — the roots of the societies I am discussing in this essay are still liberal democratic, and all who value freedom should hope that they remain so.

It would be good in most cases for obese people to stay away from Burger King, and governments may develop marketing programs that admonish this particular forbearance — but they do not coerce — chubby still gets to check-in. Governments in liberal democratic countries need to be reminded that nannyism is limited by constitutional provisions and legal rules designed to protect freedom of choice. If the productivity of a society can sustain it, this freedom of choice should even apply to a decision not to take a lousy job. In no sense is it provable that wage work — work in its capitalist incarnation — has any invariable or even predictive connection with either human happiness or moral worth. 

Is it not fundamentally unfair for those capable of working to live off the productivity of others? Let’s create a scenario. In a post-COVID world, I’m at a party wearing my Universal Basic Income Rules tee-shirt. A gentleman approaches me, we will call him Self-Made Sam. Sam is curious about my ambulatory message board, and I politely outline the basics of my stance, starting with the fact that there is no work requirement attached to giving people this money — it is unconditional cash given to all individuals. Sam starts to turn a mild shade of magenta. He says, “I started from nothing, nobody helped me, and I now own 67 combination laundromat/sushi bars in the greater Toronto area. I employ people; I pay heavenly amounts of tax. You mean to tell me you are going to take this tax money I pay — money that I earned with my blood sweat and tears — and just give it to people? They don’t have to do anything to receive it! I’m no philosopher, but isn’t that a fundamental kind of unfairness called ‘free-riding’? You must be nuts!”  

What if the few and their automated adjuncts can supply the many with a rational standard of material well-being without widespread work for wages being necessary? Does this real prospect not require that we move to a more expansive definition of productive contribution that includes things such as education, child-care, artistic expression and engagement in the community and is not just focused on wage work? Sam assumes that not doing wage work equals idleness. There is no evidence to support this from the Studies we currently have. Leisure for the poor means choices hitherto unavailable, it does not seem to lead to a massive run on Lazy-Boy chairs.

There is a narrow, freedom-based case for unrestricted acquisitive frenzy, but it is a rather dubious basis for moral posturing. A more expansive definition of productivity can actually stand the free-rider argument on its head:

“For those truly concerned about free riding, the main worry should not be that some people get away with doing no work; but rather …. That countless people who do a lot of essential work end up with no income of their own.” – Philippe Van Parijs

The most obvious example of this is, of course, child-rearing and other domestic work — still performed mostly by women. Under a UBI system, child tax credits would be replaced by income channeled directly to all members of a household, not just to some putative head of a household, whatever that means in this age of fluid domestic arrangements. Giving money to all individuals within a household also dramatically affects power dynamics within the household. These dynamics are ignored or assumed to be just peachy by current programs for no reason whatsoever.

As I head for my fourth mojito, I say, “Sam, your narrow definition of productivity is actually unfair, and there are all sorts of free-riding going on that you have not considered…. And here’s another thing, you say your life has been hard work and long hours — and has come with a lot of risk anxiety; but you never said you hated it. What if fairness requires a fair distribution of what we will call the pain of being trapped in miserable jobs. At present, the intrinsic attractiveness of a job is usually positively correlated with income. As someone with money, no matter how hard you worked for it, you have bargaining power. Are you not free-riding on those who don’t have this power, those who simplify your life by doing the scut work that allows you to be an entrepreneur?” Perhaps fairness requires that we give raises to all those whose jobs suck.

This diatribe leads us directly to my final moral disagreement with Sam from the perspective of fairness. Sam, whose productive contributions to society I do not diminish at all, (but for Sam, I might not be able to eat sushi in my local laundromat), is not self-made — none of us are. Sam’s personal striving is only a part of the picture. Sam did not line up at the starting post of a gigantic foot race with the seven-billion or so other people on the planet and take off when someone yelled “GO.” His success is part personal effort and part social dividend. Sam may have started out with little; but as a white male, he could amble in to see the loans officer at his local bank branch and receive an impartial hearing of his visionary laundromat idea. Could the same be said for a Jamaican immigrant single mother with a business plan? Sam didn’t have to pay for the roads that lead to his businesses, so his customers, employees, and suppliers can reach him or for a private police force, or a private fire brigade on standby, et cetera. In all sorts of ways, but for most of us primarily as part of our earnings, we benefit very unequally from what is freely given us by nature, technological progress, capital accumulation, social organization civility, rules, and so on.

“We are not facing a future without work. We are facing a future without jobs.”
– Scott Santens — moderator Basic Income Community on Reddit

I have painted a picture of the income support mechanisms currently used by the Welfare State as brittle, byzantine, overly coercive, and unfair; but we are stumbling along — people are helped, many are lifted out of poverty. Do we really need a radical change in this area? The answer to that question depends on where you think the future is going, and I think my sixties sci-fi story is looking more prescient every day.

The futurist Martin Ford begins his great little book “Rise of the Robots” with an anecdote that pretty much says everything that needs to be said about trying to hold back technological progress:

Sometime during the 1960s, the Nobel laureate economist Milton Friedman was consulting with the government of a developing Asian nation. Friedman was taken to a large-scale public works project, where he was surprised to see large numbers of workers wielding shovels, but very few bulldozers, tractors, or other heavy earth-moving equipment. When asked about this, the government official in charge explained that the project was intended as a “jobs program.” Friedman’s caustic reply has become famous: “So then, why not give the workers spoons instead of shovels?”

Homo sapiens, the species may develop very slowly in evolutionary terms; but ‘homo faber’, man the maker of things, that fellow is moving faster than a sprinter on steroids, and the pace keeps picking up. I suggested in a previous article that the inexorable movement past ‘mere automation’ in the direction of virtually autonomous learning machines, robots that in some sense think, at the least self adjust, self-adapt, even self-replicate, will decimate the job market within a foreseeable time frame. If a paradigm shift in wage work is looming, how do we adjust the economy to ensure that there is enough income distributed throughout society so that we can continue to buy the things our robot factories will make — so that those Amazon drones will still be able to drop all those lovely packages on our front porches? (Unless of course, we simply purchase the digital specs for the latest widget we covet and make it ourselves on our 3D-printers.)

Source: Futurism

What of the culture of work-worship, the belief, deeply rooted in the Protestant ethic, that industriousness is equivalent to virtue? All of us know someone who loves to disingenuously praise themselves by complaining about how busy they are with work. Certainly, Universal Basic Incomes will reduce stigma because of their universality; but in North America, work has never just been an economic necessity. It is also a social (at one time, a religious) obligation and the foundation of a good life. This is a problem that Universal Basic Income itself can’t fix. However, cultural fixations change and this particular one is most problematic in the still very protestant United States, a country which ranks 50th in the world with respect to income inequality right behind Djibouti. (It should rank much lower.)

There is nothing fixed in stone about what virtue a citizenry treasures over others. In ancient Greece, the cardinal virtue was courage, and leisure was an absolute prerequisite of the good life. In ancient Rome, it was duty. In medieval Catholic Europe, it was piety. Even now in Europe and somewhat Latin tinctured places like Montreal where I grew up, the identification of work with virtue is much weaker. Besides a culture shift does not require that industriousness ceases to be an important standard of cultural approval or disapproval — it may as discussed, just require a more broadly social definition of what industriousness means.

Our society as a whole and its phalanx of policy planners broadly accept the moral duty to assist the less fortunate — after all that recognition is embodied in progressive taxation itself. But I argue here that there are serious moral failings associated with even the mild coerciveness of nanny-ism that are counterproductive to the extension of human dignity and freedom of choice to the poor. I also insist that these conditional, means-tested approaches designed to push people into the labour market are unnecessary and ultimately doomed to fail.

In this article, I have developed some criticisms of the welfare state’s income support policies. I have characterized Universal Basic Income as the radical but rational alternative, a broom we can use to whisk away the vast majority of means-tested subsidies with one broad stroke. It would provide the most poorly paid workers in our society, those without benefits or predictable hours, — those who labour in conditions over which they have no control — crucial bargaining power, the power to say no. It will force two choices on employers of itinerant labour and minimum wagers, either automate or pay people more. It will end the poverty trap which, by removing a dollar given for every one earned, fosters the creation of a virtually permanent welfare class. It will provide a floor below which no one can fall, and we all know that many are slipping through the cracks now.

Does it seem that benefits targeted only to the poor must be more efficient? Not necessarily — how many deserving recipients get lost in the bewildering quagmire of eligibility requirements and fail to even try to acquire benefits through ignorance, shyness or shame. If complexity continues to increase and programs to proliferate, we may soon need one bureaucrat for each potential recipient. And with all this bureaucratic effort, we have managed to create a system that favours employers over the poor. One of the sad ironies of the current system is that because it provides little or no support to the able-bodied that is not designed to force them to take a job, any job; these regulations ensure that the meanest employer, paying the worst wages for the filthiest jobs, is not deprived of a worker as long as there is one able-bodied unemployed person standing.

A Universal Basic Income is not a panacea for all social ills and some who receive it will make poor spending decisions. Don’t we all?  Why should the poor be treated differently?  With freedom of choice comes the freedom to screw up — a very liberal freedom indeed! It is also more consistent with our liberal political heritage to give this money to individuals, not households. Power dynamics, even in households, matter. (Also people should not be penalized for deciding to live together as they often are in the current system, creating a kind of loneliness trap.)

A Universal Basic Income will not reduce people’s interest in economic advancement or dry up the labour supply (if that even matters twenty years from now); it will give people at the bottom end time and bargaining power — they will advance as they see fit to advance. One not yet mentioned aspect of this freedom — young people in poor families will at one stroke gain the ability to take unpaid internships to develop skills and connections, a privilege now usually confined to the children of wealthy parents.

Finally, a Universal Basic Income is not radical enough to require the disappearance of the fundamental desire of some people to differentiate themselves from others through the display of what they own. Those that wish to lord it over KIA owners as they drive by in their Astin Martins will still be able to do so. The required transfers are not confiscatory — human nature need not be reshaped. Those that wish to consume avidly will need far more than the basic UBI to make that happen. Those who don’t will adjust their lives accordingly. Perhaps even some of the wealthy will find that the UBI expands their range of freedoms — not all high-income jobs are correlated with self-satisfaction. Some of those wealthy brokers may just decide to take their Universal Basic Income and learn to make pottery. Perhaps affluenza will diminish over time — wouldn’t that be nice; but it is not necessary.

This is a long blog post. My defense is that the adoption of Universal Basic Income is the most important social policy issue of our time. Not all human misery is attributable to economic insecurity and poverty traps, but they are certainly number one on the causal list.

The move to Universal Basic Income is important everywhere, including in the developing world, but It is particularly important for the United States where income inequality is greater than in any other post-industrial country — not because of a lack of development; but because of bad choices, many of them deliberate.

I confess I am now a zealot for the cause — utterly convinced. The concept of ‘full employment’ defined as a full-time job for every able-bodied adult in the population is dead or dying — the concept of full-employment as enough decent-paying, non-demeaning jobs for all who want one is actually more attainable under a universal basic income regime.

In deference to those who may try to digest this persuasive exercise, I leave the discussion of the economic feasibility of a move to a Universal Basic Income to another post. There is some devilry in the details, but it is very doable. (Consider the stunning sums we already redistribute in North America and the expensive way we do it.) I will also examine some of the test studies and trial runs, supply more links, and a modest reading list.

 I leave you with some thoughts on work from the poet Kahlil Ghibran:  

“If you cannot work with love but only with distaste, it is better that you should leave your work… For if you bake bread with indifference, you bake but a bitter bread that feeds but half a man’s hunger.”