With many governments providing pandemic payments, some have argued that the time is now right to bring in a Universal Basic Income (UBI) for all society. Marxist economist, Michael Roberts, argues that while payments during the pandemic are necessary, UBI will not fix capitalist inequality.
Many people are being laid off in the lockdown, and the Irish government has raised the existing job seekers’ allowance of €203 a week to a pandemic unemployment payment of €350 per week. Something similar is operating in the UK where one in three low paid workers have lost their jobs or have been ‘furloughed’. The UK Treasury is paying 80% of the wages of these jobless to a maximum of £2,500 a month – in some ways even more generous than in Ireland, if not covering all the unemployed.
These moves have inspired some on the left to argue that this is an opportunity to make these payments permanent for all, in effect a universal basic income (UBI). A successful campaign to achieve UBI would boost the incomes of the low paid and ensure a proper safety net for the unemployed, sick and disabled, the argument goes.
But is this the way to go for the labour movement? Clearly this crisis is an emergency and with millions losing their jobs or being threatened with it, emergency action in the form of quick and easily accessible cash to meet rent, energy and other bills is essential. But is UBI a long-term solution to low pay, unemployment, inequality of incomes and wealth and a better economy and society?
What is UBI?
Universal basic income boils down to making a monthly payment by a government to every citizen of an amount that meets ‘basic necessities’, whether that person is unemployed or not, or whatever the circumstance. It sounds promising and left proponents of UBI reckon it would abolish poverty, enable us to better balance our lives between voluntary, domestic and paid work, and empower women.
But UBI is also popular among some right-wing economists and politicians. Why? Because paying each person a ‘basic’ income, instead of higher wages and social benefits, is seen as a way of ‘saving money’, reducing the size of the state and public services – in other words lowering the value of labour power and raising the rate of surplus value (in Marxist terms). In this way, UBI would become a ‘wage subsidy’ to employers, with those workers who get no top-up in income from social benefits under pressure to accept wages no higher than the ‘basic income’, which would be much lower than their average salary.
Indeed, the danger is that the demand for a basic income would replace the demand for full employment or a job at a living wage. For example, it has been worked out that, in the US, the current economy could afford only a national basic income of about $10,000 a year per adult. And that would replace everything else: the entire welfare state, including old age pensions, disappears into that one $10,000 per adult payment.
UBI and capitalism
The basic income demand is similar to the current idea among Keynesians and other leftist economists for increased public spending financed by ‘helicopter money’ – i.e. money printed by the government and dropped ‘from the sky’ to every household. So the basic income demand supposedly provides an answer to crises under capitalism without replacing the capitalist mode of production.
But UBI, as a demand by the labour movement, assumes governments would introduce it at a reasonable rate, even if it meant having to tax the rich and corporations more, putting the profitability of capital under threat. It opens up a whole bag of tricks by suggesting that we can have some form of non ‘neoliberal’, ‘fairer’ capitalism that would work for labour.
But after this pandemic, there is no way that governments will adopt a UBI that burns into profits; on the contrary, they will be looking to increase taxation and cut government spending to pay for increased debt accumulated by the emergency payments. Governments will be looking to reduce the value of labour power, not increase it.
UBI for a Left Government?
And if we had a left or socialist government in Ireland or elsewhere, should UBI be the objective of such a government anyway? With UBI, our economy would stay as it is; the government would simply extend the circle of those who are entitled to receive public benefits. If we want economic justice, then our starting point needs to be more radical. We need to find ways to ‘redistribute’ wealth other than through wages, namely through the control of the production of that wealth so that it can be allocated towards social need not profit.
We can see an ambiguity in the basic income demand. It both aims to provide a demand to fight for under capitalism to improve workers’ conditions as jobs disappear through automation, but it also is a way of paying people in a ‘post-capitalist’ world of workless humans where all production is done by robots (but still with private owners of the robots).
For common ownership
The issue is really a question of ownership of the technology, not the level of incomes for workless humans. With common ownership, the fruits of robot production can be democratically planned, including reducing hours of work for all. Also, under a planned economy with common ownership of the means of production (robots), it would be possible to extend free goods and services (like a national health service – now so obvious in this pandemic, education, transport and communications) to basic consumer necessities and beyond.
The aim would be for people to work fewer hours and get more free goods and services, not just be compensated for the loss of work with a ‘basic income’. In other words, the demand of labour should be for universal basic services (UBS) not UBI. UBS is, in fact, more practical than UBI. Work has already been done by the UK’s Social Prosperity Network, which has published a report on how Universal Basic Services could be introduced and even costed it.
Universal Basic Services
Sure, UBI or cash payments for people with no income in this pandemic is essential. But in aiming for a better world, a socialist society, the aim should be to remove (gradually or quickly) the law of value (wages, goods and services being priced on a market) and move to a world of abundance (free goods and services and lower hours of toil). Indeed, that is what robots and automation now offer as a technical possibility.
The basic income demand is just too basic. As a reform for labour, it is not as good as the demand for a job for all who need it at a living wage; or reducing the working week while maintaining wages; or providing decent pensions. And under socialism, it would be redundant.