The concept of a basic income guarantee (BIG) has gained increasing traction on the left in recent years, for example being adopted as union policy by GMB and UNITE, being a manifesto commitment of the Green Party, and supported by John Mcdonnell, the shadow chancellor.
The concept is hardly new, with subsidized grain for plebian citizens being introduced by the populist Tribune, Gaius Gracchus in 123 BC. Indeed, as one of the currently touted arguments for a citizen income is founded on the idea that automation is creating a sub class of those permanently excluded from work, then the fate of the propertyless Roman plebians, impoverished and marginalized in an economy based upon military plunder, colonial tributes and slave labour, is an apt one.
Economist, Billy Mitchell has produced a number of detailed arguments about Basic Income, in a five part series of articles.
But his general point is well made that the concept is highly elusive and slippery, due to the wide range of political interests that advocate basic income, and the differing reasons that they support the policy:
Tracing the origins of the BIG proposal reveals that the motivations of the proponents at different periods of history have varied from those who desire to cut government spending overall and push the responsibility of maintaining ‘welfare’ onto individuals, to those who were believed that unemployment was a violation of justice but was outside of the capacity of governments to solve it, to, more recently, those who invoke trepidation about the so-called second machine age and claim that robots are going to wipe out jobs on a massive scale (the ‘robot’ justification).
Voices from the left and the right weave various aspects of these motivations, often in overlapping ways, to justify their demands for a basic income to be paid by the state to all individuals (although even then, the unit that would receive the benefit is also a topic of disagreement).
An example of the confusion is that basic income advocacy group, BIEN, has published a muddled history of the concept since Thomas More’s “Utopia” onwards which conflates two distinct and separate phenomena: the state guaranteeing income, and the state providing a finite capital endowment. The second concept, advocated by Thomas Paine, gained limited expression by Tony Blair’s government with the baby bond, based upon research that even a limited access to capital at the start of life, for example to pay for an interview suit and suitable work clothes, or for driving lessons, could have a disproportionate effect in improving life chances. Sadly the Baby Bond was abolished by the Coalition government in 2010.
If we look at the detailed proposal from the Green Party then simplifying the benefit system, removing tax allowances and abolishing tax relief on pension contributions would lead to sufficient savings to fund a basic income of £80 per week for working age people, an increase of child benefits to £50 per week, and an £80 pw supplement for single parents.
A number of immediate objections can be made. Our economy is based upon fiat money, that is currency which is inherently worthless, but which gains value from being underwritten by the government, and its social and commercial acceptability as legal tender. There is therefore no limit to the amount of money in circulation, and payment out by the government of the basic income will undoubtedly be effectively financed by printing money, which will be inflationary over the longer term. Sustained economic growth and prosperity is achieved by investment in the productive economy, not by subsidising consumption.
Furthermore, any taxation and benefit system will modify behaviours, and while the Green Party’s proposals for income levels are relatively modest, they are unconditional. It would be sufficient for a significant number of people to withdraw from the labour market altogether. Furthermore, there would be a substantial number of persons in work, who either would be, or would perceive that they were, subsidizing people who were not willing to work. This is a politically untenable position.
Indeed the Green Party’s own proposal is even more economically inept, and politically incoherent than that. As the Guardian reported:
The Citizen’s Income Trust (CIT), which has given advice to the Green party and been repeatedly cited by the Greens, has modelled its scheme and discovered it would mean 35.15% of households would be losers, with many of the biggest losers among the poorest households.
The trust’s research shows that for the two lowest disposable income deciles, more than one-fifth would suffer income losses of more than 10%.
Even if the policy flaws of the specific proposals by the Green Party could be ironed out, fundamental problems remain.
As Billy Mitchell describes it:
As more an more individuals opted for the basic income without work, output would drop dramatically and material prosperity would be violated.
And Mitchell argues elsewhere:
Payment of a BIG to all citizens would signify a further withdrawal by the State from its responsibility to manage economic affairs and care for its citizens. Young people must be encouraged to develop skills and engage in paid work, rather than be the passive recipients of social security benefit.
Indeed, Basic Income Guarantee marks a retreat by the left from the concept not only that the state should take responsibility for developing skills and full employment; but a retreat from the idea that collaborative productive work is the sound moral foundation of a just society. It is through the collaborative endeavour of building and rebuilding the material world around us, producing through shared human labour our food, shelter, clothing, transport, communication and cultural artifacts that we find expression as social beings conscious of our collectivity.
Well intentioned do-gooders might imagine that freed from the compulsion to work, individuals will flower to become a generation of Shakespeares, Goethes and Mozarts, they are more likely to sit in their underpants watching Netflix. This is not a facetious point, the Basic Income Guarantee sees individuals as consumers of a world that they do not shape, they are the objects of society, not its self-conscious subjects. Passive consumption is not a stimulus for creativity.
The socialist project is to advance the interest of the working classes, and to ultimately build a society where the state acts in the interests of the working classes. Trade unions exist to combine workers to increase their strength through collective bargaining for those in work.
A Basic Income Guarantee would withdraw a number of citizens from the workforce, particularly at the unskilled, low paid end of the job market, whose work would inevitably need to be filled by immigrants. These non-citizen workers would not be entitled to BIG, and therefore the working class would be divided down the middle in such a way as to irrevocably weaken the possibility of trade union organisation.
In contrast to the collective orientation of organized labour, the Basic Income Guarantee is predicated not upon creating communities of solidarity but upon citizens with individual entitlement. It is pessimistic about the possibility of successful political action to achieve a shift of wealth and power to working people, and the possibility of working people democratically shaping society; and instead is fatalistic in seeking to provide ballast against poverty for dis-empowered individuals at the mercy of the gig economy.