Basic Income, explained right

It can be a good thing or a bad thing.

Basic Income, often also called Universal Basic Income or Guaranteed Living Income, is correctly defined as; an income paid to everyone without conditions and adequate to live on.

This idea was first articulated in that form by the economist James Tobin in the early 1960s. The basic idea has not changed much since. Some advocates of UBI feel some need to manufacture a history of it going back centuries.

These people will cite political philosophers who proposed various kinds of pension schemes, or systems of public welfare, at various times and places, but which do not align with the modern idea of a BI. The concept would have been incomprehensible in preindustrial times.

The concept had some traction in North America during the 1970s, but was crushed by the conservative sweep after 1978. Interest was revived in 1986 Europe by the Basic Income European Network (BIEN), which became BI Earth N. It is BIEN which first gave the idea the name of ‘Basic Income’, but whose advocacy for it has been dismal, for reasons articulated below.

I have been an advocate for what is now called a Basic income since the 1970s. However, as my understanding of the idea has developed, I have realized that there is a good side to it and a bad side.

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The basic fact of Basic Incomes is that it is becoming indispensable in modern technical/industrial societies. The idea of distributing the means of living through work and wages was never a good system. Wage labor only became common during the industrial revolution and was viewed with contempt before then.

This system is becoming increasingly unworkable. An increasing part of most people’s income is from government transfer programs. An increasing part of the population is not employable full time and there is no need for them anyway.

This is not because ‘technology’ is making humans obsolete. That has been predicted for centuries and it never happens. It is because of the economic distortions caused by capitalism, which makes employment at living wages nonviable for much of the population.

In any economic society, a good part of the population will be unemployable or just not needed all the time. These people still need a steady income to live on. The twentieth century liberal idea was that good wages would be taxed to pay for ‘welfare’ for the small number of unemployables.

As capitalism becomes increasingly nonviable, so does this idea of distributing income through wages, either directly or indirectly through taxes. The only way adequate incomes for everybody will be funded will be through the capture of the surplus value created by production. Of course, presently this surplus is captured by capitalism.

Capitalism will always try to capture as much of the results of productivity as possible. If lower status people get more money through a BI, all the usual means will be used to get it back from them; rent increases, reduced government services, wage reduction, wage theft, interest charges. Thus my main theme about a BI has come to be; we will not have the good kind of BI under capitalism.

Of course, this usually shuts down further discussion. However, if people are unwilling to go there, they have no moral right to be discussing a BI at all. They have nothing to talk about except the bad, dangerous, destructive forms of a BI, which I will get into below.

However, I take it as a corollary to this that a post capitalist economy will ultimately fail without a BI. That is, a socialist economy. This is defined as one organized to serve the needs of the whole population, not to support a rentier class.

A socialist economy still has the problem of everyone needing a stable, secure living income. Yet no economy really needs everybody working all the time. It needs redundancy; a reserve, on call labor force.

A modern socialist economy still needs to be competitive. It includes a mix of public and private enterprises which still need low cost labor. From the point of view of that labor, the only thing that matters is the total benefits they get and the quality of life it allows.

Thus, a BI fixes the imbalances in the labor force of modern economies. But it will not work unless a socialized system has put into place the needed structure it will need to function within. That is, low cost housing, free education, free health care, cheap transportation, and so on.

There is no way a BI and all this structure will be funded unless a real democratic government has control over the issuance of currency. This requires elimination of private banks, and credit issued only by public banks. This is, of course, the core feature of a real socialist economy.

A BI must not become a mere wage subsidy. This will require a high level of workplace democracy. Economic planning, and regulation of employment incomes between high and low limits, would need to be practised.

Thus the good kind of BI will only work under socialism. The bad kinds, however, will work very well under the bad and dangerous economic models presently being pushed on us. In fact, each bad BI model corresponds to a particular bad economic model.

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I have often explained good and bad BI by dividing all imagined BI schemes into three categories; Libertarian, Liberal, and Liberating.

Libertarians are the delightful people who think all government is criminal, suppressing, and so on. Most libertarian true believers are fairly marginal people and are clearly not able to think up their arguments on their own. They are not by themselves funding their well funded operations.

It is the industrial capitalists with means and motive in spinning up the libertarian movement. Their interest is in reducing government to the greatest possible degree, and producing a labor force reduced to conditions as close to slavery as possible. This is as much an ideological drive as a way to maximize short term profits.

There are two aims to the libertarian BI. One is to subsidize its labor force to get even cheaper labor. The other is do create a justification to shut down all other government services.

People will not need all that anymore. They will have BI money to buy these services on the efficient private market. No doubt this BI will be funded by ‘resources’, or as a ‘dividend’ on something equally nebulous, or perhaps it will be given as some sort of ’loan’.

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Liberalism, on the other hand, is usually linked to financial capitalism, which usually does not see itself as needing a large labor force. They are people who get their wealth by owning and extracting rent, not by producing for exchange. More traditional liberalism sees human populations as something to be kept busy and reasonably contented.

Liberals favour a welfare state as a way of managing the unemployed or unemployable part of the population. Welfare systems worked as a way of keeping the surplus population under control. But now there are getting to be too many unemployed and underemployed.

This is not so much due to technical change. It has nothing to do with “climate”. Western Liberal economies are in decline mainly because of growing scarcity of resources, and competition from more efficient economies.

Among some sectors of the liberal elites, a BI is seen as a more efficient way of delivering social welfare. The recipients still have to be kept docile, and the amount of BI still cannot be more than bare survival level. These are the people who are most fond of doing things through tax rebates, and so are most in favour of a BI delivered as a “Negative Income Tax.(NIT)”

A NIT would be an atrocious way of delivering a BI, especially if a person has a fluctuating employment income. There would be an enormous amount of paperwork, and the income could never be predictable. A BI must be delivered by a demogrant, meaning a predictable amount deposited at regular intervals, so people can plan their lives.

It is said that Liberalism is the most dangerous ideology. A more radical form of liberalism is growing in strength and is closely connected to the ‘climate doom cults’. They also have much to do with the mismanagement of the pandemic.

These are the people who believe that productivity and consumption must be sharply reduced. Some even think the population needs to be reduced. These people could produce the most frightening forms of a bad BI.

The aim would be to keep under management a part of the population the elite no longer wants to create employment for, or provide with more than subsistence. This is why we must be very suspicious of the people telling us that artificial intelligence is going to eliminate almost all human employment. The robots will do everything for us and we will be unemployed and happy.

Once again, there is substantial money pushing this idea forward. It is not based in reality because unemployment in North America is lower than any time since the 1970s. Other misinformation campaigns are claiming there is a ‘labor shortage’.

However, wages keep falling and costs keep rising. A BI will not solve this problem in the long run given a capitalist economy. It could be used to trap people in various ways.

There are plenty of invidious ways by which a BI or something being passed off as one could be delivered. They may involve a special currency, which may have to be spent within a given time, or within a given area. Funds may be loaded into a special debit card which allows monitoring of purchases, which may be restricted.

A housing subsidy may be issued which can be sent straight to a landlord, tying people to a location. Employers may insist that employees be receiving a BI so that they can be paid less yet be able to maintain themselves. The ways by which an undemocratic government could use a BI to control people and keep them poor, is limitless.

A BI which actually gives low status and low income people some control over their lives, and power in dealing with employers and landlords, will not long be tolerated under capitalism. This was shown in Canada by the short duration of income supplements to low income people during the early stage of covid. The preference of Canadian government is to give out income assistance in a variety of small, targeted programs.

For liberals, income supplementation must be enough to sustain people but not enough to allow any independence. Absence of systems of rent control, or of management of food supply, will also insure that income grants remain inadequate. Any increases will be captured by capitalism.

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So I turn to the Liberating kind of a BI. That is, one which is part a thought-through post capitalist political/economic system. I believe such a system would have three elements; a BI, a truly democratic system of governance, and public banking.

So I say that anyone who seriously wants a real BI, one which meets the goal of eliminating poverty and domination, should be plotting a socialist revolution. They are getting to be fairly common. However, it will also be necessary to convince socialists that BI will solve many of the problems with running a socialist economy.

This is why constantly announcing that Milton Friedman, John Tory, Elon Musk, Richard Nixon, and similar characters, were or are in favour of a BI, is the most ridiculous possible way of promoting the idea. “It’s not left or right, but forward” is the most clueless of political slogans. BI really only makes sense as a left/progressive idea.

This is not to say that moderate conservative people cannot be brought on board with the idea, and even to the radical change of systems required to implement it. Most of the really progressive ideas in history have started with the left, and got going when moderate conservatives accepted the necessity of it. Ideological conservatives will have their own idea of a BI as already described above.

This is what is really wrong with the approach of BIEN and most of its national affiliates, such as Basic Income Canada Network (BICN). They do not realize that all the apparent support for the idea is really people using the same language to talk about different things, with different aims. This is what happens when you try to build a movement around a vague idea instead of developing it into a concrete proposal.

What is encouraging about the BI movement is that many people are distinguishing the concept itself from all the bad noise about it. They are looking into the practicalities of creating and operating a good BI. This is what keeps me interested in the movement.

However, you are not going to have the right kind of BI except as an integral part of the right kind of new political/economic system. BI advocates say they want to put a floor under people. You do not lay the floor until you have built the foundation.

Thus, a clued-in advocate for a BI would do three things. One is to join with the growing call for a better way of running things. Second is to join in advocating for anything which would at least increase the living standard of low status people, even temporarily.

Finally, to call out the way a BI is a presently advocated, especially the admission of “bad BI” proposals which would be harmful to low status people.

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Here is a paper from a policy research institute which comes up with much the same conclusions as I do. A complete overhaul of the political economy will be required before a good Basic Income is workable. In fact, a new system should be designed around a BI.