DEBATING MATTERS TOPIC GUIDE

Universal basic income is not a solution to our social and economic problems

FIRST PUBLISHED: NOVEMBER 2017
AUTHOR: SAM BURT
REVISED: FEBRUARY 2021

INTRODUCTION

Government policies in response to the Covid-19 pandemic have reignited interest in the idea of a universal basic income (UBI). [Ref: France 24] The UK government has paid millions of workers 80 per cent of their wages when they are unable to work due to government-imposed restrictions. Yet this still left millions more people – particularly the self-employed – with little or no financial support. Proponents of UBI argue that this situation shows that governments can make resources available if it chooses to do so and that a universal payment to everyone would be fairer.

Campaigns for UBI have been frequent in recent years, but the idea has generally been rejected. In 2016, for example, Swiss voters rejected proposals for UBI in a referendum [Ref: Financial Times]. If passed, it would have seen all Swiss citizens receive a guaranteed yearly payment, regardless of their employment status. Parties opposed to UBI argued that it would damage the economy by removing people’s motivation to work, and incentivise excessive immigration. In the same year, the UK Government ruled out the scheme as unaffordable. [Ref: Independent].

Nevertheless, UBI, touted as ‘the dangerous idea of 2016’, continued to attract support from across the political spectrum. It was in the UK Green Party’s 2017 Manifesto [Ref: Guardian] and has been championed by ex-Labour leader Ed Miliband [Ref: BBC], but also by members of the libertarian Adam Smith Institute [Ref: Adam Smith Institute] and Silicon Valley entrepreneurs including Elon Musk and Mark Zuckerberg [Ref: CNBC]. For supporters on the left, UBI promises to shift power from employers to workers by removing people’s dependency on work to earn a living. It has also seen as a way of reducing income inequality, improving mental health [Ref: Independent], protecting the environment [Ref: Dissent], and strengthening community cohesion [Ref: Huffington Post]. Meanwhile, adherents on the free-market right see UBI as a way to strengthen, not replace, capitalism. Opponents of basic income are similarly politically diverse. Aside from the practicalities of implementation, the policy raises time-old political questions about the meaning of freedom, equality, and community. To many of its critics, UBI is seen as a concession for the on-going erosion of working people’s rights and conditions [Ref: Guardian]. Far from spreading wealth and opportunity, it would amount to ‘writing off a large number of people as not relevant to our tech-centric economy’ [Ref: Technology Review]. Central to this debate is whether UBI represents a solution to, or the continuation of, the many social and economic problems we face this century.

DEBATE IN CONTEXT

This section provides a summary of the key issues in the debate, set in the context of recent discussions and the competing positions that have been adopted.

The changing world of work

The idea of a ‘basic income’ isn’t a new one, but it has been given new life by concerns that the increasing automation of work (the substitution of robots and artificial intelligence for human labour) points towards a future without secure, well-paid, rewarding work for all [Ref: Guardian]. However, the extent to which automation is removing our need for human labour, rather than changing the types of skills that will be demanded of us, remains a hotly debated question. [Ref: New York Times] Some commentators see UBI as a means of placating middle-class unrest about the increasingly precarious status of the professions. To critics like David H. Freeman, it could be regarded as ‘a way of buying these people off’, removing any pressure on those in positions of responsibility to improve standards of education and training, and widen access to decent jobs for all. [Ref: Technology Review] No wonder UBI is popular among Silicon Valley elites, say critics; it would reconcile the ‘precariat’ to a future of insecure, short-term work and ‘disconnect large swathes of our population from the positive aspects of working for a living.’ Others still see in UBI the potential for a radical transformation of labour relations in general. Indeed, for philosopher Philippe Van Parijs, it represents nothing less than a peaceful revolution – ‘a capitalist road to communism’ [Ref: Boston Review]. Yet concerns remain about whether we are technologically prepared for people choosing to withdraw their labour from unpleasant or tedious but socially necessary jobs. Should we regard UBI as a deceptively simple policy that diverts us from more readily available solutions to our problems? Or is its impracticality within the limits of contemporary society actually part of its appeal?

Freedom from work or freedom to work?

Those opposed to UBI accuse its advocates of ‘silver-bulletry’, presenting it as an almost utopian remedy to a range of social and economic ills [Ref: New Statesman]. UBI, on this view, is symptomatic of a technical approach to what are fundamentally political problems related to work, inequality, and power. For critics like the economist John Kay, ‘basic income is a distraction from sensible, necessary and feasible welfare reforms’. [Ref: Intereconomics] Against this view, UBI is advocated as part of a radical agenda for ‘a broader anti-work politics’ [Ref: Dissent] leading to ‘a society that is premised on less work’ [Ref: IPPR]. One of the key questions in the debate about basic income is what people will choose to do with the new freedom given them. For Michael Bohmeyer, basic income would free people from the economic necessity of work, empowering them ‘to say “no”, and to ask the question: how do I really want to live?’ [Ref: New Statesman] By contrast, former Labour MP Jon Cruddas sees the idea of UBI as embodying a defeatist attitude about working-class struggles for better working conditions: ‘It imports a sort of passive citizenship with no sense of contribution. It doesn’t contest the sphere of production, and it just retreats into a hyper-consumption’ [Ref: BBC]. Furthermore, the idea of the state making identical payments to everyone, from cleaners to billionaires, is considered morally unacceptable by many. Not only does universality seem intuitively unfair, UBI would also mark a significant change in the relationship of the state to its citizens. The modern welfare state was originally conceived as a ‘safety net’ on which people could rely in emergencies, but most people, most of the time, would not depend it. With UBI, however, this will change: ‘Rather than there being existing pockets of state dependency, all of us will become dependent.’ Added to this is ‘the worrying potential for a basic income to be used to enforce a change in people’s spending habits and lifestyle.’ [Ref: Independent] Would UBI transfer power downwards – from the state to the citizen – or the reverse? What does the growing popularity of UBI say about society’s attitudes to work today?

Unknown territory?

Although no country to date has implemented UBI at a national level, it has been trialled on a smaller scale in countries including India [Ref: Independent], Canada [Ref: Quartz], Finland [Ref: Wired], Kenya [Ref: New York Times], and the USA. [Ref: Jacobin] In June 2020, the Spanish government began a scheme to provide the poorest families with up to €1,015 per month, which has been promoted by some as like UBI, but the payment is neither unconditional nor universal. [Ref: Nature] In Wales, the Future Generations Commissioner has proposed that there should be a UBI pilot scheme. [Ref: BBC News]

Supporters of UBI point to these trials as evidence of the scheme’s effectiveness. Critics contend that the relatively short time-frame and small-scale of such experiments render them of limited use in predicting the likely effects of UBI proper [Ref: New York Times]. For instance, none of the earlier trials paid basic income to people already securely employed. For Daniel Ben-Ami, these experiments do not prove whether large numbers of people might decide to work less, in which case, without real improvements in productivity, UBI might amount to ‘a savage cut in living standards’ [Ref: spiked]. While coronavirus furlough payments of 80 per cent of wages are seen as an illustration of what is possible, they have effectively meant a 20 per cent pay-cut for those relying on them.

Costs and benefits

Opponents of UBI believe it would be imprudent to invest our hopes in a policy surrounded by so many unanswered questions. Firstly, who will pay for it? Proposals for UBI vary in the generosity of their individual payments. Commentators sympathetic to UBI emphasise its likely lower administrative costs, as it would streamline a complex array of welfare benefits into a single payment. UBI is seen as an efficient alternative to what many regard as overly bureaucratic and expensive welfare states throughout the developed world. Since UBI is paid to employed and unemployed alike, it theoretically eliminates the so-called ‘poverty trap’, whereby individuals are deterred from working for fear of having their benefits withdrawn. [Ref: iNews] Sceptics, on the other hand, point out that there will still be individuals with greater need under UBI. If basic income is tied to need, then it might be more expensive overall; if everyone is to be paid the same, then inequality may widen under UBI. [Ref: Times] Countering these pessimistic forecasts, supporters claim that it will enable lower earners to invest in their skills and re-training, just as middle-class workers do currently, thus boosting economic growth and productivity in the long run. Moreover, any cost-benefit analysis must take into account potential savings as a result of reduced crime and other social ills for which UBI has been proposed a solution [Ref: Compass]. So, would UBI help us all prepare for the next wave of technological change? Or would it force us once more to choose between equality and economic growth?

ESSENTIAL READING

It is crucial for debaters to have read the articles in this section, which provide essential information and arguments for and against the debate motion. Students will be expected to have additional evidence and examples derived from independent research, but they can expect to be criticised if they lack a basic familiarity with the issues raised in the essential reading.

FOR

Why the progressive left should oppose a universal basic income
Emma Dawson Financial Review 6 May 2020

How I fell out of love with Universal Basic Income
Paul Morrison Joint Policy Issues Team 9 September 2020

Basic income is the latest bad political idea that refuses to die
John Rentoul Independent 2 January 2017

Why a basic income won’t work
Matthew Lynn Money Week 11 June 2016

AGAINST

Universal basic income is the answer to the inequalities exposed by COVID-19
Kanni Wignaraja and Balazs Horvath World Economic Forum 17 April 2020

Stop preserving doomed jobs and bring in Universal Basic Income
Thomas Hannah and Rocco Friebel LSE blogs 20 November 2020

The case for a universal basic income
Sebastian Johnson Los Angeles Times 29 June 2017

Universal basic income is becoming an urgent necessity
Guy Standing Guardian 12 January 2017

IN DEPTH

The false promise of Universal Basic Income
Alyssa Batistoni Dissent April 2017

Universal basic income: Money for nothing
John Thornhill and Ralph Atkins Financial Times 26 May 2016

Creative Citizen, Creative State
Anthony Painter and Chris Thoung RSA December 2015

KEY TERMS

Definitions of key concepts that are crucial for understanding the topic. Students should be familiar with these terms and the different ways in which they are used and interpreted and should be prepared to explain their significance.

About basic income
Basic Income Earth Network

BACKGROUNDERS

Useful websites and materials that provide a good starting point for research.

Basic income could virtually eliminate poverty in the United Kingdom at a cost of £67 billion per year
Karl Widerquist OpenDemocracy 14 August 2020

The COVID‐19 pandemic: Time for a universal basic income?
Andrew F Johnson & Katherine J Roberto Public Administration and Development 14 October 2020

The Case Against the Universal Basic Income
Le Dong Hai Nguyen SocArXIV Papers 24 June 2019

Could Labour implement Universal Basic Income?
Rudy Schulkind New Statesman 24 July 2017

Free money for everyone
John Harris New Statesman 21 July 2017

Getting to the heart of universal basic income
Conrad Shaw OpenDemocracy 7 June 2017

The Fiscal and Distributional Implications of Alternative Universal Basic Income Schemes in the UK
Dr Luke Martinelli University of Bath 1 March 2017

What if the state provided everyone with a basic income?
Simon Copland BBC Future 18 January 2017

Universal Basic Income: The dangerous idea of 2016
Gigi Foster ABC News 27 December 2016

A universal basic mistake
Jon Cruddas and Tom Kibasi Prospect 18 June 2016

Basic Income: A sellout of the American Dream
David H Freeman MIT Technology Review 13 June 2016

Could an income for all provide the ultimate safety net?
Tim Harford The Undercover Economist 3 May 2016

The Danger of the Universal Basic Income
David Rotman MIT Technology Review 11 March 2016

A future without jobs? Two views of the changing work forceEduardo Porter and Farhad Manjoo New York Times 8 March 2016

The future isn’t working
Nick Srnicek and Alex Williams IPPR 18 December 2015

The best and simplest way to fight global poverty
Matthew Yglesias Slate 29 May 2013

Universal basic income would fail to cut poverty, says OECD
Financial Times 28 May 2017

Finland’s Universal Basic Income trial for unemployed reduces stress levels, say officials
Independent 8 May 2017

Universal basic income ‘useless’, says Finland’s biggest union
Independent 9 February 2017

Basic Income: Transforming lives in rural India
Stuart Weir OpenDemocracy 20 June 2014

ORGANISATIONS

Links to organisations, campaign groups and official bodies who are referenced within the Topic Guide or which will be of use in providing additional research information.

Basic Income Earth Network (BIEN)

RSA Basic Income

World Basic Income

IN THE NEWS

Relevant recent news stories from a variety of sources, which ensure students have an up to date awareness of the state of the debate.

Spain approves guaranteed minimum income scheme for vulnerable families
Manuel V Gómez El Pais 29 May 2020

Universal basic income and covid-19 pandemic
Salil B Patel & Joel Kariel BMJ 26 January 2021

What Andrew Yang’s UBI proposal would mean for NYC
Sarah Holder and Olivia Rockeman Bloomberg CityLab 28 January 2021

Once a radical idea, universal basic income is gaining support
Romain Houeix France 24 1 June 2020

Tory mayor candidate under fire for saying people would blow Universal Basic Income on ‘lots of drugs’
Poppy Wood City A.M. 2 March 2021

Universal Basic Income is the ‘vaccine’ for poverty, says researcher Scott Santens
Times of India 7 March 2021

Stockton study shows that universal basic income can be life-changing
Michael Hiltzik Los Angeles Times 6 March 2021

Rapid response to: Universal basic income and covid-19 pandemic
Marcia Gibson BMJ 5 March 2021

Majority in Wales support a basic income trial – new findings by the Future Generations Commissioner for Wales
5 March 2021

Council leader calls for Cardiff to take part in universal basic income pilot
Alex Seabrook WalesOnline 29 November 2020

AUDIO/VISUAL

Scotland Tonight: Should there be a universal basic income?
STV
15 October 2020

Universal Basic Income: Elon Musk, Andrew Yang, Ben Shapiro, Jordan Peterson on UBI
YouTube 9 April 2019

The Universal Basic Income is the safety net of the future
Intelligence Squared 27 March 2017

Universal Basic Income: Workfare or Freedom?
Battle of Ideas October 2017

Money for Everyone: The State of the Basic Income Debate
University of Bath 11 October 2016

Robert Reich makes the case for a universal basic income
Daily Kos 29 September 2016

Is the world ready for a guaranteed basic income?
Freakonomics 13 April 2016

Why we should give everyone a basic income
TED 21 October 2014

Milton Friedman – The Negative Income Tax
Firing Line with William F Buckley Jr., 1968