Home > Uncategorized > The left debating basic income

The left debating basic income

from Norbert Häring

Universal basic income has a lot of support among the left but also faces a lot of criticism or even hostility from the left. As on of the critics of I have used a book defending basic income against criticism from the left to check my beliefs against counter-arguments from the same side of the political spectrum and to clarify the reasons for not being convinced.

One of Karl Reitter’s arguments in his book “Kritik der linken Kritik am Grundeinkommen” has indeed convinced me of something that was not fully clear to me before. The neoliberal representatives of basic income, who want to abolish all or almost all social benefits in return for the basic income, are indeed a relatively small minority that has managed to dominate the discussion in the media. If one calls basic income summarily a Trojan horse of the neoliberals one might do an injustice to many supporters of the basic income from the left.

Trojan Horse of the Neoliberals?

However, this already brings us to a first, illuminating internal contradiction. Reitter aptly analyses that the neoliberals enjoy the support of influential circles and have thus been able to dominate the discussion and make themselves appear as the most important representatives of the basic income idea. He counters that the neoliberal supporters are only a tiny and thus supposedly insignificant minority. That is why the talk of a Trojan horse is nonsense, he argues.

I would argue that if the neoliberals have the power and influence to dominate the media debate on basic income, they should also have the power and influence to steer any reform towards basic income toward their preferred variant of it. In any case, this would be an idea that should be dealt with in order to avoid introducing something with  support from the left that then becomes neoliberal and does more harm than good to leftist causes.

Neglect of the Global South?

This is connected to another gap in Reitter’s argumentation. He accuses the opponents of an unconditional basic income of arguing solely on the basis of the conditions in the industrialised countries and ignoring the global South with its completely different conditions. Strangely, however, he does not elaborate on this, so that one does not learn what additional arguments there are for a basic income in the global South.

I am one of those who are critical of the idea and have also argued this publicly.  I have already written several times about what I see as neoliberal projects in the direction of basic income, some of which are being implemented on a very large scale in the global South, and which are propagated by institutions such as the large corporate lobby World Economic Forum.

The main players are the World Bank and the large corporations from Silicon Valley and their foundations, which one can hardly help but assume are concerned with control, surveillance and data theft.

One example is the plan, pursued at least until the recent military coup there, to put 80 per cent of Sudan’s population on a basic income of five dollars per person. The money would be paid out by mobile phone so that all recipients would end up on a digital leash. Other experiments with tens of thousands of recipients in developing countries also work with very small amounts, just enough to survive.

Race to the bottom

This leads to another danger, which becomes clear when the global South is taken into consideration. Proponents of basic income tend to take a global view, according to which the great differences in wealth are profoundly unjust. That is true. But if you introduce a uniform global basic income, or bring national basic incomes closer together, then it should be clear that it is not the high level in industrialised countries but the very low level in developing countries that will have the strongest gravity.

Apart from the control aspect, I think this is the main reason why neoliberal actors and organisations like the World Economic Forum think that global basic income is such a great thing. Even if one did not want this equalisation, it would be very difficult to resist the arguments in favour of it, which would be put forward with power by interested parties. Any call for solidarity and support for the poor in a rich country would be countered with the moralising lecture that one should rather show solidarity with the much poorer people in other countries.

The foundations that carry out large-scale experiments on basic income in developing countries propagate this as the better development policy. They are tapping government grants from development aid budgets and soliciting private donations for their tiny but extensive basic incomes. Despite all the criticism of development aid to date, this looks very much like development is simply to be dispensed with and the poor are instead to be kept quiet and controlled with a basic income that is barely enough to survive. Given the competition for scarce resources in the world, it is quite plausible to me that the World Economic Forum and their likes. would think this way.

Subsistence level or full social participation

Another of Reitter’s inner contradictions leads him to avoid one of the most important sticking points of the debate. In th early pages, he approvingly refers to a definition of basic income, according to which basic income is unconditional, everyone receives it, and:

“The sum made available is intended to enable a modest life, but one that meets the standards of society, participation in everything that is part of a normal life in this society.”

This is also how I understand the left-wing variant of the unconditional basic income.

But when it comes to what a universal basic income’s costs and what the individual (voluntarily) will do in return, he consistently talks of securing material survival, or similar formulations. I also understand Reitter’s example of financing in such a way that it would ensure material survival rather than participation in everything that is part of a normal life in society. For me, the first definition means consumption possibilities somewhat below the average or median of society, the second definition consumption possibilities far below.

This ambiguity in the definition gives great degrees of freedom in the argumentation, which makes a meaningful discussion hardly possible. It is hardly disputed in the left spectrum that material and social survival is to be secured unconditionally, i.e. also without compulsory paid work. The dispute is about whether this can and should guarantee a level of consumption on a par with that of someone who earns below average or doing a hard and often unpleasant job.

Who pays?

Reitter rebukes the opponents of the basic income for insinuating that the hard-working population would have to finance the basic income. For him, this is not the case. He writes that it could and should be financed through a much higher taxation of capital income and assets. Then normal wage earners would get more than they pay.

Reitter makes it too easy for himself and overlooks an inner contradiction in his argument. Against the argument of the Trojan horse for dismantling the welfare state, he argued that social benefits are of little use anyway and are already being dismantled as it is. There is some truth in that. But: He compares the status quo of an imperfect, underfunded and misfinanced welfare state with the ideal of a basic income richly financed by the affluent alone.

That is not a relevant and fair comparison. He would have to compare the real welfare state with a basic income that gets by with equally little money from the rich, or the ideally financed basic income with a traditional welfare state that has just as much money to distribute from the rich. Implicitly associating the basic income with a land of milk and honey, where the resistance of the rich to expropriation simply disappears or is broken, makes it look attractive. But this way of dealing with counter-arguments is not fair and not useful.

Recipients as exploiters?

In a book by Johannes Mosmann on basic income, which I reviewed (in German), a working person is quoted as replying to a talk show guest who claims that the state should enable him to freely exercise his “intellectual work” with a basic income:

„I bend over backwards every day to produce the things that you consume afterwards, and in return you want to define yourself what you do in the same time that I slave away for you? You’re out of your mind!”

Reitter does not address this objection. He brushes aside the concern of parasitism with the argument that this concern makes people seem worse than they are.He is conviced that (almost) all people want to and would contribute something to society. But they should be able to decide for themselves what they would like to contribute.

That’s all well and good. But as long as he doesn’t comment on whether enough people would express a preference for repairing roads in the hot tar stench, emptying toilets and removing rubbish it’s not very convincing. There is no need to call those who would rather do mental work than such unpleasant jobs freeloaders. I would consider such behaviour normal.

One can try to argue that those who do such work today out of material compulsion would be freed from it, and that in return such work would have to be paid so well in the future that enough volunteers could be lured (rather than compelled). But I would like to read that argued through. In my opinion, it could easily lead to runaway inflation that would make a mockery of calculations of a sufficient basic income or other grave problems with the plan.

Basic income as an ideal type

Let’s put aside the question of how to get there from her and ask whether an egalitarian society, in which there are no great differences in wealth, would do well with a basic income.We take away capitalism and its excesses, which Reitter wants to overcome with basic income.

I find it enlightening to imagine a society of 50 people doing subsistance farming in which there is little division of labour and most of what is produced goes into a common pot. There is no money, but there are close social ties and debt relationships through giving and receiving gifts. Everyone is fundamentally dependent on these ties.

Lets say, a person with generally accepted authority assigns tasks where necessary and settles disputes. Those who do not cooperate properly, who do not comply with the social bonds, receive more or less clear signals of disapproval. If this works well, everyone does what they can and gets what they need.

An unconditional basic income would be alien to such a society. It would roughly mean that everyone would be explicitly assured of getting – let’s say – one 60th of everything produced, regardless of whether they participate in the tasks or whether they see their contribution more in pleasing themselves and others with song or poetry.

This message would be clear that the community does not expect you to participate in a concrete way, because otherwise there would be no need for the basic income: You decide for yourself what you want to do and contribute. Whatever it is, it is all right.

That can be liberating for the individual. But for this society, I don’t think it’s progress. htey may well have a bard and a poet and value them for their creative work. But htey will not have decided without feedback from the rest of society that their best contribution to the community is this and only this.

Hoked up on money

From the example back to the basic point I want to make: the advocates of a basic income rely on an instrument of what they actually want to fight, money, which certifies a marketable claim of the individual on society. Money, and the market based on it, are social technologies that assume and promote that the individual is for himself and meets others in the market who are for themselves. All social relations in the sphere covered by the money economy condense – at least in essence – to the one monetary dimension. The money economy assumes and promotes isolation and weak social ties.

It is unrealistic to want to eliminate money. Nor do I want to. But in view of the goals of the basic income advocates, many of which I share, I think it makes more sense to reduce the monetary sphere instead of increasing it through a monetary basic income.

Specifically, I would prefer a public housing policy that ensures that everyone can get affordable, decent housing. A free, state-run health system so that health is not a question of money. A good socio-cultural infrastructure, with low user prices, i.e. swimming pools, school meals, music and theatre of the not too expensive kind, recreational sports and other clubs, good and cheap local transport.

In a society that provides these, it is easy to ensure with traditional social benefits and without an intensive needs assessment that not only material survival but also social participation is guaranteed for all.

Reitter writes that the basic income proposal follows on from these demands, but goes even further by overcoming work as wage labour. He equates wage labour with capitalism, which is thus overcome. I have at least strong doubts about all three statements:

The basic income proposal is in latent competition with the proposals for a demonetisation of important areas of life. This is because it is based on money, not on free benefits in kind, and the financing of the socio-cultural infrastructure costs money that is not simultaneously available for a basic income.

Wage labour is not overcome unless one renounces everything that no one wants to do without being well paid.

Capitalism is not to be equated with wage labour. Even in an economy in which cooperative dominate, there can and probably would be wage labour.

The latter is an important point, because I would also like to overcome capitalism, but I think it is more effective to start with its core. At the core is the fact that capitalists, thanks to the support of a capitalist monetary system, can get paid for property rights (especially to companies and land). I don’t see how a basic income would fundamentally change that. Otherwise, the World Economic Forum would not advocate variants of basic income with so much so enthusiastically.

  1. August 4, 2022 at 12:56 pm

    My minimum minimorum rules on UBI
    It is unconditional (so redistribution profiteers hate it)
    It is universal
    It is fully paid for (no public debts contracted)
    It is large enough to help you out of the bed
    It is small enough so as not allow you stay in bed
    http://myubi.blogspot.com/2017/01/my-universal-basic-income.html

    • Meta Capitalism
      August 4, 2022 at 3:09 pm

      Per Kurowski writes, “A raise in the minimum wage is raises the bar and so there will be fewer jobs.” This is false and has empirically been proven to be false. But don’t let that stop your nonsense.

  2. Point
    August 5, 2022 at 5:16 am

    Once you take the ticket, you may be at the mercy of the donor.

    While there are many good reasons to pursue a basic income, there can be hidden costs.
    In the current era, there are frequent hyperbolic or hyperventilating pronouncements on social media from government representatives. Would you trust that same government to honor its obligation without some nasty strings attached? Means testing takes on various meanings.
    Multi-factor issues may not be disclosed adequately, if at all.

  3. Meta Capitalism
    August 6, 2022 at 4:06 pm

    The end of belonging is fundamentally a story about power. Rising inequality of income and wealth, the changing status of different types of work, and the diverging fortunes of different regions in the same country—all these are consequences of a changing balance of power and lead, in their turn, to deepening power differences. For those left behind by the economy, this is experienced as losing influence over their own lives. That is why slogans such as the Brexiteers’ “Take back control” are so powerful. Crucial to an economics of belonging, therefore, must be a vision of a restored sense of control and an end to dependence in people’s lives. (Sandbu, Martin. The Economics of Belonging (p. 111). Princeton University Press. Kindle Edition.)

    The dependence of the left behind takes many forms. The most striking is in the world of work, where members of a growing class of people work as much as they can yet struggle to make a decent income, let alone to improve their lives. Compared with the better placed, they enjoy less security and predictability of whatever income they do earn. They are more likely to be sick, be in pain, or suffer social problems. They have few, if any, alternatives or ways out of their situation. They are, in a word, left behind in a state of precarity—a term that captures well the many dimensions of economic pressure: scarcity, unpredictability, dependence, and vulnerability to exploitation. (Sandbu, Martin. The Economics of Belonging (pp. 111-112). Princeton University Press. Kindle Edition.)

    Aside from economic hardship, this causes psychological harm that has political repercussions. As I discussed in chapter 3, people tend to compensate for a feeling of loss of personal control by doubling down on group identity, which nativist and populist politicians can exploit. And this works in reverse as well: the psychological impact of precariousness aggravates the economic dynamics that leave people behind. The stress of insecurity worsens individuals’ decision-making by eroding their cognitive abilities and their aptitude for long-term planning and commitment1—precisely the sorts of skills that jobs in the modern economy increasingly demand. (Sandbu, Martin. The Economics of Belonging (p. 112). Princeton University Press. Kindle Edition.)

    In some countries, this new “precariat” has added to the ranks of a deprived and vulnerable group that had shrunk but never quite gone away; in others it constitutes the bewildering return of a problem that had entirely disappeared except in the historical and literary memory of a distant past. It is the worst manifestation of economic dependence and disempowerment. (Sandbu, Martin. The Economics of Belonging (p. 112). Princeton University Press. Kindle Edition.)

    (….) The flip side of dependence at the bottom is the opportunity to abuse power at the top. That opportunity manifests itself not just in labour markets but wherever competition is missing in markets for goods and services, and only one or a few companies offer a product or an opportunity. The threat of abusive market power is real across many Western countries, and in many parts of the economy. It is present in small places where all the jobs within a particular line of work are with the same employer,2 but also where big corporations dominate a market and make things hard for new entrepreneurs. It is manifested in the harnessing of private data for manipulative purposes, and in the new digital platforms in sectors ranging across retail (Amazon), transport (Uber), hospitality (Airbnb), and many others, where they dominate business flows and can therefore make or break smaller players. (Sandbu, Martin. The Economics of Belonging (pp. 112-113). Princeton University Press. Kindle Edition.)

    Market power can of course harm anyone, not just the groups we think of as the left behind. But the left behind are always the most vulnerable to rigged markets, and emerging forms of market concentration threaten to create new groups of left behind as technology continues to transform our economies. (Sandbu, Martin. The Economics of Belonging (p. 113). Princeton University Press. Kindle Edition.)

    An economy of belonging cannot rely on broad-based prosperity alone (though it would certainly help), but must address precariousness, insecurity, and unequal power directly. (Sandbu, Martin. The Economics of Belonging (p. 113). Princeton University Press. Kindle Edition.)

    .

  4. rsm
    August 7, 2022 at 6:28 am

    Fischer Black in “Noise”:
    .
    《 it is not clear what is gained by controlling the price level. If business cycles are caused by real factors rather than by things that are affected by the rate of inflation, then many of the reasons for controlling inflation vanish.》
    .
    To replace unjustly enclosed commons in gross violation of the Lockean Proviso, does a money-printed, inflation-proofed, dollar-denominated, universal Fed CBDC make sense? Can we print money faster than prices rise, protecting everyone’s real purchasing power, thus preserving everyone’s current degree of Pareto optimality no matter how fast and high nominal prices may rise? Can we deal with shortages by holding challenges to crowdsource innovative solutions to man-made problems such as the current supply chain issues, or politically-caused fuel scarcity?
    .
    《We believe that the most pressing needs of the moment could be met by means of what we call a National Dividend. This would be provided by the creation of new money – by exactly the same methods as are now used by the banking system to create new money – and its distribution as purchasing power to the whole population. Let me emphasise the fact that this is not collection-by-taxation, because in my opinion the reduction of taxation, the very rapid and drastic reduction of taxation, is vitally important. The distribution by way of dividends of a certain amount of purchasing power, sufficient at any rate to attain a certain standard of self-respect, of health and of decency, is the first desideratum of the situation.》- C. H. Douglas, “Money and the Price System” (1935)

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