Last week, it was announced that Finland is set to introduce a citizen’s basic income. It’s said to be around €800 a month, which would be provided universally and without any conditions to all Finnish citizens. It will replace all previous benefits. This is just the latest experiment with the idea. Several Dutch cities are about to introduce the measure too. Many European countries are debating this notion.
The case can be understood by anyone who has ever lived off of a student loan. A guaranteed baseline can free up individuals to pursue their own endeavours, whether they be cultural or economic. One of the reasons Britain produced so many great bands from the 1960s to the 1990s, as David Graeber suggests, was the role of benefits. The welfare system was much more open and generous. So it allowed people to take the time out necessary to develop their own talents.
At the same time, the role of a basic income could go further to restructure the labour market. As the economist Paul Mason has argued, it could kill-off low paid work and increase the pace of automation in almost all spheres of working life. In the midst of this, people would be more likely to volunteer, adopt a flexible work ethic and live in relative comfort. This sounds appealing in the age of high-tech liberalism.
Although it would certainly be a step towards economic rights, it’s not incompatible with the capitalist economic model. Indeed, it’s perfectly conducive to private property and markets in almost all areas. It’s easy to imagine a society in which the state just redistributes wealth in this way, while everything else remains trapped in the domain of private power. This is probably why Alaska has implemented its own form of basic income.
In the British context, the Green Party has become one of the main proponents of a citizen’s basic income. The plan is a much more modest proposal than many people think. In fact, it has attributes in common with the negative income tax proposed by Milton Friedman. The Friedmanite model would be a minimal income of around $3,000 a year as a baseline, which would essentially leave individuals free to compete with each other.
Importantly, the Greens propose to deflate the housing market by expanding social housing and outbidding London’s landlords. This is consistent with the more constrained version of the basic income. £72 a week is not much more than Jobseeker’s Allowance, which ranges from £56 to £60 a week for most people. Notably, the Finnish version may implement the equivalent income of £145 a week (or £580 a month).
The key difference is that the payment would be unconditional and universal in scope. It might help to eliminate the popular disdain for benefit claimants as ‘shirkers’, ‘scroungers’, and ‘drainers’. In most of its conceptions, basic income is not means-tested to save time and money on bureaucracy. The potential reorientation would be immense. The universal system would supersede benefits and even pensions.
This is where the anti-bureaucratic element runs up against its social benefits. It’s plausible the Green version of the plan could leave some (particularly the elderly, the disabled and mentally-ill people) on less money than under the current regime. It should also be kept in mind that the current regime can be brutal, inefficient and negligent when it comes to the disabled and the mentally-ill. Even the NHS, for all its virtues, has often fallen short in its treatment of mental illness.
What can be done to move beyond social democracy should be the prime concern of the Left. So the questions around the basic income idea are highly relevant. The Green Party badly articulated the proposal and suffered at the hands of the media. Yet the debate on basic income has not gone away. It has changed form in the UK. The Cameron government recently lost a battle to overturn tax credits. This case is instructive.
Tax credits are just subsidies for low-wages. It doesn’t come out of progressive politics. It comes straight out of Friedman’s neoliberal machinations. The Friedmanite proposal of a negative income tax was essentially devised to enable all individuals to take part in the market economy. It can also be combined with a flat tax regime and the overhaul of the welfare state. It was designed to undermine the bureaucratic structure behind welfare.
On this model, the tax credits were designed by Gordon Brown precisely because they could muster support from left and right. It was predicated on the idea of a ‘deserving’ poor. This is still the era of ‘hard-working’ families and ‘strivers’, who don’t get a fair day’s pay for their labour. If you subsidise low-incomes, the capitalists can keep wages low and extract fat profits. While it is true New Labour introduced the minimum wage, it was never enough for most people to live on.
When it came to tax credits, the Conservative Party were actually split. George Osborne wanted to phase-out the tax credits in favour of a so-called ‘living wage’, which was just a slightly higher minimum wage. Of course, it’s obviously a method to keep wages low, in the long-term, while obscuring this impact in the short-run. If you slash welfare you pauperise claimants thereby forcing them to accept any wage within reach.
So the conflict between Boris Johnson and George Osborne was really about two different sides of the same coin. The so-called ‘One Nation’ Conservatives want the tax credits to maintain the low wage system, while Osborne remained convinced he could squeeze more out of the poor. Neither side opposed exploitation, nor inequality and poverty. It was really about the form of exploitation. In a few words, it was a false conflict.
Tax credits are far from a basic income for all citizens, but it is still conceivable that the guarantee of a baseline could play the same role under particular conditions. This tells us it’s no panacea. The shift away from the post-war welfare state is already over a generation old. If this shift end of concluding as an income guarantee, it may be a step forward, but the extent to which this is progressive will be determined by other areas of policy.
It may be tempting to oppose radical experiments of this kind, but the Left should always be open to taking risks. Despite its flaws, basic income offers a step away from the traditional wage system, which any serious progressive must take issue with. Under the right conditions it would unleash human potential. The real battle, should basic income be enforced, would likely be to secure means-testing to provide for the uneven terrain. This could prevent it from becoming the tool of a regressive social agenda.
Photographs courtesy of Joel Schalit.