February 19, 2023

It can be a good thing or a bad thing.

revised May 20, 2023

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 in 1966 in the United States. A debate was going on there and then about a government program called “war on poverty”. The futurist Robert Theobald and a group called “committee on the three revolutions” believed that technology would soon create mass unemployment and the solution was to guarantee everyone a minimum income.

Later that year the economist James Tobin presented a paper describing a way of administering a guaranteed minimum income. It was what has come to be called The Negative Income Tax, (NIT); people would get tax refunds if their incomes fell below a certain level.  This thinking about the problem and its solution is inadequate and the idea has developed since then, as described below.

However, the concept as defined at the top has remained. It was never articulated in this way before 1966. Yet some advocates of BI 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. During the 1970s, experiments were conducted using the NIT model. The results were controversial.

While there were obvious benefits to supplementing people’s income, the use of an NIT model was shown to be problematic. Many participants dropped out of the studies because it was so complicated for them. It was especially difficult for people whose other income fluctuated over time.

It was clear that simply giving people a flat cash payment would be more feasible for the recipients. This idea was given a name by the McGovern campaign for the presidency in 1972. He proposed what came to be called a “Demogrant”, but then dropped it during the campaign.

During this time some right wing American economists such as Milton Friedman proposed their own idea of a NIT. It was clear that their main motives were to subsidize employers and to create an excuse to cut social programs.

Interest was revived in 1986 in 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’. This was the initiative of a group of philosophy professors at the University of Louvain in Belgium, led by Philippe Van Parijs.

This groups advocacy of the concept was been, paradoxically, very successful and very bad. The problem is they have been focused on arguing the philosophic justifications for a Basic Income. That is, whether it is ‘equitable’ to compensate someone who not contributing anything, or whether a BI is justified because civilization alienates people from their ‘state of nature’, or so on.

All this is nonsense. It has distracted attention from more important issues; how a BI should be designed, how broad public support is built, what are the economic implications. Discussion has not really moved forward in several decades.

In recent years new groupings are starting to emerge in various countries. The idea is starting to be called a Universal Basic Income (UBI) to distinguish it from more conservative views of it.That is, it must be for everyone, and adequate to live on.

The basic problems with advocacy for UBI remain. There is an obsession with cheap experiments which abuse people and show nothing not already known. There is a lot of superficial, philosophic discussion, and little deep research into the likely socionomic effects of a UBI, or the technical problems of administering it.

Every kind of proposal which calls itself a BI or is vaguely about distributing some money to ordinary people, is uncritically cheered. Few people seem to really notice that the same language of BI is being used to talk about different and incompatible things. Underneath the surface there are good aspects to a BI, and some very sinister ones.

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The basic fact of Basic Income 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 simply not needed full time in the economy.

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 much of the population economically unemployable.

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.

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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 conflict between the need of the economy for a cheap, flexible labor force, and the need of people for a steady, adequate income. But a good UBI will not work outside the socialized structures which will enable it to function. These include a social, economic, and political structure.

The social structure means; low cost housing, free education, free health care, cheap transportation, and so on. There is some talk of a “Universal Basic Services”, as though it were an alternative to UBI. Obviously, both are needed.

A UBI will not work unless both the cost of a UBI, and of wages and salaries, can be held down without reducing living standards. This requires maintaining free or low cost services. Above all it requires preventing the main way by which people’s incomes are taken back from them; housing costs.

As for economic structure, there is no way a UBI, universal adequate services, and the necessary industrial re-investments, 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 any real socialist economy.

Of course, this system cannot be run by just issuing money. The money put in must be taken back by taxes, so that the money in circulation remains constant. That is the real purpose of taxation.

An income tax suits capitalism, but will not work well under socialism. Wealth taxes, taxes on net worth, will be needed. So will sales taxes, excess profits taxes, and land taxes. For these to work right, they will all require the elimination of cash.

A socialized political structure means a real democracy, at all levels of society. People need to understand what a real democracy is. We do not live in one now, we live in an oligarchy.

We are still in an era where a true social economy will not be tolerated by local or global capitalists. A good UBI requires real socialism, which requires a democratic government robust enough to defend against efforts by capitalists to regain control. As well, it will face external aggression, but in these times it will have allies.

Democratic planning must be in place from top to bottom of the economy. This will include workplace democracy. Regulation of employment incomes between high and low limits, would insure that a UBI does not become a mere wage subsidy.

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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Good and bad BI may be explained by dividing all imagined BI schemes into three categories; Libertarian, Liberal, and Liberating.

Libertarians are the delightful people who think all government is criminal, tyrannical, 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 who have the means and motive for 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 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’.

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 favor 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 is 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 favor 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.

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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 such things as management of supply of staple foods, will also insure that income grants remain inadequate. Any increases will be captured by capitalism.

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So I come to the Liberating kind of a BI. That is, one which is a critical part of 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. It may seem incredible in North America, but they are starting to be common in the world. 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 favor 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.

Third, to call out the way a BI is presently advocated, especially the admission of “bad BI” proposals which would be harmful to disadvantaged 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.