We are in a period when capitalism and the governments that
represent its interests are increasing the rate of exploitation and reducing
the level of social provision. That is not about to change and any redesign of
income support systems such as the universal basic Income will be no panacea
and the fight decent living standards will continue out of necessity. Why are governments and political parties
considering UBI more seriously? Fearing social unrest due to unemployment and
inequality there are leading businessmen who share an enthusiasm for basic
income policy. Citigroup chief economist Willem Buiter issued a report arguing
for “a guaranteed minimum income for all, or an ambitious negative income tax …
to support those left behind by technological advance.”
“Red Tories” see a basic income either as a way to a simplified
streamlined welfare benefits system or that it should even replace the whole
welfare state. Right-libertarian hero Milton Friedman advocated a version of
the idea as long ago as the 1960s: a negative income tax, in which below a
certain income level, people receive a stipend from the government instead of
paying taxes. Richard Nixon wanted to implement such a plan. Sam Bowman of the
British free-market Adam Smith Institute says: “The ideal welfare system is a
basic income.” The right-wing Cato Institute published a series of essays
discussing variations on the theme of a guaranteed income. If labour is weak,
then the likelihood is that a basic income will be meagre and conditional and
fore-shadow the full-scale privatisation of public services. While left-wing
proponents believe a basic income will strengthen the hand of labour,
right-wing proponents back it for exactly the opposite reason. A basic income
is not only a subsidy to employers; it is a union-buster. Libertarian economics commentator Steve Randy
Waldman argues: “Supplementary incomes are a cleaner way of increasing labour
bargaining power than unionization. Unionization forces collective bargaining,
which leads to one-size-fits-all work rules and inflexible hiring, firing, and
promotion policies, in addition to higher wages.”
John Schmitt, a senior research associate with the
progressive Center for Economic and Policy Research says, “My fear is that it’s
possible for a coalition of completely well-intentioned and idealistic – with
no negative connotation to that – people on the left to support what would be a
very generous basic guaranteed income, in a coalition with significant elements
on the right, including the libertarian right, that has basically the
motivation that this will undermine existing social welfare institutions.”
Firstly, the very idea of a basic level of income is about
establishing a floor and many proponents are determined to locate that floor in
the basement. A low and inadequate social minimum seems to them a great way to drive
people into deeper poverty. While even the best basic income policy only sets a
floor below which poverty cannot fall, union militancy strengthens labour’s hand
to demand ever-greater wages and better conditions.
On the issue of Universal Basic Income, Toby Sanger, draws
attention to the Speenhamland System, a wage supplement arrangement put in
place under the English Poor Laws between 1795-1834, and the role it played in
driving down wages. Low wage paying employers could rely on the tax base to pay
their workers’ wages and employers who had been paying higher wages were under
an incentive to lower them in order to obtain the same benefit. In the present
context of vastly expanding low wage precarious work, this danger is one that
should not be underestimated. E.P. Thompson reported in The Making of the
English Working Class that the Speenhamland system had “a single tendency: to
destroy the last vestige of control by the labourer over his own wage or
working life.”
The basic income scheme will be used to undermine social and
public services, and to provide a subsidy to employers that will drive down
wages and workers bargaining power. A
guaranteed income detracts from seeking fundamental solutions to the failure of
our economic system and political systems to provide adequate reward and
meaningful employment opportunities for all. There will be no capitalist road
to socialism. There is only, as ever, the strength and determination of the organised
workers movement.
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