Universal Basic Income and the Pandemic

Amid the economic crisis triggered by the Covid-19 Pandemic, calls for Universal Basic Income are becoming louder. From its origins as a fringe idea, UBI is starting to become an economic measure of choice among some on the economic left in several western countries.

The logic and the appeal of UBI in a time of crisis are easy to see. If during these remarkable times the state is going to throw eye-watering sums of money at supporting working people's incomes - not to mention direct support for the businesses that employ them - why not target that state aid where it will be most effective? By putting a regular amount of hard cash directly into the hands of every citizen without a process of application or means-testing (so the argument goes) the state's resources will both keep people afloat financially and stimulate the economy towards a strong and sustainable recovery after the crisis ends. The goal of directly redistributing wealth is seen as an additional positive outcome by those on the economic left.  

Original proponents of UBI such as Dutch writer Rutger Bregman insist that the actual amount given to every citizen should be generous enough to sustain the individual at a basic level of existence without the need for them to work - unless they wanted to improve their lifestyle beyond the basic.  British think tank Compass, on the other hand, has recommended more modest levels of state funding for its own UBI proposal: weekly tax-free payments of £60 to every adult, £175 for pensioners and £40 for each child under 18, accompanied by the abolition of the state pension and child benefit.

I share with the proponents of UBI the aim of a more equal society. I do not however see Universal Basic Income as an effective way of achieving that desired outcome. My concerns range from the theoretical to the practical. 

• UBI confuses income with assets. Assets are items which can generate economic value - to a household or a business. Assets can be tangible, such as land, property, stock and equipment as well as less tangible such as shares, bonds, copyrights and trademarks. Proponents of UBI tend to frame the discussion in terms of income being used to pay for basic necessities such as food and utilities and as a way of simplifying the welfare state. Such an income may well be appreciated but does not in itself create fundamental structural change to an economy in which assets are not widely distributed. 
• As a Distributist, I see the need for workers owning the means of production as being more important than them having a basic state income. A democracy built upon worker-ownership would see as many people as possible owning economically productive assets. This fundamental economic principle is key to establishing a more equal society. In that sense, I would argue for Universal Basic Assets rather than Universal Basic Income. Times of economic crisis such as the current pandemic should be used not to bail out corporations at risk of financial collapse but to nationalise them, stabilise them and then quickly re-distribute them to those who work in them.  
• UBI breaks the connection between income and work. Some would argue that in the age of automation, that is precisely the point. Bregman for instance envisages a future society in which robots will carry out the vast majority of repetitive work tasks and humans will lead lives of creative leisure underpinned economically by UBI generated by the automated economy. Even if such a society were achievable on a practical level (it may be), I would have concerns for the breaking of the ancient association between labour and material gain. Such a connection has a deep psychological, cultural and even spiritual history. It is unclear how we would cope in the long term as a society with a sudden break in the association between what we do and what we gain. We may discover that UBI unintentionally becomes an example of the Alienation of Labour on steroids.      
• UBI renders working people dependent on economic elites. Some argue that it is impossible to fund a Universal Basic Income. My own view is that it could be done through taxation. This means, in practice, that owners of the means of production along with those who choose to work above the UBI subsistence level, would fund those who choose a life of learning and leisure instead of the 9-to-5 working life. At one level, Bregman argues, this is a very liberating scenario. More profoundly, however, UBI dis-empowers people rather than empowers them by turning us all into donor recipients. Such donations would depend upon the political machinations of the state, lobbied by powerful corporate interests. Levels of UBI would therefore be constantly under review. Concerns about levels of public borrowing combined with efficiency savings would be used to justify keeping UBI at subsistence levels. Citizens would therefore become even more dependent on the largesse of the economic elites than we are at present - and even more so than our feudal peasant ancestors who at least owned the land from which they produced their livelihoods.    

Times of economic crisis are often catalysts for significant change. Processes that were developing at a certain pace can be accelerated overnight.  UBI may find that its time has come. My own view however is that we would do better to see a radical distribution of businesses and other assets as the preferred economic outcome of the current crisis. 

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