There is nothing progressive about a universal basic income
“The capitalists will sell us the rope with which we will hang them. This colorful quote, sometimes attributed to Lenin, could well apply to the many free market ideologues and tech oligarchs in the United States, who are now pushing for increased social benefits and even a Universal Basic Income (UBI). . By expanding welfarism at the expense of labour, these capitalists may well hasten the decline of the very economic system they claim to support.
Even staunch free marketers, like the former senator Phil Gram and economist John Early, now argue that increased social benefits, or “income transfer payments,” should be championed to reduce inequality in the United States.
The welfarist solution can reduce income inequality on paper. But that does nothing to solve the much more pernicious problems caused by the rapid concentration of assets between fewer and fewer hands. The richest 1% in the United States has increased its share of assets by about 26% since 2002.
There are other consequences to the expansion of welfare and the devaluation of labor. It changes the character of people. The income you earn is empowering, while unemployment feeds dependency. More and more, the aspirational side of capitalism is being smothered by the deployment of ever more advantages.
Supporters of welfarism can cite the experience of Covid-19, when Pandemic emergency aid drastically reduces poverty in the United States. But the Covid grant scheme has not been a runaway success for most. Indeed, over the past year, wages have increased, but not as much as inflation.
One of the widely cited reasons for recent labor shortages has to do with a post-pandemic reluctance to accept low wages or jobs in the “gig” economy, where wages and hours are often uncertain. . Indeed, according to a UK account, self-employment and on-demand work do not support a middle-class lifestyle. Many jobs that could support families have disappeared, as has the motivation to work.
Under such conditions, that Karl Marx called “the reserve army of the unemployed” simply withdraws from the economy. Male activity rate went from more than 80% in 1950 to 68% today. Almost a third of US males of working age are not in the labor market and suffer from incarceration ratedrugs, alcohol and other health problems.
This withdrawal from the labor force is occurring against a backdrop of demographic slowdown in the high-income world. The proportion of the US population between 16 and 64 increased by 21% during the 1980s. During the 2010s, it increased by less than 5%. The EU and East Asia are experiencing even steeper declines in their working-age population.
The idea of a post-work society, with a universal basic income, is supported by both the progressive left and many tech oligarchs. The road to this future was foreshadowed in the relief program for covid-19 and in Joe Biden’s proposal’Building back better‘ program – both of which offer benefits to those who might join Workforce but you don’t care. Many have found state support during the pandemic be more profitable than working.
In the communist manifesto, Marx denounced attempts to fight poverty by offering “proletarian alms”. Written work Frederic Engels“is the first basic condition of all human existence, and this to such an extent that, in a sense, we must say that work created man himself”.
Encouraging disengagement from work also fits in perfectly with philosophy of degrowth pushed by climate activists – an increasingly dominant force on the left. Their objective is to reduce the consumption of the masses, by reducing the size of houses and cars, and by limiting travel, especially by plane. This amounts to curbing the aspiration of the non-rich. The millions of working class peopleespecially those who are well paid manufacturing, construction and energy. Broad welfarism lays the groundwork for the promotion of a properly austere ecological way of life.
The problem of universal basic income
It’s not just climate activists who support UBI – the same goes for many super-rich tech oligarchs, such as Mark Zuckerberg, eBay founder Pierre Omidyar, Elon Musk and Sam Altman, former president of Y Combinator. The likes of Zuckerberg have all bought into the idea of a UBI as a way to address growing inequality, which they fear will cause troubles among the great unwashed.
Behind this lies a dismal view of the usefulness of most humans. Greg Ferenstein, which surveyed 147 digital business founders, says most believe that “an increasing share of economic wealth will be generated by a smaller slice of highly talented or original people.” Everyone else will have to “subsist on a combination of part-time entrepreneurial ‘work’ and government handouts.”
In the technocracy envisioned by the oligarchs, there will be little need for the labor of the lower classes or the disorder of democracy. The New Yorker rightly called UBI “a futuristic answer to the dark side of technological efficiency”.
An economy built around welfare dependency also has dubious prospects. In reality, we still need people to do things that robots and AI can’t. There is a clear need for construction workers Houses and other infrastructure, providing medical care and building new industries, such as in space and biomedicine. Humans are needed, as demonstrated by current labor shortages.
We are already facing a huge shortage of workers who can actually produce things. Even like automating eliminates some routine tasks, as much as 600,000 of new manufacturing jobs that should be generated in the United States during this decade will probably not be fulfilled. The current shortage of welderstoday 240,000, could reach 340,000 by 2024. When the U.S. economy grew slightly in May, there were about 500,000 unfilled manufacturing jobs.
The costs to the economy of this after-work society are rarely mentioned. A broad-based RUB, for example, would require higher taxes for the already beleaguered middle class. Democratic presidential candidate Andrew Yang’s 2020 campaign was built around the UBI. His plan was estimated at some $2.8 trillion a year. This would be funded by a national value added tax and higher capital gains and social security taxes.
We can already see the outline of how this would play out in California. Currently, California spends about $100 billion a year on welfare. During the pandemic, California handed out checks that exceeded anything seen at the state level. It’s a bit of a shell game, though. California has much higher energy costs than almost any other state due to its ultra-green policies and the governor Gavin Newsom began handing out $1,000 anti-inflation checks.
In California today, traditional notions of economic development and upward mobility have been replaced by subsidized housing programs, a state bailout for tenants and increased unemployment benefits. The labor economy, traditionally a key source of upward mobility, is the big loser. Eager to reduce carbon emissions generated within state borders, despite the global nature of climate change, California now largely sources its oil from countries like Saudi Arabiaas he sets out to annihilate his once great local fossil fuel industry.
“The culture of much of California, driven by state policy, is one of benefits (and now guaranteed income), not a job strategy or expectation,” says Michael Bernick, former director of the California Department of Employment Development. The synergy between Silicon Valley wealth and the expansive welfare state is clear: the excess wealth of the oligarchs can fund ever more dysfunctional schools at a high level, pay huge pensions and generally expand the role of a state government, all with the blessing of the state economic royalty.
Will a UBI improve the lives of workers and the proletarianized middle class? As an author Aaron Renn suggests, parts of American society where income transfers have become a way of life suffer from shocking levels of drug addiction, alcoholism and idleness. Damon Linker, progressive writing for the The week, describes UBI as the path to “spiritual ruin,” especially for those who depend on it most. Some on the left even see it as a ‘neoliberal’scam‘ to hasten the end of productive work and social ascent, while undermining the political and economic power of the working class.
The political outlook for UBI and welfarism is mixed. Most voters, according to a July 2021 Morning consultation poll, also oppose permanent income support. Still Democratic strategists claim that such donations will be hard to resist once offered, even for those who might be skeptical of federal largesse. Already about half of Americans support the idea of a guaranteed basic income of approximately $2,000 per month, if the robots put them out of work. A UBI enjoys even stronger support in most European countriesespecially among younger people.
The welfarist wave benefits from a growing anti-capitalist sentiment. In 17 advanced economies surveyed in spring 2021 by Bench, 56% think that their political system “needs major changes or must be completely reformed”. A recent Edelman Inquiry from 28 countries reports that more and more people “believe that capitalism does more harm than good”. It also showed that more than half are worried about job losses, especially automating. Support enlarged government increased even in the United States.
Ultimately, however, reliance on transfer payments could end up undermining oligarchs and free-market ideologues who embrace welfarism. Once the notion of dependence, as opposed to reliance on labor and initiative, becomes the guiding principle of economic life, there is no reason why the massive serf class should not always seek more advantages. Already some on the left see the UBI as inadequate. Some leftists even envision a future where technology and Wall Street wealth is confiscated to finance’fully automated luxury communism‘ – a hobby company paid for by Apple and its counterparts.
It’s not a great prospect. Still, it would be a kind of justice if the “enlightened” wealthy ended up being brought down by their own inexperienced adherence to welfarism.
Joel Kotkin is a dope columnist, Presidential Fellow in Urban Futures at Chapman University and Executive Director of the Urban Reform Institute. His latest book, The advent of neo-feudalism, is out now. Follow him on Twitter: @joelkotkin