Should the Left support Basic Income?

This article first appeared on the New Compass website

2016 will see basic income rise up political consciousness. Trials and referenda will take place across Europe. Should the Left support basic income? Half a century ago, the famous psychoanalyst and Frankfurt School theorist, Erich Fromm, examined the psychological effects of giving everyone a guaranteed income. His thoughts are instructive. He thought it a 'great step' but that without other changes, it is not enough to really change society.

From occupying the fringes of debate just a few years ago, basic income – the idea that the state should pay an unconditional income to each person as of right – has swiftly climbed up the political agenda. Finland has announced a basic income trial, Utrecht and 19 other Dutch municipalities are planning to introduce a pilot scheme some time in 2016 paying a small group of benefit claimants €876 a month. Also this year, notwithstanding the opposition of the Swiss Parliament, Switzerland will hold a referendum on the nationwide introduction of a basic income set at a much higher level - US$ 19,800 a year.

What should be the attitude of the libertarian Left to basic income? Is it a way of liberating people from an increasingly cruel and, in any case vanishing, welfare system and exploitative job market? Or does it shovel free money towards the already wealthy and save a dysfunctional capitalism from itself?

Before jumping to conclusions, it is worth weighing the opinions of radical thinkers throughout history on basic income. The idea is far from new. The English revolutionary Thomas Paine proposed something similar in 1797. And the German psychoanalyst and Frankfurt School theorist Erich Fromm advocated ‘a universal subsistence guarantee’ in his famous 1955 book The Sane Society. In 1966, he considered the issue in more depth in an essay entitled The Psychological Aspects of the Guaranteed Income.

Individual freedom

The most important reason for accepting the concept of a basic income, Fromm says, is that it would drastically increase the freedom of the individual. Up to this point in history, freedom has been constrained by the use of force on the part of rulers, but also by “the threat of starvation against all who were unwilling to accept the conditions of work and social existence that were imposed on them.”

A guaranteed income becomes for the first time possible in conditions of economic abundance or, in Murray Bookchin’s phrase, post-scarcity. This lifts the threat of starvation and makes genuine independence feasible. “Nobody would have to accept conditions of work merely because he otherwise would be afraid of starving – a talented or ambitious man or woman could learn new skills to prepare himself or herself for a different kind of occupation,” Fromm writes. “A woman could leave her husband, an adolescent his family.”

This “right to live, regardless”, as Fromm puts it, is the most important justification of a basic income, in my opinion. We live in societies in the West which are stiffening the ‘threat of starvation’ just as economic abundance becomes a realisable possibility. Over 90% of unemployed Greeks and nearly two-thirds of Spaniards, countries where unemployment is staggeringly high, do not receive any unemployment benefits. An estimated 1.5 million people in Britain use food banks. Welfare benefits have become increasingly conditional on satisfactory ‘job search’ activities, conditions which are imposed on sick and disabled people as well, with the withdrawal of income an ever-present threat.

What this means is that many more people than before are dependent on others, often older relatives or partners, and powerless before a labour market eager to exploit them. Or simply destitute. Precarious ‘bullshit’ jobs, or ‘shit work’ as Spanish labour unions call them, have mushroomed. In Britain, research has shown that spiralling flexible employment practices are causing widespread anxiety, stress and ‘depressed mental states’ because of the financial and social uncertainty they entail.

A basic income could restore independence and freedom to people whose lives are increasingly blighted as a result of economic circumstances, performing a role similar to that undertaken by trade unions and collective bargaining in the era of full employment. “Income from labour will be renegotiated,” says Enno Schmidt, one of the organisers of the Swiss group, Generation Basic Income. “No-one can be blackmailed with their existence” to do work they don’t wish to. “With a basic income, I can say no to a bad deal.”

The non-work society

Basic income can liberate people from the necessity of making a living and allow other non-market activities to flourish that, while not materially productive, nonetheless make life meaningful and have important functions. This might be looking after children, artistic creation, managing a chronic illness or education for the sake of it, not utilitarian ‘self-improvement’. “This right to live, to have food, shelter, medical care, education etc,” writes Fromm, “is an intrinsic human right that cannot be restricted by any condition, not even the one that the individual must be socially ‘useful’”.

This principle, of “the right to live regardless”, whatever someone’s personal utility might be, should, in my opinion, adorn any society that does not seek to oppress its members. However that society is organised.

To the above activities should be added democratic self-management of the community. Genuine democracy is not possible in a time-pressed, hurried society. Basic income should increase the free time available to many members of society and make direct management of the community feasible, not just theoretically desirable. The practices of democracy could be learnt by experience if work fades into the background.

To many of its advocates, basic income is explicitly about relegating the centrality of work in people’s lives, permitting a collective breathing space for other, undirected activities to come to the fore. Marilola Wili of Generation Basic Income maintains that the idea represents a paradigm shift in what work means. It can “unpredictably set human forces free in ways one may have never thought about”, she says.

The great step

However, basic income alone will not produce the paradigm shift that is required. “The great step of a guaranteed income will, in my opinion, succeed,” writes Fromm, “only if it is accompanied by changes in other spheres.” The danger of a basic income is precisely that it assumes changes in other spheres are not necessary and merely bolts on to our current capitalist society, leaving its deep flaws intact.

One such area is consumption. Basic income has been presented as a solution to the lack of demand in the economy. Under this justification, basic income becomes the ‘salvation of capitalism’, by buttressing weak consumer buying power and replacing the economically destructive growth of household debt and credit. Basic income stimulates the economy and increases corporate profits while, at the same time, giving workers more freedom and nullifying the threat of impending technological unemployment. What’s not to like?

Actually plenty. Under this scenario, basic income becomes a crutch that permits an ecologically and socially destructive economic system to preserve itself, neutralising its contradictions and performing a redistribution of wealth to blunt its oligarchic tendencies. Corporations can continue selling endless individual gadgets, continue forming monopolies, continue commercialising the pores of everyday life, and continue offshoring production to areas of the globe with dirt cheap labour and transporting the goods back to the rich world, thus causing global warming. They can continue doing this because basic income intervenes to ensure a market for their products in the wealthy countries.

Fromm contrasts two types of consumption; ‘maximal’ consumption which we currently have and ‘optimal’ consumption, which entails consumption for public use through amenities like theatres, libraries and parks. “Guaranteed income without a change from the principle of maximal consumption would only take care of certain problems,” writes Fromm, “but would not have the radical effect it should.”

I believe that a serious post-capitalist Left cannot just pit good collective consumption against bad individualised consumption. Myriad individual products make life function and liberate people from toil. But it is abundantly clear that a radical change in consumption needs to take place. Goods needs to be built to last, disposable consumption ended and the practice of transporting products across the world vastly curtailed. In short, the capitalist engine behind contemporary consumption needs to be switched off. “Such a change from maximal to optimal consumption would require drastic changes in production patterns,” writes Fromm, “and also a drastic reduction of the appetite-whetting, brainwashing techniques of advertising.” This is something basic income alone will not do. And it should be remembered that the western lifestyle of the 1960s, the lifestyle Fromm derided as ‘maximal consumption’, is considered healthy and moderate in retrospect by many climate activists, compared to hyper consumption now.

However, it must be borne in mind that Fromm wrote his essay at the height of the post-war boom and in the wealthiest country in history at the time, the United States. In 2016, it is quite conceivable that basic income will be employed to keep consumption going at ‘basic’ levels should a new and drastic economic crash occur, one that cannot be bailed out by governments. Basic income could, therefore, perform a rescue act to stop society from collapsing. Which is rather a different thing to providing a long-term surrogate for the perpetually expanding market that capitalism requires but cannot itself manufacture.

Not just for the precariat

It should also be recognised that basic income, in its pure form, is not just for the so-called precariat. The Dutch pilots are for benefit claimants only but under most basic income proposals everyone gets the same, wealthy and poor alike. A basic income would be paid to all adults. It is conceivable that a basic income would allow the wealthy or comfortably off to stop working altogether, become self-employed or switch to a less demanding job. These are quite plausible scenarios, and many wealthy people do seek an escape from their high-pressure lives. But, equally, it could also simply supply an additional mass of money to the already wealthy, an issue that applies particularly to the’ basic income max’ proposals of $20,000 or $30,000 a year. This money could be used to buy more property or invest on the stock market. Thus actually reinforcing inequality and bolstering financial speculation.

Fromm concludes that the “full effect” of guaranteed income will only happen if combined with a change in the habits of consumption, a new humanistic attitude and a “renaissance of truly democratic methods”. He envisages a new Lower house (he was living in the US at the time so presumably he means the House of Representatives) which summarises “decisions arrived at by hundreds of thousands of face to face groups, active participation of all members working in any kind of enterprise.” He warns of the danger of a state that nourishes all acquiring dictatorial qualities that can only be “overcome by a simultaneous, drastic increase in democratic procedure in all spheres of social activities.”

I believe a ‘welfare state’ that restricts itself to automatically paying all members of society a guaranteed income would actually have much less power than one that makes welfare provisional on myriad conditions and intrudes shamelessly into the lives of benefit recipients. However, Fromm is right that the ‘great step’ of a basic income is not a panacea. Any just society should grant its citizens economic freedom, and for that reason alone the Left should support a basic income. But basic income does not render other changes in society any less necessary and we should not be lulled into thinking it could.

 

"Money has lost its connection with social reality." Interview with Generation Basic Income, part two

In the second part of the interview with members of the Swiss Generation Basic Income, we discuss the effects of introducing an unconditional income, how it will be financed, criticisms of the concept, inequality, and the ugly nature of current policies on welfare.

You can read the first part here

Enno Schmidt, the co-founder of Generation Basic Income, has said a basic income could be “one of the landmark historical moments, like the abolition of slavery or the civil rights movement”. What do you think will be the social effects of introducing an unconditional income?

Che Wagner: To have a right for an income that will make possible a life in dignity without condition is a landmark historical moment for sure! Primarily it represents a question to each and every one of us: do you trust others? Introducing a basic income will pose the question of trust in a fundamental way: what will you do if your income is assured?

Socially this means nothing less than that I am fully accountable for my deeds in the sphere of what I contribute to others through my work, but not in a juridical sense, because the basic income is unconditional. There won’t be a penalty for those who are not ready to contribute anything. But in the social sphere I will have to stand by the things I do for others and there are no excuses anymore, such as I have to do this because I need an income.. etc.

In the aftermath of financial crisis, we are constantly told that public spending cuts are unavoidable and that we must “live with our means”. A basic income is going in the opposite direction. To mouth a hoary old objection, where would the money come from to fund a basic income?

Enno Schmidt: This is a matter of education. Money is created where goods and services are produced that are for sale. Otherwise they could not be bought. What can be produced, can also be financed. We have no shortage of goods. There is not only enough money, there is too much money. But a lot of money has lost its connection with social reality. We do not know what the economy is, what money is, what taxes are. We think the economy is there to make money-profits, that money is a possession of which one can never have enough, and taxes should be avoided. That's just silly. The economy is there to satisfy the needs of others, to do something that benefits others. Money is a legal means to regulate the exchange between performance and need. Taxes are what we pay for the work to which we assign to the state - work, which is not paid by the individual consumer, but work we want to fund as a community. The tax is a division of the process to be generated socially, in part by the private and non-profit sectors. When you buy a computer, you don’t pay for the one you get, but the next, which is already produced. The one you took already was paid for, otherwise it could not be there. And what accounts for its price, is not the stuff that will be available at your desk, but the income of all involved in the production process, so that a computer can be made ​​and given to you. These is also the source of the income of the people who run the government and non-profit work.

All money goes into income. That's one thing. And a second is that there is so much work, as there are people. The income enables you to work. It makes you free, it allows you not to just take care of yourself but also to do something for others, and to live by what others do. This is the situation today. But we still think like it was 150 years ago. Work cannot be paid, otherwise you can buy people. Actually, slavery has already been abolished. But not in our habits.

 Where will the money come from for the unconditional basic income? It is already there. We share sufficient goods. We all have more or less an income sufficient to live on. This level of income will be made unconditional. How does it work? This is a consideration for economists. When all have an unconditional basic income, prices rise or wages fall. Most likely, wages and benefits will decrease on average to about the level of basic income. Because everyone now already comes with an income to work. Income from labour is relieved of the task of ensuring the existence of people. Wage negotiations will take place as free negotiations between free people.

There are objections to basic income from the Right and Left. Conservatives says that an unconditional income would lead most people to sleep late, drink, take drugs and not do anything useful. Some left-wingers say it is unfair to allow able-bodied people not to work while leaving the burden of producing necessary goods on others. How do you respond to these criticisms?

CW: Regarding the arguments from the Right: basic income is an arduous idea and initiative as well and is not about being lazy. The primary question for everyone is: what are you going to do when your existential income is secured? To keep up at this question will be hard and everyone has to deal with it individually. Some may go to sleep late as well but that’s within their own freedom – I don’t see a problem or even an economic issue there.

Regarding the arguments of the Left: with the basic income, people are free to contribute to society what they individually find necessary. For the first time in history that will convert to something we could call a free market situation, where everyone has the ability to say “No”, because their basic needs are unconditionally covered. To produce necessary goods is a question of the need of these very goods or services. Why wouldn’t these goods be produced anymore? It will definitely have an impact on the prices of these goods and services in the sense that quality producing will get cheaper in comparison to quantity and profit-oriented producing.

Large parts of the Left fear the shift of power to the individual who is enabled to say “No” by the existence of the basic income and thereby forget this very shift used to be the one political agenda in their initial formation a century ago. The big difference now is: it’s not a class war anymore but a simple step to empower everyone economically, whatever social class he/she may belong to.

ES: The Left and the Right are used to talking about others and to judge without touching their own heads. Perhaps the conservatives would only sleep late and take drugs, and the leftists live by the actions of others. Today, many have switched off at their workplaces, today more and more people are mentally ill and take legal drugs that are already prescribed to children. There is no way forward, without thinking again.

Does Generation Basic Income have any other objections to capitalism or conventional Parliamentary democracy? I note that you are working directly through a referendum, rather than through the Parliamentary system. Is a basic income sufficient or does society need other changes as well?

CW: I do not want to generalise here because every nation and cultural sphere has its own history. But the idea of the discussion or even implementation of an unconditional basic income is not limited to any borders; it’s a global idea in a globalised world.

I don’t object to capitalism in general because I don’t see a problem in concentrating forces by raising capital to be able to make things and ideas possible – that’s a great thing! But we’re in a situation now, where capital has too much weight and people are controlled by it and can’t live in dignity anymore. The unconditional basic income is able to change this situation not by destroying capitalism but by humanising it.

As you can easily observe, in many countries within the EU plus the USA, Parliamentary democracy is stuck in a deep crisis. In my opinion, the idea of a basic income doesn’t work in a top-down setting and it is only natural that the movement is diverse and carried by people like you and me. Strongly Parliamentary systems and political spheres controlled by parties won’t be able to keep up with such a movement. If people are able to take into consideration individual economic power and self-determination, the question of political rights and power is never far away.

There is another forthcoming referendum in Switzerland, on whether to limit pay differentials in companies to a 12:1 ratio. Does Generation Basic Income overlap with the people behind the “1:12 initiative”?

CW: The “1:12 initiative” is an interesting but rather conventional leftist proposal. We are in contact with some of the initiators and talking about similarities and differences but from the basic mindset, the two initiatives are still very far from each other. The basic income does not want to take anything away from anyone by law. On the one hand, “1:12”, like our initiative is the attempt to socialise our society. But the basic income asks: can you trust your neighbour enough to give him an unconditional income without forcing him to work for it? It can be seen as a very liberal initiative because it does not dictate by law as to what you're going to do with that income in any way. It is not predictable what will happen with this new freedom and that’s the root of all the fear of opponents, including the leftists behind “1:12”. Still, I would definitely count the “1:12” group as part of the Basic Income Generation because they are doing something they really want to do out of an inner decision – in that case being politically active!

Marilola Wili: Those two ideas are not standing in concurrence but do not overlap either. They are two totally different approaches. The “1:12 intiative” wants an income upper limit and to set a ratio by law. The idea of an unconditional basic income wants to empower everyone and ask herself/himself what she/he wants and what she/he is able to do.

ES: Also, the difference is that 1:12  just throws a stick into the gearbox. The thought is good. It is very easy to say this is justice. But nothing moves, because income is only reduced and comes from the side of an isolated regulation. It is one measure. The basic income doesn’t come from the side of a regulation, a measure, a smug sense of justice. As Che said, the basic income is not directed against capitalism, it is just better than that. It allows people to do better and to develop it further.

I wanted to ask about the 1:12 initiative because there is growing recognition, in the UK (as well as in other countries) of the damage caused by inequality. There was book published in the UK a few years ago, called The Spirit Level, that showed that social problems such as mental illness, poor educational attainment, violence, obesity, teenage conceptions etc were invariably worse in countries of high inequality. Also, I think you can trace a lot of causes of financial crisis to too much money at the top of society – money that goes into restructuring companies, mergers and acquisitions, and speculation in shares or commodities like food. Is not inequality – as opposed to solely providing an unconditional income for people – a problem that needs to be addressed?

ES: Yes, inequality has all the effects you mention. But why does nothing change? We know everything. While I am writing these words 20 children will die of hunger. Why do all the good intentions change nearly nothing? We have organisations for everything but something is missing. The old forms of justice do not apply, they have brought us to this point.

It will take a lot more than proposals such as the 1:12 Initiative. It is a distraction and not just because those in power will prevent it. But because the thought has no substance. You might think you could reach 1:12, it is so simple and direct, but it has no reality. The unconditional basic income looks like it is just imagination, but it is very real. Basic income is not against anybody or anything. It eliminates poverty, it does not stick to hatred of the rich. It’s a trap, to always look on the rich. With a basic income, a lot more people can work to ensure that inequality decreases. Then you can look at why some people are so rich, then you can go to the source. Then you can look at the causes and see what to do differently. But that only works if people are strengthened.

In the UK and elsewhere, the political debate on “welfare” is fixated on imposing ever more punitive penalties on benefit claimants, and that includes disabled people, for not seeking work with enough ardour. Hunger and destitution are resulting and more and more people rely on food banks. Does a basic income have the potential to bring about a paradigm shift into this ugly debate?

CW: You’re speaking of one of the core shifts that has to take place, whether a basic income is introduced or not. The problem here is a lack of income and not a lack of work or employment. People need an income in order to be productive and to contribute for others by work. It’s a simple rule you can test on yourself: when is it you’re more productive? In a state of pressure and stress or rather in a state of ease and security?

MW: If the basic needs of everyone are met unconditionally, the stigma of being poor, unemployed or providing care-work would swiftly disappear. That’s only one reason why the unconditional basic income would change a lot in these problems.

ES: We are now in a time of old, outdated thinking and old ideas are becoming more violent because they feel they are no longer correct. But this thinking wants to stay with all its might. It tortures people, it can only assert itself at the expense of others in its falsehood. The backlash can be bloody. We hope not. The unconditional basic income is a way to channel the pent-up energy in a positive and creative track. That way,  the contempt for the people, the misanthropy loses its power.

What does the future hold for Generation Basic Income? If you don’t win the forthcoming referendum, will you continue to campaign?

MW: Generation Basic Income is the main source of this initiative in Switzerland but we’re not bound to the results of the initiative or to borders. We are living the idea of an unconditional basic income. It’s a lifestyle. We are going to continue to engage with the idea and to make it sensible for as many individuals as possible.

Update

The 1:12 referendum was defeated, sadly, by a margin of 66-34 - http://www.independent.co.uk/news/world/europe/swiss-voters-reject-112-proposal-to-cap-top-executives-pay-in-latest-referendum-8960669.html