Basic Income’s Politics Problem

The rising interest in Basic Income, and its being put on the political agenda in countries ranging from Canada to South Africa to to Finland, is driven by a number of economic and political factors. There remain the old concerns about the administrative costs and paternalism of welfare bureaucracies, and these have been joined by observations about the increasing precariousness of the labor market, caused in part by increased automation, the growth of the informal labor sector in both the Global North and Global South and the sense that, at least at a global level, the old problem of economic scarcity may have been overcome.

Basic Income, from this perspective, represent a potential way of dealing with the fallout of massive changes within the economic structure of countries whilst also allowing individuals to retain autonomy and acting in contrast to the often-homogenizing biopolitical structures of the post-World War II Western welfare states. It is also argued that its very simplicity imbues the program with a flexibility which would allow it to work in a wider variety of economic and political contexts. Recently, both the province of Ontario in Canada and the nation of Finland have experimented with welfare delivery reforms in the direction of basic income, whilst in South Africa there is wide-ranging social push for implementation of a basic income grant program.

This rising interest has, however, led to a number of questions from both skeptics of basic income and those open to it. A number of such concerns could be classified as practical matters which are particular to the political and bureaucratic systems of each particular government concerned with implementation. There is also another set of questions which concern the basic income project at a more general level, which could be classed as pertaining to the philosophical and ontological underpinnings of such a policy.

 

The Subject Complication:

To begin with, there is the problem of exactly whom the basic income will apply to; in other words, what is the subject for claims to social justice in the world of basic income. In most formulations, from Thomas Paine forward, a basic income is conceived of as having a condition of citizenship attached to it. Though this would be a relatively straightforward in a world of limited interstate migration, the reality is that individuals and families currently exist in a wide variety of positionalities vis-à-vis the state in which they physically inhabit. In addition to citizens, there are permanent residents, refugees, students on visas, temporary foreign workers and more. The danger with a citizenship-conditional basic income, as it is unlikely that every country would implement such a policy at the same time, and certainly not at the same monetary level, is that it would further deepen the divide between citizen and non-citizen inhabitants of particular countries.

There is, of course, a  counter-proposal, of opening basic income to all living within a country, regardless of status. However, given the already fraught nature of immigration and integration policy, this would most likely prove politically damning of both the government who implemented the policy and Basic Income itself.

 

The Scarcity Complication:

This points to another potential issue with basic income, namely, that of scarcity. The compulsion to work in order to receive income, either within the market in a capitalist society or in some other arrangement, such as a communal obligation or kinship system in a non-capitalist one, has traditionally been justified on grounds of resource scarcity. In essence, the idea that one must contribute one’s labor or resources, adding to the overall “pie” of the society, in order to make a claim on taking resources out later on.

However, in practice, societies tend to exempt certain classes of people from the labor compulsion, such as the elderly and children, if sufficient resources exist to allow these populations to exist as “free riders” of a sort. The argument for basic income, in relation to the scarcity question, is that, at least at the global level, scarcity has been overcome by technological advances, productivity gains and automation, such that a labor compulsion is no longer strictly necessary.

At the national level, however, even setting aside questions of effective governance and level of citizen trust in government which affect many states, governments may be capable of deploying resources, but not all governments have the same level of resources to deploy. Given the citizenship-focused nature of most basic income projects, the scarcity question will continue to trouble such proposals absent a mass nation-to-nation wealth redistribution or the establishment of a level of transnational government capable of effectively taking on the task of administering such a program.

 

The Sustainability Complication:

Finally, there is the question of whether or not a basic income program would be sustainable in the political sense in the manner in which the growth of the social democratic welfare state was in the 20th century. The key to this growth of the welfare state, and the notion of decommodified consumption (via free-at-point-of-use services such as health care) was the mobilization of working-class political power resources, primarily trade unions and left-wing parliamentary political parties usually associated with them. By contrast, until very recently, basic income tended to be a subject of interest to academics and policymakers rather than a concrete demand made by a mobilized political power grouping, either in the traditional sense of trade unions and political parties, or in more modern social movements.

To some degree, this may be legacy of libertarian strands of support for basic income which were explicitly aimed at taking down aspects of the welfare state that such movements viewed as their major achievements. With the exception of South Africa, where there was a broad social push for the BIG, that even those social justice movements which exist outside of the traditional social democratic framework have not yet made basic income into a clearly articulated demand. Organizations explicitly concerned with labor issues, such as Fight for 15, have placed emphasis more on rights-at-work and raising wages, rather than a right-to-not-work implicit in at least the progressive, as opposed to libertarian, interpretation of basic income. In a way, this indicates that such organizations may still be stuck, to greater or lesser degrees, in the old social democratic model, with its emphasis on labor rights, albeit with some new elements.

 

A Way Forward:

With that said, the notion of basic income continues to express a certain truth about the collective stake in the commons and the ability to demand a just share of social wealth, free of restrictions or paternalistic impediments, and without the, increasingly unnecessary, compulsion to engage in the formal labor market. With both the increasing interconnectedness of global economic production, and the increasing precarity of many forms of work, the case for basic income on both moral and practical grounds has rarely been more compelling than it is now.

However, in order for basic income to be implemented in a progressive fashion, a recognition and a concrete convergence of action (as opposed to a notional convergence of interest) must be had between basic income advocates and political movements both of the precariat and the traditional working class. Just as the welfare state of the 20th century was largely built on the political muscle of the workers of its time, if basic income is to be the welfare cornerstone of the 21st, it will need a similarly strong mobilization behind it.

By Carter Vance

 

Carter Vance has a Masters of Arts from the Political Economy program at Carleton University in Ottawa, Canada. He has also published his work for Jacobin on water rights protests and has written on a variety of topics for publications such as Truthout and Inquires Journal.

 

The Automation Grift: Robots Are Hiding From The Data But Not From The Pundits –Part 1

It’s conventional wisdom among pundits that automation will cause mass unemployment in the near future, fundamentally changing work and the social relations that underpin it. But the data that should support these predictions do not. Part 1 of this article contrasts this extreme rhetoric and the data that should support the inevitable robot apocalypse, and finds that these predictions are likely motivated by politics or outlandish assessments of technology, not data. Part 2 assesses the technology behind these predictions, and follows a thread from the mid-20th century onwards. Subsequent parts will examine the political economy of automation in both general and specific ways, and will also discuss what the future should look like — with or without the robots.

The Automation Grift: The Robots Are Hiding From The Data But Not From The Pundits – Part 1

By Kevin Cashman

The Rhetoric

Few things are more breathlessly written about than automation and how it will affect society. In the mainstream discourse, technology writers, policy wonks, public relations hacks, self-stylized “futurists,” and others peddle their predictions and policy prescriptions, as if they are letting the rest of us in on a secret rather than following in a long history of over-enthusiastic predictions and misplaced priorities. Others view automation as a panacea for social problems. Either way, mass unemployment is usually at the center of this narrative and how workers, especially poorer workers, will become outmoded in the age of robots. In the waning days of the Obama administration, the White House joined the frenzy, publishing a report warning about the dangers automation posed to workers as well as the benefits of technology.

This report cited (and further legitimized) a 2013 report that boldly claimed that 47 percent of occupations were at risk from automation in the next two decades. Since its release, this study has been cited close to 900 times. Other predictions are just as bold. One is that the entire trucking industry will be automated in the next ten or so years. “Visionaries” like Bill Gates, Stephen Hawking, and Elon Musk use their stardom to add to the fears of these claims — and push for policies that don’t make much sense, like taxing robot workers or creating a basic income that is an excuse to eviscerate our other social programs and do other bad things. Still others blame automation for causing past problems, like the loss of manufacturing jobs in the U.S., when they are easily explained by political decisions, not economic realities.

With all this interest and all these forecasts, you’d think there would be evidence that automation is affecting the economy in a significant way. Indeed, economists have determined a measure for “automation”: productivity growth. As productivity growth expresses the relationship between inputs (e.g. robots, people, machines) and outputs (i.e. goods and services), it should be a decent and measurable proxy for automation. More automation and robots would result in greater outputs for fewer inputs, which would show up clearly in the data. This is because replacing humans with robots only makes economic sense if it saves money or increases output. In both of these scenarios, productivity would increase.

The Data

So what do the data points say? They show that productivity growth on an economy-wide scale has been very low for the past ten or so years, at a rate that is a bit over 1 percent annually. (In fact, multifactor productivity — productivity of all combined inputs — decreased 0.2 percent in 2016, the first decline since 2009.) The previous ten years — the mid-1990s to mid-2000s — was a period of moderate productivity growth, or just over 3 percent annual productivity growth. From the mid-1970s to mid-1990s, there was another period of slow growth. And before that, there was a sustained period of moderate growth post war until the mid-1970s: the so-called “Golden Age” of prosperity. These data points do not support the assertion that automation is happening on a large scale.

It is important to note that productivity growth and automation are constantly happening, and that automation can affect small industries or occupations in big ways. It can also replace individual tasks but not entire jobs themselves; for example, you may order your food on a computer at a restaurant rather than talk to a waiter, who would still deliver your food. These things may not show up in the data because they do not represent fundamental changes to the entire economy. In other words, automation on a small scale is not evidence that automation will cause a sea change in how work is done: it is normal.

Other macroeconomic indicators support the low rate of productivity growth seen today. The labor market has still not recovered to pre-recession levels, levels which were depressed compared to the highs of the late 1990s and early 2000s. Growth in wages and employment costs have also been relatively low. Since these indicate that there is still considerable slack in the labor market (i.e. in general it is easy to fill open positions, and there are many more applicants than open positions) there is less pressure to automate. After all, why would businesses en masse invest in automation on a significant scale if they can find desperate workers willing to be paid minimum wage?

History also provides useful data points. Technological change and its effects on the labor market have been consistently overstated in the past, which is acknowledged by even mainstream economists. If anything, this is evidence that automation is good for the economy because it creates jobs, in net, and it creates new sectors of the economy. It also can increase living standards by, for example, shortening work weeks or improving conditions of work (and together with organized labor, this happened in the “Golden Age,” which is how it got its moniker).

Supporters of the robots-are-taking-all-of-our-jobs myth usually ignore this evidence. They’ll say that productivity growth cannot take into account the changes that are happening and that automation will have catastrophic effects on the labor market either way. While there are legitimate debates to be had on how to measure automation, the reality is that despite all the spilled ink, the robot boosters do not have history or the data on their side. It is only their analysis of the technology that supports their assertions. They think that there is something extraordinary about the technological change that is happening now and it will be transformative, in contrast to the slow and steady automation that occurred in the past, where benefits were realized over a long horizon.

Part 2 assesses the technology behind these predictions.

About the Author
Kevin Cashman lives in Washington, DC, and researches issues related to domestic and international policy at the Center for Economic and Policy Research. Follow him on Twitter: @kevinmcashman.

The Basic Income and Job Guarantees are Complementary, not Opposing Policies.

It’s disappointing to see debates between proponents of the Basic Income Guarantee (BIG) and the Job Guarantee (JG). These discussions detract from the fact that both of these ideal policies are distant from the policies we currently have in place. Supporters of either of these policies should be working together to get either one implemented, and we can debate adding the other later. Today, we need to move beyond our current disjointed welfare system to one that will help Americans, and either policy (or both!) seems like a step in the right direction.

If we look at the current system, the three largest welfare programs we have are Medicaid, the Earned Income Tax Credit (EITC), and the Supplemental Nutrition Assistance Program (SNAP). Before the Affordable Care Act (ACA), Medicaid was limited to certain low-income individuals, but the ACA expanded this program so that all adults with incomes below 138% of the federal poverty line are eligible. For FY 2015 Medicaid cost $532 billion to cover 73 million individuals. EITC provides additional income to low wage workers, and in 2014 paid out $67 billion to 27.5 million tax filers. Finally, SNAP guarantees an income to buy certain necessary items, and paid out $69 billion to 22 million households in 2015.

Then beyond those three largest programs, we have a smattering of additional programs that help the poor in this country. There’s a housing assistance program, Supplemental Security Income (SSI) for the elderly, Pell Grants for college tuition, the Temporary Assistance for Needy Families(TANF) program, the Child Nutrition Program, the Head Start preschool program, various Job Training programs (like AmeriCorps and Job Corps) under the Workforce Investment Act, Unemployment Insurance, the Child Tax Credit, Supplemental Nutrition for Women, Infants, and Children(WIC), and then theres others I’m sure I missed (oh yeah, the Obama phone!) along with various state and local programs. The amount of overlap, overhead, and bureaucracy involved with running all of these programs surely diminishes their effectiveness.

All of these programs provide support by doling out income or necessities, with or without a requirement that the recipient be working. BIG and JG would both be ways to consolidate all of these programs, and then the debate becomes how much does someone have to work in order to receive assistance. A lot of people who advocate for BIG think that our current system has a lot of pointless jobs, and BIG would be away to allow those people to pursue something more creative. Considering that most entrepreneurs have one thing in common — access to capital — that may not be too far off. Then there are JG proponents who probably agree with that point, but think we can use the policy to help organize jobs that need to be done (liking cleaning up our environment, or building our infrastructure). Most people who support BIG worry that a JG would create “make-work”, quoting Keynes famous “bury bank notes and dig them back up” line. To them, just giving people the bank notes makes more sense. On the other hand, JG proponents worry about losing the social utility of work. People want to contribute to society, and they see work that needs to be done. Both policies seem hard to pass in todays political climate.

I think proponents of both the BIG and JG are disappointed with a U6 unemployment rate of 9.5%, current companies lack of interest in maintaining our environment, and over 45 million Americans living in poverty. Call it whatever you want, let’s guarantee every American access to the necessities: healthy food, shelter, and healthcare. Clearly this is going to require some people to do some work, so let’s make sure that work gets done with our social structure as well. Calling it a BIG or a Basic Necessities Guarantee (BNG) or a JG doesn’t matter so much to me.

In fact, I’d probably start with calling it the EITC. Get rid of the minimum income phase in, and we instantly have a “BIG”, with all the infrastructure already in place. It would only go to unemployed or low income citizens, since the EITC phases out, which helps it be a progressive policy. So that it can cover the housing benefits and others, we could expand the credit a bit too. How do we pay for this? It’s simple. Scrap the other welfare programs (keep Medicaid, that one’s complicated). The overhead of having all of these programs is gross. How feasible is this plan? Honestly, no clue. I’ve never made a policy. I’ve barely met anyone who even makes policy. It seems like the closest option there is, however. I can see the complaints already though. These ungrateful welfare abusers will buy alcohol and drugs with their new found income! Somehow it’s not OK to drink and do drugs if you’re poor, but if you’re rich, go for it, right? If you get rid of SNAP, people won’t buy food for themselves! Well surprise, there’s already a way to trade SNAP benefits for cash — it’s called craigslist.

Then there’s the other major complaint this would cause — now there is no incentive to work. We have to keep abject poverty as a social option so that people keep working at McDonalds making the McObese, and keep stocking the Wal-Mart shelves so that Wal-Mart can pay starvation wages which allow people to be eligible for the EITC in the first place. I’m not really sure those are the jobs that need to be done. If our low wage workers were working on local farms producing fruits and vegetables, I’d probably agree… someone has to do those things (or make robots to do them!). Yet I haven’t seen any proof an income stops people from working. It’s all speculation. I bet people still do things. Here I am, incomeless, and I’m doing something. I’m writing. I’m volunteering. I’m applying to jobs that I want to do and think will have a positive benefit. Getting rejected, but still, I’m trying.

Let’s see what happens when everyone has some cash on hand. If we start starving and need the government to force us to produce food, we’ll do it then. Yet from the friends I’ve talked to, boredom is a very potent driver of change. I know my fellow millennials and I have dreams of growing our own food in our parents backyards, or the empty lot across the street, or the empty K-Mart, or the empty mall. If only they’d let us. If only we had a little income, a little land, and some water to give it a try. If only the police weren’t killing and hurting us. If only Nestle wasn’t pumping out water from government land for free and forcing us to spend money on it. A lot of us worked our asses off at school, and what did we get? The choice between huge corporations who we see as destroying the environment, or low incomes working retail living with our family and friends. Meh. My friends and I want something different. I choose believing there’s something better than choosing between two evils.

Remember when the public hated huge corporations for destroying small business, not each others’ identities? Do we remember The High Cost of Low Price? BIG and JG proponents, let’s not quibble. We’re on the same side. There’s work to be done. Get organized. Make it happen.

Originally published on Medium