Rear View: No gods! No masters! (2017)

The Rear View Column from the February 2017 issue of the Socialist Standard

No gods! No masters!

‘Creationist Ken Ham is very angry at the Washington Post for incorrectly reporting that he believes dinosaurs were wiped out by the biblical flood described in the story of Noah’ (rawstory.com, 1 January). According to Ham, they joined Noah on his ark and the Post should get their facts right! The standard atheist approach to such nonsense is to use real facts. Against the belief in an all-knowing/loving/powerful god/s, an atheist is right to wield facts such as humans are 90 percent bacteria, see less than 1 percent of the light spectrum , have sub-optimal plumbing (breathing, eating, excretory and reproductive) and are programmed to die. The atheist could reasonably add that at least 40 percent of animal species are parasites, and over 99 percent of all species that ever lived are extinct. Socialists, unlike atheists, fight against Creationists like Ham and clerics in general not because of their belief in God but because priests of all religions have been, in all phases of history, the allies of the ruling classes in keeping the masses bent under the yoke. Churches have crowned the peoples’ oppressors, and crucified our forebears. New Age religion is merely the old repackaged in a new, modern form. Rather than obeying a priest, they choose the form of our own mental domination and the flight from reality into a magical world.

Universal Freedom

The concluding paragraph of Money for nothing: What universal basic income means for you reads: ‘I realize that to some, basic income sounds like a Black Mirror episode with millions of people sitting on their couches all day, bored, listless, and up to no good. But based on what I’ve read so far, I believe that if it’s handled correctly, it could be a positive step forward in the age-old journey to realize our true human potential’ (mashable.com, 4 January). But, of course, the capitalist class have enjoyed for centuries an unearned income – money for nothing! – that is anything but basic. For the 99 percent UBI is nothing more than a redistribution of crumbs, promoted by reformists of the left and right.

Looking backwards

When it comes to predicting the future, economists are marginally better than clairvoyants but far worse than meteorologists. ‘It is official. Figures for the past six months show that the forecasts of instant Brexit catastrophe from the Treasury and the Bank of England were garbage. The Bank’s economist, Andrew Haldane, admitted yesterday that it was a repeat of the failure to predict the 2008 crash. It was another ‘Michael Fish moment’, when meteorologists failed to forecast the 1987 hurricane’ (theguardian.com,6 January). 85 years ago we published the pamphlet Why Capitalism Will Not Collapse. The economic outlook back then appeared even worse than it is today: ‘We are in the midst of a crisis that is world-wide. Every country feels its ravages. Millions and millions of workers are unemployed and in acute poverty. Everywhere there is discontent and a feeling of insecurity, and the prestige of even the strongest of governments has been shaken. All sorts of emergency measures have been hastily adopted, but the depression still continues. Working men and women who normally ignore such questions, are now asking why the crisis has occurred, what will be its outcome, and whether it could have been avoided. In some minds there is a fear, and in others a hope, that the industrial crisis may bring the present system of society down in ruins, and make way for another.’ We warned those who said that capitalism would imminently collapse that their claim was groundless. History has vindicated this position. There will be no need for economists in a socialist world where production is for use not profit and distribution according to self-defined need rather than having sufficient money. They along with former bankers, expropriated capitalists and tax consultants will join clairvoyants, homeopaths, lawyers and priests looking for something more meaningful to do with their lives.

Dustbin of history

‘One Nation candidate Shan Ju Lin has labelled gay people ‘abnormal’, saying that they ‘should be treated as patients’ and ‘need to receive treatments” (news.com.au, 7 January). Unscientific prejudice like this serves the interests of the status quo by dividing our class and delaying the socialist revolution.

Back to Basic (2017)

The Cooking the Books column from the July 2017 issue of the Socialist Standard

In a speech at Harvard University, Facebook founder Mark Zuckerberg called for everyone to be paid a basic income by the state, whether working or not (i paper, 27 May). This was one of the Green Party’s promises in the recent general election. The ‘Parti Socialiste’ candidate in the French presidential elections, Benoît Hamon, favoured it too. As has Italian Autonomist Toni Negri.

Its various advocates offer different reasons. Zuckerberg wants to give people some free time to think up new ideas. The Green Party wants a pilot scheme to see if it would be cheaper than current income support. Hamon saw it as an answer to the fall in paying demand caused by the growing unemployment which he anticipates robotisation will bring. Negri sees it as a demand around which all critics and victims of capitalism – the employed, the unemployed, women – can unite in a way they cannot around sectional trade union demands for higher wages.

All of them envisage it being introduced within the context of the capitalist economic system of production for sale on a market with a view to profit. And that’s the rub. It is all very well proposing reforms to capitalism involving the government spending more but, since governments produce nothing, where is the money to come from? In theory the government could simply print it but that would lead to Zimbabwe or Venezuela-style inflation. It would have to come from taxes, but even taxes on wages are ultimately passed on to employers. So the money would have to come out of their profits. But profits are what make the capitalist economic system go round. Less profit means less investment. There are limits to how much a government can increase taxes without provoking an economic slowdown or downturn.

As if to answer Zuckerberg, the OECD, an intergovernmental organisation of the richest capitalist countries, published at the same time a study of the effect of introducing a basic income in four countries (Britain, France, Italy and Finland) on the assumption that taxes are not increased and that the amount of cash payments currently going to all those below retirement age were evenly divided among them.

The OECD concluded that the basic income that everyone would receive would be well below the poverty line (as the minimum to which governments at the moment guarantee to make up the income of the poor) in each of the four countries. It added: ‘Any basic income at “a socially and politically meaningful level” would require additional spending on benefits and therefore higher taxes to finance this’ (Times, 29 May).

If everyone below retirement age was paid only a basic income equal to their country’s poverty line, the OECD found that in Italy and Finland the government would actually pay less in total on payments to those under retirement age than it now does; which means that some of them would receive a drastic cut in their payments, in particular those who have taken early retirement. So much, then, for Negri’s suggestion that UBI is a demand that could unite all victims of capitalism.

The OECD report neglected one other drawback – that a basic income paid to those in work would amount to a wage subsidy for their employers. Wages tend to gravitate around a level that is enough to enable the workers to buy the things they need to maintain their particular working skills. If the government provided them with some of the money in the form of a basic income then the employers would no longer have to; wages would tend to sink by an amount equal to the basic income.

So, all in all, not even a desirable, let alone a practicable, reform.

Free Money for All (2017)

From the December 2017 issue of the Socialist Standard

It will never happen

“Free Money for All” was the headline of a review in the Evening Standard (9 March) of a book advocating a universal, unconditional basic income (UBI) paid by the state to every citizen as a matter of right. The writer’s not the only one of course. There’s an international organisation advocating it, the Basic Income Earth Network or BIEN (basicincome.org).

It’s also the official policy of the Green Party. Richard Branson is the latest billionaire to lend his support to the proposal (LINK). However, the scheme is impracticable under capitalism and would be unnecessary – in fact, meaningless – in a socialist society.

It is not the state handing out ‘free money’ that is impracticable but handing it out to everyone unconditionally. The state has long given ‘free money’ to the ‘poor’ but this has not been unconditional – you have to be poor to get it and have to prove that you are poor. In Britain up to 1948 this was paid out locally and administered by Poor Law Guardians. In 1948 these payments were nationalised and called ‘National Assistance’, later ‘Social Security’, and now ‘Income Support’. It’s still basically the Poor Law, though, with the government as the stingy Poor Law Guardians.

What the state is doing is making up the income of the poor to a set minimum – the poverty line – by giving them ‘free money’. It’s a very basic Basic Income.

It is conceivable that this could be made conditional only on proving that you are poor, as is the case now for old age pensioners. So if you are of working age there would be no need for you to prove that you are unfit for work or have been actively seeking employment. As long as you were poor, you would get ‘income support’ unconditionally. Some UBI proponents argue that this might even be cheaper as it would remove the need for so much form-filling, checking and snooping. That’s a language governments understand and pilot schemes are already underway in Finland, Canada and the Netherlands to see if this is true. In the general election the Green Party promised one in Britain. It’s what Richard Branson wants too. Although this would be unconditional (apart of course from having to be poor in the sense of having an income, if any, below a given level), it is not universal. It might even be introduced but it would merely be a cost-saving reform of the so-called Welfare State. So, yes, such a ‘partial basic income’ is something possible under capitalism.

What BIEN, the Green Party and others want is universal ‘free money’, a payment by the state to everyone as a step towards a different kind of society or at least a different kind of capitalism. The big difference is that the ‘free money’ would be paid, not just to the poor, but to every wage and salary worker too, in fact to everyone, even capitalists (‘Green Party unveils manifesto plans to . . . give cash handouts to millionaires by introducing a universal basic income, as the Daily Mail (24 May) put it, typically). One major objection to this can be summed up in a single word –  Speenhamland.

Wage subsidy for employers

In 1795 the magistrates in this Berkshire village decided to pay some ‘free money’ out of the Poor Law rate to poor but working farm labourers so as to bring their income up to a subsistence level. This amounted to a subsidy to their employers who were thereby able to continue to pay below subsistence, i.e. starvation wages. The practice later spread to other counties in the South of England. Marx mentions this in passing in Volume I of Capital:

  ‘At the end of the eighteenth century and during the first decade of the nineteenth, the English farmers and landlords enforced the absolute minimum of wages by paying the agricultural workers less than the minimum as actual wages and making up the balance in the form of parish relief.’

In fact, all state payments to workers are a wage subsidy to employers. The tax credits that Gordon Brown introduced are widely recognised as being this, but so are family allowances (which have relieved employers of the need to include an element or so much an element for maintaining a family in the wages they pay).

When in June last year there was a referendum in Switzerland on the principle of introducing UBI its advocates didn’t disguise the fact that its introduction would reduce wages. In fact they openly admitted, even proposed it:

  ‘Wages are going to adapt themselves to become a complement to Basic Income. For example with an Unconditional Basic Income of 2,500 Swiss Francs, someone who at present gets 8000 Swiss francs from their employer will not get more than about 5,500 or so wages which will come to be added to their Basic Income’ (LINK).

Beyond the wages system?

So, everybody would be given ‘free money’ by the state up to the poverty line and this would be topped up by wages paid by their employer. Some, such as the advocates of ‘Fully Automated Luxury Communism’, see this as a  first step towards breaking the link between work and consumption. They envisage the part coming from the state in people’s income gradually increasing until this is where their most of their income comes from – a gradual dying out of the wages system.

That’s not going to happen. If the wages system is going to be abolished (as it should be) it won’t and can’t be done gradually, but what about the state paying everyone a povertyline basic income? Could this happen? Capitalism is based on the wages system, on most people being forced by economic necessity to work for an employer to get money to buy the things that they need. A universal basic income paid to everyone would undermine this. While it would not remove the pressure to work for an employer it would put workers in a better bargaining position with their employers over wages. This wouldn’t be a bad thing of course, but it would have economic consequences. The higher wages would be at the expense of profits, but profits are what make the capitalist economy go round.

But more, where is the money to come from? Since the state produces nothing it would have to come from taxation but in the end taxation falls on profits (taxes on wages, as both Adam Smith and David Ricardo recognised, are passed on to employers). So, unless wages fall as the Swiss basic-incomers advocate, UBI would represent a massive redistribution of income from profits, the source of investment, to popular consumption. This would severely disrupt the capitalist economic system which is driven by investment for profit.

If, on the other hand, wages did fall, it would represent a redistribution of income within the capitalist class from those employing fewer workers to those employing many; which would cause other problems and disputes. So, as far as capitalism is concerned, it does not make sense and wouldn’t work. It’s just not going to happen. Even so, there is quite a bit of common ground in the arguments advanced in favour of UBI and those in favour of socialism. Both start from the same realisation that we are living in an age of potential abundance but that this abundance is not realised as resources are wasted in mere wealth-shifting activities such as investment banking, advertising, and legal services (our list is longer since socialism would render money and the whole financial system redundant). If these, and other forms of waste, were eliminated then society could produce enough to eliminate poverty, improve education and health care, and provide everybody with a comfortable   retirement. This is undoubtedly true. This redirecting of resources currently wasted, together with the removal of the profit barrier, would mean that more useful goods and services could be provided and an abundance – a sustainable abundance – achieved.

Socialism would also decouple consumption from work. In other words, what you consumed would no longer be tied to how much you obtained from the sale of your working skills or even to how much work you did (or were deemed to have done). After all, this is precisely what the slogan “from each according to their ability, to each according to their needs” means. But this of course is not going to be possible under capitalism.

So, to sum up: while an unconditional income for the poor is possible under capitalism as a reform of the welfare state, a universal unconditional basic income for everyone is not. The objectives which those who favour it want – a sustainable abundance and breaking the link between consumption and work – can only be achieved on the basis of the common ownership and democratic control of the means of production.

Adam Buick

Post-modern guru (2009)

Book Review from the January 2009 issue of the Socialist Standard

Goodbye Mr Socialism. Radical Politics in the 21st Century. Antonio Negri with Raf Scelsi. Serpents Tail Press, London, 2008

The Italian intellectual, Toni Negri, who was once sentenced to jail in Italy for giving a theoretical defence of urban terrorism, is highly regarded in some circles. The blurb on the back of this book describes him as “one of the world’s leading experts on Marxism” and as “a guru of the post-modern Left”. He may well be the latter but is certainly not the former.

The opening chapter is a surprisingly indulgent justification of some of the things that happened in Stalin’s Russia, even if this is part of the “Mr Socialism” to which he is saying good bye in this transcript of a question and answer session with another Italian intellectual. The other part is the whole idea of the factory proletariat, organised in trade unions and left wing political parties, as the agent of social change:

“the epoch of wages is finished and that the struggle has moved from the level of a fight between capital and labour regarding the wage, to a fight between the multitude and the State around the income of citizenship.”

The “income of citizenship” is a clumsy translation of what is more usually called a “Basic Income” or, by the Green Party, a “Citizen’s Income”, defined in a lexicon at the end of the book as:

“a monetary payment distributed at regular intervals to all those who enjoy citizenship and residency for a certain period of time, which allows a minumum dignity of life . . . It is paid to those of working age, for the period that goes from the end of obligatory schooling to pension age or death.”

Negri supports this as he sees the demand for it as “a refusal of work and of the wage relationship”. If introduced other than as some tinkering with the tax and benefits system it would indeed undermine the economic compulsion to go out and work for an employer; which of course (apart from its cost) is why it is never going to happen under capitalism. In any event, as a goal, it is a poor substitute for “from each according to their ability, to each according to their needs”.

Negri does, however, have a point when he criticises those who look only to the factory proletariat as the agent of social change. This is only a section of the working class properly so-called and, in the developed capitalist parts of the world, is now less than 50 percent of the workforce. But, in placing his hopes in those with knowledge skills involved in non-material work (the “cognitariat” as he calls them) he would seem to be making the same mistake of wanting to rely on a section only of the working class.

Surely the point is that social change has to be up to the class of wage and salary workers as a whole, not just one section. Or perhaps this is what Negri means by the “multitude”, which, if it is, comes across in English as a rather derogatory term to describe all those forced by economic necessity to sell their mental and physical energies for a wage or salary.

Adam Buick

UBIquity (2018)

The Pathfinders column from the July 2018 issue of the Socialist Standard

A word of warning to those who hope science and scientists will come to the rescue and Save the Planet with some ingenious method that hasn’t occurred to the rest of us. Two UCL academics, Simon Lewis and Mark Maslin, have put forward ‘A manifesto to save Planet Earth (and ourselves)’ with what they see as the answer to the Anthropocene crisis (BBC Online, 7 June - Link). Following the usual polemical tactic of ‘scare the pants off us’ followed by ‘knock some sense into us’ they propose a two-fold solution. The first of these, Half-Earth, involves reforesting and re-wilding half of the Earth for the benefit of its non-human species. As a way to reverse environmental pollution and global warming the idea has some merit, although some re-wilders are surely going too far in suggesting the widespread reintroduction of wolves, particularly into Britain. ‘Reforesting’ though is often a greenwash term for the common practice of cutting down slow-growing hardwoods and replacing them with fast-growing pine and conifer softwood plantations, which is hardly a like-for-like replacement destined to do anything constructive about species habitat loss. Half-Earth may be good for the planet, as the authors argue, but in capitalism it is only likely to occur if it’s also good for profits, and these two goods are not normally found in the basket.

The other idea is the evergreen and ever-present notion of the Universal Basic Income (UBI), long-time darling of the Green Party and now floated by Corbyn and McDonnell’s Labour Party, and tried out after a fashion in small pilots in Canada and Finland. This is the idea that there would be an unconditional basic income for every adult in society, regardless of whether they had a job, the aim being to decouple paid work from consumption and thereby break the soul-destroying cycle of getting and spending which is supposedly responsible for runaway consumerism, plastic continents, moral bankruptcy and everything else.

That UBI has a lot of support is hardly surprising. To those struggling to keep heads above water, it would be a lifeline or at least a polystyrene swim float, while to social progressives it would represent either a big step towards universal equity (UBIquity?) or even, perhaps, a back-door exit into socialism along the dark and dank lower colon of money and class society.

The problem is, you don’t need a weatherman to know it wouldn’t work. UBI would have to come out of the tax on the profits of employers, but these profits are derived from the hard work of the workers, and the only thing forcing these workers to work hard in the first place is their relative poverty. Release them from that poverty, and the employer’s profits accordingly collapse. Imagine if you won the lottery tomorrow. Would you go back to work? Would anyone? This is the central dilemma of the worker’s condition in capitalism. We want more than anything to get rid of the misery and stress. But that stress is the very thing holding capitalism together, and it can’t afford for us to alleviate that stress or it starts to fall apart like a human pyramid injected with a muscle relaxant.

But this wouldn’t really happen either, because workers would never be allowed to keep hold of this UBI windfall for long. What the employers would actually do is start cutting wages across the board, by roughly the amount of UBI. Perhaps they wouldn’t do it immediately, but by incremental steps, by failing to raise wages along with the rising cost of living, until they’d erased the gain entirely. They’d do this because they’d know that you, the worker with the windfall, could afford it. And why not? Look at it from the boss’s point of view. Would you pay £2 for a tin of beans when you knew you could get it for 50p? No you wouldn’t. And a boss wouldn’t pay over the odds for a worker either. In the end, the benefit of UBI would be cancelled out and nobody would be any the better off. The only way for us to beat the capitalist game is to stop playing it.

Dark Materials

Douglas Adams immortalised the idea of a depressed robot in A Hitchhiker’s Guide to the Galaxy, and Radiohead subsequently sang about a Paranoid Android. Now a team at MIT has built an AI system that makes Marvin look as perky as a springtime Pollyanna (BBC Online, 2 June - Link). They wanted to see what kinds of conclusions an AI would reach if it was only fed on the very worst information from all ‘the dark corners of the net’, so they fed it on an exclusive diet of murders, beheadings and gruesome accidents, while a control AI got a more balanced input of people and fluffy animals. When ‘Norman’ (named after Norman Bates in the film Psycho) was shown Rorschach inkblots, it saw murder, death, suicide and gore galore, while its control partner saw birds and vases of flowers. Where happy Harry saw ‘a person holding an umbrella’, morbid Norman saw ‘a man shot dead in front of his screaming wife’.

Yes, it’s tempting to laugh, and why not? Any computational system is only as good as the information being fed into it, and lately there has been concern about the intrinsic bias in some of that information, including charges of ‘machine racism’. As the article goes on to point out, an AI trained on Google news, when asked to complete the statement: ‘Man is to computer programmer as woman is to X’, responded with ‘homemaker’.

The very fact that scientists can depress a computer is a significant milestone on the road to utter nihilism, but it’s our own mental health we should be worrying about. As we have previously observed in this column (August 2017), an overload of bad-news bias is bad for us too, making us less likely to see the potential for improving the world and more likely to give up in fatalistic resignation. Maybe that’s why the capitalist press loves it so much. But we socialists at least ought to consider giving ourselves a more balanced diet, with a spoonful of optimism thrown in occasionally.

PJS

No More Work? (2017)

Book Review from the March 2017 issue of the Socialist Standard

'Inventing the Future: Postcapitalism and a World Without Work'. By Nick Srnicek and Alex Williams. (Verso £9.99)

This is in some ways similar to Paul Mason’s Postcapitalism, reviewed in the September 2015 Socialist Standard. Indeed Mason is quoted on the front cover as describing this as ‘a must-read’. Like Mason, Srnicek and Williams discuss the possibility of overcoming scarcity and eliminating boring work; unlike him, they give relatively little attention to the information economy, though they do refer to the importance of technological developments and automation, and say that any vision of the future must be based on current tendencies. They also emphasise the  likelihood of ‘surplus population’, with capitalism needing less labour to produce the same output, so large numbers of people will have trouble getting ‘decent’ jobs.

They begin by criticising ‘folk politics’, a common-sense kind of local political activism that is prevalent on the left. This, they say, is not wrong but it is not enough by itself: it is fine for movements such as Occupy, but is problematic for attempts to overcome capitalism and climate change, as it is too small-scale. Small interventions are unlikely to change the socio-economic system, and acts of resistance are defensive rather than active. To the extent that folk politics can be seen as similar to the policy of pursuing reforms to capitalism, these remarks are unexceptionable. Some other good points are made in passing, for instance that consensus decision-making can lead to the adoption of lowest-common-denominator demands.

The alternative to folk politics is to be more ambitious and aim for a post-work world, by means of ‘non-reformist reforms’ (compare Mason’s ‘revolutionary reformism’). The four minimal demands of this are: full automation, reduction of the working week (possibly via a three-day weekend), provision of a basic income and diminution of the work ethic. As part of this, ‘the demand for a post-work world revels in the liberation of desire, abundance and freedom.’ The authors also refer to ‘the possibility of production based on flexibility, decentralisation and post-scarcity for some goods.’

It is accepted that there are various ways of realising such a post-work future. One  would be ecologically unsustainable, while another would be misogynist, with women still bound to household work. Srnicek and Williams opt for the leftist version, which among other things involves open borders, a reduction of both waged and unwaged work, an improved welfare state and a global basic income. It is acknowledged that this would still have commodity production and private property, so would not be post-capitalist, but ‘would be an immensely better world than the one we have now’.

But, just as with Mason’s book, the reader is forced to ask, why just advocate this, why not abolish commodities and wage labour? The authors do refer at one point to the aim ‘to build an economy in which people are no longer dependent upon wage labour for survival’, and they also talk about full unemployment (which is not clear, but might mean an end to the employment relation). Moreover, despite the sub-title, their vision of future society is not really post-work either, as the aim is just to reduce necessary labour as much as possible.  So they are pretty inconsistent as to what they want, and moreover they see their proposed reforms as taking decades to achieve, so it is hardly a matter of ‘something now’.

The book makes some interesting points, but, while Srnicek and Williams criticise folk politics as too timid, their own demands are essentially reformist and so are themselves not ambitious enough.  

Paul Bennett

Free is Cheaper (2017)

The Cooking the Books column from the December 2017 issue of the Socialist Standard

In 1964 a group of American liberal intellectuals calling themselves the Ad Hoc Committee on the Triple Revolution submitted to President Johnson, on their own initiative, a set of proposals to deal with the impact of what was then called 'cybernation'. They argued that the coming of machines that didn't require a large labour force to operate them would lead to increasing unemployment and so less paying demand for goods and services. To remedy this, they proposed to break the link between income and having a job by instituting a guaranteed income for everyone, employed or not.

The socialists of the time saw the 'problem' the Committee perceived of industry being able to provide plenty for all with less living labour as reinforcing the case for socialism, making possible the application of 'from each according to their ability, to each according to their needs' on the basis of the common ownership and democratic control of the means of production. They regarded what the Committee proposed as pitifully inadequate and impossible under capitalism.

Now, over fifty years later, another group – University College London's Institute for Global Prosperity – has come up with a similar proposal to deal with the same drop in employment and income they expect to result from growing automation. Their proposal is in fact more radical: that 'free housing, food, transport and access to the internet should be given to British citizens in a massive extension of the welfare state':

 'The recommendations include doubling Britain’s existing social housing stock with funding to build 1.5m new homes, which would be offered for free to those in most need. A food service would provide one third of meals for 2.2m households deemed to experience food insecurity each year, while free bus passes would be made available to everyone, rather than just the over-60s. The proposals also include access to basic phone services, the internet, and the cost of the BBC licence fee being paid for by the state ' (Guardian, 11 October).

 This 'universal basic service' is offered as an alternative to the 'universal basic income' that others have proposed to deal with the same perceived problem of the impact of advancing technology of employment and incomes. From a socialist point of view, it is more attractive as it would reduce rather than pander to money-commodity relations. There were some members of the Socialist Party members in the 1950s who saw extending free services as the way to socialism (they left).

 The trouble is that, as a reform of the 'welfare state', it is envisaged as being implemented under capitalism to deal with the problem of how to deal with people without an income from employment. Its proponents claim that it is 'fully costed' as all reforms have to be these days. They say that 'the value for an individual using all services would represent £126 of net weekly earnings' which could be funded by reducing the personal tax allowance; in other words, by reducing net weekly earnings. Which sounds like the 'redistribution of poverty' that the 'welfare state' has been all about.

 A weekly saving of this amount would have the same effect as a weekly basic income of the same amount. It would be a wage subsidy to employers and so would exert a downward pressure on wages. Much better to go the whole hog and abolish the wages (work for money) system through making the means of production the common property of all, so that everyone can have free access to all of what they need.

Notes by the Way: Will the Forty Fall for it? (1938)

The Notes by the Way Column from the July 1938 issue of the Socialist Standard

Will the Forty Fall for It?
It is Lord Beaverbrook’s boast that he allows much latitude to his writers and cartoonists— Low in particular—to say or draw what they like. This lands him often in the peculiar position of having the feebleness of his policies exposed by Low’s wit or some telling fact in an article. Recently, during a period of five or six weeks, his editorial arguments for national defence were blown sky high by displayed articles in his Daily Express. First came an article showing how “our" England is owned by a handful of landlords, so that not one in forty of us owns any soil in the land we call our own. Then came an editorial saying that it is only right and democratic that we should have conscription in war-time; every man should take part in national defence. Then this was elaborated in an article which assured the dictators that an attack on England would cause every man to leap to the defence of his native soil!

All of which boils down to this, that the 40 who own no soil are to be conscripted to defend the monopoly rights of the 41st. A very excellent doctrine for the latter, but a strange interpretation of democracy.

The answer of the workers to Lord Beaverbrook—and to the Labour Party advocates of “war to defend democracy"—should be a very determined declaration that they will be willing to defend their native soil when they own it and not before, and that in the meantime they intend to devote their whole energies to gaining possession.

* * * *

The Slum Empire—New Landlords Want to Move In
In order to justify the seizure of the German colonies after the Great War the Allied Governments, their own hands red with the blood of natives slaughtered to protect profits, dwelt on the unfitness of Germans to administer colonies. They lacked, so it appeared, that inherited capacity of the Britisher to rob the native and make him like it at one and the same time.

Now come the West Indian troubles to upset the legend, at a very awkward time, too, just when the Germans are preparing to resume the “white man's burden."

Here are a few of the things said by Mr. Lloyd George in the House of Commons on June 14th, 1938, based on what he saw when he was in Jamaica last year:—

    . . .  he spent over three months in Jamaica, and he was perfectly appalled at the conditions. He felt ashamed that we should have tolerated—and for a very long time—such a state of things under the British flag while we were boasting about our great Empire.
  There was no language, however violent, adequate to describe the conditions (in Kingston, Jamaica).
     In Jamaica wages were incredibly low—he did not know how the people lived and kept a family—and the housing conditions were indescribable. We did not want a slum Empire.

(The Times, June 15th, 1938.) 

Promptly the German Press has drawn a moral in conformity with the desires of the German capitalist.

The official German newspaper, Diplomatic Correspondence, says (Manchester Guardian, June 16th) that the Jamaica disturbances prove that new blood is needed in the government of the Colonies —German blood, of course. The British Government shows “a lack of the right attitude towards the natives. . . . It is once more seen that the nation which likes to be called the first and oldest colonial Power in the world is repeatedly confronted with tasks with which it cannot adequately cope . . ."

The Diplomatic Correspondence goes on to re-inforce its argument from the Palestine troubles

* * * *

How to Spell "Slump"

During the last industrial crisis a writer in The Socialist Standard jeered at the capitalists and their economic advisers because of their inability to learn anything from a crisis or a dozen crises. Always they cherish the same illusions and twitter about the same "remedies," only to discover afresh each time that the permanent prosperity they believed in had crashed again.

We owe our masters an apology. They really have learned something new and refreshing this time. It consists in the remarkable discovery that there will never again be a slump because slumps are in future to be called “recessions."

* * * *

"Basic Incomes": Another Effort to Reform Capitalism

An organisation called the Society to Promote Human Equality has published a pamphlet on “Basic Incomes," which contains for its size (16 pages) a remarkable amount of error and confusion. The scheme, one which has appeared before under various names, is that each individual should receive from the Government an income of 4s. a week; the amount to be increased later on. It would be paid to everyone, from millionaire to pauper.

The authors discuss such questions as the way the money will be provided and the likely effects of the scheme, but are so delightfully vague about everything that it is a little difficult to pin them down. In their own words, the scheme is "experimental" and we would have to wait and see what result it produced.

An example of their vagueness is the following statement on raising the money: —

   How is the money to be found? Three ways only seem to present themselves: (a) By taxation; (b) By the creation of currency or credit; (c) By profits arising from publicly-owned industries. We are concerned mainly that the money should be found by one, or by a combination of the three methods, (p.6.)

The writers are not quite sure whether there are only three ways of doing it, and they are even less sure which way they will use, so they are concerned (but only "mainly") to do it by one, or possibly by all three, of the ways.

They are equally unsure of the effect. They recognise (page 8) that when the worker gets his 4s. per head of his family, his wages may be reduced as a consequence, but, they add, “the cost of production would be reduced, prices would be lower, and real incomes would advance." They leave out of account the more obvious conclusion that, if an employer is able to reduce his wages bill, his profits will be correspondingly increased.

In short, the scheme is an example of the futility of trying to cure a disease before understanding it. The writers live in an abstract world and do not know the real one, in which wages roughly correspond with the workers' cost of living. They do not know that the workers must be kept poor, otherwise they would not work to produce profits for the capitalist class. They do not see that subsidies paid by the Government to supplement wages only result in bringing down the wage level correspondingly, yet this was well enough known a century or more ago, when the practise of subsidising agricultural wages with poor relief was common.

* * * *

The Man Who Did Not Know When To Be Cruel To Children

The military mind is a remarkable thing. An aircraftman who made his seven-year-old son pick up hot coal has been dismissed. For being cruel to a child? But surely that is what aircraftmen are for! Bombing planes are kept precisely for the purpose of slaughtering children’s fathers in foreign air forces, destroying homes, and maiming mothers and children wholesale. Of course, “our" Air Force, like all the others, will protest with their hands on their hearts that they are only for national defence, and that they will only bomb military objects and points of use to military forces. But as that includes railways, factories, roads, bridges, food supplies, etc., etc., and as nobody but a fool believes that bombs can select their targets, the truth is that all air forces are babykilling brigades. Imagine what would happen in war to this particular aircraftman if he returned from a raid with his bombs not thrown, with the excuse that he could not be sure he did not hit some enemy child.

Edgar Hardcastle

Demanding the Impossible (2017)

Book Review from the August 2017 issue of the Socialist Standard

'Utopia for Realists'. By Rutger Bregman. (Bloomsbury, 2017. £16.99)

Bregman is a Dutch philosopher and he has produced a book that many are claiming is up there with Piketty in terms of recent works that have achieved real kudos and wide resonance among critics of the market economy.

In fairness, it is well-written and thought-provoking—definitely a cut above the many philosophical pot-boilers that wordily say little and invite being left on the ‘New Titles’ shelves at Waterstones. Bregman is good at sensing where the problems in modern day society are and how they have morphed over recent decades—the proliferation of ‘bullshit jobs’ from PR to the law, from public sector pen-pushers to private sector money-shufflers; the disconnection between the property-owning ideals of the free market nirvana, and the inability of people to secure their place within it; the massive rise in automation which counter-intuitively has led to people working longer and harder, and often with less purpose.

Where Bregman is less convincing is his prospectus for change. Most of the ideas he advances here are familiar ones—a basic income scheme, a move towards a 15 hour work week, open borders, increased taxes on wealth . . . in other words, a reversal of the dominant trends within capitalism over the last three or four decades that were promoted by Friedman, Hayek and their latter-day neo-liberal evangelists.

Bregman sees these as being radical and seemingly utopian demands that are capable of realisation in the way that other supposedly outlandish reforms were previously (he cites votes for women and same-sex marriage among others). But many—in fact, almost all—of the examples he gives of this nature were cultural changes that occurred within the market economy as it swept away the last vestiges of the attitudes that went alongside the feudal master/servant relationship. In other words, they were entirely compatible with the development of capitalism itself. Capitalism’s economic laws are rather different and do not bend so easily to the political will of those who would seek to curb their seeming excesses—the tendency towards an increasing work week in recent decades being a case in point.

That’s why Bregman’s book title is misplaced—his prospectus for change isn’t really Utopia for Realists but Utopia for Utopians. This is because the reason capitalism hasn’t delivered what many radicals have expected over the years is that in many ways it can’t. For instance, a basic income scheme is capable of realisation within capitalism only within certain parameters but these are circumscribed by the profit system and the need for the driving force of capitalism to operate —businesses competing to accumulate capital without the state interfering to prevent this. At a higher level of technological advancement this applies to basic income schemes today just as it did the original Speenhamland system and the Poor Law in nineteenth century Britain. Within the market economy, these schemes are unable to abolish poverty—in capitalism, the rich are rich because the poor are poor, and wealth accumulates to those that have it and only expands on this basis. In anything other than the very short-term, capitalism is incapable of behaving any other way.

The fact that until comparatively recent times the working class of wage and salary earners were often able to increase their absolute levels of income (and sometimes their relative share of income for a time) was the product of organised trade union action, but there were always limits to this. That the average skilled US worker hasn’t seen an increase in their real wages for around 30 years and that most workers in the UK and many other European countries have had real pays cuts for over a decade now illustrates this point well enough.

Capitalism has economic laws that are not easily transcended within the system (as has been illustrated by reformist governments of the Labour variety and also by more radical interventions such as the creation of centralised state-run capitalism in Russia and its satellites in the twentieth century). So what is needed is the sort of movement that Bregman identifies—radical, democratic, confident in its ideas—but one genuinely focused on challenging capitalism at source and creating a society capable of realising the potential that the market economy has unleashed. As Bregman himself rightly says:

‘A worldview is not a Lego set where a block is added here, removed there. It’s a fortress that is defended tooth and nail, with all possible reinforcements, until the pressure becomes so overpowering the walls cave in’(p.240).

Capitalism, with its interconnected production across the globe, its robots, 3-D printing and digital media, has brought about a real potential abundance of wealth that is now held back by the artificial scarcity associated with the market, money and production for profit. A genuine society of abundance will have no time for basic income schemes and attempts to institute part-time wage-slavery, and will instead mean a conscious move towards full unemployment and zero money income instead—only achievable on the basis of common ownership, the abolition of the market and free access to wealth.

Dave Perrin

An unrealistic utopia (2017)

Book Review originally published on the Socialism or Your Money Back blog

Utopia for Realists and How We Can Get There. By Rutger Bregman. Bloomsbury. 2017. £16.99.

Rutger Bregman is a Dutch advocate (the book is translated from Dutch) of a universal, unconditional basic income as a payment from the state to all citizens as of right and of an amount at least equal to the poverty line. A large part of the book, however, is devoted to advocating an unconditional basic income for the poor only, i.e. not a universal one (and not entirely an unconditional one since you have to be poor to get it). In other words, a proposal to merely reform the so-called Welfare State.

At present, the state already gives the poor 'free money' but conditional, besides means -testing, on being sufficiently unfit for work or seemingly actively seeking work, as the case may be. Bregman’s case against this is that it would be cheaper to make such payments unconditional as this would avoid the administrative work involved in checking entitlement and organising bogus courses for the unemployed; that 'free is cheaper' if you like. A number of pilot schemes are being carried out, as in Finland and Canada, to see if this is true. Bregman lists some previous ones which he says have shown that it is.

What he really wants, though, is an unconditional, non-means-tested, payment to everyone. His case for this has certain similarities with the case for socialism: that we are living in an age of potential abundance (he writes of a 'Land of Plenty') but that this abundance is not used to directly improve people’s life but is wasted on such non-wealth-producing activities as investment banking, advertising and legal services (since he doesn’t envisage the disappearance of money his list is shorter than ours). The resources exist, he points out, to eliminate poverty, improve education and health care, and provide a comfortable retirement for all. For him, it’s the introduction of a universal unconditional basic income that will enable this.

Some of the objections to this are the same as those raised against socialism – that if people were given free money (or had free access) the incentive to work would be undermined. Bregman counters: 'There is overwhelming evidence to suggest that the vast majority of people actually want to work, whether they need to or not' and 'Stable and meaningful work plays a crucial part in every life well lived.'

In any event, he does want people to work less as he also advocates a 15-hour week. This, he says, should be enough to provide an adequate plenty for all. The resources for this would come from increased automation, the end of the consumerist mentality, and from what is currently wasted in wealth-shifting rather than wealth-creating activities.

Bregman includes the word 'utopia' in the title but is it a realistic one? Since he doesn’t object to the market mechanism or even to profit-making his scheme is to be introduced within capitalism. This is not realistic. One of the objections to such schemes, and which socialists share, is summed up in one word: Speenhamland.

In 1795 the magistrates in the Berkshire village of that name decided to make up the wages of poor farm labourers up to a minimum level with payments from the Poor Law rates. This was a subsidy to their employers who were thereby enabled to continue paying below subsistence, or starvation, wages. Marx pointed this out in Volume I of Capital :

'At the end of the eighteenth and during the first years of the nineteenth century, the English farmers and landlords enforced the absolute minimum of wages by paying the agricultural labourers less than the minimum in the actual form of wages, and the remainder in the form of parochial relief.' (Chapter 24, section 4)

That a universal UBI would be a subsidy to employers is in fact a major socialist objection to it which Bregman is unable to counter. Indeed, in the Swiss referendum on the matter in June last year, the advocates of a UBI openly stated that everybody’s wages would and should be reduced by the amount of 'free money' from the state.

The other socialist objection is that ignores the economic imperative of capitalism, enforced through competition, to accumulate more and more capital out of profits, and so profits must come first before meeting the consumption needs of the population. Catering for these is kept to the minimum to maintain productive efficiency or, in the case of 'free money' payments to the poor, to the minimum needed to avoid bread riots. Bregman shares the illusion common to many would-be reformers of capitalism that production under capitalism can be made to give priority to people’s consumption instead of to profits. It can’t, as the failure of numerous reformist government that have set out to do this is testimony.

This said, Bregman’s book is very readable and he lands some effective punches on the status quo. He also has a pertinent criticism of those he dubs 'underdog socialists', Old Leftists nostalgic for what capitalism used to be like until the mid-70s:

“Reining in and restraining the opposition, that’s the sole remaining mission of the underdog socialist. Anti-privatisation, anti-establishment, anti-austerity. Given everything they’re against, one is left to wonder, what are underdog socialists actually for.”

And he does get Marx right when he writes that, for Marx, ‘releasing the proletariat from the shackles of poverty required a revolution, not a basic income.’

Adam Buick

Green Scenario (1990)

Book Review from the September 1990 issue of the Socialist Standard

Getting There. Steps to a Green Society. By Derek Wall. Green Print. £4.99

During the Euro-elections last year Derek Wall was one of the Green Party's three national spokespersons. He wasn't heard of much as the media ignored him in favour of Sara Parkin. This probably pleased some Green Party strategists who feared his leftwing views might put off the muddle-in-the-middle voters they were targetting.

For example, while one platform speaker at the Green Party Conference last September proclaimed “we come not to bury the market economy, but to use it” (Independent, 22 September). Wall writes that "ecology is incompatible with the market".

He is undoubtedly right here. Where wealth is produced by separate firms competing to make profits out of supplying a market, it is considerations of cost-saving and profit-making that will determine the materials and methods of production used: the short term will prevail over the long term and the cheaper over the ecologically appropriate.

Wall sees the solution as lying in the establishment of a decentralized society where much less would be produced and consumed than today and where these reduced needs would be mainly met locally. Money would not disappear completely but its role and influence would diminish drastically since peoples needs would be met directly (growing their own food, making their own clothes, etc) or on a barter, mutual aid or gift basis.

This might not be capitalism but it wouldn't be socialism either. In any event Wall doesn't call it socialism but a "Green society" and sees it as coming into being in embryo within capitalism (indeed as already having come into being in the form of "picnics and parties, collective allotments. co-operative buying, shared meals, local community news sheets, learning exchanges, tithing, ecological transport") and eventually growing to be strong enough to dissolve capitalism into a network of “local economies". This, according to him. is the way to "smash capitalism gently".

It couldn’t work of course. People can't just opt out of capitalism and begin satisfying their needs on a non-market basis. To launch and sustain this, money would be required (to hire or purchase land, premises and machinery, for instance) and, as long as capitalism exists, there is essentially only one way most people can obtain this: by going out and working for an employer for a wage or a salary. It is true that another possible source of income does exist in payments from the state. However, these are never generous and are in fact deliberately kept as low as practicable so as to offer a very miserable existence to those unable or unwilling to work for an employer.

Nor is the capitalist state going to allow state payments to be used to try to undermine capitalism in the way Wall suggests. But replies Wall, this time echoing official Green Party policy, a Green government would introduce a Basic Income Scheme under which everybody would receive a payment from the state, as of right and without means-testing, of an amount sufficient to satisfy at least their basic needs without having to go and work for an employer. The theory is that people could use this income to finance an "alternative economy".

It's a nice theory, but where's the state going to get the money from? It could only come from taxing the profits of capitalist firms, but any attempt to raise the massive amount that would be required to finance such a scheme would provoke an immediate and widespread economic slump. Wall, however, believes that "bankers create money out of thin air" and seems to be advocating that the state should do the same and simply create the money it needs, just printing pound notes and handing them out! Unlike banks, the state could do this but as the amount of real wealth in existence would remain unchanged this would result in a massive inflation that would rival that in Germany after the first world war.

Actually. Wall is not quite that naive. He does realise what would happen should a Green government committed to such a programme ever come into office:

A Green government will be controlled by the economy rather than being in control. On coming to office through coalition or more absolute electoral success, it would be met by an instant collapse of sterling as ‘hot money' and entrepreneurial capital went elsewhere. The exchange rate would fall and industrialists would move their factories to countries with more relaxed environmental controls and workplace regulation. Sources of finance would dry up as unemployment rocketed, slashing the revenue from taxation and pushing up the social security bills. The money for ecological reconstruction—the building of railways, the closing of motorways and construction of a proper sewage system—would run out.

But if this is the case, as it would be, a Green government would clearly be unable to help an embryonic green economy to develop by introducing a Basic Income scheme to allow people to escape from the wages system. In admitting this Wall is also admitting the non-viability of his scheme to “smash capitalism gently".

Adam Buick

No Basic Change (2016)

From the July 2016 issue of the Socialist Standard

In June Swiss voters – they get the interesting things to vote on – rejected a proposal to introduce a basic income from the state for everyone as of right whether they are working or not. Perhaps surprisingly, only 23 percent voted for with an overwhelming 77 percent against.

According to the Times (6 June), critics denounced the proposal as a ‘Marxist dream’. We don’t think Marx did dream of a basic income. What he had in mind was the abolition of the wages system and its replacement by ‘from each according to ability, to each according to need’. This would mean that, after cooperating to produce things and provide services, people would have free access, without having to pay, to what they needed to live and enjoy life.

The voters were asked to decide only on the principle of introducing an unconditional universal basic income without any mention of its level. However, its promoters such as BIEN Suisse did publicise a figure of 2,500 Swiss francs a month, or 30,000 a year, an amount just slightly above the poverty line in Switzerland.

In previous articles analysing Basic Income schemes we have always pointed out that this would result in a strong downward pressure on wage levels resulting eventually in a fall in wages. As we wrote when the Green Party included this measure in their manifesto for the 1987 general election:

‘If wage or salary earners are paid £100 a week by the government, they can use this income to maintain themselves; which means that the employer will be relieved of having to include an amount to cover this expenditure in the wage packet or salary cheque. Economic forces will therefore tend to ensure that wages and salaries fall to a level which, when added to Basic Income, will allow the employee to maintain him or herself. In other words, wages or salaries would become sufficient only to top up Basic Income to the economically determined level’ (Socialist Standard, September 1988).

The Swiss proposers of the scheme didn’t even bother to argue against this. Not only did they accept it but they incorporated it into their scheme. In an article in French costing the scheme on the website of Génération RBI (Generation Unconditional Basic Income) they emphasised, with graphs and numerical examples, that everybody earning more than the poverty line would be no better off financially as, they said, their wages would be reduced by the amount of the Basic Income:

‘Wages are going to adapt themselves to become a complement to Basic Income. For example with an Unconditional Basic Income of 2,500 Swiss Francs, someone who at present gets 8000 Swiss francs from their employer will not get more than about 5,500 or so wages which will come to be added to their Basic Income’ (Link ).

So their total income would be the same, only under their scheme, instead of all of a worker’s total income coming from their employer, a part would come from the state and a part from their employer. This would not be a subsidy to employers (another danger of such schemes) as taxes on employers would be increased to pay for this. And of course a basic income equal to the poverty line is neither going to undermine the wages system nor break the link between work and consumption, as other supporters of such schemes have argued.

We commend them for their honesty and logic at the expense of the credibility and attractiveness of their scheme to reform capitalism.

The Green Party's Basic Income Scheme: could it work? (1988)

From the September 1988 issue of the Socialist Standard

In their manifesto for last year's general election the Green Party proposed to "guarantee economic security to each person as a right" by instituting a Basic Income Scheme involving "an automatic weekly payment to everybody, throughout life, regardless of sex or marital status, non-means tested and tax free, at different rates for different age-groups". No figures were mentioned but the manifesto stated that "the payments would guarantee an income adequate to live on, higher than current welfare benefits".

This is a scheme, then, to give every adult in Britain, whether in work or not, an income high enough to allow them to live appreciably above the official poverty line. The idea behind the scheme - guaranteeing everybody security from material need - is entirely laudable. But could the scheme work within the present economic system?

The prices-wages-profits system
The basic feature of capitalism is that wealth is proposed for sale and that people's incomes - whether wages and salaries, profits or benefits - derive ultimately from the receipts obtained from selling what has been produced. In fact the incentive to produce under this system is monetary profit, the difference between sales receipts and the amount of money originally laid out in purchasing the elements necessary to production (materials, buildings, machinery, power, labour, and so on). Maximising monetary profit is the primary objective of production and what makes the economic system function.

Out of sales receipts - or rather, to strictly accurate, out of that part of sales receipts representing the new value added in production - are paid both the work incomes (wages and salaries) on which most people now depend and the property incomes (dividends, interest, ground rent) that accrue to those having ownership rights in the means of production.

Wages and salaries correspond more or less to the cost of bringing into being and maintaining the working skills which employees sell to employers (cost of training plus the cost of housing, food, transport, and so on which employees must incur to maintain themselves and their families), while profits are the part of the newly added value left after wages and salaries have been paid. The government obtains the money to pay out social benefits from taxes which ultimately fall on profits or incomes derived from profits. Taxes on wages and salaries, by increasing the cost of maintaining employees and their skills, are eventually passed on, through the operation of economic forces, to employers in the form of increased money wages.

Where will the money come from?
What, then, would be the effect of introducing the Green Party's Basic Income Scheme into this prices-wages-profits system? If everybody, whether in work or not, is to be paid "an income adequate to live on, higher than current welfare benefits", we are talking about a massive increase in government expenditure. Which makes the question"Where is the money to come from?" wholly relevant.

We have just seen that the ultimate source of government revenue is profit made in productive industry. But if the money paid out as "basic income" is to be taken from profits -  the fuel on which the present economic system runs - there is a serious risk of reduction in economic activity and a knock-on effect leading to a slump and growing unemployment; in short, of provoking an economic crisis. In other words, the increased taxes on profits needed to finance the Basic Income Scheme would risk killing the goose that lays the golden egg.

Drastic fall in wages
In reality, however, all the money to pay the "basic income" would not be generated from existing profits, since a large part would come from the drastic reduction in wages and salaries that the introduction of the scheme would bring about. Employers would be provided with an extra income to compensate in part for the extra tax burden they would have to bear.

For it should not be imagined that wages and salaries would remain at their present levels if everybody, including those in employment, were paid a basic income of, say, £100 a week by the government. Such a payment would result in a fall in wages and salaries of an equivalent amount because, as we have seen, they are fixed by the operation of economic forces at around a level sufficient to maintain the employees in question and their skills.

If wage or salary earners are paid £100 a week by the government, they can use this income to maintain themselves; which means that the employer will be relieved of having to include an amount to cover this expenditure in the wage packet or salary cheque. Economic forces will therefore tend to ensure that wages and salaries fall to a level which, when added to Basic Income, will allow the employee to maintain him or herself. In other words, wages or salaries would become sufficient only to top up Basic Income to the economically determined level. Or, put the other way round, Basic Income (like Family Allowances today) would be a subsidy to employers, and a massive one at that.

Growth of voluntary unemployment
Employers, however, would not welcome the scheme because it would completely upset the wages system, under which people are forced by economic necessity to sell their skills to an employer. If people received an adequate income from the government, what would be the incentive to find employment?

This problem would be particularly acute for paid work at and immediately above the Basic Income level. The manifesto used a peculiar argument in this respect, stating that

The "unemployment trap" is created by the withdrawal of benefit when a person finds work. Perhaps more than any other measure the Basic Income Scheme would stimulate employment, since it would always be financially worthwhile to work.

It is not clear exactly what this means, but it appears to be accepting the common slur that many of the unemployed don't work because it's not financially worth their while; in other words, that much unemployment is voluntary. But this is clearly far from being the case. Most employment today arises because, for the time being, it is unprofitable for employers to invest in full production. The jobs are simply not there, and merely providing a financial incentive to work won't make them reappear.

As a matter of fact, and contrary to what the manifesto suggest, the Basic Income Scheme would probably lead to a massive increase in voluntary unemployment (not that there's necessarily anything wrong with that, but that's another question). Imagine a situation where people went to work for an employer only when they needed extra money to pay for some special item or, say, a visit to friends or relatives abroad. Imagine too what would happen to discipline at work if people were not there through economic necessity: they would (quite rightly) refuse to be bossed around or do unpleasant jobs. Profit motivated industry just couldn't function under such circumstances.

So, once again, the result of introducing the Basic Income Scheme would be an economic crisis. (Of course the whole scheme might be a subtle way of destabilising the present economic system, but I think rather that its architects really imagine it to be feasible.)

What's the alternative?
Our purpose in criticising the Basic Income Scheme and showing it to be impracticable has not been to defend the existing prices-wages-profits system but rather to suggest that some other way will have to be found of guaranteeing people basic material security.

The socialist answer would be to allow people free access to the common store of wealth set aside for personal consumption, according to what they themselves judged to be their reasonable needs. Other needs would be satisfied on the same basis. Houses and flats would be rent-free, with heating, lighting and water supplied free of charge. Transport, communications, health care and education would be organised as free public services. There need be no admission charges to museums, parks, libraries and other places of entertainment and recreation.

Such free access would be a much more direct way of ensuring that people were freed from material insecurity than the impractical Basic Income Scheme proposed by the Green Party. It would also involve, as a corollary, the transformation of work. Instead of working for wages to produce profits for an employer, people will be able to co-operate to produce what they really needed.

In fact such direct production for use, replacing production for sale and the profit motive, is the only possible framework within which we can satisfy our needs in an ecologically acceptable way. For, with the end of production for sale will go also the pressure for blind economic growth generated by the competitive struggle for profits. If production were geared directly to supplying needs it would eventually tend to platform off at a level sufficient to provide for current needs and repairing and maintaing the existing stock of means of production.

Adam Buick

Basic Income: a dangerous reform (2008)

From the March 2008 issue of the Socialist Standard

The Green Party’s idea of paying everyone a minimum income whether or not they are working might seem attractive, but it won’t necessarily leave us better off.

In 1795 the magistrates of Speenhamland in Berkshire started a system under which farm labourers on poverty wages had their income supplemented from the poor-rates. The result was predictable. Farmers were encouraged to keep, and even to extend, paying low wages. The payment from the poor-rates became a wage subsidy to employers. Today, the Green Party wants to revive this under the name of “Citizen’s Income”, which they describe as “an automatic, unconditional payment sufficient to cover basic needs of every individual, working or not”.

This is more commonly called a “Basic Income”. Daniel Raventós, whose study (and advocacy) of the proposal has just been published by Pluto Press, goes into more detail:

“Basic Income is an income paid by the state to each full member or accredited resident of a society, regardless of whether or not he or she wishes to engage in paid employment, or is rich or poor or, in other words, independently of any other sources of income that person might have, and irrespective of cohabitation arrangements in the domestic sphere” (Basic Income: The Material Conditions of Freedom).

He lists various things in its favour: that it would abolish poverty, enable us to better balance our lives between voluntary, domestic and paid work, empower women, and “offer workers a resistance fund to maintain strikes that are presently difficult to sustain because of the salary cuts they involve”.

Maybe it would do some of these things, but two linked questions arise. Where’s the money going to come from, and how likely is it to be introduced in the form its advocates want?

Abolishing means-tested benefits such as income support (in Britain) and paying every citizen a state income equal to the official poverty line (of 60 percent of average after-tax income) wouldn’t be cheap. Raventós, basing himself on income tax returns in his native Catalonia, calculates that it could be done by means of a 50 percent flat-rate tax on all incomes. Others have suggested that it might be financed by a wealth tax or by a tax on pollution, but Raventós wants to show that his scheme could be financed merely by redistributing the money the state already collects and spends on family allowances, pensions and means-tested benefits, without any extra taxes. In other words: that the total amount of money paid by the state either as benefits or tax concessions would remain the same, merely distributed differently amongst workers. As we said of the 1943 Beveridge Report that laid the foundations of the post-war “Welfare State” in Britain: it would be “a reorganisation of poverty”.
Raventós lists various objections to the Basic Income scheme, basically that it would reduce the incentive to work, an argument he is able to refute; but he misses the main objection that, like the Speenhamland system, it would be a wage subsidy to employers. To understand this, we need to look at the economics of wage labour in some detail.

Labour market forces bring it about that the income of workers is more or less what they need to keep their working skills up to scratch and to raise a new generation of workers. At one time, in the early days of capitalism, workers’ incomes were made up exclusively of what their employer paid them. Since the introduction of pay-as-you-earn income tax and the “Welfare State” matters have become more complicated. The income of many workers is now made up not only of their take-home pay from their employers but also of various payments from the state, mainly family allowances but also tax credits for the worst paid.

If a basic state income of say, £200 a week (or £10,000 a year), was brought in, this would upset the balance: market forces would tend to bring about a new equilibrium, with those workers who currently get no extra income from the state (those without a dependant family) seeing their take-home pay from employers tend to fall by £10,000. Of course it wouldn’t be as simple as this since in many cases the extra state payment would be compensating for the abolition of family allowances, but there would in general be a strong downward pressure on wages and salaries.

That there would be a tendency for something like this to happen has been recognised by less naïve advocates of Basic Income than Raventós. C. M. A. Clark, who wrote a study of the effects of the introduction of a partial Basic Income scheme in Ireland (The Basic Income Guarantee: Ensuring Progress and Prosperity in the 21st Century, 2002), admitted this was a possibility. In a previous article in the American Journal of Economic Issues in June 1996 he and fellow author Catherine Kavanagh had gone into more detail. They described part of the “conservative case for a Basic Income” as follows:

“By partially separating income from work, the incentive of workers to fight against wage reductions is considerably reduced, thus making labour markets more flexible. This allows wages, and hence labor costs, to adjust more readily to changing economic conditions” (See Here).

And “the liberal argument against Basic Income” as being that:

“if a Basic Income policy is seen as a substitute for a full employment policy in the traditional Keynesian sense, then it is a major step backward and would harm all workers. The Basic Income would, in effect, subsidize employers, allowing them to lower wages . . .”.

Clark and Kavanagh conclude, rather over-optimistically:

“Whether a Basic Income policy would weaken or strengthen workers’ power in the labor market is a more difficult question to answer. It would depend on the context in which the Basic Income policy was instituted and the support workers already received from the state. The existence of a minimum wage, strong unions, and enforced pro-labor legislation might be essential to preventing the Basic Income from becoming a wage subsidization policy”.

Clark and Kavanagh are being over-optimistic because no union can be that strong and because no state could sustain “pro-labor legislation” for any length of time that adversely affected profits.
Unions do have some power, but it is limited to working with favourable labour market forces to get higher wages and better working conditions. When, however, labour market conditions are against them the most they can do is to slow down the worsening of wages and working conditions. If all workers got a basic income from the state of £5000, let alone £10,000, a year, this would change labour market conditions in favour of employers. In pay negotiations they would point to the state payment as evidence that they did not need to pay so much in wages or salaries to maintain their employees’ accustomed standard of living. The workers and their unions would realise this and the negotiations would be about what the reduction in wages and salaries should be. If the reduction was less than the Basic Income then the unions would be able to cry victory, but a reduction there would be. It is just inconceivable that a state payment to everybody in work would not adversely affect wages and salaries.

As to “pro-labor legislation”, this presumably means that the state should take the side of workers against employers. Many Labour and similar governments have come into office promising to benefit wage and salary earners, and all of them have left office without doing this; most in fact have done the opposite and have ended up restraining wages and cutting state benefits. Why? It is not because they were sell-outs or were not determined or resolute enough. It was because they were attempting the impossible: to make capitalism work in the interest of the wage and salary working class.

Capitalism runs on profits, derived from the unpaid labour of workers, and can only run as a profit-making and profit-accumulating system in the interest of those who live off profits, i.e., the capitalist class who own the means of production and employ others to operate them. Any government has to accept this and that, if it’s not to provoke an artificial economic crisis, it has to give priority to profit-making over “pro-labor” legislation. This is why Labour and similar governments have always failed.
In fact, insofar as Basic Income is seen as a “pro-labor” measure as it is by Raventós, then that is a reason why it is never likely to be introduced, at least not in the form that people like him want. As we saw, Raventós puts forward as an argument for Basic Income that it would “offer workers a resistance fund to maintain strikes that are presently difficult to sustain because of the salary cuts they involve”. But can anyone realistically imagine that any government would bring in a measure that would make striking easier for workers? Already, today, there are provisions to cut state benefits paid to strikers. No state is going to shoot itself in the foot by undermining in this way the profitability and so the competitiveness of enterprises operating from within its borders.

So, if a Basic Income scheme is ever introduced, it’s not likely to be more than some limited reform of the tax and benefits system. But even it were to be introduced in full it could turn out to be counter-productive for the working class by leading to an across-the-board decrease in wages.

Adam Buick