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Socialist Project • E-Bulletin No. 1241
April 1, 2016

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Looking the Basic Income Gift Horse
in the Mouth

John Clarke

Both the Trudeau Liberals in Ottawa and the Wynne Government at Queen's Park in Toronto have been making noises of late on the subject of Basic Income. The last Ontario Budget, in fact, declared an intention to carry out a pilot project in a community still to be announced. While no clear details are yet available, it is very likely that we will soon be dealing with a practical initiative that we will have to respond to. We will have to consider how we view the possibility of the Liberals moving in the direction of a Basic Income system.

Let me tell you how Basic Income can achieve savings in other areas, such as healthcare and housing supports.

After decades of intensifying austerity and the erosion of systems of income support, with social assistance in Ontario now providing such wretchedly inadequate benefits that people are unable to feed themselves properly and retain their housing, the notion of a basic level of income that all are entitled to can't fail to generate a level of interest and raise some hopes. However, I am convinced that a good hard look in the mouth of this particular gift horse is well advised. What are the different notions of how a Basic Income system might work? Why are governments now considering it more seriously? What form would it be likely to take in the present economic and political context?

Looking Deeper Into the Gift Horse

As soon as you start to look into the question of Basic Income or, as it was often called in the past, Guaranteed Annual Income (GAI), you are immediately struck by the ease and enthusiasm with which free market thinkers and warriors of the neoliberal order have embraced the concept. From Milton Friedman to Charles Murray, the idea has found warm support on the political right. There are some clear and obvious reasons why this is so. Firstly, the very idea of a basic level of income is about establishing a floor and right wing proponents are confident they can locate it in the basement. A low and inadequate social minimum seems to them a great way of folding in existing, relatively adequate programs so as to, precisely, drive people into deeper poverty.

Another attraction offered by a low universal payment to those who take the side of the capitalists is the potential role it could play in depressing wages. In a recent contribution to the Union Research blog on the issue of Basic Income, Toby Sanger, draws attention to the Speenhamland System, a wage supplement arrangement put in place under the English Poor Laws between 1795-1834, and the role it played in driving down wages. Low wage paying employers could rely on the tax base to pay their workers wages and employers who had been paying higher wages were under an incentive to lower them in order to obtain the same benefit. In the present context of vastly expanding low wage precarious work, this danger is one that should not be underestimated.

The right wing Basic Income agenda, however, sets its sights on more than cutting benefit levels for people in poverty and depressing the wages of the lowest paid workers. Potentially, it is a means to gut social programs and to decimate the workforce that delivers them. The notion is to use the basic payment to advance the pace of privatization enormously. This kind of payment would replace public services and all who received it would become customers shopping for their social needs in the private market. Not just income support systems, but public housing, healthcare, education and transportation are threatened by the parsimonious universal payment envisaged by free market Basic Income.

A Different Kind of Basic Income?

Of course, the political right's version of a system of basic social payments is countered by those with more progressive concepts. There is a notion of Basic Income that stresses income adequacy, the need to advance full employment and the importance of preserving and strengthening a range of other elements of the social infrastructure. Without doubting the good intentions of advocates of a progressive Basic Income, it does need to be pointed out that the question of which version is to be adopted will not be decided by an impartial court of the common good but by present day governments. The people running the show on Parliament Hill and at Queen's Park have some history behind them when it comes to the implementation of measures of austerity and privatization. Their recent experience in bold new social policies that raise the living standards of working class people and increase their share of the social wealth is significantly less.

The austerity agenda, which we can trace back to the 1970s but which has intensified following the international crisis of 2008, has placed a central strategic importance on weakening the adequacy of income support programs. In addition to the massive undermining of federal unemployment insurance, provincial social assistance has been enormously weakened. People on Ontario Works (OW) and the Ontario Disability Support Program (ODSP) have seen the spending power of their income reduced by up to 60 per cent since the infamous Tory cuts of the mid 90s. Not only have income levels been driven down but rules and policies have been adopted that have made programs harder to access and more uncertain for those receiving them. The increased poverty and the climate of desperation that this attack has generated have been of central importance in ensuring an astounding growth of low wage, precarious employment in Ontario.

As the Liberals, political chameleons that they are, posture on the issue of Basic Income, we must avoid the trap of thinking that a rational and socially just approach is going to be won on the strength of good arguments. The idea that Basic Income is so sensible that everyone on both sides of the class divide will want to get behind it and make it work in the best interests of all is profoundly mistaken. If the concept is being advanced in Ontario by the very provincial government that has led the way in program reduction and austerity, it is not because they want to reverse the undermining of income support, the proliferation of precarious employment and the privatizing of public services but for the very opposite reason. They are looking with great interest at the possibility of using Basic Income as a stalking horse for their regressive social agenda and it will be the version that Bay Street has in mind that will win out over notions of progressive redistribution. As the announcement in the Ontario Budget acknowledges:

“The pilot would also test whether a basic income would provide a more efficient way of delivering income support, strengthen the attachment to the labour force, and achieve savings in other areas, such as healthcare and housing supports” [page 132].

This is a particularly bad time for the lamb to accept an invitation from the lion to lie down.

Social programs that have emerged in capitalist societies, especially those devoted to income support, have always been reluctant concessions. Their design, effectiveness and contradictions have reflected the prevailing economic and political situation and the balance of class forces in society. For decades, we have been fighting a largely defensive struggle to prevent the decimation of systems of social provision. We are not in a period when bold new redistributive programs are on the drawing board. The Liberals will be only too happy if we give up our fight to defend the systems that have been won in previous struggles and join them, as ‘stakeholders’ at the consultative round table. A decade of experience in maintaining an empty discussion of ‘poverty reduction’ has turned them into experts in such diversionary tactics. At the end of the process, however, if we allow them, they will put in place a version of Basic Income that will give Milton Friedman very little reason to turn over in his grave.

We are in a period when capitalism and the governments that represent its interests are increasing the rate of exploitation and reducing the level of social provision. That is not about to change and any redesign of income support systems we confront will be all about furthering, not limiting, levels of social inequality. This is a particularly bad time for the lamb to accept an invitation from the lion to lie down. Basic Income will be no panacea and the fight for income adequacy will continue, of necessity, to take the form of social mobilization against an agenda of austerity and regression. •

John Clarke is an organizer with the Ontario Coalition Against Poverty (OCAP).

Related Reading


#10 Anonymous 2016-05-25 22:54 EST
A basic income
A few more middle class ppl will need to be pinched perhaps before a basic income is implemented. More grassroots support is reqd. More articles in the MSM too.

#9 Anonymous 2016-04-18 14:12 EST
Basic income
Anything better to try than this horrible situation where people have to pay 75 per cent and more of their income just for housing.
Hungry children disability and OW it's all disaster, must be eliminated in Canada or we are just nothing but hypocrite Sociaty.

#8 Martin Mair - Active Unemployed Austria 2016-04-08 17:05 EST
Jean Jaques Rousseau
It seems that Jean Jaques Rousseau was more progressive than some so called leftifst, who still beliefe, that only man who are labouring have a right to live. As Jean Jaques Rousseau worte in 1754: "Beware of listening to this impostor; you are undone if you once forget that the fruits of the earth belong to us all, and the earth itself to nobody."

All the huge prductivity of machines (robots are still coming now and take over millions of jobs), infrastructure, natural ressources and so on, why should only the capitalists take all the profit, why not share with erverone?

The Second Part

UBI should be financed by taxes on the huge productivity of machine, infrastructure, natural goods, financial transactions, big private properties and so on and it will be a good way to overcome capitalism.

If no one has fear to die on hunger, the capitalists would find noone to work for them als wage labour slaves and we have time and energy to fight to take over the whole economy and do it in a democratic way, were everyone cant take part as equal brothers and sisters!

#7 Anonymous 2016-04-08 16:56 EST

A Universal Basic Income is absolutely neccessary, because more and more of the wealth of nations is due to the work of machines (robots) and not to human work, and also a lot of wealth comes from infrastructure and other ressources. As Jean Jaques Rousseau wrote in 1754: "Beware of listening to this impostor; you are undone if you once forget that the fruits of the earth belong to us all, and the earth itself to nobody."

The Second Part

So UBI should be financed by taxes on the productivity of machines, robots, infrastructure, mineral ressources, oil, financial transactions (tobin tax) big properties and so on.

#6 Daniel 2016-04-04 14:04 EST
Course of Action?
It seems one of the traditional leftist problems - all we do is say: "this is how it is, this is what's gonna happen, we told you so." The right are much more about action.

So, going back to Universal Basic Income - because that's how it's called nowadays, that's what's being sold, not GAI or Mincome (though not really Universal in the budgeted form) - what do we do to shape it our way?

Where do we write articles? Where do we find posters? What are our exact demands?

If the right are creating the wave we must modulate it. We must take action. We must take socialism from this comatose existence as academic sophism back to the mainstream working class.

#5 Radio Jammor 2016-04-02 12:19 EST
Basic Income
Your fears outlined here are reasonably put, but in essence the argument against a Basic Income is how it is implemented. It can be implemented badly and screw people over or it can be implemented as it should be and make society better.

The UK Government is already trying to sneak in what you fear with Universal Credit - and it's going badly. The movement for providing a basic income that benefits the majority (and what I once saw rather amusingly described as 'guillotine insurance for the rich') and society as a whole, should use the sneaky UK Government's Universal Credit issues as an example of how not to do it.

#4 Tony Green 2016-04-01 19:25 EST
Basic Income the sick Neolib version
Totally Unacceptable. Basic Income is only socially effective for the poor if govt support for health welfare eduction housing and full employment remains in place.

#3 Gerold 2016-04-01 18:15 EST
Guarenteed Annual Income
Two problems with Guaranteed Income (GI) or GIA or whatever it’s called:

a) ’Mincome’ was tried in Dauphin, Manitoba in the late 1970s. Yes, small scale experiments “seemed” successful as long as outside donors supported it. GI Is NOT SCALABLE. It cannot work on a large scale unless we find donors OUTSIDE the country to fund it. Who would that be? Martians, perhaps?

b) It adds another layer of government. Do you think existing bureaucracies will be scaled back? When has government ever diminished itself?

It’s a pie-in-the-sky dream spawned by economic ignoramuses.

#2 Kim 2016-04-01 06:32 EST
Basic Income
Thank you so much for this article. I am going to post this where ever I can.... I thought GAI was in trouble as soon as I heard it being changed to Basic Income. I was a Caseworker for Ontario Works, and it is the most soul destroying work possible. The system is so flawed.

#1 Joop Böhm 2016-04-01 06:22 EST
universal basic income
As Martin Luther King jr. declared in 1967: "I am now convinced that the simplest solution to poverty is to abolish it directly by a new widely discussed measure: the guaranteed income." That's simple and honest. And it works!

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