Ideas / Universal Basic Income
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ECONOMIC POLICY The Promise of a Universal Basic Income—and Its Limitations

Burgess COMMENTARY

Peter Burgess

ECONOMIC POLICY The Promise of a Universal Basic Income—and Its Limitations



The idea that a country should provide its citizens with an infusion of cash on a regular basis has cropped up repeatedly over the course of history, starting with Tudor England, when Sir Thomas More argued in Utopia that every person should receive a guaranteed income, and later gaining traction in the United States, in policies proposed by everyone from Martin Luther King Jr. to Milton Friedman.

Since the 2008 financial crisis, the idea has resurfaced, once again backed by a diverse group of figures. Part of this renewed interest stems from the economy itself: Even as jobs have rebounded from the depths of the recession, wages have remained paltry and the terms of employment are often highly precarious. Part of the interest also stems from the worries that people have about the rise of automation and artificial intelligence and their fear that things will only get worse for the American worker. But no matter what motivates this renewed interest in a guaranteed basic income, it’s a policy that’s been championed by everyone from former Service Employees International Union president Andy Stern to Facebook co-founder Chris Hughes.

Stern, in his 2016 book Raising the Floor, argues that a universal basic income is the only way to ensure economic stability and a chance at the American dream. The UBI wouldn’t just cover gaps in household budgets; it would revolutionize society, responding to automation and allowing everyone to choose both how much they work and what kind of work they do, be it in a factory or in a studio, making art. For his part, Hughes shares Stern’s paranoia about the robots coming for everyone’s job; in his new book, Fair Shot, Hughes argues that regular cash payments from the government would give people security in an economy made increasingly precarious by the technology that has made him and others like him rich.

Annie Lowrey’s Give People Money presents many of the same arguments, although unlike Stern and Hughes, Lowrey is able to do so without hyperventilating about how technology is going to destroy our economy. Keeping a closer eye on the economic implications of a UBI, she also offers a better-reasoned and more engaging account of why the policy should be implemented in the United States. Still, like Stern and Hughes, she does fall into the trap of vastly overselling what a guaranteed income can accomplish. Realistically, while it may be able to address the problems of desperate poverty and a culture of overwork, it stands little chance of transforming the economy itself.

Why should we consider a universal basic income? The most straightforward answer is that it can achieve a dramatic reduction in poverty. As demonstrated in a variety of different economies, both developed and developing, a UBI provides a critical infusion of cash that allows families to assuage the ills of impoverishment. To get a closer look at a UBI in action, Lowrey traveled to Kenya, where the theory is receiving its most robust experiment: GiveDirectly, a nonprofit that gathers money from donors, sends regular lump-sum payments to people living in some of the country’s villages. As GiveDirectly’s own research and that of others have found, the money doesn’t induce poor people to give up work; nor does it simply feed bad habits like drinking and smoking. Instead, people invest the income in themselves and their families. They can eat more. They can afford to take better care of their health. They and their children get more education.

But the most important consequence of giving cash, rather than stuff or services, is that it allows people to buy the specific things they lack. Lowrey describes seeing people’s houses in Kenya stuffed with Toms shoes that they didn’t need—each pair donated when someone buys a pair themselves—as well as soccer balls and nets that do little for a family that can’t buy enough food. “[C]ash is a proven aid intervention,” Lowrey notes, “whereas many of the goods and services provided by charities are not.” Plus it’s far cheaper and easier to disperse.

As a way to combat poverty, Lowrey contends that a UBI could work in the United States, too. It “could be a powerful tool to eliminate deprivation…. About 41 million Americans were living below the poverty line as of 2016,” she notes. “A $1,000-a-month grant would push many of them above it.”

Lowrey’s argument about poverty is persuasive. By giving every family in the United States $250 a month for each of its children, we would reduce child poverty by about 40 percent and effectively wipe out the most extreme cases. By giving every American about $3,000 a month, we would cut the official poverty rate in half and provide a higher standard of living for all—even for those who are not impoverished. In a review of the existing research on universal cash dispersals in developed countries—the Alaska Permanent Fund Dividend, for example, which gives every Alaskan resident a cut of the state’s oil profits—economist Ioana Marinescu found that universal basic incomes help people improve their nutrition, education, and health.

Lowrey argues that a UBI could even change how we view poverty and the poor themselves. She recounts visiting Maine, where she interviewed people who were unable to jump through the hoops to receive the government aid they so desperately needed. “We judge, marginalize, and shame the poor for their poverty—to the point that we make them provide urine samples, and want to force them to volunteer for health benefits,” she notes. “As such, we tolerate levels of poverty that are grotesque and entirely unique among developed nations.” But giving everyone, including the poor, unconditional cash could mean seeing poor people “as deserving for no other reason than their poverty—something that is not and has never been part of this country’s social contract.”

For Lowrey, an American UBI would then be about economic justice: It is a dividend from the government that gives each citizen a cut of the prosperity that we all help to generate. A universal basic income would represent a commitment to the idea that we all contribute to society and that, in one of the richest countries on earth, none of us should go without some means of subsistence. “UBI would be sharing the public wealth,” Lowrey argues, before pressing the point:

all Americans “make” and “take” over their lives, and no business or individual is truly self-made, no matter how hardworking and innovative…. It would acknowledge our interdependence as well as our independence.

As a way to slash poverty and more fairly distribute our country’s wealth, a universal basic income could prove a powerful tool. But the problem with Lowrey’s argument, as well as Hughes’s and Stern’s, is that they see it as a solution for many other of today’s economic problems. Hughes and Stern, for example, prescribe giving people cash because they believe it will also address the issue of automation in an era in which new forms of technology continue to replace human labor.

Lowrey is skeptical of this idea. “[D]espite the creation of AI and the concern about the future of human labor, the arguments for implementing a UBI to ward off technological unemployment felt hyperbolic—or at least premature—to me,” she writes. Nonetheless, she contends that a UBI could solve other economic problems. It could fill in the income holes for those who work at jobs with erratic hours (Uber drivers, for example, or retail workers), and it could also help prevent more people from being tossed into abject poverty by the sudden loss of their jobs during a recession. It could serve other purposes as well—as an initial investment in someone’s new business, or to pay for a move to a place with better work opportunities, or to enable a person to go back to school and get better credentials.

According to Lowrey, a UBI could also address one of the central problems in today’s precarious labor market: By allowing workers to walk away from a job, it could give them considerable leverage over their employers and provide them with more say in shaping the terms of their employment. A UBI, she argues, would

ameliorate the catastrophic loss of worker power…. With a basic income, workers could refuse to take a job with low pay. With a basic income, workers could demand better benefits. With a basic income, companies would have to compete to win workers over.

Here Lowrey encounters the same challenges as Hughes and Stern: None of the amounts being proposed by UBI supporters come close to giving workers the power to walk away from an exploitative job. Lowrey’s version of the UBI would consist of $1,000 a month for every citizen of the country, potentially paid for by a potpourri of policy options. (Hughes promotes an even stingier one: just $500 a month for a limited slice of the populace.) But $1,000 a month is clearly too little to live on in a society in which other necessities—rent, car payments, doctor’s visits—are not also provided by the state. Twelve thousand dollars a year wouldn’t lift even a single person without kids above the federal poverty level—an official number that doesn’t accurately measure what it takes to get by in this country. And that’s for a single person without children. If checks are only sent to adults, a single parent of two children, as Daniel Hemel has pointed out, would have to work at least 32 hours a week on top of a $1,000-per-month UBI just to clear the poverty line. A median two-parent, two-child family needs nearly $40,000 more a year above the poverty line to really make ends meet.

The current precariousness of work, therefore, would remain, since even with a basic income most Americans would still have to do a considerable amount of work and would be forced to accept the employment terms on offer. Few, if any, could walk away from a fast‑food job that refused to pay above minimum wage or offer humane scheduling and benefits if the fallback were a mere $1,000 a month. The possibility fades even more quickly for those with children and those who are the sole earners in their households. Without another source of income, a single mother couldn’t actually choose to focus on raising her children on $1,000 a month, let alone making art or starting a business or caring for her parents in their old age. A UBI might help to address questions of basic subsistence, but it’s the power to say no to crummy jobs that could truly transform the economy—and there, a universal basic income falls dramatically short.

Another policy solution that many contrast with the universal basic income might actually give workers such power: a federal jobs guarantee, or a program that would employ any willing person in a variety of societally necessary tasks in exchange for a decent living with decent benefits. If a good job were always on offer through the government, losing a job thanks to a recession or an unfair boss wouldn’t mean catastrophe. Workers wouldn’t have to put up with low pay and poor treatment; they could go get a public job instead. And for their part, private-sector employers would soon learn that they had to raise their standards to compete with good government jobs.

This is an idea that Stern, Hughes, and Lowrey all consider briefly and then dismiss. Despite his labor credentials, Stern worries about the complexity of such a program and the “huge government bureaucracy” it would require, to say nothing of the costs, whereas Hughes simply doesn’t trust the government to carry it out. “The arguments for a federal job guarantee require faith in government’s ability to connect people to jobs they want and need,” he writes. “It falls squarely in the tradition of government telling poor and middle-class people what to do with their lives.”

Likewise, Lowrey somewhat glibly dismisses the idea because it “might be a nightmare to run.” But a jobs guarantee is hardly any more utopian than a universal basic income. Part of the allure of the latter is how simple it would be for the government to just cut everyone a check. But that simplicity sacrifices larger benefits. Yes, a jobs guarantee would require far more bureaucracy and government involvement, and it could very well cost more. But in exchange, it would give Americans a lot more power over their working lives than a universal basic income would: a real choice between what’s on offer in the private sector and in the public-employment office, between the wages available at Walmart and a decently paying government job. Those who easily find themselves in careers with good benefits wouldn’t need to avail themselves of a federal jobs guarantee. But those stuck in minimum-wage work over which they have little control—or who can’t get even that thanks to barriers like felony records, racism, and disabilities—would have the luxury of options.

Of course, there are some things that a jobs guarantee can’t do. It wouldn’t value unpaid labor or question the American obsession with a job as proof of a person’s worth. Indeed, what sets the UBI apart is that it gives someone money without requiring that she leap into another job. A UBI can also help value the unpaid work that women disproportionately shoulder at home, serving as “a powerful rejection of the notion that people who toil without pay do not contribute,” Lowrey writes. She also argues that it can help attack racial income and wealth gaps by “ensuring that the minority would get what the majority got.” (This last claim is a bit more dubious: Since a UBI is distributed equally to everyone, it’s hard to see how it could minimize racial gaps in income and wealth.)

Yet despite the arguments over which policy—a universal basic income or a jobs guarantee—is better, the best approach would likely be to consider that American society needs a UBI (to eliminate extreme poverty and decouple a person’s worth from her work) and a jobs guarantee (to ensure that when she does work, it’s for decent pay and good benefits). Other policies could raise the quality of life for people in this country still further: for example, programs that make education, housing, health care, child care, and other life necessities—which often come with an exorbitant price tag—available to all.

A UBI may be moving from the realm of fringe utopian discourse to actual policy-making. Experiments in various types of universal cash benefits have appeared in Scotland, Finland, and the Netherlands; in Oakland and Stockton, California; and in Ontario, Canada. Hillary Clinton even considered campaigning on the promise of one. But a universal basic income isn’t a panacea for all of our social ills so much as one solution that must be coupled with others. It could be a powerful answer to some of our most intractable problems, but it won’t fix everything.
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Ken Loach Director Ken Loach at the premiere of his film I, Daniel Blake, London, UK, October 2016. (Joel Ryan / Invision / AP)

The British film director Ken Loach is one of the most celebrated cinematic voices of our time. A deeply engaged artist and one of a handful of directors to have been awarded the prestigious Palme d’Or twice, Loach’s work often takes up social and political themes. His oeuvre has spanned the Spanish civil war (Land and Freedom), the Los Angeles janitors’ strike (Bread and Roses), the occupation of Iraq (Route Irish), the Irish war of independence (The Wind That Shakes the Barley), and the coercive side of the welfare state (I, Daniel Blake). While the so-called “populist revolt” has triggered much debate on the role of economic inequalities and social exclusion, Ken Loach has been one of the greatest narrators of working-class consciousness and its transformations under neoliberalism.

In this conversation with Italian writer and political activist Lorenzo Marsili, Loach looks at the role of art in moments of political transformation, the evolution of the working class, the meaning of class struggle today, and the left’s failure to inspire radical change.

The interview was recorded during the shooting of DEMOS, a forthcoming documentary in which Lorenzo Marsili travels across Europe investigating transnational solidarity 10 years after the financial crisis.

Lorenzo Marsili: The debate on the role of art in political change has a long history. Today we are clearly going through a moment of great geopolitical transformation and global disorientation. What would be your vision of the role that creativity can play in such a moment?

Ken Loach: In general I think that in art you only have the responsibility to tell the truth. Any sentence that begins “Art should…” is wrong because it relies upon the imagination or perception of the people writing or painting or describing what are different roles that art can play. We need to assert the fundamental principles of ways in which people can live together. The role of writers, intellectuals, and artists is to look at these as the core principles. This is the long view of history, of struggle, so while you may have to make a tactical retreat, it is important to be aware that this is still a retreat, and the core principles are what we have to bear in mind. This is something that people who are not involved in day-to-day tactics can do.

LM: In your work the human element is not merely an illustration of the theory, but really incarnates and becomes the political. Would you agree that art has the power of showing that, ultimately, there are humans behind the great economic and political processes?

KL: Absolutely. Politics lives in people, ideas live in people, they live in the concrete struggles that people have. It also determines the choices we have—and the choices we have in turn determine the kinds of people we become. How families interact is not some abstract concept of mother, son, father, daughter; it has to do with economic circumstances, the work they do, the time they can spend with each other. Economics and politics are related with the context in which people live their lives, but the details of those lives are very human, often very funny or very sad and in general full of contradiction and complexity. For the writers I have worked with and for me, the relationship between the personal comedy of daily life and the economic context in which that life happens has always been very significant.

LM: So there’s a dialectical relationship between how economic change transforms human behavior, and human behavior, especially through collective action, transforms economic relations.

KL: Take a worker. His or her family is functioning or trying to function, but individually they have no strength because they have no power. They are simply a creature of that situation. But I do think that the sense of collective strength is something very important. This is where it gets difficult. It is not easy to tell a story where collective strength is immediately apparent. On the other hand, it is often crude and silly to finish every film with a fist in the air and a militant call to action. This is a constant dilemma; how do you tell the story of a working class family, tragically destroyed by economic and political circumstances, and don’t leave people in despair?

LM: Something that I find hopeful even in a bleak movie such as I, Daniel Blake is that we see the coercive state apparatus, but we also see the resilience of a certain human solidarity: The poor help each other out, and people stop and clap when Daniel Blake writes a scathing graffiti outside of the job center. It suggests that we haven’t been completely transformed into homo economicus; that there is still resistance towards the commodification of all life.

KL: Yes, this is something that middle-class commentators don’t get: Workers…take the piss even if they’re laughing. In the trenches there is a bitter comedy, and this is where we see resistance, even in the darkest places. But in particular, we’ve had this rise of food banks, where charity food is provided [and] you see the two public faces of our society. In I, Daniel Blake, when the woman is handing out the parcel of food to a woman who has nothing, she doesn’t say, “Here’s your charitable food”; instead she says, “Can I help you with your shopping?” On the one hand you have that generosity, and on the other is the state, which behaves in the most consciously cruel way possible, knowing that it is driving people to hunger. Capitalist society is caught in this schizophrenic situation and it is depending on us to organize the solidarity.

LM: It does often seem that traditional economic alienation has morphed into an alienation towards the state. Do you think this is at the heart of phenomena such as the rise of nationalism, of xenophobia, even Brexit? Beyond the scapegoating of migrants, there is perhaps also this sense that “there is nobody that stands up for me.”

KL: Yes, I do think that the mood that the right-wing populism really indicates is a failure of the left…in a similar manner as in the 1920s and 1930s. The right-wing parties enter the way with a very simple answer: The problem is your neighbor, your neighbor is a different color, your neighbor is cooking food that smells different, your neighbor is taking your job, your neighbor is in your house. The danger is that it’s backed by the mass press, tolerated and promoted by broadcasters like the BBC, that, for instance, gave Nigel Farage and his company all the airtime they wanted.

LM: The focus of your work has always been on working class solidarity. You’ve lived through the transition from post-war social capitalism to the arrival of neoliberalism. How have you seen class solidarity transforming over this period?

KL: The biggest thing has been the reduction in the power of trade unions. In the 1950s and 1960s they became strong because people were working in social organizations like factories, mines, or docks and at that point it was easier to organize trade unions. But those old industries died. Nowadays, people work in a much more fragmented way. We are strongest when we can stop production, but if we’re not organized at the point of production, we are definitely weaker. The problem is that the production is now so fragmented and with globalization our working class now is in the Far East or in Latin America.

LM: Deliveroo or Foodora gig workers on a bicycle might not even consider themselves to be workers.

KL: Yes, or they have franchises, or they are so-called “self-employed.” It’s a huge issue. It’s an issue of organization for the working class.

LM: Do you think the concept of class still makes sense? Many people would not consider themselves to be working class even though they’re poor and sometimes definitely feel miserable.

KL: I believe class is fundamental. It just changes shape as the demands of capital for a different kind of labor force change. But it’s still the labor force. And it’s still being exploited and it’s still providing surplus value even more intensely than before. More important, if we don’t understand class struggle, we don’t understand anything.

LM: It’s one of the great challenges today: restarting the struggle among a fragmented population that doesn’t conceive of itself as part of a group.

KL: It’s a challenge for our understanding. It was very funny, I was recently talking to some very nice people in Japan who were writing an article and I was insisting on the necessity of understanding class and of conflict. A very nice woman told me, “We’re going to show your film to the Japanese government officials,” and I said, “Well, why?” and she said, “Well, to get them to change their mind,” and I replied, “But that’s the point I just made! They will not change their mind, they are committed to defend the interests of the ruling class and they’re not to be persuaded, they’re to be removed!”

It’s a very hard point to get across when the idea of making the system work is so deeply embedded. That’s one of the terrible legacies of social democracy that we’ve got to fight.

LM: It’s an effective form of social control, when your subjects believe they can talk to you and that you will take their concerns into account.

KL: This is why we need to revive the whole idea of transitional demands. We have to make demands that are absolutely reasonable based on the interests of the working class.

LM: I want to bring this to a close, but I notice you once ran a campaign for the European Parliament.

KL: I’d forgotten that.

LM: It’s interesting to me how Europe was never really debated very much here in the UK. Suddenly, after Brexit, everybody is talking about the European Union and it’s become the most talked-about issue after football. Do you feel there is still hope of constructing a transnational democracy or is it simply too late?

KL: I really don’t know the answer. But I do think that international solidarity is clearly important. Can it be organized within Europe? I don’t know. The structure of the European Union is indeed so difficult, it is hard to see how we introduce the change without starting all over again. Obviously, every change has to be endorsed by every government and we all know how difficult the practicality of that process is. Clearly, we need a different Europe based on different principles: on common ownership, planning, equalizing economies, sustainability, and generally working toward equality.

But we simply can’t do that while big corporations are prioritized, while profit is prioritized, and while the legal system prioritizes profit. Effecting that change is beyond my pay grade. Yanis Varoufakis assures me it can be done. I’m sure he’s right. I trust him, but I don’t know how.
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