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Category: Economics

Could the Left and the Right be uniting over Universal Basic Income?

The idea of states giving every citizen a no-questions-asked income has been much discussed recently and it seems those advocating the concept are...

3 January 2018


The idea of states giving every citizen a no-questions-asked income has been much discussed recently and it seems those advocating the concept are coming from both capitalist and collectivist view points 

As the political spectrum appears ever more disparate is there a policy panacea that could make sense to both Left and Right? As incongruous as it sounds to orthodox politicians, the idea of simply giving people money for nothing is winning favour on both sides of the Left-Right divide.

The citizen’s income, more commonly referred to as a universal basic income (UBI), refers to the radical idea of an unconditional, regular cash transfer for every citizen. UBI has become a hot topic, gaining support in socialist and capitalist circles, as well as criticism. Most recently, Tory M.P. Nick Boles, described the idea that UBI and machines could replace work as “dangerous nonsense”, advocating a moral objection to UBI in his book Square Deal. However, the concept has already moved on from theory: Finland is currently rolling out a trial UBI programme, paying the unemployed unconditional monthly sums while the Scottish government has achieved some cross-party consensus and is planning trials in Glasgow, Edinburgh, Fife and North Ayrshire.

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The diverse origins of UBI were debated last year at a panel discussion entitled Citizen’s Income — Can It Work?, hosted at London’s Conway Hall by UK campaigning organisation Positive Money. Speaking on the roots of UBI, Barb Jacobson, co-ordinator at Basic Income UK cited 18th century political theorist Thomas Paine’s Agrarian Justice and English radical Thomas Spence’s response to it in The Rights of Infants as being enlightenment era prototypes of UBI. In these pamphlets Paine and Spence put forward ideas such as taxing land owners in order to make fixed payments to others and collective ownership of land, setting the foundation for progressive visions of a basic income.

In the modern world, UBI-like concepts have been championed both by the Green Party and the Labour Party as revolutionary ways to eradicate poverty but the concept of a state paying its citizens is by no means the preserve of the Left. Although known for their critiques of socialism, economists Friedrich von Hayek and Milton Friedman both proposed either UBI or a “negative income tax” (NIT) where income is “topped up” or “taken away” depending on the income threshold, meaning all citizens receive a minimum level of income, the poorest being paid by the state. Duncan McCann of the progressive New Economics Foundation highlights the subtle differences in an interview with Glint: “If you have an innate dislike of tax and redistribution you tend more towards the NIT as it is less baked in – while in UBI you give too much [to the rich] and claw back excesses with tax.”

Edinburgh council

Edinburgh council is looking at trialling at UBI programme

Those on the Right who favour UBI argue that it would remove the paternalism of the welfare state, and improve the efficiency of markets. Such a “money will set you free” approach runs in parallel with broader themes of transferring spending power from the state to the individual: “Would you prefer £100 of food or just £100?” Sam Bowman, executive director of the capital cheering Adam Smith Institute asks Glint. “Of course £100, because that includes the possibility of £100 worth of food, but also you have other options in case you value other things more. Basic Income just says it’s better that people should have more control over things like their own education [and] healthcare.”

However, Left-wing support for UBI follows a tradition of the collective body-politic being more closely integrated into the state, rather than individual whim, so how can this be supported by self-styled neo-liberals like Bowman?

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A 2016 article in the American conservative publication National Review posed such a dichotomy: the state would be the universal provider and so everyone would be tied to the welfare system at every income tier. However for Bowman this is less a hurdle than a re-interpretation of the status quo: “The state is already fused to the individual. Every single thing I do I end up making transfers of money to the government. Whether it’s through buying things, through council tax, through my income. So I don’t accept that it would be some massive change if the government was giving me money instead.”

Arguably then, UBI is not so radical; perhaps representing nothing more than a more efficient way for the state to keep people out of poverty. So why does it remain so politically controversial? “I think one of the great paradoxes of policy at the moment is how hostile people on the Right are to the idea of a basic income and how much people on the Left like it,” says Bowman. “It really tells us a lot about the importance of marketing in politics; it’s interesting to see how much people on the Left think it’s a Left-wing idea, and treat it like a Left-wing idea and people on the Right don’t treat it like a Right-wing idea.”

Old divisions new methods?

Unsurprisingly the prospect of a Right-wing “hijack” of a proposal that was based on progressive values such as social justice and universality is cause for Left-wing scepticism. McCann’s own think tank encases this conundrum. “One of the reasons a lot of people at the New Economics Foundation don’t subscribe to the universal basic income is that it doesn’t do anything to undermine the fundamental ownership or capital and power in the economy,” he says.

A capitalist plot to give scraps to the masses in the face of widening wealth inequality? Bowman neither denies nor fully objects to this accusation. “It looks to me like the capital share of income is set to rise and rise and rise because of the nature of tech, and that may be very distressing to people, even if they’re much richer — basic income is one way of keeping people happy without disrupting the systems we have for creating wealth.” This means Left-wing sceptics are correct in their reasoning for capitalist support for UBI, even though they’re critical of it. “To an extent [they are] right, a lot of what I want is to have a very deregulated market with a Basic Income as an insurance policy.” He expands the point by suggesting a debate on the necessity of the minimum wage would be a lot cleaner if everyone was financially secure.

That debate would certainly be more important believes McCann, who believes UBI would inform an advancement of the progressive agenda: “It could be a very useful stepping stone for those at the bottom in the sense that they would could meet with employers in a more equal fashion and then we could lead people to demand a more fundamental reform of the economic system that we live in.”

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Currently the difficulty in moving UBI theory into practice lies in what can be taken from the trials. A scheme addressing those living on benefits, such as in Finland, is a different proposal to those who are having their incomes supplemented, such as in Canada. One leans more towards universal poverty eradication, while the other leans towards supporting those suffering from “in-work poverty”, resembling something like a Negative Income Tax.

Helsinki Street

Finland’s experiment in Universal Basic Income will conclude at the end of 2018

Universal Basic Invoice

But perhaps the most obvious hurdle is affordability. Former Green Party leader Natalie Bennett was grilled during the 2015 election on insufficient costing for her UBI proposal, and Iran scaled down their universal household income grant to a third of the population when it became financially unsustainable. With such sensitive issues around funding, would we need a radical reform of how we create wealth and taxes to fund it?

McCann says the jury is still out on that question, owing to factors that are difficult to quantify: “Affordability is a tough question. If you just redirect the existing welfare budget on a small scale it works. But when you scale it up you have to consider more systematic effects, such as NHS savings from a healthier and less stressed population, or a reduced demand for government funding for nurseries, social care and elderly homes as people have more space to take care of their families. If you’re paying £20,000 to every UK citizen without taking that into account then [that’s a lot harder to] compute.”

If UBI does save the state money in the long run it could also save it from ideological logjams, says Bowman: “You don’t even need to have the debate about whether it’s right that the government taxes rich people and gives it to poor people, it’s separate to how we should spend money that government spends on people.” Excessive bureaucracy would also be cut he says: “I think a big argument for the basic income is that by giving people money we can start to roll back the regulations that are a much bigger imposition into people’s lives.”

Whether overtures to UBI are written for a more marketised society or a more collectivist one, both schools clearly recognise the economic and social value of a minimum standard of living. McCann finishes with a diplomatic stance, saying he is “hoping that we are entering a place where we can collaborate more in these projects and we won’t be stuck in our own bubbles – we can’t reject ideas from outside that. For me it’s at least progress if we carry on the way we are going, with the same constraints, but everyone is having their basic needs met.” As a statement that is hard to reject, however the temper of politics interprets UBI.

The top image shows The Wealth of the Nation by Seymour Fogel an interpretation of the theme of Social Security on display at the Voice of America headquarters in Washington

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