You can’t beat UBI without a real alternative

If there is anyone who is as opposed to universal basic income (UBI) as I am, it seems to be Andrew Jackson. His most recent polemic of this failed idea, Basic Income and the left: The political and economic problems details an exhaustive list of defects that are often overlooked or swept under the rug entirely by UBI’s supporters:

  • First, Jackson explains why UBI is very expensive when compared to its limited impact on poverty. Studies done in Canada show that a UBI, even one that pays an extremely low basic income still requires the state raise massive tax revenues over and above present social welfare spending. Even at this cost UBI will have only a negligible impact on poverty.
  • Second, UBI sets one group of workers against another: Think, for instance, the political impact of a program that sacrifices Social Security for income support for GenXers and Millennials, that sacrifices the income of the employed for the unemployed, that privileges native-born workers against migrants.
  • Third, UBI is inconsistent with the requirements of the capitalist mode of production. UBI allows workers to access the means of subsistence without selling their labor power. If, as UBIers argue, a UBI makes it possible for workers to avoid labor completely, and if profits are dependent on labor, how will this not have the effect of undermining capitalist production for profit?
  • Fourth, despite running into the logic of the capitalist mode of production, advocates for UBI want to leave that logic in place. Capitalists continue to own and manage the means of production and the vast majority of society remains dependent on the sale of their labor power to secure the means to life.
  • Fifth, the advocates for UBI appear not to take the role of the state as the embodiment of capitalist relations seriously. UBIers don’t grapple seriously with the role the state plays in propping up capitalist profits through its various fiscal and monetary policies.
  • Sixth, advocates for UBI ignore the likelihood that UBI, rather than adding to wages, will allow capitalists to cut wages proportionally. This is already apparent in the fact that Wal-Mart and other employers routinely pay so little wages their employees often qualify for public assistance. Are we to believe these employers will not take the opportunity offered by a UBI to add further pressure on the wages of their employees? Essentially, UBI could act as a subsidy for capitalist profits.
  • Seventh, UBI can serve as a means for the state to attack employment in the public sector and destroy public unions. UBI does away with a whole class of public employees who are now necessary to administer numerous social welfare programs. Once it is implemented, these employees will join their peers in the ranks of the reserve army of labor. Potentially, UBI can add to the problem of unemployment rather than address it.
  • Eighth, UBIers conveniently ignore that UBI requires legislation: This means the specific flavor of UBI that ultimately emerges from the Washington sausage factory will be determined by a political struggle between classes. How many people are ready to let the level of their benefits be determined by Paul Ryan, Mitch McConnell and Donald Trump. How many have faith the their interests will be looked after by Nancy Pelosi, Chuck Schumer or the next corporate Democrat that wins the Oval Office.
  • Ninth, UBI is seen by the Right as a way to abolish the social welfare state. Few people even realize that Obamacare was originally developed by the Heritage Foundation as a GOP alternative to single payer and first implemented by a Republican governor, Mitt Romney. Today, the Heritage Foundation’s Charles Murray is championing UBI as the 21st century alternative to the social welfare state. He is not doing this because he wants to raise benefits and improve the conditions of the working class.

I wasted a lot of space in this post going over Jackson’s argument in detail for a simple reason: Not for want of effort, but I think his argument on basic income misses the essential reason why basic income is a dead end for the working class. While the list of defects of UBI as Jackson shows are numerous, I don’t think these arguments will have any impact on the debate. People are looking for a way to cope with the crisis of the social welfare state. For many UBI advocates, these defects, while real, can be addressed down the road.

To give an analogy, while Obamacare wasn’t single payer, it keeps the issue of health insurance alive. The defects of Obamacare create hope among many progressives and radicals that Obamacare will be eventually replaced by single payer. Similarly, these same people support UBI because they see it not as the ultimate solution to the financial problems they experience, perhaps, but as a step along the path to ending poverty an inequality.

In other words, a negative critique of UBI like the one Jackson levels is necessary but not sufficient if we hope to avoid wasting many decades getting to a real solution to poverty and inequality. People who know UBI only offers decades more of useless debate on the problem of declining wages and growing inequality have the responsibility to offer an alternative, not simply criticize UBI.

And here is where Jackson’s effort collapses: Jackson offers no realistic alternative to UBI but the same old outdated programs of the collapsing social welfare state. Fearful that UBI will ultimately undermine the minimum wage, public full employment policies and targeted poverty programs, Jackson still offers nothing in place of the obviously politically vulnerable institutions during a time of deep crisis and the specter of automation, which waits in the wing.

If UBI is an expensive way to deal with the next generation of automation, the old social welfare state is equally as expensive. This means UBIers have on their side that the existing social welfare state is already dead and automation will make this clear in the coming years. It is not as though we have a choice — UBI or the old welfare state — the welfare state is dead. What will replace it?

If UBI is the only alternative to the failing welfare state, Jackson’s critique of UBI’s defects is the worst possible news for us; a catastrophe is coming and that catastrophe’s name is UBI.

Our only chance of breaking this cycle is putting an end to wage labor. As I have shown, with adequate planning, the complete end to wage labor can be achieved in as little as five years simply by reducing hours of labor the equivalent of one working day per year. In five years the working week would be zero and there would be no need for any wage labor at all. If Postone is correct, the material basis for the complete elimination of wage labor — a huge hidden block of unnecessary labor time — already exists in our economy. All we have to do to realize this superfluous labor time as free disposable time for everyone is prevent the state from extending the life of wage labor through schemes like UBI.

Communism simply progressively eliminates the worker’s dependence on the sale of her labor power. This elimination is made necessary by the fact that, with the development of the forces of production, so little labor is required from workers to produce commodities that conditioning consumption on wage labor becomes superfluous to the production of material wealth and an actual barrier to the production of material wealth.

UBI tries to address this problem by giving everyone money for basic necessities but it does this in such a way that the connection between consumption and production is still maintained for anything beyond sheer physical survival. The advocates for UBI think they can abolish the dependence of consumption on labor for necessities but keep it for “luxuries”. The worker should be able to afford chicken but not steak, a mass transit ticket but not a Lexus, an apartment but not a McMansion.

In other words, for the Right, UBI, like wages now, should be an instrument to reduce the consumption of the working class to a level consistent with capitalist profits.

Essentially, the distinction between UBI and labor hours reduction comes down to the proposition that wage labor is necessary and should be continued in a form consistent with capitalist profits versus the view that wage labor is unnecessary and must be abolished. Whether one side or the other in this debate admits it or not, their approach is determined by their opinion on whether wage labor is now necessary or not.

11 thoughts on “You can’t beat UBI without a real alternative”

  1. Great post! But you yourself point the way forward: people must be convinced that wage labor is no longer necessary. And you can’t tell them to just “go read Postone” because people are not going to read Postone. You need to show them some tangible, obvious signs that wage-labor is no longer necessary and explain “who will clean the sewers” and how they will feed their kids without wage labor.

    And I don’t think most people will buy the argument that, “People will naturally want to do whatever little bit of necessary labor is left to do without being forced to by pain of starvation and death.” Under capitalism, work sucks, and I imagine that most workers cannot truly step out of that frame of mind. If you tell them that they really can live without working, they’ll say to themselves, “Fine, I wouldn’t work another day in my life!” And what’s worse, they will imagine everyone else having the exact same response, and they’ll see a society without compulsory work as a pipedream.

    That’s why I think there need to be some minor, non-commodity incentives for work in the transitional period. They must not be things that bestow power differentials or things that could be traded around in a black market (as they would be in return for favors and other types of social power, being scarce things). They must be non-transferable luxury services, like an ocean cruise or a skydiving trip, rationed out by some democratic authority. Even if such incentives will end up playing a very minor to non-existent role in motivating people to work when the actual day comes…even if people really will feel differently about work when it is non-compulsory (which I believe as well), these incentives give us something we can tell people about in the meantime that sounds vaguely plausible, so that our plan doesn’t just amount to, “Proclaim full communism and pray that a few generous individuals show up to do the last little bit of necessary work.”

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    1. Good points. This is why I think income taxes on wages is a sleeper issue for communists. If you can show people that hours can be reduced and the income effect offset by elimination of all taxes on wage labor — this two sided measure being the first step — the working class might be more open to the idea.

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  2. Hey Jehu,

    Do I have this correct below, as far as it goes? I am trying to tease out in my own head why whether or not fiat/nominal/credit money can function as measure of value (which is what fiat currency cannot do, even though it can perform the other functions of money as far as I can tell) matters. You clearly draw theoretical and political conclusions from it about next steps (reduce the working day), what communism is (free time, that is, a world without labor or money, though based on some recent arguments, one has to investigate “labor” as a concept rather carefully, since if it equates with productive activity, then we will never be free of labor despite accelerationist fantasies, though we may well be free of commodified labor or servile forms of labor, that is, productive activity as form of domination), and why orthodox Marxism and the Left in general are functionally apologists for labor and/or money. I do disagree that they are “charlatans” or “liars”, but rather that they have ideological commitments, desires for political effectivity (the militancy/activist gig), and a material existence that strongly lends itself to labor ontologies, market socialism, etc., just like most of the rest of humanity when it comes to thinking this through, they don’t need to lie. they just need to be far more normal and critical than they would like to imagine themselves to be. And frankly, those of us who do not subscribe to such things appear to be crazy. Why wouldn’t we?

    Okay, sorry, too much preface.

    You argue that we have to ask ourselves: Can fiat currency replace commodity money in the measurement of value as Marx argues real money must do (otherwise it does not act as money and is merely an arbitrary symbol, which for Marx money simply cannot be reduced to)? Your answer is that it cannot, not because you are a “gold bug” and think everything would be okay if we went back to the gold standard and fiscal responsibility, but because the turn away from commodity money (gold or otherwise) to fiat currency is the monetary expression of the crisis of valorization of capital that finds one of its turning points in the 1971-3 conversion to inconvertible paper money, but which had intimations as early as the move to the Gold Dollar standard and Bretton Woods. Given the necessity of money to generalized commodity society (c.f. “The Commodity Nature of Money in Marx’s Theory”, Claus Germer, in Marx’s Theory of Money, Fred Moseley ed., Palgrave 2005 for a clear defense of the necessity of commodity money in Marx), whether or not one has a value-form notion of value, something akin to Postone and Kurz, or an old-fashioned embodied labor theory of value, a crisis of the money-form indicates a crisis in the essence of capital, not merely the surface. Or to put it another way, if the surface of money, the appearance of appearance, is in crisis, then the crisis is fundamental in nature.

    The move to IPM reflected a necessary move in relation to the crisis of valorization, in which the superfluity of labor power for the production of material wealth is coming into fatal contradiction with labor as the social form of wealth. It was going to be impossible for gold or any commodity money to represent the total claims to wealth because the amount of “fictitious capital” associated with financial transactions, military production, and other kinds of unproductive labor was increasingly far beyond the amount of value being generated by productive labor. As a result of this, pegging currencies to commodity money would directly express this crisis, but not merely express, it would exacerbate it by causing the total system of payments to become paralyzed.

    Thus, currencies had to “float”, that is, become dependent on the stability of states (initially and largely still the stability of the United States and hence the dollar because ot its central role as world currency thanks to its role after WWII and in the purchase of primary commodities, such as oil), who had the ability to print currency on demand to meet quantitative currency requirements, whereas they could not simply add to stocks of money commodity (gold in this case). [Why not? Why not just dig up more gold? Why not go to bimetallism? Why not platinum? Why not simply choose suitable commodity as money commodity? What made commodity money unable to accommodate the crisis of growing quantities f fictitious capital?]

    However, this relies on a fundamental irrationality even from the perspective of capital: currency ceases to function as a measure of value, which it had as commodity money, just as with a a 1lb metal weight. That is, a pound of metal that exists only as measure of other “things” with weight, not as a metal object as such, though if it were not also a thing with weight, it could not serve as an objective measure of weight. Same with commodity money. Fiat, not being related to a money commodity, which could be gold, silver, etc., it honestly matters less than that money be a commodity, has no capacity to function as “measure of value”, even as it can function as means of exchange and circulation.

    Why should this matter?

    Firstly, for everyday people it doesn’t matter.

    Secondly, capital seems to get along just fine as is. However, the argument would have to be that not only does this indicate a crisis, but also that it masks the crisis on one level and also exacerbates it on another.

    The masking matters insofar as not understanding the nature of the problem precludes grasping the actual situation of capital and the Left then simply expresses the reigning ideology of financialization and is as irrational as ‘economics”. This means that the Left cannot perform the only possible useful task it has, which is to grasp the conditions of the possibility of communism, instead of being defenders of shortening the working week and following on the undermining of money and value, they support 1) more jobs (arbeit mach frei) and 2) Universal Basic Income, which reinforces the validity of more money as solution. Rather, for Jehu the crisis of commodity money indicates that capital itself is bringing about the end of jobs and money and instead of opposing it, we should embrace it with radical conclusions, to the extent that it matters at all what the Left embraces.

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    1. Chris,

      I thank you for putting into words the ideas have I have fumbled to write for almost 20 years. I will post this to my blog for all to read. It should not go unnoticed.

      –Jehu

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    2. I think I can answer the question in this aside:

      > ” [Why not? Why not just dig up more gold? Why not go to bimetallism? Why not platinum? Why not simply choose suitable commodity as money commodity? What made commodity money unable to accommodate the crisis of growing quantities f fictitious capital?]”

      The development of production and the increase in average organic composition of capital had caused the value of all commodities, including money commodities, to enter free-fall.

      That meant that wages, which were tied to the value of some definite quantity of commodity money, were hyper-inflating.

      To see how this works, let’s start in 1967, as the crisis was just beginning to become obvious. Look at minimum wage as dollars, as gold, and as what the worker buys in order to live:

      25.4 hours @ minimum wage = $35.56
      25.4 hours @ minimum wage = ~1 oz. gold
      25.4 hours @ minimum wage = ~4.4 days subsistence

      But, the labor value of subsistence was, simultaneously, much lower. The labor content of those cans of beans, gas for the stove, etc. was just a fraction of the socially average equivalent of 25.4 hours. We know that for sure because a mere seven years later there is:

      25.4 hours @ minimum wage = $50.80
      25.4 hours @ minimum wage = ~0.28 oz. gold
      25.4 hours @ minimum wage = ~4.4 days subsistence

      The use values the worker gets (“4.4 days subsistence”) we’re holding constant in order to discover that, during that period (and since), freed from the gold peg, the labor value of wages plummeted. It took much less work to produce subsistence than 1967 wages reflected — hence the need for a massive adjustment.

      Where were the excessive wages of U.S. workers going? Some mix of increased consumption by workers, and super-profits for producers of retail wage goods.

      On the surface, that fall in the value content of commodities relative to U.S. wages manifested itself as the threat of a run on U.S. gold reserves. This reflected the fact that U.S. wages in gold-backed dollars were claims on far more labor value that was needed to produce the subsistence of U.S. workers.

      Digging up more gold (or using a different metal) to solve the immediate threat of a run on U.S. reserves would not have worked. In the long run such an increase in the money supply would have raised nominal prices of wages and of subsistence in equal proportion. E.g., we could have had 25.4 hours == ~2 oz. gold = ~4.4 days of substance. That would have left in place the skewed ratio between the labor value of wages and the much lower labor value of subsistence.

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      1. “Where were the excessive wages of U.S. workers going? Some mix of increased consumption by workers, and super-profits for producers of retail wage goods.

        On the surface, that fall in the value content of commodities relative to U.S. wages manifested itself as the threat of a run on U.S. gold reserves. This reflected the fact that U.S. wages in gold-backed dollars were claims on far more labor value that was needed to produce the subsistence of U.S. workers.”

        This is what needs more work for me to understand.

        If the excessive wages were going to consumption by workers, then isn’t that just an increase in Dept. 2 and even if the workers in the service industry are unable to make above a certain amount of $, don’t they in fact produce value to the degree that their labor actually produces commodities that reproduce labor power (e.g. fast food workers largely feed other bodies bearing potential labor power, therefore their labor is value productive, as is the value all the way back in the chain.) So that should not be a problem.

        i don’t know what super-profits for producers of retail wage goods has to do with it.

        Wouldn’t there also have to be an accounting for non-productive expenditures: military goods, luxury goods not pegged to the reproduction of labor power?

        Wouldn’t there have to be a rising organic composition of capital in which at first the relative proportion and then even the absolute mass of value was shrinking, so that the realization of a sufficient amount of value to make reproduction happen would be in jeopardy?

        Of course, actual capitals do not experience this in quite that way, since they experience it as a lack of total income (and probably a shrinking rate and maybe even mass of profit within that total income) to both reinvest and make a profit, with no reference to or idea of value.

        So how does moving to fiat seemingly hold off a crisis of valorization, of reproduction?

        i see how it would hold off a run on gold supplies from one country by others, and obviously as the dollar was stand-in world money since it could be exchanged for the commodity money standard. However, how does that tie to dropping gold as world money globally? Does there always have to be a currency that stands in as “as good as gold” for the commodity money itself to be stable? Wasn’t that in a sense the dilemma of money in the 18th and 19th centuries and why everything before the adoption of the pound sterling required transactions of actual quantities of gold or bonds and bills that would eventually be exchanged for standardized amounts of actual gold and silver to which many currencies were pegged?

        How does “The development of production and the increase in average organic composition of capital had caused the value of all commodities, including money commodities, to enter free-fall.” cause the use of commodity money itself to become non-viable?

        Or we might say, why does it matter to capital (systematically, not capital as some pseudo-Subject here) at a certain point if currencies are pegged to a money commodity or a “basket of goods”, i.e. a group of commodities presented as a virtual money commodity, even if you cannot redeem currency for this “basket” as you used to be able to do with gold.

        This is what I can’t quite wrap my head around. I mean i get it, and then it slips away, which makes me think we have not worked it all the way through (neither did Marx, btw, since the 4th volume of Capital should have dealt with the state, the world market and global money according to what I understand of his plans.)

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  3. Great post, alternatives to UBI absolutely must be explored.

    I believe that “Second, UBI sets one group of workers against another”, this is on. Consider Switzerland’s referendum on UBI. The people of Switzerland who are able to sell their labour time openly rejected subsidizing those who are unable to sell their labour time. I can’t see that any other way.

    One of the underlying issues with the Greek financial crisis was the funding of the pension plan. All of your great analysis of that can be equally applied to UBI, “Third, UBI is inconsistent with the requirements of the capitalist mode of production.”, so is the pension plan.

    Keep up the great work!

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