James Foley

James Foley

UBI: The limits of technocratic utopia

Reading Time: 14 minutes

UBI has arrived as a fashionable policy response to the crisis triggered by the pandemic. James Foley argues that as flagship response by socialists it makes little sense, and that we should return to a focus on class agency above technocratic fixes.

Most policy ideas struggle to raise even a shrug of public enthusiasm. Yet even before the virus, universal basic income (UBI) fervour had turned Andrew Yang, an unremarkable Silicon Valley entrepreneur with no prior political experience, into a semi-serious Democrat contender for the US presidency. Now, post-lockdown, versions of UBI have been floated by everyone from Donald Trump to Nicola Sturgeon. Affectionately known as the “capitalist road to communism”, UBI has emerged from the subcultural fringes into the post-Covid mainstream.

UBI has brought passion, even a certain fanaticism, into policy cultures accustomed to business as usual. But this zealousness also serves to narrow the scope for objective debate. Practical concerns, over costs or other matters, are often tersely dismissed as small-mindedness or penny-pinching. Supporters have a frustrating tendency to shift the definition of UBI depending on what argument they are making or who they are arguing with. On the other side, critiques of UBI are just as impatient and often amount to trolling. UBI’s merits are thus rarely discussed in a spirit of good faith.

My strongest concerns, about the left’s methodological commitment to class politics, will be explored in this essay. That said, I begin with no principled objection to unconditional government payments. Coronavirus, on top of a decade of capitalist decline, brings the very real prospect of mass unemployment, on an unprecedented scale. Some new social contract may be inevitable, if only as a stopgap. Even lifelong opponents of UBI might find themselves overwhelmed by the tide of events, because the left, broadly conceived, has few other proposals to confront mass redundancies. Without work on alternative ideas like a jobs guarantee, something named UBI may become the default leftist response to the coming depression, irrespective of its flaws.

But the growing sense that UBI is morally righteous regardless of facts or circumstances seems dangerously naive. For sections of the left, UBI is a matter of principle, even the matter of principle, and mere numbers are an afterthought. They attach little risk to this formulation, despite UBI’s historical roots on the libertarian think tank fringes. At times, the contemporary left could be reasonably accused of unreasonable scepticism; UBI, by contrast, inspires unreasonable credulity in otherwise reasonable people. It also inspires utopianism, meaning that practical proposals can be dismissed for failing to live up to the dream of endless free money for all. Yet the case equally rests on realism, the belief that, regardless of what one’s vision of UBI consists of, it is politically feasible in the here and now. UBI is a tangled web of principles and agendas, united by the seductions of smart thinking and the faith that policy can solve problems of distribution without wrenching conflict.


What is UBI?

What even is UBI? Unfortunately, there is no consistent answer to this question, which carries an important implication: nobody can be opposed to (or supportive of) all versions of it. The field is simply too crowded with variations. A recent report by New Economics Foundation (NEF) notes that most official definitions centre on unconditionality (everyone gets it) and basicness (it meets everyday needs – it is above the poverty line). However, “what’s been tested in practice…is almost infinitely varied, with cash paid at different levels and intervals, usually well below the poverty line and mainly to individuals selected because they are severely disadvantaged, with funds more often provided by charities, corporations and development agencies than by governments.” In other words, most are neither unconditional nor “basic” nor funded by taxpayers. They are temporary, largely charitable extensions of welfare for the extremely poor, arguably defying both the letter and the spirit of UBI as articulated in philosophical think pieces.

Such dilemmas recently resurfaced when the Spanish government announced that UBI would form part of their legislative programme. Initially, supporters could barely contain their delight: the doubters were wrong; UBI was very real and very feasible. But on closer inspection the Spanish government’s offer was neither universal nor a liveable income. Instead, it was a (laudable enough) extension of welfare payments to cover roughly 40 percent of the population. News outlets, having reported the dawn of UBI, issued sheepish corrections. Pro-UBI websites, rather furiously at times, issued statements denouncing the Spanish experiment’s limitations.

In such cases, UBI itself is a victim of its supporters’ idealism. It is telling that the most popular book on the topic, by Dutch philosopher Rutger Bregman, is titled Utopia for Realists. For the faithful, true UBI promises to overturn old dilemmas between grand futuristic visions and actually existing realities. True UBI is a “hack”, a shortcut past all the roadblocks that impede radical change. True UBI is certainly not the politically sullied business of emergency welfare payments. But such optimism has rarely been put to practical test, except in small-scale experiments which, as NEF demonstrated, rarely approach the splendour and simplicity demanded by the faithful.

As the potential for something badged as UBI draws closer, the realist-utopian coalition tends to divide into its constituent parts. Bregman, its most influential populariser, has recently admitted that true UBI is not feasible after all. “I have…become convinced that the practical concerns still loom too large,” he concedes. “A universal basic income means not only that millions of people would receive unconditional cash payments, but also that millions of people would have to cough up thousands more in taxes to fund it.” He thus moved to promoting a negative income tax, essentially means-tested, but more tapered than a standard welfare system, which he calls a “basic income guarantee”.

Crucially, Bregman’s grounds for this are political feasibility rather than affordability. This is an important concession, because the ideological case for UBI rests on claims that a fully universal benefit will automatically receive stronger public assent than a means-tested one. Bregman now suggests the opposite. To be clear, he is promoting a fairly standard redistribution programme because it is more politically saleable.


Economic Dilemmas

Even Bregman’s new proposal leaves unanswered questions of cost. How will a more expansive welfare system, far less full UBI, be funded? There is, of course, a long-established answer to that question. In what remains the clearest and the most famous programme for UBI, all means tested benefits are simply revoked and divided up across society as cash. Due to purportedly massive efficiency savings from eliminating bureaucracy, nobody will lose out, leaving aside the redundancy of society’s welfare administrators. Anecdotally, I find that supportive members of the public have been sold UBI on this basis: the mythology is central to its appeal as a policy “hack”. Bregman seems to imply that even his more saleable basic income guarantee will depend on some such mechanism. “For the left, a world without poverty…For the right, no more nanny state.”

Leftist supporters usually distance themselves from this version. They shudder in horror at the prospect of eliminating state pensions or housing benefits. “A few seconds’ thought will show this is a dystopian, even nightmarish vision of a state which has retreated from many of its core function and which, faced with its citizens’ needs, takes up the posture of a permanent shrug,” notes John Lanchester, himself a supporter of UBI. “It’s a deeply vindictive vision – Mad Max, minus the exciting chase scenes”.

Leftists thus suggest a mixture of more traditional income-generating policies: cutting down on tax avoidance, reductions in military spending, taxes on the rich, and the like. Some suggest starting with a very minimal (thus not transformative) amount, funded by a (regressive) VAT tax. Others back a large expansion of state spending without extra revenue, based on the (again, untested) precepts of modern monetary theory (MMT), which make the case for essentially unlimited government spending.

Something as radical as MMT would surely be necessary for any expansive vision of UBI. The International Labor Office suggests that “for most world regions, the average costs…are in the range from 20 to 30 per cent of GDP,” a phenomenal figure. As NEF have observed:

Gross costs can be reduced by paying smaller amounts to each individual or introducing conditions so that fewer people get paid, but these changes limit the potential of UBI to realise many of the aims of its supporters: for example, a small payment will not be sufficient and a conditional payment will not be universal; neither variation is likely to provide a route to radical transformation. Both are probably better understood in the context of progressive welfare reform rather than support for UBI.

To be clear, I do not deny room for greater fiscal deficits and I reject the more elaborate scare stories of runaway inflation or capital flight. But I also believe that capitalism is ultimately limited both structurally and by the preferences of key actors, such as financial markets. There are objective reasons why these forces are even more powerful today than in the era of post-War Keynesianism.

In any case, cutting into elite incomes or threatening the low deficits, low inflation model that serves financial markets will involve class struggle. And this runs up against one horn of UBI’s appeal: its bloodlessness, and thus its feasibility relative to other policies. While rival leftist proposals run aground of various neoliberal interest groups, UBI promises consensus. Without that element, we are forced to reckon with all the political economic complexities of class that imperil any old left-wing policy. UBI’s specific benefits shrivel. Socialists in the Marxist tradition may have no trouble with this, but UBI’s wider appeal is as a shortcut past these strategic problems.

If UBI is just another high tax redistribution programme, this raises issues not just of feasibility (minus class struggle) but also opportunity cost. Granted that extra resources are made available – is UBI necessarily the best use of them? Some true believers will always say yes, but many researchers would be much more sceptical. NEF’s research, based on economic modelling and the analysis of sixteen practical UBI trials, finds that, “There are more effective and sustainable ways of meeting people’s needs and fighting inequalities than just giving cash to everyone.”


UBI’s Broad Coalition

UBI’s appeal rests on a broad coalition that seems to offer a shortcut past traditional roadblocks to socialist policies, and, certainly, UBI inspires a fringe fanaticism in many subcultures. However, to be clear, activist and policy enthusiasm is not necessarily mirrored in public opinion. Indeed, on polling evidence, UBI is actually less popular than comparably radical policy programmes. In a post-Coronavirus poll, YouGov found that 51 percent were in some way supportive of UBI, which, in itself, is impressive, but this compares with 72 percent backing a jobs guarantee and 74 percent backing rent controls. Nor has UBI necessarily commanded vast support from political leaders or politicians, although Coronavirus may be changing that.

Historically, UBI’s apparent broadness and thus feasibility is a product of near-universal approval among technocrats and technological optimists. Unity in this sphere spans everyone from techno-capitalists like Peter Thiel to post-capitalists like Paul Mason. Leaving aside familiar names like Hayek and Friedman, enthusiasts include Charles Murray, the infamously racist sociologist behind the demonization of welfare programmes. “What I want is a grand compromise,” Murray says. “We on the right say: ‘We will give you huge government, in terms of the amount of money we spend. You give us small government, in terms of the ability of government to mess around with people’s lives’”. However, framed in the jargon of stigma reduction, UBI is equally synonymous with the liberal left, and thus many of critiques of UBI amount to trolling in defiance of perceived “woke” taboos.

While rent controls or jobs guarantees are inherently divisive in class terms, and involve interference in private business, the abstract idea of UBI avoids these pitfalls. Its strongest support, after all, comes from the ideological representatives of Silicon Valley. Yet what this adds in realism, it adds exponentially in risks. These forces are not known for their naivety: they will not “expropriate themselves out of the goodness of their heart”. Their motives are surely as much about class consciousness as techno-utopianism. A UBI with genuine transformative potential would thus meet the roadblock of sharp resistance, a resistance that its leftist supporters have mostly failed to factor in. As Gourevitch and Stanczyk note:

there remains the question of why the business class would ever agree to expropriate itself. After all, a genuinely liberating subsistence-level basic income is at bottom just a massive redistributive program, larger than anything that has ever been attempted, and ultimately to be paid for out of existing and potential business profits. What reason is there to think that, once its many virtues are made clear, the business class will be prepared to get on board with this idea?

Thus, UBI has seemingly built the oddest coalition of forces in political history. Neoliberals and tech gurus back it as the final ideological blow to collectivism; leftists believe it will end welfare stigma, boost the bargaining power of workers and maybe even accelerate progress to full communism. To put it mildly, there is only a narrow window to fulfil all of these visions. Somebody’s UBI must surely be betrayed – and badly. It would, of course, be narrowminded to dismiss UBI simply for its ideological infidelity: there are just as many neoliberals opposed to the idea. However, it would be equally foolish to ignore their motives, especially as their visions of UBI are often better organised and fully costed, while the left’s visions are most often philosophical think pieces.


UBI and Socialism

For all these practical concerns, my ultimate worry about UBI is the political methodology it implies. The versions promoted on the mainstream left suggest we can substitute raising class consciousness for a post-political legislative solution that will glide through parliaments via the assistance of academics and think tanks. To leftists jaded by decades of defeats, frustrated at the weak and indecisive leadership of socialist elders, a policy “hack” has understandable appeal. But the result is to reinforce wrongheaded conclusions about political economy. To act as if the middle and capitalist classes will have no agency in shaping UBI in their interests is the result of decades in which the left has become imprisoned in ethical categories of thought. Added to this is baleful influence of Silicon Valley ideology on today’s younger generation of leftists, leading to a mode of historical thinking that downplays struggle at the expense of technology and smart thinking.

Certainly, there are opposite problems on the left. Srnicek and Williams, two key socialist supporters of UBI, have rightly critiqued “folk politics”, the left’s debilitating obsession with small-scale, authentic, traditional and naturalistic struggles over big visions. Such preferences are a marked feature of post-Corbynite Labourists, who, confronted with the Coronavirus crisis, have earnestly sought out “real” communities, “authentic” voices, and so on, as a respite from political defeat. To be clear, I accept the critique that such sensibilities have little prospect of scaling up; worse, it can amount to a disavowal of political responsibility.

Yet, far from being opposites, it is common to find the same individuals simultaneously advocating folk politics and a UBI. This paradox should not surprise us. One asserts a preference for the diligent, moral purifying long game, the other for a shortcut, a “hack”; but both are products of frustration at losing the battle for cultural and political leadership. Both are products of disorientation after the collapse of left populist projects.

At the margins, one can find more nuanced, tactical positions on the socialist left. For thinkers led by the late Erik Olin Wright, UBI works to strengthen the bargaining position of workers, with the cushion of guaranteed income giving them the confidence to engage in protest against employers. “By increasing workers’ capacity to refuse employment,” says Wright, “basic income generates a much more egalitarian distribution of real freedom than ordinary capitalism, and this directly contributes to reducing inequalities in access to the means to live a flourishing life.” Wright even suggests that it could constitute an “unconditional strike fund”. However, this view is far from being universally shared in the labour movement. Certainly, the elimination of social programmes which forms part of traditional outlines of UBI could easily have the opposite effect.

Wright’s approach is by far the most intellectually serious case for UBI to emerge from the socialist left. It has the further benefit of framing UBI in terms of restoring working class agency, a not inconsiderable factor, since the left’s growing apathy on this front constitutes the core of its historical problems, and most UBI programmes are thus essentially indifferent to class, barring worthy but essentially moralistic considerations on poverty and welfare stigma. However, even Wright’s method has essentially bracketed “realist” questions of political economy and the material balance of forces. This leaves two questions unanswered. Firstly, of the various competing UBI coalitions, which is liable to prevail in practice? Secondly, is his expansive version of UBI economically feasible under capitalism? Is it a real utopia, achievable given all the strains and pressures of the system as it is, or simply a utopian thought experiment about life under a more technologically advanced socialism?

It should be remembered that many socialist visions of UBI are premised on the impossibility of working-class agency and on fatalism about prospects for intervention in the economy. In this context, UBI acts as a compensation for the inevitable onward march of automation. Such prognostication fared remarkably poorly during the last crisis: of all capitalism’s economic problems, the twin ailments of the 1970s, unemployment and inflation, did not overly trouble the system.

Admittedly, such problems, missing from the post-2008 politics, could easily return with a vengeance, even accounting for a rapid economic recovery from the lockdown. But there is a deeper issue here. The left’s tendency to write off class agency means that it often reappears in disruptive forms, leaving unresolvable predicaments for leftist strategy. Thus, the UK Labour Party has self-immolated over its preference for the status quo when faced with Brexit and Scottish independence, two momentous challenges to the democratic deficit. UBI, in this context, may reinforce the tendency to ignore the working class as a potential collective political subject, substituting instead a payoff, a new dole, in the manner that proved so disastrous for Labour. The type of agency implied by UBI is essentially apolitical, and, at worst, a form of passive, anomic, consumer individualism, as represented by the gamers who drove the Yang campaign.


Doubts Persist

We have considered the varying definitions of UBI, the limitations in practice, the economic and political constraints, the sharp divisions within the pro-UBI bloc, and the problem of class agency. Once these questions are factored in, even the strongest arguments for UBI are open to doubt.

The Left’s ethical case rests on eliminating the stigma attached to welfare applications. Yet the stigma of poverty takes many forms. If UBI replaces existing benefits with a yet more meagre dole, as neoliberals would demand, it could even exacerbate stigma, as poor families, denied housing and childcare benefits, become yet more dependent on food banks and other forms of charity. Some will see this as unrealistically gloomy, but economic forecasts suggest the possibility. Certainly, most estimates show that a UBI replacing existing benefits would be extraordinarily regressive: indeed, an IPPR economic model showed that it would substantially increase relative child poverty in Scotland. Moreover, NEF’s analysis shows that even the most expansive existing UBI experiments (e.g. Alaska) have made little or no impact on inequality.

A realistic UBI that does not draw blood from cuts elsewhere is likely to involve conditionality, as with the Spanish case or Bregman’s new proposal. At this stage, UBI is simply a fancy brand name for a more-encompassing, less-stigmatising benefits system, which nobody on the socialist left opposes. However, this has two consequences. At a stroke, it is liable to disband the motley ideological coalition and re-establish traditional left-right problems of redistribution. There is nothing necessarily wrong with that, but it means the post-political elegance of UBI has been lost, leaving old fashioned dilemmas of class politics for the left. Also missing is the much vaunted unconditionality that constitutes UBI’s core difference from rival proposals.

Proponents, citing the “redistribution paradox”, argue that, because the policy is universal, because middle class people gain too, political objections will fall away. While key supporters seem to be abandoning this point (see above), it remains strategically central to many UBI campaigns.

Yet the argument is not altogether simple. UBI is substantially different from, say, socialised medicine, which benefits upper income earners in numerous ways. Firstly, the NHS makes substantial efficiency savings over privatised models, helping not only middle-class users but also businesses who avoid hefty insurance premiums. Equally, by making it easy for the poor to visit a doctor, socialised medicine helps combat transmittable diseases. By contrast, UBI is more like a zero-sum game. While a motley coalition is possible in advance, ultimately, the money must be drawn from somewhere, give or take any modest efficiency savings from cutting public bureaucracy. Some social groups will lose out. If this falls on upper income earners, the transfers will be anything but hidden. They will be openly presented on pay packets and, naturally, in critical tabloid newspapers. Thus, while upper income earners, excepting privatised medical interests, have clear interests in the NHS and even universal education, matters are much fuzzier with cash transfers.

Of course, we should support much needed redistribution and start from the perspective of trying to achieve the maximum equality feasible under present conditions. UBI’s appeal to leftists over more standard models of redistribution is its universal acceptability, its capacity to leap over tricky questions of class interests that make our other proposals unacceptable in post-neoliberal societies. This depoliticized, technocratic aura rests on ambiguity about what UBI will mean in practice.

Leftist supporters seem to believe that, if the general principle is agreeable across the classes, benefits to the working class must follow. In a democratic society, voter preferences will ensure that society’s majority stamp their interests on the policy. But abstract voter preferences have little impact on the economic behaviour of governments. Public opinion has rarely been the barrier to leftist economic policies. For decades, public majorities in the UK and the US have opposed the broad drift of neoliberal policy, yet the policies continued uninterrupted, regardless of shifts in government, because the ruling classes have better organisation and more political agency. Added to this, sections of the working class, rightly or wrongly, will be sceptical about a “something for nothing” system, which explains the policy’s relatively weak support next to a job guarantee.

It is thus equally possible that the Left supports the principle of UBI in good faith, only to find itself betrayed. This, after all, has been the story of the past four decades.

If the emergence of something badged as UBI is inevitable, the socialist left should adopt a stance of measured, critical distance. There are no grounds for defending the brutal sanctions regimes and underlying poverty-shaming premises of existing means-testing regimes such as Universal Credit. However, the abstract principle of UBI is not a victory for the working class, far less the dawning of full luxury communism. At best, UBI will become a new terrain for standard, thorny and contested questions of distribution, questions that UBI’s most prominent supporters are ill-prepared for, having grounded their case in utopian optimism about policy and technology.

In purely policy terms, it is impossible to oppose UBI without knowing what it means. It is equally impossible to endorse it. But, given these uncertainties, we should at least distance ourselves from the political methodology that UBI implies for the left, insofar as it substitutes class agency for the cult of smart thinking.

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