Basic income, despite its appeal, cuts against class struggle and lets capitalists off the hook, argues John Clarke

Following in the footsteps of a sizable number of their international counterparts, the Welsh government has launched a pilot project to study the possibilities of basic income. As it unfolds, ‘more than 500 people leaving care in Wales will be offered £1600 each month (before tax) for two years to support them as they make the transition to adult life.’

Those behind this pilot ‘hope the financial stability will give people the opportunity to make positive life choices as they leave care and provide a more solid foundation from which to build their adult lives.’ That all young people in such a situation should be provided with meaningful financial support shouldn’t be in question but there is an expectation that this initiative might provide ‘robust data about the wider effects of a basic income (or a universal basic income) in Wales.’ 

That the pilot could be a step towards a complete reworking of the social benefits system is confirmed by a recent vote in the Senedd calling for it ‘to be extended to workers employed in heavy industries.’ The politicians behind this initiative were strongly motivated by the notion that a basic income system might benefit workers being displaced, as industries are forced to transition to zero carbon approaches. Though the vote is non-binding, social services minister Jane Hutt, said ‘that it was “in line” with the Labour adminstration.’

False promises

The idea of a system of income support that is more adequate and secure than at present has an obvious appeal, especially at a time of great economic uncertainty and in the midst of a punishing cost of living crisis. Existing benefit programmes are unquestionably wretched and they have been taken to even lower levels by more than a decade of intense austerity.

Despite this harsh reality, however, there are good reasons to question whether a system of basic income would actually provide the advantages that are claimed for it. Some organisations on the front lines of struggles against poverty and austerity, such as Disabled People Against Cuts (DPAC) in the UK and the Ontario Coalition Against Poverty, that I was an organiser with for many years, have taken the position that basic income offers false promises and poses considerable dangers.

I would argue against the expectations raised by the Welsh experiment with basic income on three bases. First of all, these pilot projects, of which there have been many, all suffer from the same very obvious deficiency. A small number of people in poverty are provided with an increased level of income and, very predictably, this improves their lives somewhat. The real question of how a basic income would work, if it was adopted as the normal income support system by a major political jurisdiction, simply isn’t addressed by test runs conducted on such a scale.

The second reason why basic income offers a false promise lies in the unwarranted assumption that it would somehow be automatically more adequate than existing systems. In a capitalist society, the job market rests on economic coercion and, if workers or potential workers have an alternative source of income that meets their needs, their bargaining power is massively increased. For that reason, social benefit levels are set high enough to control social unrest but great care is taken to ensure that they are not adequate enough to discourage people from taking low paid jobs.

The post-war Attlee government is renowned for laying the foundations of the welfare state in Britain and the renowned William Beveridge provided the ‘blueprint’ for this. However, even that social policy reformer took care to stress that ‘The state in organising security should not stifle incentive, opportunity, responsibility.’ Today, we are living at a time when many of the reforms associated with the post-war years are under sustained attack and considerable damage has been done to them. During the neoliberal decades, benefit systems have been slashed so as to push job seekers into the low wage sector. Disabled people have not been spared in this regard and measures like the work capability assessment have been used to force them to join the scramble for the worst jobs.

In this context, major improvements in the system of income support would run counter to the needs and objectives of employers and governments. Such gains could only be achieved by united working-class action that forced the hand of those in power. The notion that there is a social policy redesign that can get around the problem is quite mistaken. If basic income were introduced, the same forces would apply the same pressures as are directed against present benefit systems. There is no magic quality about basic income that would make it immune from these pressures and ensure that it met peoples’ needs. It would be as vulnerable a target for the austerity agenda as any other measure of social provision.

Thirdly, however, there are aspects of basic income that make it a dangerous proposal for the left to put on the table. In Ontario, where I live, a Liberal provincial government ran a basic income pilot until it was cancelled by in incoming Tory regime in 2018. The hard right Pierre Poilievre, who is almost certain to become the new Conservative federal leader in September, wrote an article at the time, in which he criticised his Ontario counterparts for rejecting basic income. He pointed out that it was an idea embraced by his hero, Milton Friedman.

Very simply, the appeal that basic income holds for the political right is that it represents a major extension of the cash benefit in areas of social provision. Most people who would receive it would be those working for low wages. As such, it represents a subsidy to the most exploitative employers that provides for the needs of their employees out of the taxes paid by other workers. As such, it cuts across efforts to improve workers’ rights or increase minimum wages.

At the same time, in a political climate of austerity and privatisation, the danger of this extended cash benefit is that it will be used to replace public services that are already under severe attack. The right-wing political scientist, Charles Murray, has promoted basic income on just these grounds, insisting that it would replace, rather than augment, other forms of social provision.

Fight back

In arguing against the false promises of basic income, I’m very far from advocating despondent passivity. This is a time when a major fight back is getting underway. When Mick Lynch of the RMT says that “The working class is back. We refused to be meek. We refuse to be humble. And we refuse to be poor anymore,” he is expressing a sentiment that is being put into effect by working-class people internationally. If, however, the response to the cost-of-living crisis must be to strike for wage gains that can compensate for the inflationary surge, there is also a great need to address the wretched poverty that people on social benefits are thrown into.

The situation facing working class people at the moment is one in which inflation is out of control, even as conditions of economic downturn develop. The threat of recession is, of course, intensified by the class war response of the central bankers who are driving up interest rates and unemployment levels. In such a situation, the fight to win wage increases will be greatly undermined if those who must turn to social benefits are left in an impoverished and desperate situation. The need for a united struggle that leaves no one behind is a pressing one.

The great problem with basic income is that, precisely when there is such an acute need for a major fight back, it seeks a non-existent detour around the class struggle. If precarious, low-wage work has proliferated, rather than fight for decent wages and workers’ rights, it lets the exploiters keep their profits and asks only for wage tops up, paid for out of the taxes of other workers. In its response to technological displacement, instead of fighting for reduced hours of work at no loss of pay, it again lets the capitalists off the hook.

The Welsh pilot project is only the latest in a series of efforts to legitimise the concept of basic income and it is unlikely to be the last. As a progressive remedy to the effects of a capitalist system in crisis, it fails and offers only false hopes. The version of basic income that Milton Freidman advocated and that his present day co-thinkers look to is, however, a very dangerous possibility. Whether we confront it as a progressive dream or a neoliberal reality, basic income is an approach we should emphatically reject.