A practical, socialist alternative to Universal Basic Income?

By David Klemperer /  @dmk1793

What is Labour’s big idea? Despite our bold manifesto at the last election, this is still a question we struggle to answer. We’ve made it clear that we stand for a fairer way of doing things (serving the many, not the few), but beyond reversing the worst excesses of austerity and Thatcherism, what does this actually mean? With left-wing attitudes on the rise, we need radical proposals to give them concrete form.

Perhaps the most talked about potential ‘big idea’ for the left is Universal Basic Income (UBI), the policy of providing every citizen with a large unconditional cash benefit. In the past few years, it has attracted advocates across the Labour party, from John McDonnell on the left, to Jonathan Reynolds on the right. Open Labour’s own Jade Azim called for it back in 2016, while Ed Miliband made it the subject of the first episode of his new ideas podcast.

Undoubtedly, it is an attractive proposition. Not only is it a direct means of addressing poverty, but in an age when technological change threatens to make employment scarcer and more precarious, providing everyone with a guaranteed source of income would tackle the key emerging problem of insecurity. Many advocates also present it as a way to simplify the welfare state, replacing complex bureaucratic systems with a single payment.

But as a pragmatist and as a socialist, I am unconvinced.

For a start, there is the issue of cost. Based on estimates from the Resolution Foundation, providing a ‘full’ UBI, one that covered all basic needs, would cost over £500 billion per year. Even the more limited scheme put forward by the Fabian society, based on providing a flat-rate credit of £60 per week to every adult, would cost £150 billion. It is hard to see how a Labour government, not least one burdened with the costs of Brexit, would be able to afford quite so much extra spending alongside its other priorities.

Perhaps more worrying though are the ideological assumptions that lie behind the idea. For all that UBI is gaining traction on the socialist left, its most fervent advocates have always been found on the libertarian right. This is no coincidence, since Milton Friedman originally conceived of the policy as a way to dismantle the welfare state. If we’ve provided a basic income to everyone, the logic would run, why do we need state education, pensions, or an NHS?

Fundamentally, UBI rests on an individualistic conception of social welfare. Rather than building collective institutions to help those in need, and to insure ourselves against risks we all face, it reduces our societal obligations to a single cash grant. It is unsurprising that tech billionaires are so interested: it’s the welfare policy that best fits with their world view of ‘disruptive’ individualism – a convenient means to salve their consciences and buy off discontent in the hyper-capitalist techno-state they dream of building.

And in practice, it doesn’t seem to be very progressive in distributional terms. This shouldn’t be surprising: its universal nature means that it is by definition not targeted towards those most in need. Analysis of the Basic Income welfare scheme proposed by the Green Party in 2015 found that it would leave many of the poorest families more than 10% worse off!

Given these concerns, it was with great excitement that I read the Institute for Global Prosperity’s alternative proposal. In a new report published by UCL, Henrietta Moore, Jonathan Portes, Andrew Percy, and Howard Reed call for the creation of ‘Universal Basic Services’ (UBS).

The authors rightly argue current trends of low productivity, low wage growth, and increasing automation look set to create an economy marked by high inequality, high unemployment, and low job security. As a policy response, they propose to expand public services into the key areas of housing, transport, food, and information. Specifically, their plan includes building a large stock of new social housing to be offered at zero rent, providing free meals to families suffering food insecurity, making all local bus services free, and covering the cost of internet for everyone. Together, these measures would constitute the expanded vision of the welfare state that they call Universal Basic Services. While the provision of food and housing would augment our existing services to give people real security, free transport and internet would also ensure widespread opportunities for economic, social, and democratic participation.

To me, this plan represents a practical, socialist alternative to UBI – addressing the same issues of insecurity in a technological era, but in a more realistic and collectivist manner.

For a start, it is more readily achievable. The estimated price tag of £42 billion is no trifle, but a far less daunting sum than the cost of any UBI plan. At the same time, it uses these resources more efficiently. By spending money directly on services, rather than cash benefits, economies of scale mean we provide more value to citizens. And since services are disproportionately used by those in need, UBS is also more distributionally progressive than a Basic Income.

Most importantly though, and in contrast to UBI, the plan for Universal Basic Services is based on a clearly socialist approach. Rather than subverting the logic of the welfare state, the plan for UBS upgrades the it to cover new areas. Where UBI gives citizens money to use within the market economy, UBS takes basic goods out of the market system all together – a far more transformative move.

UBS may not be perfect, and it is certainly no panacea. But it does present a radical yet achievable ‘big idea’ for us on the left. Turning food, housing, transport, and internet into basic rights we can all enjoy – this is the kind of concrete, bold, socialist vision that Labour should embrace.

© 2017 Open Labour