The Highest Sustainable Basic Income

2.1 A Radical Suggestion

1. Real freedom is the freedom to do whatever one might want to do.  People like Hayek argue against this concept of freedom because once we leave behind their more narrow account of freedom, they think we end up equating wealth with freedom.  This suggests that real freedom requires us to leximin people’s purchasing power, subject to respecting everyone’s formal freedom.  Parijs says, “Put bluntly, our ideal requires us to raise the lowest incomes as much as is compatible with a ban on forced labour” (33).

2. Real freedom is not just about choosing between sets of goods; it is the freedom to choose between different lives.  This distinction does not deprive income of its importance, but it does make it crucial that the income be unconditional.

3. If we are serious about real freedom for all, then we must pursue the highest possible unconditional basic income consistent with security and self-ownership.  This is a radical suggestion in contrast with both right-libertarian’s narrow definition of freedom and the social-democratic concern with consumption.  The concern for consuming as one might wish is more narrow than the ability to live as one might wish.

4. Both “scientific” and “utopian” socialists can find something to like here, as it loosens the grip of wage labour upon people’s lives.  It can also be allied with recent “green” and “alternative” movements, who are so concerned with self-realization.  Parijs says, “Real-libertarians can side with the old critics of alienation or the new advocates of alternative lifestyles, but only to the extent that their demands require no perfectionistic premiss, no superiority claim on behalf of one particular conception of the good life.  if it is true that societies such as ours are heavily biased the other way, this extent can be very large.”  (Parijs 1997, 34)

5. Basic incomes have appeared throughout the twentieth century, but they were conditional in various ways.  He will argue for an unconditional basic income.  “Unconditional” has four aspects.  An unconditional income is granted 1) even if one is not willing to work, 2) regardless of wealth or poverty, 3) whoever one lives with, and 4) no matter which part of the country one lives in.

2.2 Unconditionality and Real Freedom

6. The real libertarian seeks a formal-freedom-respecting basic income; is such a thing compatible with the four unconditionals?  So far, only the first unconditional has been met.

7. The second point, the absence of a means-test, is basically the choice between a basic income and a negative income tax.  Basic income has the advantage in terms of leximin real freedom for three reasons.  First, a negative income tax has an unavoidable time-lag between income-assessment and payment; to compete with a basic income, it would have to grant advance payments.  Second, under a negative income tax, one’s budget is partly made of a promised corrective transfer, rather than a basic income check which simply appears.  This is related to the “unemployment trap”—often, what deters people from taking a job is the liquidity gap and uncertainty that goes along with abandoning a safe and regular benefit as the result of taking a job they may be unable to keep.  Third, in an era of computerized transfers, the administrative costs of an unconditional basic income would be far lower than a negative income tax.

8. A basic income has to ignore residence, even though living alone might be more expensive than living in a group.  This is because, again, real libertarian seeks to leximin the freedom to do what one might wish to do, including moving out on one’s own again.

2.3 Sustainability

9. One problem is that we cannot give away society’s wealth today at the cost of economic collapse tomorrow.  

10.  Sustainability first means paying attention to incentives.  A basic income would still rely on labour time and labour effort, and to the extent that capital is privately owned, on the supply of savings and investment.  For any sort of socio-economic regime, we need to select the tax structure which durably generates the highest yield, and that the rates should be pitched at the peak of the “Laffer hyperplane,” the highest tax yield that can be durably generated under such a scheme.

11. So once deductions are made in the name of formal freedom, a higher tax yield means a higher basic income.  What is relevant to leximin real freedom is the per capita basic income, which is affected both by tax yield and the number of people between whom it is divided.

12. How high this highest sustainable level can be is affected by several features of a socio-economic regime.  One is potential productivity.  Once the basic income scheme is in place, it is important that productivity not shrink over time, especially intergenerationally.  He says,

Since some natural resources will inevitably be depleted, we will have to use a combination of technological progress and an accumulation of capital in order to prevent a fall in intergenerational productivity.  He says, “This amounts to a criterion of intergenerational justice of a familiar type, which only requires the next generation not to be worse off than the present one, not that it should be made better off as a result of the present generation’s efforts just as the present generation has been made better off … as a result of the efforts of previous ones. (39-40)

13. The hope is that there would be an expansion in productive power, leading to an increase in the size of the basic income.  This would be a by-product of the present generation’s self-interested activity and its concern with making sure enough is left for the next generation.  He says,

In this fight, it is easy to understand that a socio-economic regime which does not take precautions to slow down the depletion of society’s natural resources may find itself at a disadvantage compared to one which does.  In order to maintain its productive potential once the depletion of natural resources starts biting, it will have to induce a higher rate of accumulation than would otherwise be necessary, at the expense of a higher basic income.  Also, we can now see why a socio-economic regime that generates faster technical progress or faster accumulation, with a given rate of depletion of natural resources and a given level basic income, can hope to be at an advantage, or because the basic income of later generations is thereby allowed to be higher: the option for a leximin criterion makes such considerations irrelevant.  Rather, a superior propensity towards a net increase in productive potential at a given level of basic income makes room for a higher sustainable level of basic income from the present generation onwards.  (40)

14. Parijs thinks we can eventually develop this into a handy heuristic for judging different socio-economic regimes.

15. A basic income has to be granted entirely apart from people’s willingness to work or their other income (and this is the main difference between a UBI and a negative income tax).  It has to be pitched at the highest sustainable level, subject to the protection of everyone’s formal freedom.  Incentive and ecological effects have to be incorporated into this notion of sustainability.

16. While it is true that access to tools, health care, and things like public parks also enhance a person’s real freedom, the market economy generates a presumption in favour of cash.  But this presumption can be overturned: “Achieving the greatest possible real freedom for all may therefore require a significant fraction of the basic income to be given in kind” (31).

17. The idea of a periodic endowment might seem paternalistic—if we are trying to maximize freedom, then perhaps the cash should be provided all at once (perhaps upon attaining adulthood).  However, he does not think a society of free people could really countenance a group of destitute old people who have already spent their lifetime endowment.  There is no neat answer to this problem, but he thinks a monthly instalment is a suitable compromise.

18. There is a problem potentially arising from linking income and freedom.  If people have only their basic income, they will still choose different sets of goods, and so will be able to do different things—but Parijs is claiming they will all still have the same real freedom.  If the prices of sets of goods increases, then the content of the sets of goods will also increase or decrease: this seems to be a change in real freedom.

19. The solution is to say that it is not actually the size of real freedom that institutions should maximize: rather, it is the means or endowments which form the material substrate of real freedom that should be maximized.  If we are going to say that one endowment is larger than another, we need a measuring rod, and the most appropriate one “is provided by the competitive market prices that emerge from free choices on the basis of equal entitlements” (Parijs 1997, 32).  This reflects the opportunity-cost of each bundle.  

The Wage Don’t Fit (from Inventing the Future)

20. An essential demand for a post-work society is a universal basic income, a livable amount of money with no means testing.  This has been proposed several times since the 1940s, including by American presidential administrations like Nixon’s and Carter’s.  It has been seriously considered around the world, in Europe and South America.

21. The demand for a UBI “is subject to competing hegemonic forces.”  It would just as easily produce a libertarian dystopia as a post-work society, and so some equate the two poles.  Hence, three qualifications must be added to this demand.  First, it has to provide a sufficient amount to live on, second, it has to be universal  and third, it has to be a supplement rather than a replacement for the welfare state.

22. For the first point, if the UBI is too low, it will only be a government subsidy to businesses.  For the second point, it has to be genuinely universal, including both prisoners and immigrants—this would also avoid the stigmatization of welfare.  Finally, in order to avoid the conservative argument for a UBI, to avoid it being an excuse to turn social services into a private market, it cannot replace the welfare state.

Drawing upon moral arguments and empirical research, there are a vast number of reasons to support a UBI: reduced poverty, better public health and reduced health costs, fewer high school dropouts, reductions in petty crime, more time with family and friends, and less state bureaucracy.  Depending on how UBI is presented, it is capable of generating support from across the political spectrum—from libertarians, conservatives, anarchists, Marxists and feminists, among others.  The potency of the demand lies partly in this ambiguity, making it capable of mobilizing broad popular support. (Inventing the Future, 76-77)

23. There are four major points concerning a UBI.

24. First, the demand for a UBI is a political demand, not just an economic one.  It is not just about a redistribution from the rich to the poor, or an attempt to maintain economic growth.  From this reformist perspective, a UBI would be not much more than a progressive tax system.  The UBI’s real significance is the way it changes the balance of power between labour and capital.  The proletariat is defined by its separation from the means of production; they need to sell their labour to survive.  A UBI would change this; it “unbinds the coercive aspects of wage labour, partially decommodifies labour, and thus transforms the political relationship between labour and capital” (IF, 77).

25. Making work voluntary rather than coerced would have several consequences.  It would increase class power by reducing slack in the labour market.  When everyone is employed, the disciplinary threat of being fired loses its power.  It would also make strikes easier to organize.  People could manage their time more freely, and use it to build communities and engage in politics.  They continue, “Moreover, the demand for UBI combines the needs of the employed, the unemployed, the underemployed, migrant labour, temporary workers, students and the disabled.  It articulates a common interest between these groups and provides a populist orientation for them to mobilize towards” (IF, 77).

26. The second aspect of UBI is that it changes precarity and unemployment from states of insecurity to one of voluntary flexibility.  The push for flexible labour initially came from workers trying to deal with the tediousness of Fordist labour.  Marx praised flexible labour by implication when he said that communism “makes it possible for me to do one thing today and another tomorrow, to hunt in the morning, fish in the afternoon, rear cattle in the evening, criticize after dinner, just as I have a mind, without ever becoming hunter, fisherman, herdsman or critic.”  For us today, flexible labour is just one more part of precarity and insecurity.  The UBI could return the liberator force of flexibility.

27. Third, a UBI would allow us to rethink the value of certain jobs.  With a UBI, the pay for dirty or boring work would have to be increased, while rewarding work would be less well paid: “In other words, the nature of work would become a measure of its value, not merely its profitability” (IF, 78).

28. Fourth, a basic income is a feminist demand.  It would overcome the gendered division of labour, women would no longer be bound to the nuclear family, and alternate domestic arrangements could be experimented with.

The Right to Be Lazy

29. The main obstacle to a UBI is not a funding issue:

While the problem of funding UBI appears immense, most research in fact suggests that it would be relatively easy to finance through some combination of reducing duplicate programmes, raising taxes on the rich, inheritance taxes, consumption taxes, carbon taxes, cutting spending on the military, cutting industry and agriculture subsidies, and cracking down on tax-evasion. (79)

30. The most difficult problems are political and cultural.  The political problems would arise from the interests arrayed against it, and the cultural problem is the way work is engrained into our identities.  This chapter will deal with the cultural problem.

31. The main reason for the United States’ earlier attempts to implement UBI is that it conflicted with common notions about the work ethic of the poor and unemployed.  Instead of seeing unemployment as a structural problem, it was seen as a personal deficiency.

32. Overcoming the work ethic is a central part of any post-work society:

As we saw in Chapter 3, neoliberalism has established a set of incentives that compel us to act and identify ourselves as competitive subjects.  Orbiting around this subject is a constellation of images related to self-reliance and independence that necessarily conflict with the programme of a post-work society.  Our lives have become increasingly structured around competitive self-realization, and work has become the primary avenue for achieving this.  Work, no matter how degrading or low-paid or inconvenient, is deemed an ultimate good… The fact that so many people find it impossible to imagine a meaningful life outside of work demonstrates the extent to which the work ethic has infected our minds.  (79)

33. In job interviews, we all get the question “Why do you want this job,” and of course the most common answer is “Money,” but this remains a repressed truth.

34. The central ideological support for the work ethic is that remuneration has to be tied to suffering.  People must suffer before they can receive a reward:

The epithets thrown at homeless beggars, the demonization of those on the dole, the labyrinthine system of bureaucracy set up to receive benefits, the unpaid ‘job experience’ imposed on the unemployed, the sadistic penalization of those who are seen as getting something for free—all reveal the truth that for our societies, remuneration requires work and suffering. (80)

35. What we need is a counter-hegemonic approach to work.  First, UBI should be positioned as not only a possible solution, but a necessary solution to problems of employment.  Second, the work ethic is in conflict with the changing material basis of the economy – it is increasingly unable to generate enough jobs.  Third, there is already a widespread hatred of jobs to tap into.  Only 13 percent of people find their jobs fulfilling.

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