Basic Income: A timely solution to the imminent welfare crisis?

Universal Basic Income, or Citizen’s Income, is the idea of guaranteed a monthly payment, paid equally to all citizens, what some are calling ‘money for free’ [1]. It is an idea which is steadily gaining traction, it is now Green Party policy [2], and has the backing of the SNP’s National Conference [3]. Basic Income is one policy which seems to most capture the spirit of unbridled optimism of the Yes Movement: a remedy for the ills of late stage capitalism and the economic challenges presented by continued automation. It is also seen as a commonsense solution to our current state of affairs, whereby too many people are overworked, many more are unemployed and vast swathes of society are not having even having their basic needs met. Inequality has sky-rocketed, work is no longer a route out of poverty and our social security system no longer provides a ‘safety net’ for those in need.

In this context, the idea of giving everyone a basic amount of money to live on is appealing. This appeal is demonstrated by the number of events bringing together supporters of universal basic income. In late 2016, the Royal Society of Arts supported public lectures in both Edinburgh and Glasgow, where proponent Professor Guy Standing spoke to hundreds of people about the benefits of Basic Income [4]. Tied into these meetings were discussions with Fife and Glasgow Councils about piloting such a venture [5]. Last week, Women in Scotland’s Economy, hosted Philippe Van Parijs, to present a paper at the second annual Ailsa McKay Lecture, entitled ‘Basic Income: A radical proposal for a free society and a sane economy’, and on Wednesday 24th May Basic Income will be examined from a feminist perspective at the Fika Café Glasgow.

Although we most often here a progressive case for a basic income, not everyone is so sure that free money as radical a solution as is generally assumed. On the 12th of May Glasgow’s Centre for Contemporary Arts, hosted an event entitled. ‘What’s Wrong with Free Money? A Critique of Demands for Universal Basic Income’ [6] which sought to challenge Left-wing support for this policy. In their article of the same name [7], Cristicuffs point out that basic income has been supported at different points in time by Conservatives, such as Richard Nixon, free market libertarians, as well as the progressive Left. Starting from the perspective that there must be something fishy about a policy that is supported by people with such widely divergent political views, they conclude that the policy is based on a fundamental misunderstanding of capitalism, and its need to create poverty. This argument is reminiscent of Leftist critiques of the creation of the Welfare State, which contend that social security merely acts to ameliorate capitalism, thus allowing its contradictions to continue, and ultimately does not solve the problem – which is capitalism itself. For some, a Basic Income is merely a way of maintaining poverty, rather than a means of ending it.

While there is wisdom in being skeptical of a policy which is supported by Left and Right, these discussions seem abstract in the face of the reality of our current failing social security system. Speaking with a welfare rights worker, who did not want to be named, there is a clear consensus, among those who work directly with claimants, that Universal Credit will prove to be an unmitigated disaster [8], that it is completely unworkable and destined to fail [9]. For those experiencing the failures of our current welfare system, Universal Credit is a crisis quietly unfolding and already the cause of immense suffering [10].

When faced with an unworkable welfare system, which appears beyond repair, an opportunity may be presented to establish something new. If, as some suggest, Universal Credit really is doomed, then something will need to take its place. Replacing the kafkaesque, cruel and complicated Universal Credit with the simplicity of a guaranteed income for everyone, could well become politically feasible, even desirable, right across the political spectrum. With a Government, unburdened with the legacy of creating Universal Credit, could Scotland now be the place where such a radical idea actually takes hold?

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[1] https://www.youtube.com/watch?list=PLAMn_8UEZ6_NWbbhwodrq47l5QigdgHsk&v=_EIGfzKvg5I
[2] https://www.theguardian.com/politics/2017/may/22/greens-to-unveil-plans-for-universal-basic-income-in-manifesto-launch
[3] http://www.independent.co.uk/news/uk/politics/universal-basic-income-snp-scotland-independent-conference-vote-a6931846.html
[4] http://basicincome.org/news/2016/11/scotland-fife-glasgow-investigate-basic-income-pilots/
[5] http://www.thenational.scot/news/14921161.Trial_for_a_basic_income_for_all_may_go_ahead_in_Scotland/
[6] http://www.cca-glasgow.com/programme/caught-learning–whats-wrong-with-free-money
[7] https://antinational.org/en/what-wrong-free-money/
[8] http://www.eveningtimes.co.uk/news/14880887.Universal_Credit_system_a__bad_joke___Holyrood_committee_told/
[9] http://www.newstatesman.com/politics/welfare/2014/01/five-reasons-universal-credit-will-fail-even-if-they-sort-out-it
[10] http://www.inverness-courier.co.uk/News/Life-on-universal-credit-no-food-and-relying-on-hand-outs-31032017.htm

Comments (16)

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  1. raddledoldtart says:

    One possible extra costing in any set up arrangements for UBI should be taken into account, the need for a rehabilitation program for redundant jobcentre staff, so they can learn how to behave as human beings again.

  2. Geacher says:

    Where will the money come from this?

    1. Kjell Magne Fagerbakke says:

      Fee and dividend may be a zero play economic mechanism that may provide a lot of money for UBI, and taxing CO2 is a Great beginning

    2. patrick says:

      Geacher

      Where will the money come from this? From the same pocket to build Nuclear Submarine, tanks, and other weapons useless nowadays. Don’t you?

  3. Muscleguy says:

    If only for greatly simplifying the benefit system it would be a good idea. When you add in the need to spread the benefits of automation to include those denied jobs as a result of it, the social cohesion benefit of everyone getting something and the end of vagrancy and of some forms of partner abuse then the case becomes overwhelming.

    It would also greatly increase the amount of money in circulation. One problem with quantitative easing was that the money disappeared into the banks. They did not increase small business lending, RBS destroyed some instead, and a lot of it simply paid down their debt or bolstered their security funds.

    With VAT etc and more people employed as a result of the increased economic activity that government coffers would soon swell too. Which is why we need independence and full fiscal control in order to capture the full benefits. With 10% of income tax we would get some benefit but not enough.

    BTW when I hit reply the Name and Email fields were filled by someone else’s name and email. Bella tech people you need to look at that urgently.

    1. Geacher says:

      I don’t see how introducing a *living wage* would increase the amount of people employed though…it would decrease in many cases the incentive to work. I’m afraid that: increased welfare>more money in circulation & spent>more tax raised>more jobs>”government coffers swell” is cod economics. Again, where would the funds come for this?

      1. Wul says:

        The would come from the same place as the benefits that are currently paid, i.e. Govt. tax receipts in the Treasury.

        There may not be a need for any increase in state spending because there would be large administrative savings in not having a complex, means tested welfare benefits system to maintain. (folk with a disability or other need for extra cash would still get it, but many benefits would be collapsed into the basic income)

        Money can be found by governments for anything that they see as a priority, its not that hard to do. As I understand it, we are talking about a fairly modest amount; £6-8K/year/

        1. Pratim says:

          UBI will work only if needs of life are not for profit i.e 1. Education 2.Food 3. Utilities 4. Transport 5.Health/Medical treatment
          If companies continue to produce for making profit, and not on cost basis, then UBI is destined to fail – as soon Govt will run out of money. With present form of capitalism, it’s really difficult to sustain UBI for long time.

        2. Mike McGeachy says:

          A modest amount…£6-8k per year…modest? How many people are on benefits in Scotland, 480,000? That equates to £2.4mill more on the benefit bill, just to encourage people not to work. Madness.

          1. Wul says:

            Remember that any money given to people in lower income brackets gets almost immediately re-circulated into the local economy.

            If you give someone a fiver and they spend it, the money hasn’t disappeared, its still there contributing to the economy.

            The danger is giving money to the rich. They hoard it or move it offshore where it truly does disappear and become a net loss to the economy.

  4. Steve says:

    How progressive UBI is depends mostly on the level at which it is set.

  5. Wul says:

    Thanks for this Liz,

    Would you be able to report back here on the discussion tonight from the feminist perspective? I’d be interested to hear about it. (UBI could maybe be a useful support to people in abusive relationships who are currently financially dependant on their abuser)

    PS: I echo the concerns about the “Reply” field on this web site. My replies do not show up, but eventually appear hours later. It makes for a disincentive to take part in the debate.

  6. Dougie Blackwood says:

    The cost of running the existing benefit system with its bureaucracy, duplication and ineptitude would be almost completely removed. Yes there would be a cost but with a little extra collected from the haves the end result would be cost neutral.

  7. Penny says:

    This proposal is essentially a “trust fund” for everyone! We see how that worked out for generations of trust fund wastrels in the UK; the history of the country is littered with the folly, foolishness and sheer stupidity of these idiots. What is missing from the discussion is not merely the small question of: where does wealth of the nation of trust fund citizens come from (A Smith raised the issue and K Marx answered it fully: from what the work of the population produces. ) and the important question of specie being: were does work fit into our ‘human’ natures. Income is a claim on output; no output, all those numbers in your bank account don’t translate into food, shelter and the rest. Who produces the food, the shelter and the rest? The proposition assumes a welfare state without a welfare bureaucracy and reveals how little it understands either.

  8. Joop Böhm says:

    It’s a shame that governments let people suffer. It is a matter of decency, of civilization to give people enough money for a careless living.

  9. Crubag says:

    My back of the envelope calculation was that to give everyone the minimum wage would cost the equivalent of the entire Scottish public sector budget.

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