Theme: Public Policy | Content Type: Digested Read

How Seriously Should We Take Universal Basic Income?

Simon Szreter


Adam Winger

| 7 mins read

Universal Basic Income (UBI), a government scheme making regular payments akin to a salary, has become a favourite of the radical centre of politics. In the last decade there have been pilots introducing UBI in the USA, Europe, India and Africa, and the policy has been lauded as a potential feature of the post-Covid era by UN Secretary-General António Guterres.

The core idea for UBI is simple and attractive: an unconditional monthly payment given to every citizen, forever. Its aim is to empower citizens to make choices unconstrained by the challenges of poverty and the compulsion to work long hours. Over the last century, this feature of UBI has, surprisingly, drawn vociferous support from across the political spectrum, including both the libertarian right and the freedom-embracing left.

Has UBI’s time now come? If so, how does it compare to a long history of similar-sounding and once popular proposals, such as a guaranteed income or a negative income tax? Fortunately, recent historical scholarship now enables us to think about UBI critically and in an informed way.

The rise and popularity of UBI

UBI first came to the attention of policy officials in London and Washington DC following the end of the First World War. Proposed by the British radical thinkers Dennis and Mable Milner in 1918, the concept of a ‘scheme for a state bonus’, akin to a UBI, inspired similar ‘social dividend’ and ‘social credit’ schemes to be actively considered throughout the interwar decades. However, it was the well-known libertarian Milton Friedman who brought UBI-type policies to wider public attention in 1962, through proposing the idea of a negative income tax in his widely read book Capitalism and Freedom.

It is not hard to see the attraction of UBI for liberal thinkers, including Friedman. As a social scheme, UBI seems to provide a neat solution to the awkward problem of winners and losers in free market economies that are also voting democracies. By providing a guaranteed income, societal issues such as poverty can be removed without dismantling capitalist markets or undermining democratic institutions. But why have left-wing intellectuals and policy advocates been prepared to promote UBI over the last three to four decades?

The answer is varied. For many twentieth-century left-wing thinkers and politicians, a key factor was the widespread disillusionment in the ability of communist states or Keynesian managed economies to provide paid employment and a secure livelihood for the many following the crises of the 1970s. For others, it was the ‘cybernation frenzy’, that predicted intelligent machines would displace workers, and the influential positioning of Michel Foucault, that humans’ social and psychological existence must be treated as distinct from their economic role, that saw negative income tax and UBI schemes become popular with the left.

More recently, concerns over the freedoms of the individual provided a common ground for thinkers of both the New Left and the New Right, each identifying the ‘state’ as a common enemy. Following the growth of Reagonmics and Thatcherism in the 1980s, those on the New Right saw the expensive welfare state as a distortion, ‘crowding out’ the allocative efficiencies of the free market. To the New Left the welfare state was increasingly viewed as a pacifier of the exploited and excluder of the marginal. UBI provided a way for both sides to argue for basic financial support of marginalised members of society without requiring them to give anything in return.

Criticisms of UBI and an alternative way forward

Today the impending climate crisis and concerns over the cost of living has seen UBI rapidly move up the agenda. The previous neo-liberal mantra that economic growth is a rising tide lifting all boats is no longer credible, especially when it appears to be quite literally submerging many poor, low-lying communities on previously dry land. However, UBI is not a panacea that can address the economic and climate-related issues we face.

Though UBI is widely considered a putative solution to poverty, it does little to redress the structural inequalities that cause poverty. This is because, at its heart, UBI is a cash transfer that perpetuates, rather than reduces, the powerful corporate and financial forces of inequality that have kept the poorest citizens disempowered, unable to reform the world’s capital systems, which continue to wreak havoc on the environment.

Importantly, adopting UBI as a national policy would be so expensive that its costs would displace a range of alternative resource-using policies that can redress absolute poverty while also reducing inequality. Rather than providing a universal income, Hilary Cooper and I instead argue in After the Virus (2021) for universal high quality public services as the key to empowering the poor. . To nurture such empowerment requires well-resourced education, health, housing and social services, fully staffed by respectful, highly-trained public servants, sensitive to the localities and persons they work and live with. With it comes the need to re-invigorate trade unions as a counterbalancing force and to place a much higher value in the labour market on the time and attention bestowed on creative and caring activities, redirecting the economy away from inequality-fuelling and environmentally damaging materialist consumerism.

The fundamental problem with UBI is its restricted focus on a cash transfer. Providing the poor with mere sufficiency stands in the way of addressing the powerful global, corporate, legal and financial forces of inequality keeping them poor. The plundering of the planet and of the poor are intimately related issues, both requiring a thoroughgoing focus on inequality, not just poverty. Behind this lies the issue of power. The poor are not only lacking in adequate weekly cash, they are disempowered.

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    Simon Szreter

    Simon Szreter is professor of history and public policy at the University of Cambridge, and a fellow of St John's College, Cambridge.

    Articles by Simon Szreter