There was some speculation last year about the possibility of the Labour Party leader, Jeremy Corbyn, lending his support to the idea of basic universal income. Basic income (which is sometimes called “citizen’s income” or “universal income”) is the idea that absolute poverty can be alleviated by providing every member of a society with an unconditional subsistence income. Supporters of basic income argue that it would alleviate absolute poverty and would also motivate people to work because they would always better off, as work-related income would be additional to their subsistence income.
Jeremy Corbyn had stated during the leadership contest that he was interested in the idea of a “guaranteed social wage” but that he believed there were issues that needed to be worked through.
Richard Murphy is a highly esteemed economist at Tax Research UK and an advocate of basic income. He’s also the co-author of Financing the Social State (pdf), which recommends the implementation of basic income in the U.K. This policy paper was published in 2013 by the Centre for Labour and Social Studies. Grassroots supporters across the left are happy to see Richard Murphy is involved in drafting Corbyn’s economic policy.
John McDonnell, the shadow chancellor, has said that the Labour Party will consider universal basic income as a part of its new policy, during a recent talk at the London School of Economics. He said: “It’s an idea we want to look at. Child benefit was a form of basic income so it’s not something that I would rule out.”
At the very least, this indicates the idea of universal provision has regained some credence in the face of a longstanding and seemingly unchallengeable political norm of increasing means-testing and welfare conditionality, established by the Thatcher adminstration, and radically extended by the current government.
McDonnell also said that economists were “close to consensus” that the Conservative Party’s austerity policies had failed, highlighting a largely welcomed and clear opposition to rigid, neoliberal Osbornomics. It’s true that austerity was founded purely on ideology and traditional Conservative prejudices, it was a political decision taken in the context of better alternatives and more humane choices. The poorest citizens have been targeted for the largest proportion of austerity cuts, with disabled people carrying the financial largest burden. It’s worth remembering that after the global recession of 2007, we were in economic recovery by the last quarter of 2009, without any need for austerity.
Last month, an Early Day Motion (EDM) on the policy, tabled by Green Party MP Caroline Lucas, calls on the Government to commission research into the idea of universal basic income’s effects and examine its feasibility to replace the UK’s existing social security system, instead paying all citizens a flat, unconditional income, which would likely come in place of existing social security measures like means-tested benefits.
The motion, which raises the profile of the idea, says the policy “has the potential to offer genuine social security to all while boosting entrepreneurialism.”
But opponents of the basic income have raised concerns including work disincentives, lack of targeted support for those most in need, and the size of the political spending commitment required.
“The basic income offers genuine social security to everyone and sweeps away most of the bureaucracy of the current welfare system. Fundamentally it would allow people the freedom and flexibility to do more of what they want to do – as well as supporting them in the caring roles they might need – or choose – to do,” she said.
“A basic income would also protect people from rising insecurity in our increasingly ‘flexible’ labour market and help rebuild our crumbling welfare state. I also know from speaking to people in my own constituency that the stability of a basic income could be a real boost to freelancers and entrepreneurs who need support to experiment, learn and take risks, while keeping their heads above water.”
“It’s crucial that any shift towards this bold new policy protects and increases the income for the poorest and those who aren’t able to work. A universal payment for all must not undermine additional help for those who need it most.”
However, last year, the Citizen’s Income Trust (CIT), which has given advice to the Green Party and often cited by the Greens, has modelled the party’s scheme and discovered a major design flaw. It was revealed that that 35.15% of households would lose money, with many of the biggest losers among the poorest households. At the time, Malcolm Torry, director of the CIT, which is a small charitable research body, said: “I am not sure the Green party has yet taken on our new research or the need to retain a means-tested element. We have only just published the new work.”
The criticisms of the scheme, as well as doubts about costings, led the Greens to make a temporary tactical retreat on the issue, with the party’s leader, Natalie Bennett, saying detailed costings for the policy would not be available in the manifesto last March. The Greens had proposed a citizen’s income of around £72 to every adult in Britain regardless of wealth and existing income, which would cost the Treasury around £280bn.
One longstanding criticism of basic income is that it would provide payments to citizens that are already very wealthy, perpetuating social inequality, and wasting resources.
The CIT added that if the policy was applied without a means-tested component, then poorer households would end up receiving far less in state benefits than they would under the existing system.
In 2012, an affordability study done in the Republic of Ireland by Social Justice Ireland found that basic income would be affordable with a 45% income tax rate. This would lead to an improvement in income for the majority of the population.
At a time when the politically planned decline in state provision leaves us questioning how we may prepare for the future, state provision funded by taxation seems by far the most fair way of providing for social support in the long term, and is part of a philosophy that each person, community and society as a whole should care for all. Furthermore, as we have witnessed the biggest and most sustained drop in wages since the 1800s, the government’s assurances that “work is the only route from poverty” no longer carry weight and credibility. For many, work does not “pay.”
Collectivist values are under threat – the failure of “reformed” social security, which has in reality entailed ideologically-driven cuts to the poorest people’s lifeline income, leaves people marginalised, excluded from society, and increasingly, in absolute poverty, is clear evidence of this loss of the core principles of community cohesion, consensus and the post-war collectivist spirit. Collectivism is founded on the idea that everyone has equal worth, and that equality does not imply a lack of unique individuality, but an equal amount of freedom and equal opportunity to develop one’s own potential. Collectivists also tend to strongly favour inclusion and democratic decision-making.
One valid concern about raising people’s household wealth through citizen’s income is that it would encourage inflation. The price of services may rise. Rents may be hiked by private landlords, for example. After the introduction of child tax credits, many private childcare companies subsquently massively increased their prices, and it wasn’t unusual for some to demand payments for a full year, which included periods when childcare wasn’t required. An introduction of basic income must also, therefore, include a package of anti-inflationary measures (such as rent caps) or the value of the payment will soon be eroded, as basic costs for essentials and services rise.
One of the strongest arguments for basic income is that people would no longer be compelled to work in order to meet their basic needs. This means that employers would find it difficult to exploit workers, and would be pushed to offer decent wages, good terms and employment conditions in order to attract workers. People would have greater freedom to pursue meaningful, suitable and appropriate employment rather than having to take any job to avoid poverty and destitution.
However, opponents claim that the incentive to work would be destroyed because basic income is unconditional. Nonetheless it’s difficult to justify dehumanising policies that keep people financially desperate so that they take any job, regardless of its pay, security, terms and conditions. That ignores the fact that people have potential, skills and talents, and simply reduces working to a way of meeting only basic survival needs, which demotivates people and means that they are not willing participants in their working lives. Very wealthy people that inherited fortunes often continue to work, it’s a nonsense that keeping people close to starvation can “incentivise” them in any way at all, other than to fight for their survival. That reduces and regresses society, uncivilising us.
De-commodifying labor by decoupling work from income liberates people from the “tyranny of wage slavery” and leaves a space for innovation, creativitity and rebalances power relationships between wealthy, profit-motivated employers and employees.
There is little support for basic income from the Conservatives, as a means of redistributing income. Whilst a handful of right-wing advocates of basic income generally favour the minimisation or abolition of the public provision of welfare, some have cited basic income as a viable strategy to reduce the amount of bureaucratic administration that is prevalent in many contemporary welfare systems.
Yet we have seen an unprecedented increase in a dark, unaccountable bureacracy this past five years, with private companies such as Atos, Maximus, and the likes of A4E and other private welfare-for-work providers marking the increased conditionality of welfare support – for both out of work support, and soon, for support paid to those in low paid and part-time work. Conservative inclination has been towards substantially raising the (increasingly privatised and for profit) administrative costs of welfare, whilst at the same time radically reducing the lifeline benefits for people needing support for meeting basic needs.
Conservatives may well raise the “something for nothing” objection to basic income, which is founded on the absurd idea that the only way people may contribute to society is through paid labor. Yet non-remunerated activities such as bringing up children, caring for elderly or sick and disabled relatives, supporting vulnerable neighbours, community work, volunteering for charities or investing time and effort in other voluntary endeavours such as contributions to the arts, sharing knowledge, education, writing, are all clearly valuable contributions to society, but these skills and activities have been steadily devalued, whilst providing an increasingly passive, exploitable, disposable (“flexible”) labor force for employers is seen by the Conservatives as somehow fulfiling the best of our potential.
The Conservatives would have us believe that any kind of social security system, which supports the casualties of free-markets, somehow creates those casualties, via vague pet theories of unverified mechanisms such as a “culture of dependency” and a “something for nothing” culture. But we know that the competitive, market choice-driven Tory policies create a few haves and many have-nots.
Even the most ardent neoliberalist would concede that whilst such a free-market system creates clear winners, it also invariably creates casualities – situations of insolvency for others. Inequality is a fundamental element of the meritocracy script that neoliberals so often pull from the top pockets of their bespoke suits. It’s the big contradiction in the smug, vehement meritocrat’s competitive individualism narrative.
This is why the welfare state came into being, after all – because when we allow such competitive economic dogmas to manifest, there are always winners and losers. It’s hardly “fair”, therefore, to leave the casualties of competition facing destitution and starvation, with a hefty, cruel and patronising barrage of calculated psychopolicical scapegoating, politically-directed cultural blamestorming, and a coercive, pathologising and punitive behaviourist approach to the casualities of inbuilt, systemic, inevitable and pre-designated sentences of economic exclusion and poverty.
For me, the most compelling argument for a basic income comes from Abraham Maslow, who was humanist psychologist. He proposed his classical theory of motivation and the hierarchical nature of human needs in 1943. Maslow said basically that the imperative to fulfil basic needs will become stronger the longer the duration that they are denied. For example, the longer a person goes without food, the more hungry and preoccupied with food they will become.
So, a person must satisfy lower level basic biological needs before progressing on to meet higher level personal growth needs. A pressing need would have to be satisfied before someone would give their attention to the next highest need. If a person has not managed to meet their basic physical needs, it’s highly unlikely that they will be motivated to fulfil higher level psychosocial ones.
Maslow’s theory has certainly been verified by the findings of the Minnesota semi-starvation Experiment, and other studies of the effects of food deprivation. Abraham Maslow’s humanist account of motivation also highlights the same connection between fundamental motives and immediate situational threats.
The experiment highlighted a striking sense of immediacy and fixation that arises when there are barriers to fulfiling basic physical needs – human motivation is frozen to meet survival needs, which take precedence over all other needs. This is observed and reflected in both the researcher’s and the subject’s accounts throughout the study. If a person is starving, the desire to obtain food will trump all other goals and dominate the person’s thought processes. This idea of cognitive priority is also clearly expressed in Maslow’s needs hierarchy.
In a nutshell, this means that if people can’t meet their basic survival needs, it is extremely unlikely that they will have either the capability or motivation to meet higher level psychosocial needs, including personal aspirations, social obligations and responsibilities, and the capacity to seek employment.
Keeping people in a state of desperation to meet their basic needs damages social cohesion, places limits on both individual’s and society’s developmental and progressive potential: it stifles personal and social growth. A basic income would liberate people from the all-consuming struggle to meet basic survival needs, allowing them to live meaningful lives. A basic income would rebalance citizen’s rights and responsibilities fairly. It would also ensure that the state does not abuse and exploit socially protected groups.
As a very wealthy first-world nation, ensuring that all citizens can meet their basic needs for food, fuel and shelter is the very least we ought to expect from a so-called democratic government.
Maslow’s classic hierarchy of human needs
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9 thoughts on “The Labour Party is considering a Universal Basic Income policy”
I fully agree with your article and funnily enough, Maslow was who I was thinking of when I first heard of Basic Income. One aspect I feel Basic Income would improve is time, or rather the amount of free time people have. People on low paid jobs have to work a lot of overtime just to make ends time. Having a basic income could decrease the need to work overtime. Therefore the time spend doing overtime could be spent on doing other things as you allude to in the article such as volunteering and concentrating on the arts. It could also help with allowing people to spend time away from work or only work part time for health reasons, as full time hours could have an adverse effect on their health (for example based on my own experience, working less hours would help with my depression and anxiety, but I can’t do that as financially it would impact me. But with a basic income, I would have the flexibility to do that).
Something I have just thought of as how this would affect people who are disabled and need aids and appliances to assist them in day to day living. Would they still be able to receive money for that, or would the basic income be the same for everyone regardless of circumstances?
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Yes, I only support the BI on condition that those who are too ill or disabled to work are fully supported and aren’t worse off. It couldn’t work if people can’t get by, and disabled people have more needs and a higher cost of living, as you say. It has to be about being more civilised, not less. Otherwise it simply becomes another smoke and mirrors ploy for dismantling social provision.
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I agree with the basic idea and its justifications … however you do go on a bit, I actually gave up reading around half-way 🙂
The basic idea wouldn’t suffice, the details matter a lot. One model, for example, would have left some of the poorest worse off.
Without attention to detail, we’d be like the tories: they do things without any justificiations or made up ones. Personally I prefer the democratic, accountable approach
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Reblogged this on wgrovedotnet and commented:
Whilst I am an avid follower of Richard Murphy, to adopt a policy such as Citizen’s Income unless we have resolved the other handicapping issues of the Tory austerity and lack of pursuance of Corporate welfare and other “managed” tax evasion/dodges is to introduce a toxic emotive issue. Only if we can raise the finances to empower employers(state investment) and require those with the broadest shoulders pay their equal share(as promised by Tories in May 2015)can we expect small and medium sized business to pay a higher minimum wage. Only when we have a moving economy (it is stagnant at the moment) will we have money in the exchequer.
This will be a disaster and I hope that John’s Mc’s serious economic advisers will close this idea down quickly. I seem to be in a minority of one on this issue. I actually asked John at his LSE lecture last week whether he was considering this – adding that I was dead against. I need to write a paper on this. But could do with some help from others. Basically my argument is that we need full employment, shorter working hours and increased revenues spent on necessary public goods and services, i.e. a social wage.
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I agree with all you say, (“we need full employment, shorter working hours and increased revenues spent on necessary public goods and services, i.e. a social wage.”) but for the reasons outlined, I can still see that a basic income could work with those conditions, too, and don’t see them as mutually exclusive at all. I was very skeptical previously regarding basic income, but providing it ensures that the poorest citizens are not worse off, and can meet their basic needs, and that vulnerable citizens are supported too, I think it’s worth exploring in addition with those things you outline
I would like to to see a system that gives people a choice between the present one and one where they receive a basic income if they wish, but if they do they then pay tax at a higher rate in the pound on every thing they earn. You could do this using the tax codes.
This would be much simpler as only those on low incomes would apply as those on high incomes would pay more in extra tax than they would receive in basic income iif they claimed it.