UBI: A Bad Idea For The Welfare State

In its admittedly noble striving for increased social justice, the political left has historically had several ideas that, one might dare claim, were not particularly well thought out. For example, the idea of ​the centrally planned economy, the nationalization of all the means of production, forced collectivization of agriculture and, I can add, the Swedish wage earner funds. One reason for these, sometimes monstrous, failures is a reluctance to take the implementation process into account and think through how the policies will actually work when they meet reality and with what consequences.

Many political programs from the left have been confined to general principles and the concrete implementation problems associated with them have been left out. This is not a good way to do politics because research can show that many well-meaning public policies, not least those designed to increase social justice, have failed miserably at the implementation stage. Good intentions have often been dashed because implementing the program has led to “bureaucratic nightmares” that have made them lose broad-based legitimacy (“the road to hell is paved with good intentions”…).

The latest such idea from the political left is the policy known as ​​unconditional universal basic income (UUBI). The concept is simple – every citizen will be entitled to a basic income that frees them from the necessity of having a paid job. The universality behind it is such that even those who work will receive this basic income. Those arguing for the UUBI point to a number of advantages. First, all means-tested programs for those who cannot support themselves through paid work can be abolished. Second, technological developments imply that the number of jobs will be significantly reduced, which means that many people will be unable to get paid work in future. Third, such a reform would force employers to create more acceptable and less demeaning types of work because people would not take jobs they consider unsatisfactory. Releasing people from the compulsion to have a paid job would, according to the proponents, also mean strengthening the voluntary/civil society sector and cultural life.

Lined up behind the idea are a large number of internationally renowned political philosophers, but also sections of many Green and left-wing political parties in Europe as well as a not insignificant number of internationally prominent politicians, such as Bernie Sanders and Jeremy Corbyn and, surprisingly, several high profile IT entrepreneurs in Silicon Valley. The proposals about the size of this unconditional universal basic income vary, but if it is going to be at all possible to live on this income, suggestions of around £800 per month have been put forward: what you can get from a student loan to pay for living expenses .

The UUBI is a very well-meaning idea but I would like to point to a number of problems that are not taken into account. First, such a reform would be unsustainably expensive and would thereby jeopardize the state’s ability to maintain quality in public services such as healthcare, education and care of the elderly. The effect of declining quality in such public services would be that many who can afford it would start buying these services on the private market. This would imply that this group’s (let’s call it the middle class) willingness to pay taxes would decrease substantially because they would ask themselves why they should “pay twice”. The decline in taxes would further reduce the ability to maintain quality in these services which could escalate into a downward spiral where the public service that would be available for those who cannot pay their own way would be of an even lower quality. Fewer and fewer would support such programs with their taxes and their votes. There is substantial empirical support for the notion that a public service that only addresses the “poor” becomes “poor service”. In other words, ​​an UUBI is most likely to be a death sentence for most universal welfare state programs.

Another problem for the UUBI concerns overall political legitimacy. According to its advocates, the basic income would be awarded to all citizens over the age of 18. With £800 a month, a young person can manage quite well for a while. However, thereafter many will realize that this income is insufficient for their needs. There is a risk that a sizeable portion of those who started adult life living on the UUBI will seek to increase their standard of living with various kinds of “irregular” income (drug trafficking, prostitution, etc.). Cases like these, even if they are relatively few, are likely to get a lot of negative publicity. The UUBI will lose legitimacy from media reporting about people who have a high living standard by combining income from various irregular activities and the UUBI. In addition, with Additionally, on £800 a month you can live a pretty enjoyable life surfing on the beaches of Bali. The political logic that ensues is most likely to be a downward pressure on the level of the UUBI.

A third problem concerns the need for work. During the 19th century, English textile workers formed what was known as the Luddite movement. They are best known for attacking and destroying the new steam-driven weaving machines because these were seen as cutting the number of jobs on offer. The argument that we face a reduced demand for labor due to technological development is, in my opinion, as bad today as it was then. On the contrary, we have an increased need for labor in many areas of care. The population in Europe has been ageing and, while many elderly people are taken good care of when it comes to their physiological needs , they are often very lonely and there is no time for the personnel working in elderly care to go shopping with them or take them to leisure activities. Families with small children often suffer from severe stress and need support. The examples can be multiplied. With an unconditional universal basic income, people will ask why they should pay wages to people who can work but choose not to work when there is a need for many more “hands” in such areas. They will ask why they should pay a monthly wage to someone on safari while their elderly and frail mother has no one to help her take a walk in the park.

The basic error with the idea of ​​unconditional basic income is its unconditionality. If people are going to continue to pay taxes for the welfare of others, several conditions must be met. One of them is the principle of reciprocity: people contribute productively to the common good as far as they can. The main body of the welfare state was never built on altruism but on reciprocity. Breaking with this principle is most likely to lead to the dismantling of the type of broad-based social solidarity that built that welfare state.