Basic Income as a System of Control

Chris Shaw | March 15th, 2017

“Basic income – in both the north and the south – all depends on how we frame it. Will it be cast as a form of charity by the rich? Or will it be cast as a right for all?”^[1]

The above remark encapsulates the promise and the potential perils of a universal basic income (UBI): a periodic cash payment unconditionally delivered to all on an individual basis, without means-test or work requirement. Many commentators have praised the transformative possibilities of a universal basic income, which would supposedly end the necessity of work and make wages a tool of social policy rather than simply an economic consequence of the labor market. A basic income becomes a social wage that involves understanding what constitutes a social minimum.

It is easy to be swayed by the idea of UBI in a world of sticky labor markets; persistently low wages are stubbornly refusing to match recent productivity growth. A Universal Basic Income could also tackle the spectre of technological unemployment. It presents policymakers with a potential means of averting a dystopia in which machines are controlled by a transnational capitalist class of international investors and corporate megaliths: further monopolizing the economy and entrenching an ever more precarious form of wage labor.

To a political class that generally wishes to maintain the status quo, UBI represents a more palatable mix of utopian thought and realistic, technocratic policy. To some radicals, UBI represents a chance of significantly pushing society in a more post-capitalist direction, whether that is accomplished by instituting a new form of democratic mutuality or reasserting the right to the commons. “A basic income might defeat the scarcity mindset that has seeped so deep into our culture, freeing us from the imperatives of competition and allowing us to be more open and generous people”^[2]: such is the thought of UBI’s most vociferous proponents.

However, defenders of UBI fail to address several fundamental issues with the concept. They fail to account for the fact that capitalism, as a generalizable system of capital accumulation for profit, has become entrenched to the point where it has become very difficult to combat. Processes and relations of capital affect all areas of life: from social relations within the household to the social provisioning found in welfare states. One example is the New Deal, in which forms of social provisioning were geared towards supporting work that was deemed to be “socially useful” (i.e. easily manipulated for government projects and particular business interests). Similarly, the New Deal’s integration of trade unions into its national framework was not a social revolution of the aims of the state; it was simply an institutionalization of centralized labor-pricing that was amenable to particular trade associations^[3]. The welfare state and representation of labor played important roles in constructing the Fordist mode of production (of which the New Deal was a significant part). They contributed towards the formation of a generalisable consumption standard, where commodities are made purely for mass consumption, and a system of general equivalence for the products of mass production.

What this shows is that radical movements — from trade unions in the early 20th century to today’s advocates of basic income — are easily co-opted. Antonio Gramsci called this tendency trasformismo, which refers to the convergence of politics around a centrist mode of political understanding. A state’s legitimacy partially rests on successfully integrating and moderating radical movements within civil society. These include trade unions, forms of mutual aid, and the various other voluntary governance structures which constitute daily life. No state can persist if it is viewed as nothing more than a coercive structure. It would either crumble and be replaced by the ad hoc, pluralistic nature of governance in civil society, or descend into authoritarianism. The legitimation provided by forms of everyday state governance and integrated institutions are essential to the full functioning of the state. Universal Basic income could easily be co-opted into this framework of governance, just as trade unions were in the 1940s. Capital, as a social relation of power, has regularly used the state and its ameliorative mechanisms to introduce capitalist relations into non-capitalist areas (as well as sites of resistance): instituting welfare and allowing trade union representation.

The neoliberal transformation of the welfare state towards workfare, combined with the ever-increasing precarity and “flexibility” in our working lives, has been a defining characteristic of the development of a post-Fordist form of production. Gains from automation are being centralized under corporate control via intellectual property laws, which siphon the scientific and knowledge commons into the hands of private capital. This has also been a newer method for integrating welfare-related institutions into frameworks of neoliberal growth regimes, as was done under Bretton Woods with the development of corporatist welfare arrangements. Work is being made flexible and precarious^[4]; workers are acting as contracted parties to corporations who no longer own the means to production, but retain control of the means to knowledge, information and financial capital.

Basic income could be absorbed into this neoliberal growth regime by allowing for further centralization of control over production and consumption. The increased flexibility of work, as well as the emerging focus on skilled work in the technology sector and low-paid work in the retail and services sectors, has led to the development of a generalizable consumption standard. This is being stratified into a new class system of technological managers, a transnational capitalist class, and a general lumpenproletariat of workers holding insecure positions in multiple sectors of the international economy. What economists call “labor force participation” is declining for a reason. We probably reached Peak Employment in 2000. It simply takes less labor to make the things we need^[5]. With low labor-force participation, the development of a consumption standard has become more difficult while making the labour-force more flexible in its participative role. Individuals in poverty are bearing the brunt of this problem by taking on increasingly higher levels of private debt and relying on temporary work contracts.

These low-skilled, temporarily-employed workers are thought of as the main beneficiaries of a basic income. UBI can ameliorate many drawbacks of flexible work, provide a safety net to those burdened with high levels of debt, and maintain a level of consumption that is amenable to production of goods in the international economy. As the opening quote of this piece made clear, basic income is what one makes of it. In our current system, basic income is amenable to low-pay, centralized economies of knowledge production. Gains from automation and technology cannot be adequately distributed and the welfare state becomes the basic income guarantee. This guarantee is made universalizable and stringent as new forms of gainful exchange and the development of the entrepreneur of the self (as seen in Uber and AirBNB) become stigmatizing conditions. Only under these circumstances can one can actually access the ability to consume and thus be part of the wider economy.

This therefore raises issues pertaining to the institutionalization of basic income. It is one thing to frame basic income as a radical proposal that turns capitalism on its head. It is quite another to successfully institutionalize this value structure and create systems of plural governance that can successfully implement it. The main problem seems to be basic income’s unitary focus on the distribuendum, whereby the distribution of resources (nominally through centralized state structures) is the main axiomatic variable in determining justice and fairness^[6]. This fundamentally ignores the value structures that inform this initial distribution of goods, and its further redistribution relative to political negotiation and institutionalization. The purposes for redistribution, and the forms of governance that decide and politicize it, are just as important as the distribution itself.

In constructing a society that displays anarchist values in its distribution of politico-economic power, we cannot solely focus on the distribution of goods. As seen with the integration of trade union power in the New Deal, a system purely focused on the distribuendum can simply replicate capitalist structures: mitigating their worst excesses but never getting to the fundamental issues of wage labor and exploitation. The lack of a suitable distributional nexus that controls basic income is problematic when considering its radical potential. Who controls the mechanisms of distribution-and-transfer? What forms of income should be redistributed? How can these distributions reproduce themselves, and how they can minimize their coercive capacities?

A comprehensive answer to these questions is beyond the scope of this essay, but sketching out preliminary thoughts seems worthwhile. Firstly, the best methods to raise funds for a UBI must originate from the re-commoning of collective resources (land, knowledge, infrastructure of various kinds) that can raise funds from the socialization of rent accruing from its initial privatization. Such a concept can be seen in the idea of a land value tax (LVT), where ground rent that normally unjustly accrues to private landlords and state-backed landowners can be re-socialized, with land recognized as a commons that cannot be truly owned by any one person. Similar transfer systems can be implemented into an understanding of other commons, where tolls/charges are applied to private capital owners who want to appropriate these collectively-owned resources for their own ends. By providing an economic price to the negative externalities produced via public subsidy, one can push against megalithic corporate power and develop a commons economy in which power rests in public hands.

Secondly, the issue of institutions is also extremely important. Many basic income advocates see it as a replacement of the existing welfare state. However, allowing this supposedly radical reform to be in the hands of the centralized state is a grave error. As seen with the construction and deconstruction of welfare structures since World War II, the state in its current form is a tool of capital, and thus welfare is itself amenable to changes in capital’s regulative structures. Instead of focusing on the state as the locus of change, there needs to be a constitutive set of regulations and structures^[7] which produce methods of governance that fit into value structures akin to a democratic mutuality. This concept is similar to Anderson’s democratic equality^[8] and Cohen’s understanding of political community^[9]: both relational concepts of egalitarian theory that are pluralistic and multi-sited in network distributions. This approach views institutions as sites of mutual exchange, either economically or politically, that encourage horizontal relations with the ability to confederate vertically.

Democratic mutuality is encapsulated in the idea of reflexive metagovernance^[10] that combines the distributional effects of markets with forms of social provisioning and decentralized planning systems, creating an economy-without-adjectives. Examples include the system of savings banks and income-pooling in the Mondragon cooperative system, the forms of gift economy provision engaged in by the Piquetero movement, and the decentralized elements of participatory budgeting and welfare systems (Bolsa Familia and the Porto Alegre budgeting system) in South America^[11]. Conceptually, Chris Cook’s ideas on the application of public company law in the UK and US to blockchain governance can incorporate new knowledge and technology infrastructures on the internet into a public system of governance that controls the distribution of these commons and the rates of rent relative to their private appropriation^[12]. Kevin Carson has also discussed decentralized methods of governance:

“As both states and corporations approach fiscal exhaustion and retreat from the social sphere, employer and government-based safety nets will be increasingly replaced by extended family, multi-family, or neighborhood cohousing projects, micro-villages, etc., for pooling incomes, costs and risks. Or by friendly societies and mutuals, or guilds providing unemployment and health insurance for the self-employed. In such a society, the typical person might be born into a multi-family compound or mini-village with a guaranteed right of subsistence and access to tools or productive land in return for contributing a modest amount of labor (if capable) to common needs”^[13].

Basic income, as something that reorients society away from neoliberal value structures, is just as compatible with democratic mutuality and systems of reflexive metagovernance as it is with the corporate state. Basic income can be important in transforming society at the meta-level by acting as a complement to insurrectionary politics, a system developed outside the networks of the state, and a component of emerging forms of multi-scalar governance in distributed networks, cities and regions. However, basic income’s contradictory nature also means that it is amenable to capitalist and statist interests, and thus an imperfect concept when thinking about radical discursive politics. Fundamentally, UBI must be seen as one reform in a comprehensive radical alternative that develops a world of pluralistic governance and a resistance to capitalist globalization. It comes down to an argument between state structures of distribution-and-transfer, and cooperative structures developed organically from the ground-up.

References

[1] Hickel, J. https://www.theguardian.com/global-development-professionals-network/2017/mar/04/basic-income-birthright-eliminating-poverty

[2] Hickel, J. https://www.theguardian.com/global-development-professionals-network/2017/mar/04/basic-income-birthright-eliminating-poverty

[3] Kolko, G. http://www.counterpunch.org/2012/08/29/the-new-deal-illusion/

[4] https://c4ss.org/content/47925

[5] Carson, K. https://c4ss.org/content/40806

[6] Schemmel, C. Distributive and Relational Equality, 2012

[7] Sinclair, T. Let’s Get it Right This Time! Why Regulation Will Not Solve or Prevent Global Financial Crises, 2009

[8] Anderson, E. What is the Point of Equality?, 1999

[9] Cohen, G.A. Incentives, Inequality, and Community, 1991

[10] Jessop, B. Governance and Metagovernance: On Reflexivity, Requisite Variety, and Requisite Irony, 2002

[11] Houtart, F. https://www.opendemocracy.net/fran%C3%A7ois-houtart/citizen-revolutions-in-latin-america