Return to site

Beyond UBI

Universal Basic Income is a middle-man solution — to give everyone a solid foundation, we should meet people’s needs directly

 
By Thomas Venner, Citizen State Advisory Committee Member (Europe)

· Basic Needs,Big Ideas,UBI,Economics

Our current economic system has eaten away its own foundations. The challenge now is to create new ones — but how do we do it without just reinforcing the failures of the past?

First of all, we need to understand where the current problem comes from. Under the current model, the majority of people effectively rent their own existence — the necessities of life are a mandatory expense, and the majority of the average person’s income is immediately swallowed by it. The concept of a Universal Basic Income (UBI) is at face value an attractive one because it helps people cover these costs more easily and in an ideal world leaves them with more to actually live on afterwards. The problem with the UBI argument, on the other hand, is that it either accepts the existence-rental model as a no-alternative inevitability or doesn’t consider whether that model should continue in the first place.

It needs saying to start off with that none of this is a criticism of the UBI idea itself. The intention behind it is good; the idea of how it should work is solid in and of itself. A universal, no-strings-attached option, without the administrative burden or the constant pressure for recipients to prove eligibility that means-tested models always produce, is always going to be the better option. But things don’t always work the way they should on paper — and well-intentioned plans often don’t survive contact with the intent to exploit them.

Just as conventional welfare systems have routinely become de facto subsidies for underpaying employers, a UBI that just ends up paying mandatory living expenses would — however much it helps people survive them — ultimately go towards shoring up the exploitative business models of private-sector essential utility providers, acting as a layer of insurance against their own customers’ poverty. In a worst-case scenario UBI would, in practice, simply become a second-hand subsidy for landlords and utility companies as rents and prices are increased to swallow it along with the same chunk of tenants’ and customers’ pay packets they were taking already. So what can we do instead? How can we set up a system that does the job without being open to these vectors of exploitation?

Maybe instead of a UBI, it’s time to think bigger — and start looking at a system of Universal Basic Provision

Maybe instead of a UBI, it’s time to think bigger — and start looking at a system of Universal Basic Provision. Instead of a mechanism where households become an administrative middle-man in what’s functionally the same process of state-subsidised private-sector contracting that characterises semi-privatised public services like the National Health Service in UK, with the potential for exploitation and the profit-driven inefficiency that comes with any public-private partnership, maybe it’s time to consider an alternative that cuts out the middle-man entirely; a model where the fundamental necessities of life are guaranteed and provided directly without leaving them up to the vagaries of the market.

 

Because the simple fact of the matter is that when it comes to providing the essentials of life, the market can’t do the job. The forty-year neoliberal experiment has proven that conclusively. Its evangelists promised that privatisation, deregulation and leaving everything up to the market would deliver a future of continual improvement, efficiency and prosperity; instead it’s delivered meaningless “growth” in profits alone, reliant in itself on a combination of a race to the bottom on pay and a minimum-service-for-maximum-price provision model that’s now leading to its own systemic collapse. The normal outcome of market equilibrium can’t be reached in a situation where what you’re selling is something people have effectively no choice but to buy regardless of adequacy or cost; no stopping point where customers can choose not to purchase your goods or services anymore. It’s not a license to gouge so much as a mandate to — when it comes to the provision of necessities, the private sector will simply continue to provide less and charge more until its market share collapses underneath it from its customers ending up literally unable to pay what’s being asked; at which point those private-sector providers go to the state with their hand out. It’s a simple fact of market forces. Market logic will always prioritise profit-focused solutions over outcome-focused ones, and when the outcome imperative comes into conflict with the profit imperative then the outcome is abandoned. The value of such a system overall is another discussion; the point is that when it comes to delivering baseline necessities, the essentials that people need to exist, the market model comes with a guarantee of failure.

 

Under this model, a UBI would just end up being at best another patch on a hull that’s now more hole than steel, a temporary workaround for a system that’s in a state of continuous, sustained failure — and at worst just another corporate welfare package that delivers little or no meaningful benefit to those it’s supposed to. Of course this can be prevented in a number of ways; it can be combined with rent caps, utility regulation, even the return of key services into public ownership or the creation of new public-sector options where none previously existed. It’s entirely likely these solutions would even work, up to a point. But why not go further? Instead of a stopgap that’ll only demand more stopgaps down the line, why not build a new foundation for the whole system that can actually carry the load?

 

A Universal Basic Provision model would simply circumvent the whole problem entirely, replacing the baseline of the system itself with a model that’s comprehensive, equitable, and insulated from the potential instability or exploitation inherent to the market. With the economies of scale — and freedom from the baked-in inefficiency of needing to turn a profit — of a unified, not-for-profit system, these needs can be met more effectively and at a lower cost than the market can. It’s not just a social good either — a Universal Basic Provision programme would create a guaranteed base of jobs and a sustained double stimulus from both the direct effect of a large-scale public service programme and the increased economic activity generated by its outcomes, locking in a higher low-tide level for the economy overall and ensuring robustness even in times of recession. It would pay dividends in terms of increased economic security, establishing a strong foundation for a stable economy, delivering the true “beyond boom and bust” economic model that neoliberalism promised but catastrophically failed to deliver by creating a solid layer of redundancy, setting a hard floor on how deep a recession can go. For the discretionary economy, the conventional market system continuing on top of this foundation, the benefits would also be enormous. By eliminating the mandatory costs of living entirely, average discretionary income will rise dramatically even with no concurrent increase in real-terms pay, with a resultant increase in economic activity — and by extension tax revenue — that would make such a policy pay for itself multiple times over. And as a last structural multiplier on its positive outcomes, Universal Basic Provision would act as a buffer against inflation by eliminating the basic living costs that form its primary driver.

 

It’s time to think differently about how a modern economy should work — a process that’s already started, but needs to follow its questions to their real conclusion. A robust socioeconomic system should provide the basic necessities of life for its population, not just as a matter of human rights or social health but as a prerequisite for stabilising its own foundations. And it’s something we can already do, if we put our minds to it — so why not start?

All Posts
×

Almost done…

We just sent you an email. Please click the link in the email to confirm your subscription!

OK