Proper Jobs, Not Dole

It was recently reported that Hawaii may be the first US state to introduce Universal Basic Income (UBI). Given that it’s generally a good idea to be deeply suspicious of anything that any capitalist government does, perhaps this piece of news is not quite as hopeful as it may appear.

The idea of UBI has been around for quite a long time. It is, for example, a core policy of the Green Party in England and Wales. The Greens call it “Citizens’ Income”, and propose that it should replace most forms of state benefit, and be payable to every citizen whether they are working or not. No doubt the intention behind it is good and worthy – that no one should ever be in poverty – but just throwing money at a problem is seldom the best way to solve it. The underlying reasons and nature of problems need to be addressed and remedied if they are really to be eradicated.

The heart of the problem that UBI is supposed to cure is poverty. But capitalism, the economic model which rules the planet, depends on carefully maintaining a proportion of humanity in abject poverty. There are several reasons for this.

Firstly, it establishes a permanent pool of cheap labour. Most people need money to survive. Employers provide money, in return for labour. When good jobs are scarce, as they usually are, many people struggle to find work and therefore obtain the money they need to survive. These people become desperate to feed themselves and their families, and will sell their labour for whatever pittance grinding employers will provide.

Secondly, it provides an ever-present threat which employers can use to motivate their workers to accept abysmal working conditions. Workers either gratefully accept whatever crumbs their employer throws their way, or return to the streets to sleep in doorways, and rummage through waste dumps to survive.

Thirdly, it enables ruthless producers to keep their costs of production low, to undercut other producers who may genuinely want to provide decent working conditions for their workers, but cannot do so because they cannot compete with the sweatshops and slave-drivers.

But the suggestion that a UBI would eliminate these problems, because no one would ever again be so poor that they had to work for slave wages, is problematic for a number of reasons.

The Inflation Problem

The first and most obvious wrinkle is the amount of money that would constitute a single payment of UBI. What would an individual payment be? How would it be measured? The nominal value of money is only as good as what you can buy with it: fifty years ago you could buy a pretty good house in England for about £2000. Today £2000 would only be enough to pay to rent that house for about three months.

So say, for example, that a payment of £200 a week today was thought to be enough to keep one person in food, clothing and basic shelter. In our existing system that money is provided by employers, many of whom demand a week’s worth of sweated labour in exchange. If the state were to provide the £200 a week instead, no questions asked, and without any reciprocal requirement for work, why on earth would people continue doing sweated labour for it?

I know the supporters of UBI argue that it would not stop someone working – because they could obtain even more money by doing so, and that work fulfils a social need as well as an economic one… and so on. And they’re partly right, but that’s not the main point here. The main point is that the employer who was previously producing some product or providing some service in exchange for sweated labour could no longer do so at the price he was selling it at, because his pool of cheap labour would reduce or dry up altogether. Although some of his workers might choose to work in abominable conditions for slave wages, many certainly wouldn’t. The proof of this is already widely available.

In Britain, for example, most unskilled work is carried out by immigrants of one kind or another (economic migrants, asylum-seekers, refugees). These people have very little in terms of family support networks, and most of them are not entitled to receive any state benefits whatsoever. Some are not even allowed to look for work. Therefore their only option of obtaining money is by selling their labour for whatever pittance they can get. So from harvesting essential foods, to factory work, to office cleaning, to hotels and catering, it’s pretty rare to find British people performing the most laborious tasks. It’s hard, monotonous, dirty, physical work, often carried out in horrible and dangerous conditions working long and antisocial hours. Of course, British people could do it, and some do, but many choose not to because they have established family support networks and access to a welfare system that provides a meagre alternative. But most new immigrants don’t have those alternatives.

It’s unknown if the proponents of UBI intend that this heavy reliance on imported sweated labour should continue, whilst British UBI recipients would have no requirement whatsoever to do any work; but if that is the intention, is that really a good way to manage our society? And if immigrant labour suddenly stopped performing the worst-paid jobs, who would do them? British people could do those jobs now, if they wanted to, but most choose not to – because they have alternatives. How would paying UBI, which would be even easier than welfare benefits to claim, change that?

So the key problem here would seem to be those employers currently using sweated labour, and paying the least amount of money in return for their labour.

If sweated labour is supposed to somehow disappear by introducing UBI, what would happen to the employers using that labour, and the jobs they provide? They would have to either pay their staff far more for the same work, or somehow improve their working conditions, both of which options would increase the selling price of their product or service. In other words, prices must inevitably rise, and before you know it the £200 that used to provide a week’s food and basic accommodation would suddenly only pay for five days food and accommodation, say, or four days, or three. So you have to increase your UBI to £250 a week, or £300 or whatever, which increases prices again… and so on. In other words, UBI would almost certainly be very inflationary.

Real money is based on labour

It’s been well-known for a long time that labour is the bedrock and foundation of money. Adam Smith, for example, said:

Labour alone, therefore, never varying in its own value, is alone the ultimate and real standard by which the value of all commodities can at all times and places be estimated and compared. It is their real price, money is their nominal price only. ((Wealth of Nations by Adam Smith, p. 47))

Although this fact is pretty much self-evident to anyone who gives the subject some thought, the capitalist system requires that labour is unofficially divided up into “worthy” labour and “unworthy” labour. The ideal type of worthy labour is that which is paid for with lots and lots of money. Worthy labour is performed by “exceptional” people, whose services are so prized that their monetary rewards must be continually increased far more than anyone else’s – or else (the argument goes) they would take their precious expertise elsewhere. Unworthy labour is work that’s deemed too trivial and mundane to justify anything but the most meagre monetary compensation. Contrary to those performing worthy labour who must always be paid more and more for their services, the less that can be paid for unworthy labour, the better. Rather than valuing unworthy labour it’s continually demeaned and there is instead a continual search to find those who are prepared to sell it cheaper than anyone else.

Careful maintenance of large permanent pools of unworthy labour is the cornerstone of capitalism. It’s regarded like any other production cost – raw materials, energy, transportation – and the core principle is to obtain as much of it as possible at the cheapest cost. For some reason worthy labour is not deemed a production cost, and paradoxically demands that it not be paid for as cheaply as possible, and that the more that’s spent on it, the better.

This intrinsic injustice in the capitalist model to the concept of work and reward is what makes the model a corrupt and basically evil system. It’s this injustice that causes the poverty, homelessness and suffering that UBI supposedly would cure. But it won’t cure it, because it doesn’t address the underlying injustice. In fact, it makes things rather worse, because it introduces a new inflation-driver into the economy.

Reinventing the Public Sector

Given that labour, not money, is the real bedrock of wealth, it stands to reason that policies that maximise the potential of labour are crucial to wealth-generation. As Smith pointed out, money is just a nominal value of labour: money is only as good as what it can buy, what products of labour it can purchase.

An essential element of the capitalist model is that labour be wholly controlled by capitalists, by people who can make profits from selling the products of other people’s work. In Britain, for example, receipt of unemployment benefits is conditional upon the recipient (a “job seeker”) applying for jobs. But the economy is managed in such a way that most employers are found in the private sector. Although there are some very well-paid “worthy” jobs available, with good conditions of service attached, they are greatly outnumbered by “unworthy” insecure, minimum-wage jobs which hardly pay enough to keep people alive and which invariably require working in terrible conditions.

Just one generation ago, however, job seekers always had an alternative to working for capitalist grinders: they could work in public services. Just one generation ago the public sector was the largest employer in the country by a very long way. There were always a multitude of jobs available, jobs which were reasonably well-paid and came with exceptionally good conditions of service. The Thatcher economic revolution changed all that. The public sector was slowly destroyed. Jobs which were previously done by public servants of one type or another could now only be done by people working for capitalist grinders. Workers did the same jobs for less money and in worse conditions, whilst their capitalist bosses pocketed huge profits. As many of these public services were delivered through government contracts, the taxpayer still paid for the service, but got a worse service at a higher cost.

It’s very clear to see that an ideological revolution is required in how people think about work. We’re currently conditioned to think that work is dependent on the existence of private sector employers. The fact that the public sector could provide plentiful jobs which are both socially important and well paid with good conditions of service, as has happened in the past, is completely ignored. This is because the public sector would then produce serious competition to the private sector, and contrary to the propaganda, if there’s one thing the private sector hates above all else, it’s competition.

A standard argument against this thinking is that it would be hugely expensive to the taxpayer, who would have to pay for it, and this is seen as a bad thing. But this argument has serious flaws.

Firstly, the taxpayer currently pays far more for public services that are provided by the supposedly more efficient private sector than if those services were directly delivered by the state. There is abundant proof of this. For example, the US health service, which is mostly provided by the private sector, is about the most expensive healthcare in the western world, costing the US taxpayer far more than the far better healthcare provided in most of Western Europe by the public sector. So too with essential utilities like water-supply and public transport, both of which cost far more when provided by the private sector than the public sector.

Secondly, the notion that taxpayers resent paying taxes doesn’t always follow. Most taxpayers don’t mind paying taxes – when they get good public services in return. Furthermore, if people were better educated to the benefits of a healthy public sector, instead of being brainwashed into thinking that it’s some form of communism, there would be even fewer complaints about paying tax.

Thirdly, although taxes do indeed pay for most of our public services, they don’t have to. If we had a reformation of our monetary system, a simple alternative model could be used. Our monetary system is currently controlled by the private banking system, which unsurprisingly manages money supply to best suit itself and its corporate customers, rather than society as a whole. If our money was controlled instead by a public banking system, things would be very different. We could have full employment through delivering state-operated public services. If we had full employment through providing great public services, poverty wouldn’t exist, and no one would need UBI.

UBI – Who Really Benefits?

It’s always worth asking who really benefits from some new proposal, and the question should be asked about UBI.

Its proponents would argue that all citizens would benefit, because every citizen would always have some money. But as I’ve tried to show, UBI would be inflationary and the amount of money paid to each citizen, to ensure a comfortable life, would be continually problematic.

It’s further argued that UBI would be far simpler and cheaper to administer because it would replace most existing state benefits, making thousands of administrators redundant. But the cost benefits are debatable, and the newly unemployed administrators would have their decent salaries replaced with meagre UBI payments.

Then there’s the actual paying of UBI. Who is going to do that? There’s a curious connection in the US between super-rich investment banks and payment of food stamps to the super-poor. A few years ago it was reported that almost half of the states in the US are contracted to investment bankers JP Morgan to administer their food stamp payments. Why would the ruthless world of banking be interested in welfare provision? Might it have something to do with the fact that “18 of the 24 states JP Morgan handles have been contracted to pay the bank up to $560,492,596.02 since 2004” and, ” the three companies that administer EBT [Electronic Benefit Transfer] receive a small fee that can range from $.31 to $2.30 (or higher depending upon the number of welfare services on an EBT card and state contractual requirements) for each SNAP [Supplementary Nutritional Assistance Program (food stamps)] recipient”? Replacing the existing rather administratively heavy welfare system with a far simpler money-for-all system, no questions asked, would surely appeal to those doing the administrating – and would almost certainly involve processing considerably more money, since every citizen would receive the payments, instead of just a minority.

 The Ethical Dimension

Of equal importance to the economic aspects of UBI is the ethical dimension. Which is better for society: to have a sizeable sector of the community who could choose to live their entire lives in pointless idleness without doing any work at all, surviving on no-questions-asked state hand-outs; or to have a system whereby anyone who wants money could always earn it by doing useful well-paid jobs in the public sector?

There is sometimes a repugnance to the notion that those of working age and who are able to work should obtain their money by working for it. The repugnance is perfectly understandable when the only work available is provided by slave-drivers and sweatshop grinders who grow rich and fat on the labour of others. In this situation – which is pretty much what the capitalist world has created – the only choice for a sizeable chunk of society is doing awful work in awful conditions for a pittance of a wage, or homelessness and starvation. But there could be other types of work – plentiful, secure, well-paid and useful work.

If the public sector was properly developed, to do what it could and should do – provide the infrastructure for a caring secure society – there would always be jobs available in public services helping to build and maintain that infrastructure. These would be jobs that could be well-paid, with good conditions of service and would always be useful to society as a whole. From routine maintenance of public property to doing highly skilled professional work in a myriad of disciplines; from food production to manufacturing and warehousing; from maintenance of essential utilities to public transport; from providing law and order to teaching and healthcare; from routine administration to delivering care and comfort to those who need it, the public sector could and should be a permanent source of good and useful work to anyone who wants to do it.

The inevitable question of how this could be paid for is simple to answer: through tax and banking reforms. A state-owned public bank could provide whatever interest-free money the state needs to pay for its services; and the super-rich, who rely on the public sector for their wealth, should be properly taxed to help pay for it.

Full development of the public sector does not mean the eradication of the private sector. The private sector would inevitably shrink, but not disappear. There would always be a need for private enterprise, which the state should always nurture and support, but the economy would no longer wholly depend on private enterprise, as it does now.

In such a society, with a properly developed public sector, poverty would permanently disappear, because such a society would freely provide all the services from which poor people are deprived. In such a society, there would be no need for a UBI, because anyone who wanted money could always obtain it by doing useful rewarding work, and enjoy for themselves the benefits and protections of the public sector. Surely it would be far better to build such a society than merely dole out money for people who don’t need to work for it and who could waste their lives in pointless idleness, money which would inevitably serve only the corporatocracy, and help it to continue maintaining the dystopian world we have today.

John Andrews is a writer and political activist based in England. His latest booklet is entitled EnMo Economics. Other Non-Fiction books by John are: The People's Constitution (2018 Edition); and The School of Kindness (2018 Edition); and his historical novel The Road to Emily Bay Read other articles by John.