In reply to Liam Hogan on UBI

Liam Hogan at

kindly and thoughtfully responded to my request to write something on a UBI. His musings did not disappoint – thoughtful and well written as always. But wrong!

Here is my response. I can’t figure out how to share his post directly just yet, so I will have to make do with simply posting his link above. I have written this reply in his comments section as well, so feel free to comment over on his page.

Very well written and a useful contribution.
To take the last point first – How do you think we propose to pay for a UBI? You seem to presuppose a simple income redistribution like the current welfare system – which won’t work. A UBI can be paid for a number of ways, but two jump out immediately as particularly attractive – a) by ownership of the means of production (either in part or as a whole), or by taxes on the common wealth and land of a society- a tax on unearned rents. The first of those goes straight to your last point. A UBI is simply the dividend from ownership. The question is which you choose to do first and which has more likely chance of gaining the support of the majority in a liberal nationalist (post)colonial society. We know that the State ownership of certain means of production in the 20th century did not free people from capitalist wage labour relations, either here or in the Soviet systems. A UBI is a practical way of allowing that freedom to happen.
To your point that technological change has always existed, ie. the ‘there’s nothing new under the sun’ argument. People can argue about this, but all the signs are there that deflationary forces in the production of actual goods are real and accelerating. If energy abundance is a likely result of simple (ie. non-exponential) advances in technology, then costs of material production will continue to fall. Add to that demographic change, which further removes the effectiveness of monetary policy, which is already proving to have little growth-promoting potency, and the result is deflation and permanent high unemployment. Both of these are already happening. Since the 1970s unemployment in Australia has never been under 5%, and no policy, fiscal or monetary, macro or micro-economic has been able to give us full employment. And the jobs that have been created after automation has killed the old ones are mostly low-paid, insecure and often meaningless or demeaning. If the effect of automation is to increase unemployment by ‘only’ 9% as some conservative commentators are saying, then this is taking us into devastating territory. Even with our current levels of unemployment we have seen the precipitous decline in working class industrial and political power, in all jurisdictions, no matter the local labour laws, because unemployment is the strike-breakers friend. A UBI gives labour a base from which it can negotiate with capital about wages and conditions, rather than capital’s preferred position of ‘take it or starve’.
To address your point that allowing top-ups to the UBI defeats the simplifying purpose of a UBI. Well it all depends on the top ups. For instance, I don’t think a UBI could ever replace the NDIS. But the rules for qualification for the NDIS are very different from those that dictate whether you get the single or couple pension, or unemployment benefits if you’re in a relationship. I don’t think the state has a lot of right to ask who I sleep with and how often in order to determine what subsistence cash I am given to keep body and soul together in a permanent low-employment economy. But that is the situation we have now. I do accept that the Government should see proof that my child has a disability before giving me money for that child’s treatment. So to get to practicalities, a UBI in Australia should be higher than the single pension, higher than the dole + rent assistance, and the UBI + child’s UBI should be higher than the single parent payment. So it can replace nearly all our welfare payments, but it needn’t replace the NDIS. That would reduce the complexity of our welfare system by about 95%. The only people that may be worse off in that situation are people currently working at DHS, and a transitional package would need to be implemented to ensure they got other comparable jobs. If any didn’t however, they’d at least be eligible for a UBI which would be higher than the benefits they previously administered. As a proud CPSU member I am very serious that the workers who currently administer the welfare system are looked after in the transition away from our complex and often punitive system of welfare compliance.
Finally, as to your labelling of UBI as a libertarian solution or even as immoral. Firstly, you and I are old enough to remember when
libertarian socialists were the best kind – when a revolution was no fun unless it allowed dancing. Alas, ‘libertarian’ has been hijacked as a term by Americans with adolescent fantasies of screaming ‘leave me alone!’ at the world. Even still, the idea that people should be able to say to the state and capitalists that they don’t want to give them their time, their bodies, their obedience or their mental energy is still attractive to many. I for one, agree with you that the state, especially the colonial settler state, the nationalist, genocidal war-mongering state, the state of child abuse, deaths in custody, torture in detention and so on, is something that it would be nice to be able to avoid if possible. No other policy proposal I have seen in the past twenty years does that as effectively as a UBI, especially if innovative institutions are set up to pay for a UBI.
Finally, to address possibly the biggest hurdle, the ‘immorality’ of giving anything to people that are already rich. This is what Yanis Varoufakis addresses in his speech here
As Yanis points out, we already do give direct income support to the already rich – the tax free threshold applies to all, no matter their income. You can give people a UBI and do away with the tax free threshhold pretty easily and have nearly the same net result. And of course the rich also get all the benefits of our common wealth and the economic rents they appropriate for themselves more generally. A UBI paid for by either owning some of that currently owned by capitalists, or by taxing their rents, starts to deal with that immorality of the rich getting something for nothing.
The implementation of ‘from each according to ability, to each according to need’ has its attractions, but the rub always lies in – who judges ones abilities and needs? Funnily enough, our system at the moment works on this principle. Our progressive income tax takes from the richest according to their ability, but only at the top marginal tax rate. Our punitive job search/welfare system judges the abilities of the poorest. Then the Parliament, the liberal nationalist settler-colonial legislature, decides how much we all ‘need’. Currently that’s set at about ‘starving-minus-$100-a-week’ for those out of work who are judged to be fit and able to swing a pick.
In contrast to ‘from each according to ability, to each according to need’ I prefer, ‘All human beings are born free and equal in dignity and rights.’ and ‘Everyone has the right to life, liberty and security of person.’
A UBI can help make that a reality. Our current system does not.
Once again, thanks for taking the time to respond. As usual, your eloquence far outweighs mine, but I hope you don’t see the urgency of my response and language as anything other than how it is intended, as usual, with great respect and affection.


About lukewhito

Politics, history, cricket, rugby league, bodysurfing. Kids and family. Love it all.
This entry was posted in Labor, Tax, Universal Basic Income and tagged , , , , , . Bookmark the permalink.

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