You take a large chunk of a country’s tax revenues and pay people a few thousand pounds a year to do nothing. That’s the essence of an unconditional basic income scheme – and it took less than a day for the Green party’s version, at £3,744 a year, to be emphatically slapped down. One of its unlikely critics was the Citizen’s Income Trust, part of a global movement in support of the idea, who pointed out that, in the form proposed by the Greens, a third of families might lose out.
The “unconditional basic income” has a long history in economic thinking, with proponents on both the left and the right. For conservatives it is a way of radically cutting the administrative costs of means-tested benefits, and subsidising low-paid work. For those on the left, who embraced it after the 1960s, it is seen as a way to alleviate inequality. But if the basic income has any relevance to today’s economy, it is as a solution to a much bigger problem: the disappearance of work itself.
In 2013, researchers at the Oxford Martin School predicted that in the next two decades 47% of US jobs would be in danger of being lost to automation. McKinsey Global Institute research suggests that 140 million knowledge workers worldwide are at risk of the same fate. Most policymakers do not even want to think about the prospect of mass automation, because it is unlike any change we have seen before.
In every previous technological upsurge, deskilling and job destruction went alongside the creation of new, high value jobs and a higher-wage consumption culture. But automation disrupts that pattern: it reduces the need for work in one sector without necessarily creating it in another.
When the internet age began, economists blithely expected it to be a repeat of the Belle Epoque. Instead, in the developed world, it created a workforce whose incomes cannot rise, shunted by the million into what anthropologist David Graeber has called “bullshit jobs”: that is, menial, low-paid work for which there is no obvious social rationale.
For those who saw this problem early, the solutions proposed included “work-life balance”, the shorter working week, and the advance of commercial norms into parts of human life currently uncommercialised. We would all become service workers – some called to the Bar, some providing webcam porn – and work fewer hours.
It was the French social philosopher Andre Gorz who saw the logical flaws in that. People would resist the commercialisation of human life, he predicted. Gorz saw the basic income not as a solution to welfare costs, nor as a way to undermine cheap labour, but as a transitional subsidy towards a low- or zero-work society. It should, he wrote, enable us to “refuse work”; it would represent “the pooling of socially produced wealth”.
But it would be one massive act of pooling. If you do a fag-packet calulation, you can see why in the long-run the only form the basic income could take is that of a radical challenge to market economics. (I stress what follows is conjecture, and not an attempt to number crunch today’s party-political proposals).
If you paid every adult in Britain – including pensioners – say, £6,000 a year, with no requirement to seek work and no means test, it would cost around £290bn a year.
You would abolish the basic state pension (currently around £6,000) and basic unemployment benefits, keeping only benefits targeted to extra needs such as child support or disability, which come to around £30bn now, so the overall cost might come to £320bn a year.
That is a huge amount of money. The current welfare bill in Britain is £167bn – of which two- thirds goes to pensioners. Its eats around 23% of government spending. A true, subsistence level basic income would close to double that. But it is imaginable, in the short to medium term, if you factor in the benefits.
The first would be to eradicate low-paid menial work. Why slave 10 hours a day with mop and bucket for £12k when you get £6k for free? Corporations would rebalance their business models towards a high pay, stable consumption, low-ish profit world, and the tax take would rise as a result. All tax relief for the poor would end.
The second benefit, though less tangible, would come to the spiralling healthcare budgets of western societies. Drugs are dear, collaborative networks of peer educators and self-help groups come for free, at least in theory, once everyone is being paid simply to exist, and has the time and freedom to contribute. This is the view taken by the prophets of peer-to-peer economics, who envisage a new, collaborative production sector. My fag-packet logic tells me it would mean tens of billions in lower healthcare costs, and savings in other areas too.
The rest of the fiscal gap would be closed through raising tax – so this is not a cheap or easy solution. It would be a pathway to a different kind of economy. But for both left and right it would challenge the last vestiges of what Gorz called “the utopia based on work” which has sustained us for two centuries, but may no longer.
Paul Mason is the economics editor at Channel 4 News. Follow him @paulmasonnews