Pedestrians walk past closed shops in Toronto on April 28, 2020.Fred Lum/The Globe and Mail
The notion of a universal basic income has floated on the edges of governments' and social philosophers' imaginations at least since the 16th century, when Thomas More contemplated a system that would pay you to do nothing in his socio-political satire Utopia. Since then, visionaries and rascals as varied as Martin Luther King Jr., Richard Nixon and Milton Friedman, the regulation-lite guru beloved by Ronald Reagan and Maggie Thatcher, have extolled the virtues of basic, or universal, income.
The COVID-19 pandemic, which has thrown millions out of work and pushed many economies into double-digit GDP losses, has revived the idea of no-strings-attached payments; several experiments in the concept are under way or about to get started. One is in Germany, where 120 people will get €1,200 a month for three years. They will work with a control group of 1,380 who won’t receive the payments. Even hair samples will be tested to help determine comparative hormone stress levels.
Canada is newly intrigued by the idea, too. The country became a modern-day basic income pioneer in the mid-1970s, when the unlikely town of Dauphin, Man., ran an experiment. Sadly, the results were never thoroughly studied. Last month, the Liberal caucus called on Justin Trudeau’s government to make a basic income a priority policy resolution at the party’s November convention.
There is a lot to like about a basic income, but even more to dislike. It’s a sop to the poor that will fail to address, and could reinforce, the fundamental inequalities in Western economies.
Let’s start with the bits that appeal to basic income’s growing army of promoters. While critics believe paying people to do nothing would encourage people to do nothing, others think it would create more budding entrepreneurs than sofa sloths. Instead of being locked into dead-end, low-paying jobs, a basic income would allow the young and old alike to retrain, go back to school or take business risks without worrying where their next meal is coming from.
Basic-income fans argue that the time is right for the concept because of the rise of the machines and artificial intelligence and their potential to take a wrecking ball to traditional jobs. In the view of supporters, a basic income would act as a transition scheme, gently repositioning workers from the old to new economies. They argue it would streamline bureaucracies by replacing the tangle of means-tested welfare and employment-support programs with a single one that would guarantee an annual income for everyone.
The pandemic, of course, has reinforced all these arguments as the numbers of suddenly jobless rise, especially among the poor. It’s not their fault the virus eliminated jobs in restaurants, bars, hotels, cinemas, airlines and retailing, so why not use guaranteed payments to relieve their anxiety?
My own view is that a basic income is a lot less moral – and practical – than meets the eye.
Your first clue that something is wrong with basic income is that the concept has support among those on the political right as well as left, and among business owners as well as employees. If Big Business likes the idea, you know you should be suspicious.
A basic income would be a godsend for Big Business. It would allow them to fire employees at will, knowing that no one would go hungry. It would allow the neoliberal agenda that embraced open markets, deregulation, privatization, globalization, shareholder value and unsustainable growth to remain intact. In recent years, this agenda created enormous amounts of wealth for the few, not the many. It would allow the wildly unbalanced economy to remain that way.
The launch of a basic income would avoid the central question facing neoliberal economies: Do our economic systems exist simply to fling money at one another, or do they exist to build services and programs that build fair and livable societies?
There is no doubt that a basic income would be expensive, perhaps monstrously so. Why not spend that fortune instead on high-quality health care that is free for all, superb schools and children’s daycare, drinkable water and renewable-energy infrastructure? Or, in the United States and Canada, a postal system that actually delivers the mail to every address?
The argument that a basic income would streamline government is hopelessly naive thinking. Government bureaucracies and agencies are easy to create but almost impossible to dismantle. In his 2012 book, Time to Start Thinking: America in the Age of Descent, Edward Luce noted that the U.S. government regulations book stretched to 70,000 pages, that there were 64 chiefs of staff, 10.5 million outside contractors, 37 policy czars, 56 programs to promote financial literacy, 51 “entirely duplicate” schemes for worker assistance and so on.
Good luck getting rid of all the welfare, employment and training programs so they can be replaced by a basic-income plan. The effort could take decades and trigger a civil war among bureaucrats desperate to keep their jobs. Bureaucrats vote, too, and there are many millions of them in the United States, Canada and Europe. If the basic-income program were outsourced to private contractors, the potential for fraud and corruption would be immense.
Beware what you wish for. A basic income would reduce the incentive to craft a fairer society and economy. It would be an opiate for the masses and a gift for Big Business.