The bulk of contemporary political and economic arguments in support of a universal citizen’s basic income recently appears to centre on the threat of automation “Quick the robots are coming, the peasants will revolt – let’s give them a basic income!” or “Quick the robots are coming, we need an alternate income source”
It is a powerful and emotive argument and one that traditionally rests on the mainstream economic premise of something or someone being ‘productive’ as well as the perceived ‘affordability’ of cash transfers.
The current global interest in a C.B.I has seen discussions abound in mixed political and business platforms and taken seriously at the Davos meeting of the World Economic Forum in the early part of this year. The debate about a recognisable Basic Income has, as we know, been existed for centuries. There have been trials throughout the 20th century in western and eastern economies, and we now have trials in Finland, Utrecht, Canada, India once more and the very real prospect of our own here in Scotland with four councils and the Scottish Government indicating support for looking at the effects a C.B.I could have on our economies, wellbeing and public finances.
But we are still talking about it, in ways in which that create doubt in the minds of those who are hearing about it for the first time:
Will it work? Giving away free money? Won’t everyone just stay at home and watch Jeremy Kyle and Loose Women? Who will pay for it?
While a basic income has support from left and right political spectrums, it also poses those same sections challenges to the traditional assumptions each hold about the way in which the world operates.
Yes it works, previous trials have evidenced that those poorest people given basic incomes use the money to better their lives, homes, education, health.
Who says its ‘free’ money? As members of societies that have contributed collectively to rentier incomes, should we not also benefit from those same incomes as the author of The Precariat: Guy Standing argues?
Who is counted as being ‘productive’ in our modern economies? Is it only those who trade their labour for wages? Or is it also the women, men and non-binary people who produce and care for other human beings? Those who support or prepare for our lives in this capitalist economy of ours? Who is ultimately more productive? When am I more productive? When I am sitting at my desk in uni creating a thesis, or when I am at home during what is termed to be my leisure time in economic terms; cooking meals, washing clothes, nurturing my children, spending my studentship in my local shops? The tendency to commodify all human activity in order to give it value in a market based economy results in unduly restrictive social citizenship rights, more-so for those related to income security.
Outlets like the Daily Mail call basic income a lazy charter; freeloaders spending our hard earned taxpayer’s cash. This extension of the strivers and scroungers narrative is the most corrosive, in my view. It gets into the mind-set of ordinary people, voters and workers. Why should I work when so and so down the road with the big flat screen TV and no worries gets it all for free? There’s no evidence for this, this is fear mongering in order to keep the elites in power, so long as ordinary people are fighting each other over the scraps from the table, those at the top can continue to manipulate the economy and political processes to suit themselves. Successive C.B.I trials have demonstrated that for many involved, the freedom to work and choose meaningful work is taken up by those in receipt of a C.B.I. The only groups that have shown to reduce their paid work are those of school age and youths who with a C.B.I can afford to go into further and higher education instead of having to work for pittances that support their family survival.
Who will pay for it? Where will the money come from? This is an interesting question. We have been told repeatedly by government ministers that there is no magic money tree. Our welfare system is already in crisis, how can we afford to just give money to everyone? We spend billions administering a flawed system that seeks to penalise and create anxiety amongst its claimants. The marginal tax rate of between 80 and 90% for income earned on top of benefits and tax credits, means that individuals struggle to escape the poverty trap. And the system does this because the overarching narrative is “Work makes us free”. As a society we tie ourselves in knots examining the best way to redistribute money that will alleviate suffering, we place conditions on the most vulnerable in our society, so that we don’t waste this precious resource on the undeserving or unworthy. Yet, I have yet to see the same handwringing over the state use of Quantitative easing. The UK created £375bn (£6000 for every person in the UK) of new money in its QE programme between 2009 and 2012
Then in August 2016, the Bank of England said it would buy £60bn of UK government bonds and £10bn of corporate bonds, amid uncertainty over the Brexit process and worries about productivity and economic growth.
The Eurozone began its programme of QE in January 2015 and has so far pumped in €570bn of extra money in just two years. Originally the programme was set to run end last September, but it has now been extended until at least March 2017. Without so much as a murmur from the media or even so-called progressive organisations. We can easily afford to create and pass money to ‘productive’ entities such as the banks….and shareholders.
Very little of the money created through QE boosted the real (non-financial) economy. The Bank of England estimates that the £375 billion of QE led to 1.5-2% growth in GDP. In other words, through QE it takes £375 billion of new money just to create £23-28bn of extra spending in the real economy. It’s incredibly ineffective, because it relies on boosting the wealth of the already-wealthy and hoping that they increase their spending. It relies on the assumption that trickle-down economics works…..not based on the evidence that it doesn’t – just 8p of every £1 came back to the real economy, the rest was reinvested in the financial markets to generate greater shareholder profits.
We know that the loans system creates ‘new money’ and that this goes into our real economy at local levels that support jobs and consumption. So why are we so hesitant to create a similar system that removes the risk from lenders and borrowers alike? Because, that would be trickle up economics and there is less control over that for those who currently control the levers.
In terms of our Social Welfare
We are at a pivotal junction in Scotland currently. We are seeing the creation of a social security system, that it is hoped will be different from the current plethora of UK benefits, conditions and administrative hoops that individuals are forced to jump. We have an opportunity to create a system that places the individual in the centre as a person of value to their community and social setting, not just as an economic unit.
How much do we know about those who are designing this new system? The Holyrood Social Security Committee is currently made up of 4 women and 5 men, all white, no disclosed disabilities. Westminster’s Welfare and Pensions committee has three women and 8 men, again all white. How much confidence can we have that those designing and responsible for administering our systems of social welfare spending are representing the interests of the many and not just the privileged classes of our society? What ‘social protection’ might encompass is currently a contested space for ‘framing’ the debate and practice. Who is making the decisions about its nature and the responses? Who controls what ‘social protection’ means?
We know that women are disadvantaged in terms of rights to benefits within a system that is based on paid contributions while in employment. The economic and societal positioning of women leads to inequalities in access to benefits and services which result in unequal outcomes in terms of single parent households, unpaid domestic work, increased female life expectancy. We know that austerity has disproportionately negatively impacted women, and in particular it has impacted on those women from Black and minority ethnic communities even more disproportionately and with harsher consequences as shown by recent research by the UK women’s Budget group and the Runnymede trust.
That’s why it is interesting, and welcome, to see that the Scottish Government has committed itself to exploring and achieving split payments of universal credit. It has set about creating a social security system that hears from those who use, expert user panels have allowed those with first-hand experience of the welfare system in the UK to input at the design stage. Policies, such as C.B.I that aim to achieve equality, including gender equality, must account for the gender-based social structures of constraint and explicitly recognise the positive social contributions of non-paid work activities such as domestic or care work.
The current flux in global and local economies alongside the debates around what social security ought to look like could be described as our generation’s Beveridge moment. We have general cross party consensus in Glasgow, Fife, North Ayrshire and Edinburgh that basic income trials should take place. Because there appears to be a universal understanding here that the system is not working now and is not fit for purpose.
But, although the advantages a C.B.I could have for women may be realised, they follow from generalized assumptions about patterns of men’s economic behaviour. The androcentric economic bias implicit in those assumptions stems from a failure to properly account for societal structures that constrain women’s choices. Therefore any trials must, take into account the different lived experiences and social constraints of women across the intersections and truly reflect the diversity of our society.
The rise of automation is a powerful argument in support of C.B.I, but it feels like it is a man’s argument for the most part. And is one that is passing many women by as they continue with the day to day drudgery of surviving.
We know that women are most negatively affected by poverty and austerity. Women are twice as likely to give up paid work to take on carer responsibilities; women continue to provide the majority of domestic labour such as care work, child rearing, emotional labour and housework that the robots created from technological advances required by the drive for greater profits tend not to carry out or which remain unaffordable to most. When critics of a basic income state that it would encourage freeloading and laziness, it is men’s behaviour they are speaking of, it is men’s engagement with the paid labour market they refer to.
We also know that those with disabilities face enduring financial hardship and greater anxiety with the removal of lifelong awards, the changing of systems like DLA to PIP and the sustained uncertainty that accompanies their daily existence. This uncertainty and anxiety is at the root of many disabled people’s doubts over whether a C.B.I could offer them the same advantages that it describes for the non-disabled. The Milton Friedman approach to Basic Income sees the sweeping removal of all other forms of welfare, so it is relatively easy to understand the hesitancy from such groups to support a C.B.I. Therefore any trials in Scotland must ensure these fears are accounted for and addressed fully or we risk alienating wide sections of our society and marginalising women further.
There are feminist arguments against a C.B.I too that see it as a means of entrenching gendered stereotypes, by reinforcing the role of women as mothers and care providers in the home. The rationale for which, sees women as only entering the paid labour through financial necessity and not due to personal ambition or achievement. This concept is inherent on the androcentric perspective of mainstream economic thinking. Fixating on economic behaviour models that only reflect men’s economic behaviour is to continue the mistakes of the previous designing of welfare systems.
Feminist economic perspectives seek to transform economic modelling and transcend traditional left & right politics to enact change that supports economic equality, and equality of opportunity. It is important that any discussion of C.B.I moves beyond the automation argument to account for the gendered division of labour and highlight other forms of disadvantage and oppression encountered by women with intersected identities otherwise we run the risk of failing to take those who may benefit most from a C.B.I with us in the call for increased income equality and greater emancipation from the effects of social structures that reinforce inequality at present. Scotland has a unique moment within its grasp just now.
So, while we may not yet have complete gender parity in our elected houses of government, or within our social security and welfare committees, we must ensure by our activism, that we are taking our C.B.I cause to all of Scotland’s communities and enabling the same to share and create new arguments for income equality in the form of basic income. The proposed trials must ensure that all women, men and non-binary people across all of our society’s intersections are represented within them. And additionally that measurement of the outcomes of trials is comprehensive enough to look beyond the household as a unit and looks at the individuals within them for meaningful analysis. For that to happen we need to be asking the right questions from the start; how do we create a social security system that provides income security for all? – The threat of automation alone is not sufficient to design or call for a C.B.I that does that.
- Jen Broadhurst, Economist, CBI advocate and CBINS volunteer – @jenmb36