Mid-Covid, Universal Basic Income now doesn't look idealistic, but realistic | Rethinking Poverty

Mid-Covid, Universal Basic Income now doesn’t look idealistic, but realistic

Posted on 24 Apr 2020   Categories: Blog, Coronavirus, Cross-posts, New economic models Related Tags:  

by The Alternative UK

From WSJ
From WSJ

From our beginning, we’ve identified Universal Basic Income as a foundational policy for A/UK – as a way to ground active citizenship, encourage creative living, redistribute wealth and collectively reap the benefits of disruptive automation (see our archive). Recently it’s been prototyped, with test schemes suffering at the hands of incoming governments. UBI was even the basis of a US Presidential campaign (Andrew Yang).

But Coronavirus, and the startlingly “universal” nature of its impact on economies and households, has brought UBI (even if deployed on a temporary basis) straight to the centre of policy considerations.

The most striking current initiative is from the Spanish government, who are going to bring in a basic income scheme (not universal, because targeted at the poorest families). Interviewed by Paul Mason in the New Statesman, the Podemos leader Pablo Iglesias – part of the left-leaning national coalition government in Spain – explained further:

We are currently working – together with the Ministry of Inclusion and Social Security and the Ministry of Labour – to launch a basic income for those households that, as a consequence of the crisis, have run out of income and are not entitled to unemployment benefits. It is not for all households, only for those without income.

Our proposal is to give an allowance of around 500 euros a month to an adult who lives alone, which would reach up to 1,000 euros per month in the case of a home with two adults and two children.

Inevitably, the Spanish government will have to issue debt in the coming months to pay for this. This is not a problem in this context, since the ECB [European Central Bank] has already said that it will buy this debt to guarantee the stability of sovereign bonds in the financial markets.

And by guaranteeing this basic income for households that lose their earnings, we will facilitate the recovery and, with that, the return to economic growth. The best way to reduce debt is to restore growth as soon as possible.

There are reports that you consider it to be a permanent solution – what is the rationale for that?

Indeed, we think that this basic income should remain once we overcome the current crisis. We do not propose the implementation of a universal basic income, but rather a guaranteed income scheme that supplements the income of poor households.

This has been done for years in some Spanish territories, such as the Basque Country, and with good results. What is necessary now is to extend these guaranteed income schemes to the whole country, with the aim of lifting out of poverty the more than nine million Spaniards who live below that threshold.

Permanently adopting this type of measure would not only help to have a fairer and more equitable distribution of income. It would also allow for a more efficient functioning of our economy, ensuring sufficient levels of internal demand.

Once the crisis is over this measure does not have to be financed with increases in public debt. Spain has an income-to-GDP ratio 7 points lower than the eurozone average. We can reduce part of this difference with a well-designed wealth tax.

It’s fascinating, if a little dispiriting, to see how much the Podemos leader’s case for UBI is so trapped within the productivity discourse of GDP-led growth – the universal payment rendered as a way to restore “sufficient levels of internal demand”.

It’s as if, somehow, the Coronavirus wasn’t triggered by the kind of heedless, growth-driven extractivism of our current model (see our blog featuring Mike Davis, and Pat Kane’s pieces (1, 2) on the microbiologist Rob Wallace recently).

Can we so easily return to the same framework? After all, we recently had Northern England in floods, and an Australia in flames.

We enjoyed these quotes from the academic Guy Standing, interviewed in Wired magazine, on the saliency of UBI:

Are we being timid? Is the coronavirus pandemic the time to launch UBI, in every country, forever?

According to Guy Standing, a Soas professor and a co-founder of the Basic Income Earth Network, definitely. Standing worked with the Labour party to sketch out a UBI pilot that found its way into its 2019 election manifesto, and has just published a book, Battling Eight Giants, detailing all the reasons why UBI has become an urgent necessity.

“The pandemic is making it even more imperative that we introduce basic income in every part of the world,” Standing says. While the coronavirus crisis can be compared to the Spanish flu – which claimed tens of millions of lives between 1918 and 1920 – there is a key difference between the two pandemics, he argues.

“What was extraordinary about [the Spanish flu] is that there was no economic crisis immediately afterwards. By contrast the coronavirus pandemic is going to be associated with an incredible economic crisis that spreads across the world,” Standing says. “And it’s this combination – the pandemic and the economic crisis – that is going to cause many more people to die or have lives of misery.”

According to Standing, vertiginous levels of private and corporate indebtedness, the swelling of the ranks of economically insecure workers, plus the dependence of many sectors of the economy on the integrity of global supply chains make today’s world economy inherently fragile.

The coronavirus – with its baggage of furloughs, financial insecurity, healthcare systems overload, and societal fragmentation – might trigger a collapse. A basic income, Standing thinks, would stave that off.

Standing thinks that many governments might eventually wind up adopting UBI as a temporary emergency measure, but that the policy will stay put once citizens have tried it, and seen its benefits.

“UBI will become a legitimate part of our society very quickly,” he says. In the long run, he hopes that the policy might become the backbone of a society built around “work, not labour”. In Standing’s ideal world, people liberated from economic insecurity would devote their time to community work, the arts, and productive leisure.

More here.

And as ever, we refer you to the work of early A/UK co-creator Phil Teer, and his inspirational work on UBI and our social and cultural imagination. Phil contributed to this London Futurist discussion on UBI and Covid (embedded below, 6.14 onwards).

And finally, an encouraging public statement from the First Minister of Scotland on UBI, responding to Reform Scotland’s paper on UBI (paper here, story here):

[It’s true – she has been long interested – see this from 2017:]

This was originally posted on the Alternative UK blog on 12th April 2020.


Read our coverage of the coronavirus pandemic here.

Posted on 24 Apr 2020   Categories: Blog, Coronavirus, Cross-posts, New economic models Related Tags:  

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