Battle for the Economy: Universal Basic Income: Workfare or Freedom?
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With automation threatening swathes of jobs, there’s growing momentum behind the idea of a universal basic income (UBI): an unconditional payment from the state regardless of any other income. For those unable to perform or find paid work, it would provide enough to live on. For those who can work, it would allow an escape from the ‘poverty trap’, where the loss of welfare benefits makes low-paid work uneconomic.
Can UBI really work in practice? Some argue it would require an unacceptable increase in taxation. Others question whether it really could replace all welfare benefits. More fundamentally, does everyone, no matter how rich, deserve it – or should it be means-tested? And above all, should we ask for something in return – using UBI as the basis of a new relationship between citizens and society?
The debate around universal basic income is not confined to the developed world. Recently, developing countries like India, Brazil and Kenya have considered various proposals for universal basic income as a way to alleviate poverty. Is universal basic income feasible in a developing economy? What are the pros and cons of such a policy in the context of a developing economy? These questions are of contemporary significance across the globe today.
From each according to his ability, to each according to his needs’, wrote Karl Marx 150 years ago. Since then, the Left seems to have focused its energies on the first part of the sentence – emphasising the individual’s entitlement, rather than their responsibility to wider society.
But some argue that UBI provides an opportunity to redress that balance, by acting as the keystone of a new contract between individuals and society: one in which we are rewarded for our role as active citizens – whether that takes the form of playing our part in social care or community work – or even government. In effect, rather than be passive recipients of welfare, people could be paid for taking part in emerging initiatives such as citizens’ juries or participatory budgeting.
Others worry that asking people to do something in return for government support may conjure up visions of Victorian workhouses, where the ‘deserving poor’ were put to work in return for bed and (barely) board. Previous attempts at ‘workfare’ arrangements have tended to end in failure. But a policy along these lines could potentially solve a number of problems in a society wrestling with both the economic costs and social consequences of ‘benefit culture’.
But is this realistic? Do we really want to have a society where people only take part if they’re paid to do so? And what if they prefer to spend their time making music, or caring for their kids – or enjoying a drink while watching daytime TV? Do we withdraw their income, turning them into a new underclass of ‘undeserving poor’? Or do we encourage participation with bonus payments for good, active citizens?
Produced with additional help from Jane Baldwin and the following Weidenfeld-Hoffmann Trust scholars: Geraldine N Chipendo, Saadia Gardezi and Vaishali Rao.