The dystopian truth about a universal basic income

Proposals for a universal basic income (UBI) are rarely out of the news. UBI is regularly championed, but rarely criticised. If it’s true that it’s an idea whose time has come, as some suggest, we should be very worried indeed.

The basic idea of a UBI is that the state would make a regular guaranteed payment to every citizen, regardless of their means and employment status. It would be set at a level sufficient to cover the ‘basic’ necessities of life: food, shelter and clothing. Its advocates, from the left and from parts of the free-market right, claim that this would simplify the welfare system, tackle poverty and improve recipients’ mental health.

The latest UBI initiative in Britain was announced earlier this month by the think-tank, Autonomy. It wants to run a two-year micro pilot involving 30 people across two areas of England, one in the north-east and one in north London. The recipients, to be chosen at random from a pool of volunteers, would receive £1,600 per month without any obligations. This follows the launch of a similar two-year trial last year by the Welsh government, which is paying the same amount to 500 young people leaving care.

Autonomy says that the purpose of the pilot is primarily to ‘make the case for a national basic income and more comprehensive trials to fully understand the potential of a basic income in the UK’. In other words, this is not an objective experiment, in which observers will assess the pros and cons of a UBI. Rather, this is ‘research’ with a predetermined outcome – that is, the recipients will agree that a basic income is ‘a good idea’. After all, anyone given an unconditional £38,400 over two years is almost guaranteed to report that they feel less poor, less stressed and happier compared with the control group which goes without.

Beyond its small scale, the study has a couple of further fundamental limitations. Firstly, it is time limited. This extra cash will therefore be experienced very differently to a permanent and universal scheme, in which a national population would build the basic income into their future expectations. For instance, very few people in this pilot would give up an existing job for a life of ‘creative leisure’ when they know that, within two years, they will return to their previous living circumstances.

The other big flaw of this pilot is that it is unlikely to secure official backing from Whitehall. As a result, the pilot payments will be interacting with existing welfare payments and taxation. The conventional UBI model is a non-means-tested alternative to existing welfare arrangements, not a taxable supplement.

Aware of this deficiency, the organisers note ‘the risk to participants, including how payments would interact with taxes and existing benefits, [and the] potential for tensions within the community’. Volunteers could even lose welfare benefits during and after the pilot. But so far, Autonomy has failed to say how it would account for the complex interactions between the existing benefits system and the pilot scheme. This is a pretty big flaw in the research.

What’s more interesting than the actual research project itself, however, is the enthusiasm with which UBI is now being advocated by certain sections of society. It tells us a lot about how these left-leaning think-tankers, academics, journalists and even some free-marketeers view work, individual autonomy and the potential of automation.

UBI supporters’ ambivalence over whether people choose to work or not is especially telling. White-collar roles have long been culturally disdained as mundane and unfulfilling. But UBI supporters have turned this disillusionment with certain jobs into an antipathy to work in general.

Hence they don’t call for improved working conditions, or for better jobs, but for people to be able to take or leave work. Some leftist academics even champion a ‘post-work’ future. It is no coincidence that earlier this year, Autonomy endorsed the supposed benefits of a reduced four-day working week.

Of course, increased flexibility at work can sound benign and may suit some people, especially those with childcare needs. But today, ‘flexibility’ generally means deprioritising work in favour of almost anything else in our lives. The widespread acceptance, even by many employers, of white-collar staff working from home since the pandemic lockdowns ended is revealing in this respect. It shows how work has lost its social significance.

A lot of work in the past was also pretty mundane and mindless, not to mention physically arduous. Yet there wasn’t the same aversion to work that there is now. Instead, there was a shared belief in the dignity of work. Work was considered a key aspect of being an active citizen and often formed a core part of one’s personal identity. People in the past fought to retain or find jobs, not to avoid the workplace like today. The idea of a UBI feeds off and reinforces precisely this cultural devaluation of work.

The calls for a UBI also reflect the paternalistic outlook of its supporters. They assume that people need to be looked after by the state. That rather than relying on our own individual and collective resourcefulness, we need a permanent handout instead. Far from freeing us, a UBI would shackle us permanently to the state.

The presumption of people’s helplessness has become a self-fulfilling prophecy in contemporary Western societies, where many have fallen into welfare dependency. The postwar welfare state was originally intended to provide a valuable safety net for people unable to perform or find work. Today, it has become a web that entraps people. It subsidises low-paying employers and disincentivises people from searching for more productive, better-paid employment.

The welfare state has extended its reach enormously over the past half-century. Official figures for the share of the non-retired population living in households that receive more in state benefits than they pay in taxes has risen steadily. This category of ‘net-welfare dependents’ already accounted for 30 per cent of the non-pensioner population in the late 1970s. After the financial crisis in 2010, the proportion of net-welfare dependents peaked at 45 per cent, and has barely changed since. In 2019, on the eve of the pandemic, 43 per cent of non-retired people were still net-welfare dependents.

The expansion of welfare has fostered a culture of dependency and, for some, a sense of entitlement. Far from helping the poorest in society to free themselves from impoverishment through their own actions, welfare dependence has led many to passively accept their relative hardship. Welfarism saps individual autonomy and community solidarity.

Supporters of a UBI often present it as an alternative to this dependency-forming and incentive-distorting system. But this is a flawed argument. A guaranteed basic income for all would not eliminate dependence. It would extend it into a permanent way of living for many people who either don’t have jobs or with low-paying ones. It would expand and normalise the overreliance on the state that has already long been undermining people’s aspiration and endeavour.

The government does need to provide decent welfare, but only to people in real need. For everyone else, it needs to ensure that there are enough jobs that provide, at a minimum, a liveable income.

Finally, support for a UBI is also born of anxiety about automation. Its supporters assume that good jobs are inevitably going to be harder to come by in the future, and therefore the state needs to step in. Robotics and artificial intelligence (AI) in particular are expected to boost productivity over the next couple of decades. Some argue this will come at the cost of human jobs.

As Will Stronge, the director of research at Autonomy, put it: ‘With the decades ahead set to be full of economic shocks due to climate change and new forms of automation, basic income is going to be a crucial part of securing livelihoods in the future.’ But this justification for a UBI is based on an unnecessarily gloomy prognosis.

The replacement of workers with technology is actually an expression of economic and social progress. The problem with Stronge’s position is that he simply assumes that advanced societies will no longer be able to create new roles and better jobs to replace those that can be performed by technology. The promotion of a UBI is underpinned by a belief that society won’t be able to generate new industrial sectors or areas of employment.

The pessimism of UBI advocates is born of historical ignorance. Since the Industrial Revolution in the early 19th century, automation has successfully displaced tens of millions of jobs, many of them the most routine and repetitive forms of labouring. And over the ensuing 150 years, up to the 1970s, the workforce actually expanded. Automation, productivity growth and job creation occurred in parallel.

As John Plender, a senior Financial Times columnist, explained recently, technological advance will indeed displace workers. But it will also make all goods and services cheaper, ‘raising real incomes and generating new sources of demand in other sectors of the economy’. And as a result, it will create new jobs.

This pattern of job creation exceeding job destruction was the norm for most of the 19th and 20th centuries. Of course, there is no guarantee it will resume again in the 21st century. Indeed, the decay of productivity growth and the slump in the creation of good-quality jobs since the 1980s does not bode well. But this is not down to technology taking away jobs.

On the contrary, in the current depressed conditions, the real peril we face is that automation will be deployed far too slowly. Right now, there are too many impediments to investment. We need new technologies to be implemented far more widely. This would increase productivity, displacing some work but also creating new and better jobs elsewhere.

A UBI, then, is not a progressive or emancipatory proposal. It is the product of a deep cultural and political pessimism. It rests on the devaluation of work, the diminution of individual autonomy and an anxiety towards automation. The answer to our economic malaise lies not in universal state dependency. It lies in regaining a belief in progress and in the value and importance of work.

Phil Mullan’s Beyond Confrontation: Globalists, Nationalists and Their Discontents is published by Emerald Publishing. Order it from Emerald or Amazon (UK).