A neoliberal Citizen’s Income?

by Citizens' Income Trust | Apr 19, 2017 | Opinion

An article by John Clarke, ‘Progressive Dreams Meet Neoliberal Realities’, poses an important question: Is it true that ‘we can draw a line between the models that are concerned with improving lives and raising living standards and those that are focused on intensifying the capacity for capitalist exploitation’?

First of all for some of the mistakes in the article. The ‘progressive’ camp is well described as offering a range of schemes that would be ‘responsibly redistributive, reduce poverty and inequality and ease up on bureaucratic intrusion’, and that would provide enough money to live on: but it is not true that those who propose schemes that would be ‘responsibly redistributive, reduce poverty and inequality and ease up on bureaucratic intrusion’ ‘pay great attention to explaining how nice their systems would be but give little if any thought to the concrete prospects of implementation’. Research published by the Institute for Social and Economic Research and by the Citizen’s Income Trust shows that schemes that would be ‘responsibly redistributive, reduce poverty and inequality and ease up on bureaucratic intrusion’ can be perfectly implementable.

A second mistake is to suggest that ‘there is a fight to be taken forward for living income, full entitlement and programs that meet the real needs of unemployed, poor and disabled people, as opposed to the present ‘rituals of degradation’ they embody.’ Unfortunately, it is precisely the fitting of benefits to needs that results in the ‘rituals of degradation’.

In the section of the article that matters, ‘Neoliberal version’, Clarke suggests that the motive underlying the schemes proposed by at least some of those governments proposing pilot projects is in fact the same as Charles Murray’s: the dismantling of all other welfare provision. He suggests that Citizen’s Income plans might be described with ‘progressive’ phrases, but their purpose is pernicious. He also suggests that Citizen’s Income proposals can provide cover for additional austerity within the current system; and that Citizen’s Income is being proposed in order to promote a more exploitative employment market.

In the section ‘Progressive Dreams’, Clarke suggests that ‘progressive’ versions of Citizen’s Income would be politically infeasible because they would tip the balance of power away from employers. He claims that it is neoliberal governments that seem to be interested in Citizen’s Income, suggesting that ‘progressive’ versions don’t stand a chance; that pursuing an infeasible Citizen’s Income might divert attention from tackling neoliberal depredations; and that Citizen’s Income would be an inadequate response to the problems facing our society. Clarke suggests that what we need is such public services as ‘free, massively expanded and fully accessible systems of healthcare and public transportation’, social housing, universal childcare, ‘living wages, workplace rights and real compensation for injured workers’.

Clarke’s final paragraph is worth quoting in full:

I am suggesting that our movements need to challenge, rather than come to terms with, the neoliberal order and the capitalist system that has produced it. For all its claims to be a sweeping measure, the notion of progressive BI is a futile attempt to make peace with that system. In reality, even that compromise is not available. The model of BI that governments are working on in their social policy laboratories will not ‘end the tyranny of the labour market’ but render it more dreadful. The agenda of austerity and privatization requires a system of income support that renders people as powerless and desperate as possible in the face of exploitation and that won’t change if it is relabelled as ‘Basic Income’.

The arguments need to be tackled one by one, starting with Charles Murray’s. Those who would like to replace public services such as healthcare with a Citizen’s Income confuse two different kinds of universality. The universality of healthcare must be one of availability, whereas the universality that characterises Citizen’s Income is one of provision. Whether healthcare is provided via the highly efficient NHS, or via an insurance system riddled with market failures, what individuals require is availability when it is needed, however much that costs. One person’s absorption of healthcare resources will be very different from another’s. Some people might spend months in hospital, and others might hardly ever see the inside of one: but they all need healthcare to be there when they need it. No standard amount of money can replace such a universality of availability. No doubt this argument will need to be made constantly. The important thing is that it is the only right argument and that it has to be made.

Some of Clarke’s other statements are genuine wake-up calls, and suggest that only Citizen’s Income schemes that do not impose losses at the point of implementation should be proposed. Similarly, nobody should be suggesting that a Citizen’s Income scheme could substitute for a National Minimum Wage or for a Living Wage. Citizen’s Income and a Living Wage would function very happily alongside each other, and would function far better than a Living Wage with a means-tested benefits system. Every time a Living Wage level is raised, means-tested in-work benefits fall, whereas this would not happen to a Citizen’s Income.

Some of Clarke’s arguments need to be tackled. No financially feasible Citizen’s Income would tip the balance of power very far away from employers and towards employees, if at all. Means-tested benefits function as dynamic subsidies – that is, they rise if wages fall – whereas Citizen’s Income functions as a static subsidy because it doesn’t rise if wages fall. Thus employers might experience more resistance if they attempt to cut wages. Also, because a Citizen’s Income might give to some employees more choice over employment patterns, and thus more ability to negotiate in the employment market, it might look as if the balance were shifting towards employees. However, because the overall effect would be to reduce the inefficiencies in the employment market, employers would find their firms becoming generally more efficient. This really could be a situation in which everyone wins.

No doubt some experiments are being conducted by neoliberal governments. This will not be a problem if researchers test the piloted schemes for household losses, and for changes in inequality and poverty. The best response, though, would be for governments across the political spectrum to research and pilot Citizen’s Income, and not to leave it to governments at only one end of it.

Finally, if universality and unconditionality are good for benefits systems, then they are good for everything else. The UK’s Sure Start childcare provision was designed to be universal, which removed the possibility of stigma. The NHS attracts no stigma, and it is highly efficient. Some services will need to be paid for, at least to some extent: experiments with free public transport can mean overloaded transport systems – but many public services are more efficient if free at the point of use. So far from Citizen’s Income being seen as a replacement for public services, it should be regarded as a default model for them unless proved otherwise.

As for Clarke’s final paragraph: let’s be realistic – the neoliberal age might be with us for some time to come, so what the situation requires is survival mechanisms and a modelling of how it might evolve to the benefit of people and planet. Citizen’s Income is precisely what is required. If Mr. Clarke would like to suggest a better alternative then we would be pleased to hear from him.