The solution to poverty is to abolish it directly by a now widely discussed measure: the guaranteed income. … We are likely to find that the problems of housing and education, instead of preceding the elimination of poverty, will themselves be affected if poverty is first abolished.
Martin Luther King Jr., Where Do We Go From Here: Chaos or Community? (1968)
We hope this email finds you, and all those you care for, safe and well.
Many of us also have family, friends and colleagues in many different parts of the world and, coupled with the ever rising number of cases here in the UK/Europe/USA, the news about the spread of Coronavirus (COVID-19) across the global south, for many of us, will be even more worrying.
It is becoming more apparent with every passing day that the Coronavirus pandemic is holding a mirror up to every single aspect of human life and activity and that this scrutiny leaves much of humanity’s 21st century day to day behaviour sorely wanting. The ultimate damning evidence of this is the millions upon millions of our fellow sisters and brothers in the global south who don’t even have access to the basic protective shield of soap and water as this pandemic rages across the globe.
It’s not as if we didn’t know the system was long broken. We did. The evidence has been piling up for years and years. However, global inequality and the unstoppable ascendency of the tax evading greedy 1%; the harm of agribusiness and factory farming at one end and illegal poaching at the other; big pharma’s monopolies and the erosion of the primacy of publicly funded healthcare and research; and finally, ultimately, climate catastrophe; none of this was enough to force the hands of the political class, financial and corporate sectors to change course and ‘do the right thing’.
A bat and a pangolin.
Only this year, in the full flush of Brexit and election victory, the British Home Secretary Priti Patel announced that nurses, paramedics, nursery teachers, cleaners, carers, social workers were unskilled and immigrants who wanted to come to the UK to do these jobs would not be welcome in the post-Brexit Britain. Now, suddenly, we cannot live without them, because they are lifesavers. The shopworkers, warehouse workers and drivers, carers, cleaners, bus drivers, nurses, paramedics and teachers – all at risk from coronavirus, all vital, all until now, profoundly undervalued and underpaid.
It’s crystal clear, with this global health and economic meltdown, that those in control were wilfully incapable of doing the right thing. So now, we now need to look to those who have previously done the ‘heavy lifting’ on the new ideas we desperately need put into action as we contemplate the transformed post-COVID world.
We need the UK Bill for a Green New Deal to urgently pass and more, we need an equitable global GND for all; we need an NHS for all ie universal healthcare along with universal basic services; we need respect and reinstatement of labour representation and union rights; we need a counterbalancing surge in the global co-operative economy; and through our own GND Plus work, we have been developing and sharing ideas that raise debate and offer a framework for a long overdue, complete overhaul of foreign policy, defence and security thinking for a climate changed, post-pandemic world.
And until January 2020, who had heard of Universal Basic Income (UBI), let alone assumed it was a good idea? A handful of persistent, committed advocates and a tiny number of forward looking countries and /or regions around the world, that’s who.
Today, Saturday 4 April, through our MLK Global project, we mark the anniversary of the assassination of Martin Luther King. In 1968, just weeks before he was murdered, he talked about the need for a guaranteed income. Below are a couple of articles by our lead researcher Dr Ho-Chih Lin, about UBI past, present and future. UBI matters because its potential and immediate adoption is but one clue to how our world may well be transformed, for the good, in a post-COVID 19 world.
Hoping you and yours stay safe in these times.
Deb, Ho-Chih, Kev and all at Tipping Point
COVID 19 has profoundly exposed the failures and immorality of neoliberalism and the fragility of full-on globalisation. To save lives and minimize pandemic deaths directly or indirectly, everyone has had to follow ‘social distancing’ measures. However, this has also meant that many people are struggling financially to support themselves and their families due to loss of income. No social distancing policing will be effective if people have to make the tough choice between starving at home or getting infected by the virus at work.
It’s become clear that people need government assistance now if they are to survive. We also need to make sure the economy can bounce back after the pandemic is over and not enter into a prolonged depression because productivity capability has been decimated facilitated by inadequate government policies. Two keys are essential: 1. people need to have adequate financial support to follow social distancing measures without worry. 2. jobs have to be retained so people can go back to work straight after this crisis is over.
Number 2 is relatively politically uncontroversial – many countries have announced measures to financially support companies to “retain jobs” throughout the pandemic, ie not firing employees to save their bottom line. Number 1 is however a different story. There is an obvious solution but it was one that kept getting rejected by political leaders for all the wrong reasons: Universal Basic Income (UBI) is a ‘disincentive to work’ and ‘the well-off do not need it.’
These objections are beside the point because it has been shown that UBI has little to no impact on recipients’ likelihood of undertaking paid employment. Furthermore, common sense tells us that ‘not enough income for survival’ is a huge incentive for people to seek employment/work. When the government’s social distancing measures want non-key-workers to stay at home, they have to provide financial assistance so everyone has enough to survive this pandemic, especially to low-paid workers who usually cannot work at home and have minimal savings to fall back to. One of the main purposes of tax is to redistribute income and wealth within the economy. UBI is a direct and straightforward financial assistance from government to people without bureaucratic delay (inherent in means-tested benefits, eg. Universal Credits) simply because it is universal. The speed of this pandemic has made many people already struggle to survive even for the next few weeks. Any delay in government’s financial assistance is a political choice that will risk lives of people in need. UBI is taxable so whether the well-off needs UBI is a question that can be easily addressed by a fair tax system.
Meantime Citizens Advice proposed a “crisis minimum income” of at least £180 a week so everyone has enough money “to protect their own health and the health of others.” It said a single-person household needs £960 a month to avoid getting into difficulty, and a couple with children £1,700. Millions stand to lose earnings as a result of social distancing measures. The charity predicted people would typically be spending £27 less a week on transport and £19 less on leisure, but that food and energy bills would rise.
“The government must set a crisis minimum income of at least £180 a week so that people can afford the basics while they are unable to work,” said Dame Gillian Guy, the chief executive of Citizens Advice. “Increasing sick pay and support from the benefits system will mean people don’t have to face the impossible choice of working while unwell or ignoring guidance to self-isolate or socially distance.”
Daniel Susskind, an economist at Balliol College of Oxford University, writes in the Financial Times that universal basic income is “an affordable and feasible response to coronavirus”. He recommends every adult in the UK should be paid £1,000 a month to provide “a direct and instantaneous burst of financial relief” to the many people across the UK who are worrying about making ends meet during the pandemic.
There are 52m adults in the UK, roughly 90% are British citizens. Handing out £1000 per adult (a virus does not respect nationality so why limiting to only citizens) would cost the UK government about £52bn a month. As Dr Susskind pointed out, it will only be a small fraction of the nearly £500bn bailout by the UK government during the 2008 global financial crisis. This UBI will only be temporary. Most experts expect the pandemic to (hopefully) ease in the summer if not before (most flu/corona viruses tend to hibernate during summer months) so we are looking at up to 3-month emergency funding between £52bn and £156bn – still less than a third of bank bailout in 2008.
How does this compare, let’s say, to an issue close to our hearts here at Tipping Point North South – global defence spending? Here in the UK, under HM Treasury (HMT) accounting, defence spending was around £48.7 billion. It is pretty clear now that the two biggest threats to our national (and international) security are the climate emergency and global pandemic, (not omitting nuclear war by accident or design) and our militaries are, in truth, ill-prepared to deal with either. We have to ask, are we getting value for money? Are we actually ‘protected’ from the biggest threats to our human security? And the trillion-pound question – what is our military for and what’s been the purpose of our defence spending? The UK alone has spent nearly £1 trillion on defence in the last two decades, supposedly to counter global terrorism threats since that fateful date, 11/09/01. Maybe the date on which the British Prime Minister announced the national lockdown because of the Coronavirus crisis – 23/03/20 –should be the date that finally made us turn our heads around and readdress our priorities.
If we are going to spend another £1 trillion in the next 20 years, it simply cannot be wasted on the same old ‘defence paradigm’ and ‘national security threats’ with no mention of climate breakdown or pandemic. COVID-19 is the wake-up call that shows us why we urgently need ‘defence’ to address climate emergency and global pandemic.
But if this is too much to ask of our leaders just yet (though we need to get there), a £1000 yearly UBI for the next 20 years will cost the same £1 trillion. After all, once we get our money back, we can always find better uses for it.
UNIVERSAL BASIC INCOME
The UBI concept has been around a long time, from Thomas Paine to Martin Luther King.
The solution to poverty is to abolish it directly by a now widely discussed measure: the guaranteed income. … We are likely to find that the problems of housing and education, instead of preceding the elimination of poverty, will themselves be affected if poverty is first abolished….A host of positive psychological changes inevitably will result from widespread economic security. The dignity of the individual will flourish when the decisions concerning his life are in his hands, when he has the assurance that his income is stable and certain, and when he knows that he has the means to seek self-improvement….There is nothing except short-sightedness to prevent us from guaranteeing an annual minimum – and liveable – income for every American family. The time has come for us to civilize ourselves by the total, direct and immediate abolition of poverty.
Martin Luther King Jr., Where Do We Go From Here: Chaos or Community? (1968)
The idea of universal basic income has rapidly gained traction among people who are either worried about or looking forward to an automated future and people who are deeply concerned with rising inequality in the society – it has been COVID-19 however, that has catapulted it onto the mainstream agenda.
However, the idea of a basic income goes back centuries – from Thomas More, Johannes Ludovicus Vives, Marquis de Condorcet, to Thomas Paine and John Stuart Mill, they have all argued a basic income, in its various forms, as a way to solve some social ills and improve social welfare, resulting in a more civilised and equal society.
For radical economic historian Karl Polyani (1888-1964), now enjoying a revival amongst progressive thinkers and economists, labour, along with land and money, is a “fictitious commodity,” but none of them were created for the purpose of being turned into market commodities. He writes:
Labor is only another name for a human activity which goes with life itself, which in its turn is not produced for sale but for entirely different reasons, nor can that activity be detached from the rest of life, be stored or mobilized; land is only another name for nature, which is not produced by man; actual money, finally, is merely a token of purchasing power which, as a rule, is not produced at all, but comes into being through the mechanism of banking or state finance.
Furthermore, marketisation is inherently destabilising:
To allow the market mechanism to be the sole director of the fate of human beings and their natural environment . . . would result in the demolition of society. For the alleged commodity “labor power” cannot be shoved about, used indiscriminately, or even left unused without affecting the human being who happens to be [its] bearer.
Universal basic income in its essence is to give a flat, non-means-tested payment to every citizen, at a level sufficient for subsistence. It is a simple idea that has something in it for everyone —socialists, conservatives, liberals, libertarians. From Milton Friedman to John Kenneth Galbraith, from right to left, intellectuals and political activists have voiced their support for basic income based on their own beliefs and concerns. During the final year of his life, Martin Luther King Jr. strongly advocated for guaranteed income as ‘the solution to abolish poverty’. In the 1970s, the Nixon administration pushed for Guaranteed Annual Income (GAI) and the House of Representatives even approved the proposal (but the Senate killed the bill).
Universal Basic Income isn’t really about welfare spending – it’s about tax policy. And it is affordable
Universal Basic Income is an unconditional direct cash transfer from the government to individuals. The Government provides social security (eg. unemployment benefits, disability allowances), spending money on essential public services (eg. health care, education, national infrastructure) and gives conditional cash transfer (eg. tax credits, food stamps) to maintain a civilised society. UBI is therefore unique and it is a misunderstanding to think UBI is all about the welfare spending. UBI does not substitute the welfare state and does not necessarily mean welfare spending will increase.
One major criticism of UBI is it will be very expensive. It will be if we are talking about £15000, or even just £8000, annual cash transfers to a large population. However, there is no reason why UBI has to start too ambitiously and beyond the means of a given individual country. A modest UBI programme in a developed country could readily be funded by reforming the tax system and getting rid of some of the redundant welfare programmes (if UBI is introduced) such as child benefits and job seeker’s allowances. Even if the UBI is just £4000 a year, since it is affordable and universal, it would have broad political support, just like personal tax allowances in the UK (personal exemptions in the USA). Nevertheless, personal tax allowances are regressive and benefit wealthy individuals disproportionately. In contrast, UBI would be progressive and popular.
There is no one-size-fits-all scheme for the universal basic income, but if one can implement, all can. You just need to find the way that works for you
A report (2016) by the Joseph Rowntree Foundation found that poverty costs the UK taxpayer £78 billion a year in additional public services spending and lost taxes. A UBI will not substitute the welfare state but it will significantly reduce poverty and hence reduce the associated burden on the public services. The additional spending on treating health problems associated with poverty alone costs £29 billion a year.
It will increase tax revenue. UBI is a cash transfer and the poor necessarily have to spend all their money just to meet their living expenses. Because of the multiplier effect in the economy, a pound given by the government to spend in the economy will create economic benefits multiple times its original value. The economy grows, the economic pool that the government can tax becomes bigger and so is the tax revenue.
Despite the British government spending £78 billion a year, poverty has been going up, inequality is getting wider and the living standard for most people has not improved, if not actually getting worse. This certainly calls for a rethink about our approach to poverty elimination.
Ideally, we need to go further ie Universal Basic Services – universal access to quality health, housing, transport and education that really makes a difference. But for now, UBI is a good start in opening up the debate.