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UBI

Universal Basic Income is Basically Terrifying. Here’s Why.

There’s something headed down the pipe that you’re going to hear about a lot, over the next few years, and it’s called UBI.

Depending on who’s in control of the initiative, it might have different names: Universal Basic Income, Unconditional Basic Income, Partial Basic Income, or Guaranteed Minimum income, being just a few of the variants.

Basically, UBI seems like a brilliant solution to the intractable problem of poverty, and is being promoted as such.

But the long term ramifications of UBI should strike fear into the heart of nearly everyone, who currently holds down a traditional “middle class” job. Why? Well, let’s start with a little bit of background information,

What’s the Big Idea?

The origins of UBI can be seen in the scattered writings of philosophers ranging from Thomas More, to John Stuart Mill. In the modern era, however, they were cohesively pulled together by nobel laureate Bertrand Russell at the end of the First World War. In his book, Roads to Freedom, Russell posited that: “a certain small income, sufficient for necessaries, should be secured to all, whether they work or not…”.  

Russell argued that doing so would allow the formation of a government system that provided the greatest basic freedom to individuals, while continuing the inducement to work, in order to obtain an income above the basic minimum level.

The concept was kicked around in intellectual and economic circles for roughly 70 years, until 1984, when a group of researchers and trade unionists got together in Belgium, and concocted an outline for a system of UBI, which they entered into a contest on the future of work. They won.

From that success, came the formation of BIEN; the Basic Income Earth Network, and the idea has been kicking around in various forms, until 2015. That’s when Switzerland decided to put the concept to the test, in a national referendum which ultimately, was defeated. It seems that careful Swiss voters decided that the plan would eventually bankrupt the country.

Who on Earth, Would Support THAT?

It’s worth noting that the Swiss were among the first to consider some concrete form of UBI, as the country is also the home of the World Economic Forum, one of the most powerful money-shakers on the planet. The WEF has strong ties to the International Monetary Fund ( IMF ) the World Bank, and its off-spring: ICSID the International Center for the Settlement of Investment Disputes. The ICSID may be the most powerful, undemocratic, and unaccountable organization on earth; capable of over-ruling sovereign governments on matters of trade and economic policy.  But that’s a story for another day.

The fact that these Titans of global economic control and manipulation are interested at all in UBI, should be sufficient to give the rest of us reason to pause.

If the global economic elite, the “uber-capitalists” of the world are all for it, there’s reason to believe that UBI is not the Socialist panacea that it seems on the surface.

And they are, interested. Just look at the 2017 Global Risks Report, from the World Economic Forum.

“… rising income and wealth disparity is rated by GRPS respondents as the most important trend in determining global developments over the next 10 years. This points to the need for reviving economic growth, but the growing mood of anti-establishment populism suggests we may have passed the stage where this alone would remedy fractures in society: reforming market capitalism must also be added to the agenda.” p.6

… Implementing alternative models of income distribution There are an increasing number of proposals for fundamentally new models of income distribution, which do not tie welfare benefits to being out of work. These include a negative income tax, in which people earning below a certain threshold receive supplemental pay from the government; wage supplements, in which the government makes up the difference between what a person earns and a recognized minimum income; and a universal basic income paid to all members of society regardless of their means. Such income distribution systems would make it much easier for people to take on part-time work or intermittent work as desired.” p.38

Although the Swiss rejected it, the idea of UBI is far from dead. In fact, it’s gaining traction in many parts of the world, including a proposal in Finland, a pilot project in India, and our own backyard, right here in Ontario.

Wondering Which Way the Wynne Blows

In just a few weeks time, the government of Kathleen Wynne will introduce a UBI pilot project of its own. The idea supposedly sprang from the fertile mind of Hugh Segal; appointed “special advisor on basic income” by the Liberal Premier in June, 2016.

If you know anything about Hughie Segal, then you should know this: he is first, and foremost. a conservative.

His CV includes stints as a Conservative Senator,  Chief of Staff to Conservative Prime Minister Brian Mulroney, NAFTA negotiator, and member of the Institute for Research on Public Policy.

If Hugh Segal is masterminding the implementation of this experiment in UBI, then you can bet that it is founded in solid, conservative, capitalist roots, and did not spring independently from the wild ground of democratic socialism.

And while on the surface it may appear that our Liberal Premier is leaning left in a bid to halt poverty in the Province, the reality is that this policy has at least tacit blessing from traditional monied interests. The question is, why?

A Hard Rain, is Gonna Fall

The world has been struggling with the scourge of poverty since the moment that trade became possible. Inevitably, in any trade deal, there are some participants who benefit more in the long run, than do others. This is not necessarily due to any sort of nefarious undertaking by one side or the other; but can simply be the result of preconditions which make a particular country flourish under the terms of an agreement, while other nations involved see more limited success. ( Or no success at all. )

A continual lack of success, breeds poverty, and extreme poverty sustained over a lengthy period of time, leads to instability, and a volatile society. Instability and volatility are not good, for the growth and success of capitalism. Therefore, minimizing these conditions is in the best interests of monied interests. And the Global Risks Report confirms that:

… recent events in Europe and the United States suggest an appetite for rebalancing towards democracy and national sovereignty. The combination of economic inequality and political polarization threatens to amplify global risks, fraying the social solidarity on which the legitimacy of our economic and political systems rests. New economic systems and policy paradigms are urgently needed to address the sources of popular disenchantment. p.13

Put another way, we’re mad as hell, and we’re not going to take it anymore.

But the disenchantment of the populist classes is really in its infancy. Wait ’til things really get rolling. And when will that be? Well, sooner than you might think.

By many estimates, 30 – 40% of the jobs we do right now, will no longer exist within 20 years, due to automation, technology, and artificial intelligence. Self-driving vehicles, already being tested, are just the beginning. When they wipe out roughly 300-thousand trucking jobs in Canada,  at least 400,000 in Britain, and 1.7 Million jobs in the United States ( and that’s not counting cabbies ) we will begin to see the tip of the iceberg.

In February 2016, then-president Barack Obama released an economic report to the U.S. Congress that suggest that 62% of American jobs could be eliminated by 2030.

In the same month, The American Association for the Advancement of Science held it’s annual meeting, and declared that half the jobs performed by humans will be gone, again, by 2030.

A 2013 report from Oxford University by Carl Frey and Michael Osborne predicted the same 50 percent reduction in human jobs within the next two decades, and a report by the giant management consultant McKinsey & Company estimated that, 45 percent of current jobs could be replaced tomorrow, with existing technology.

The argument has been made that technology will create more jobs than it destroys, but try telling that to the angry, unemployed rust-belt residents who voted for Donald Trump. And other numbers bely this argument as well. Take this example from a recent article in The Atlantic  :

In 1964, the nation’s most valuable company, AT&T, was worth $267 billion in today’s dollars and employed 758,611 people. Today’s telecommunications giant, Google, is worth $370 billion but has only about 55,000 employees—less than a tenth the size of AT&T’s workforce in its heyday.

In general, the greater the efficiency and productivity, the smaller the workforce required to maintain, and service it.

Following this through to it’s logical conclusion, when Millions of jobs are lost to technology, what will those displaced workers do, to survive? The vastly increased pool of available labour will be competing for a vastly smaller number of available jobs. And when there’s a glut of labour, wages inevitably decline. Less jobs. Less money available from those jobs. More people out of work. Can you imagine Britain, the U.S. or Canada with a 40% unemployment rate? If that’s not a recipe for social volatility, nothing is. It’s no wonder then, that elite global economic forces are jumping on the UBI bandwagon. But is it, a viable solution?

Whither Thou Goest … Leave Me Here.

Let’s say we institute UBI, remembering that the pilot project is a recommended $1,320 per month — or about 75% of the current measurement for the poverty line in Ontario. You’re still allowed to make money on top of that, and you’re going to have to. But can you make up more than the extra $330 per month it’s going to take, just to get you up to the basic poverty line? Especially if 40% of the current job market disappears?

According to StatsCan, there were roughly 7.1 Million people employed in Ontario as of February 2017. That means that if 40% of them are suddenly out of work, there will be 2.8 Million people seeking enough employment to raise themselves to the basic poverty line. And remember, a glut of labour drives wages down. So unless you are handy, crafty, or somehow manage to keep your own business afloat as a self-employed entrepreneur, in a province where nearly half the population lives below the poverty line … earning that extra income is going to be a serious challenge.

Things you enjoy or take for granted right now; travel, theatre tickets, sporting events, dance lessons or activities for the kids — or even yourself — all of those things represent the difference between paying rent, or buying food. And I say rent, because the idea of home ownership will be a ridiculous dream that almost no one can afford on 13-hundred dollars a month. Boats? Cottages? A car? Dream on.

UBI is welfare, in lipstick and high heels.

And, just like welfare, it will be controlled by the forces of government, commerce, and big business. After all, the money will have to come from taxes on those business interests, since there won’t be enough income tax coming in to get even close to what’s needed to pay UBI to everyone that qualifies.

Do you think that those monied interests will enthusiastically shovel ever-greater amounts of tax dollars into government coffers, in order to  increase the amount paid out in UBI?  Call me “negative” if you wish, but personally, I’m doubtful.

And so by accepting UBI, we are basically trading one form of “wage slavery” ( the current necessity to hold a job, even if you hate it, in order to feed, clothe, and shelter your family… never mind the debt for which your bank holds you responsible … ) and replacing that servitude, with an even more punishing system under which we all struggle for existence, just below the poverty line. Does that sound like a bright, and appealing future to you? Something to strive for? Something you’d want for your kids? You’re welcomed to it, if you wish, but please leave me behind.

Like it or not, however, we’d all better get used to the idea because, at the moment, there are not a lot of other options being pitched.

So, What About the 1% ?

All of this UBI stuff really only matters to those who now enjoy the comforts of a rapidly shrinking “middle class”, or “working class” existence. Those who belong to the most wealthy segment of society, will not only avoid the stark reality of UBI, they will actually benefit from it.

As workers are removed from the equation, their wages and benefits no longer flow away from the company ledgers. As automation, technology and artificial intelligence replace them, all business becomes more efficient, and more profitable. Those gains, both from wages not paid, and increased productivity, go directly back to shareholders and directors as increased income. The super-rich, will get super-richer. So yes, they will be able to afford to pay ‘ a little more in tax ‘ , and will do so willingly, because the gains they will make on the other end will far outweigh the hit they’ll take on taxes. For the wealthy, UBI is a wise investment.

The only other way to fund UBI, is to run government debt up to levels never yet conceived, printing money on a scale not seen since the Weimar Republic. The resulting impact from inflation however, would negate most of the gains that the wealthy would otherwise enjoy, if public debt were kept to a reasonable limit. And so UBI, funded by increased corporate, and personal income tax on high income earners, would obviously be the best way to go for those who already don’t need the money.

At least some of those one-percenters however, are worried about the consequences of such upheaval.

Billionaire hedge fund manager Paul Tudor Jones II is one of them. Jones launched Just 1000, a non-profit designed to alter the behaviour of corporate entities, by driving customers and business towards the companies that embrace values such as fairness to employees, sustainability, and community giving. Just 1000 will publish a public list of the companies and businesses that best reflect those values, encouraging the public to support them, and competitors to emulate them. Although there is definitely a strain of altruism in Jones’ blood, self-interest also plays a significant role. At a TED talk in March 2015, Jones made that, abundantly clear:

“This kind of gap between the wealthiest and the poorest will get closed. History shows it usually ends in one of three ways—either higher taxes, revolution, or war. None of those are on my bucket list.”

Jones is not alone. At the World Government summit in Dubai, TESLA CEO Elon Musk added his voice to the list of the super-rich who see some form of UBI as “necessary” in the near future. Musk summed it up this way:

“If there’s no need for your labor, what’s your meaning? … Do you feel useless? That’s a much harder problem to deal with.”

And, Microsoft founder Bill Gates has also posited a theory on the advancement of technology and its subsequent effect, on employment. Gates actually wants to slow down the tech tsunami by imposing some form of tax on businesses that replace workers with automation and robotics. But such a measure would really only be a band-aid used to staunch the flow of the inevitable.

And the rest of the 99% ? 

In the end I would like nothing better than to wrap this commentary up with some brilliant and positive solution for the most frightening forecast of the future that I’ve ever encountered; but alas, as they say in the vernacular; ” I got nothin’.” The best that I can offer is the written equivalent of the canary, chirping madly in the coal mine. Current conditions are dangerous, and heading towards dire. If you have a voice, use it now. Let those in government, and their corporate masters know that you’re not interested in a future that involves mere survival at a level below subsistence for the vast majority of society. There has to be something better than UBI.

Being paid for not working at all may sound “too good to be true”, and in this case, when it comes to UBI, that’s absolutely correct.

scoturquhart@outlook.com

I'm a veteran broadcast journalist, producer, writer, and talk show gadabout. I like to play bad hockey, drink good beer, take sporadic rides on my bicycle and generally annoy my family with Dad jokes and selective memory. ( Lois the dog, excepted. )

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