A leftist critique of Universal Basic Income

Many leftists will say there’s a good way of implementing UBI. But on a foundational level, UBI results in middle class pacification, and an increased emphasis on consumerism.

Christian Patterson
2019-04-01
Underground Mall

The idea of Universal Basic Income has become more mainstream in the US since Donald Trump was elected. At that point in time, I first noticed it suggested by DSA-types, and I figured it’d never happen. However, the way dialogue is shifting on UBI, I’m worried it could happen one day.

There are many UBI advocates throughout history, and they tend to be left-wing – either social democrats, or what we now call democratic socialists, or whatever the equivalent was in their historical context. Four of the most famous UBI advocates include Thomas Paine, Henry George, Desmond Tutu, and Martin Luther King Jr.

What I didn’t expect, when UBI was re-emerging into mainstream American discourse, was how much the idea would catch on with technocratic capitalists. Some of the biggest proponents in the U.S. include: Mark Zuckerberg, Elon Musk, Facebook co-founder Chris Hughes, eBay founder Pierre Omidyar, CEO of Hootsuite Ryan Holmes, and Zipcar co-founder Robin Chase.

Then, of course, UBI is the main platform for democratic presidential candidate Andrew Yang, the founder of Venture for America, a non-profit that teaches people how to be entrepreneurs, has made UBI his main political platform.

But even deeper, UBI has some weird capitalist bedfellows. Milton Friedman, the economist who laid the foundation of contemporary American neoliberal economic policy, advocated for something like UBI.

And finally, the greatest goon of all, Charles Murray is a supporter of UBI. Charles Murray works for the conservative think-tank American Enterprise Institute. He’s most notable for being in the tradition of Henry Ford and Barry Goldwater style right-libertarianism, that’s more explicitly fused with racism (aside from the way capitalism in itself is racist). His 90s book The Bell Curve renewed interest in scientific racism. He suggested IQ is tied to race, and argued that IQ is a stronger determinant on human lives than the socioeconomic class they were born into. He justifies the fact that black people are oppressed by claiming they’re stupid, rather than economic reasons. This guy is a huge influence on the alt-right, and also notably influential to Sam Harris.

Charles Murray wrote a book in 2006 advocating for UBI titled In Our Hands : A Plan To Replace The Welfare State. That subtitle could be considered “saying the quiet part loud,” except his fans already love the quiet part. My biggest objection to UBI, in the form it’s proposed by most powerful people, is that it will be a reduction of government programs to pure consumerist-commodity machine.

In the rest of this post, I will break down what I understand to be socialist or communist goals, and how UBI could, and could not, be compatible with those goals. I’ll then go into what kind of UBI we’d get in the current global economic landscape.

The goals of a socialist worldview

The desire for a communist society is abolishing the capitalist mode of commodity production. There are other ways to conceptualize this same idea. For example, a more conventional formulation would be: the root desire of communism to make a stateless, classless, currency-less, society.

However, for the purpose of this post, I’m trying to use a technical framing. The abolition of the capitalist mode of commodity production is a key to abolishing capitalism. Capitalism depends on wage labor to extract surplus value from the commodity production process, that ending it would functionally abolish capitalism. This element of the economy pertains to the idea of UBI, so that’s why I’m focusing on that.

Commodities are how rich people get richer – business owners invest money into raw commodity material, give the material to workers, and the workers convert it, through labor, into a more valuable commodity.

The chain of commodity production, using t-shirts as an example, would look like: First, a capitalist owns a farm and he pays workers a wage to plant and harvest cotton. Then, capitalist A sells the cotton to capitalist B for a profit. Capitalist B owns a factory with spinners and looms, and pays workers a wage to spin and knit the cotton.

Capitalist B then sells the knitted cotton to capitalist C for a profit. Capitalist C owns a factory with bleaching, dying, and sewing machines, and pays workers to craft the cotton into clothing. Capitalist C then sells the shirts to capitalist D for a profit, and capitalist D brings those shirts to sale at a retailer.

I understand the redundancy of the illustration (“we get it after the second capitalist!”). But the point is every transaction benefits the capitalist class. This is by design, because capitalism is a profit-motivated economic system. We buy things that we need or want, and the capitalist class is motivated to give us these things because it makes them rich.

This is why commodity production is the key to post-capitalist economy. Commodities, in the most basic sense, are fungible material – fungible meaning that every unit of the commodity is interchangeable. All oil is the same oil, and you can’t tell where coffee beans were grown solely by drinking coffee.

Commodities can exist outside of capitalism, but in a different context. However, commodities under capitalism are the engine that generates capital. If commodities were no longer a device for profit accumulation, then consequently, the economy would no longer be profit-motivated, pulling the rug out from what causes capital to function.

The American Middle Class Commodity Empire

The process of capital accumulation starts on the production side. It starts in the purchasing of material and employing people. However, in the US especially, the economy is usually discussed and framed from a consumer side perspective.

If you’ve watched local news lately, think about how much more often they do stories about stuff like Amazon package theft, “consumer advocates” busting workers, buying and consuming things in general. Local news often play viral videos, making the news itself a commodity for consumption (entertainment rather than reports).

Compare that to the amount of reports on labor and labor rights. The most you’ll get that makes the capitalist class look bad on local news is when there’s mass layoffs. But largely, when the labor side of the economy is discussed, it has a capitalist-class focus, reducing the economy to decisions capitalists make.

The goal of American media is to increase consumerism amongst the middle and working class. It’s better for business. The US restaurant industry tries to do the same, which is why America notoriously has the “customer is always right” mentality that most countries don’t have as much.

The point is, capitalists needs to retain the middle class, because the middle class is the consumer class. Of course they work, but the way they identify as a member of society is a consumer. The “middle class”, arbitrary in its definition, is more accurately the “consumer class”, in terms of the way its socially positioned.

The reason I see the middle class as the “consumer class” is because it’s something people choose to identify with. Extremely wealthy people often call themselves “upper-middle” class, because they want to present as consumers, not capitalists. Working class people often assume, and take on the label, of middle class, because they engage as consumers, even though they aren’t a consumer on the same level as the true middle class, and their primary role in the economy is as a worker, rather than consumer.

UBI as middle class pacification

UBI is an economic solution that is distinctly, focused on the consumerist side of the economy. UBI has nothing to say about the way economic value is generated (through labor). UBI proponents claim it’s a solution for automation, but this isn’t true.

UBI in itself can be used as a supplemental policy to other policies. We can imagine a communist society, where workers control the economy directly, and UBI is used to distribute surplus value. We can imagine UBI working somewhat well, co-existing with programs like Social Security, Disability, and Unemployment. We can see UBI fixing housing problems, if it was paired with strict rent control.

The way UBI would work best though, in my opinion, is more through a full employment program. The way this would work, is rather than getting, as Andrew Yang proposes, $1,000/month, you would be enrolled into a work program, if you’re able to work. This full employment program would guarantee that everyone has a job and income, while supplemented with retirement and disability programs.

Under a UBI program, we get $1,000/month, and then if we work, we get more money. Instead, a job guarantee is a centrally organized program that directly deals with automation. Instead of an increasingly smaller amount of laborers fighting over jobs, a job guarantee would figure out the amount of necessary labor, and distribute that throughout the workforce. The wages are then adjusted, because with a larger workforce, there would be less necessary work hours per person.

There are a few reasons that I prefer a full employment to UBI:

  • It de-tethers wage labor from profit motive. When the capitalist class wants more profit, the most efficient way to do so is manipulate the wages, benefits, and hours of workers. But if our workforce was centrally organized, then wages and labor distribution can be determined by need, rather than profit maximization.
  • If wide swaths of the U.S. population stopped working, and lived off of $1,000/month, sitting in their rooms, playing the video games they buy with that money, then it would pacify Americans, turning us into consumerist automatons.
  • If we worked 15-30 hours per week, contributing our time to the betterment of society, and earnestly getting compensated in proportion to labor, then people would be thrilled to work. People hate working because they get so little to show from it, and don’t see how their work positively impacts the world (often, there’s no positive impact from many jobs under capitalism).

UBI could be an efficient economic policy, but it requires a comprehensive set of supplementary policies to work. But anyone with power to potentially influence UBI policy is a technocapitalist, or aligned with technocapitalist interests, and wouldn’t implement UBI in this way. Without that, all UBI does is pacify workers, and makes them more dependent on the “generosity” of our capitalist overlords.

UBI is the ultimate “middle class” policy. It would help some poor people in some ways. UBI makes potential workers into exclusive consumers – the easiest demographic to manipulate. The middle class is the non-capitalist group that associates socially most with the nouveau riche capitalist class. UBI isn’t a solution, it’s a middle class pacifier!

UBI as the foundation of a National Company Town

UBI certainly wouldn’t abolish class. In fact, it would solidify class. It would move class closer to a caste system. The people who aren’t working, but receive their UBI would be reduced to an underclass. They would have basically no access to social and economic mobility, because the UBI would be calculated to cover necessities to live, and little more, preventing unemployed people from accruing meaningful saving.

UBI would enable a national, socioeconomic dynamic similar to company towns. A company town is a town where most, or all, housing and businesses were owned by the primary, or only, place of employment.

UBI isn’t going to make it so there’s one private company running everything in the US. But, UBI would look similar to a federation of company towns formatted for a national scale.

Under a UBI program, the government would tax companies, meaning American companies would effectively pay two wages: they are paying the wage of the workers, and the consumer wage from the UBI program.

This would actually be good for the capitalist class, especially in this stage of capitalism. For example, imagine a capitalist economy in the 1800s. There would be hundreds, thousands, hundreds of thousands(?) of employers. Almost everyone would be employed: there was more of a shortage of workers themselves than work to do. The idea of giving a UBI program at this point in history would be anachronistic.

Imagine a version of the near future. More and more corporations are becoming consolidated. There’s even less movie studios, less tech companies, less food companies, restaurants, financial firms, private banks, less stores, less distributors, less every company. We will all be working for an increasingly smaller amount of massive companies, that have increasingly more power.

In this situation, the country would be growing closer to a nationwide company town. Because even though there wouldn’t be one company, as power and capital is consolidated into increasingly less companies, they will synchronize their capitalist class interest better.

If there’s 100 companies competing in the same sector, they will all do whatever they can to be the most powerful company in that sector. And yet, all company owners have some interests they share, even as they compete. They all want policies that assist capitalist interest.

If those 100 companies are then condensed into three companies, competition is a non-issue. At that point they’re approaching “too big to fail” levels. If an industry is condensed into three companies, then new-coming competitors have little room to breathe. At that point, those three massive companies would probably have formed a cartel, or de facto cartel.

With every transaction, the capitalist class gains money. Profit travels through the commodity form. So, we would become closer to a situation where capitalists give out money in the form of UBI and wages, that they inevitably get back while circulating through the economy.

UBI as the foundation of a National Casino Economy

To drive the point home, I want to illustrate another parallel. Instead of describing a pseudo-national company town model, I will use a casino. The way casinos handle money is one of the most bold-faced examples of how capitalist accumulation happens, a process that’s typically concealed from us.

Casinos have several things that they spend money on. Of course, there’s the constant capital, like maintenance costs and property taxes. There’s also the wages that they have to pay to the workers.

However, unlike production jobs, where every employee, in theory, generates X amount of commodities per Y hours of work, casinos have a different model for value generation. Casinos are open 24/7, and workers will be there, whether there’s gamblers or not. This means employees are treated more like constant capital than variable capital. A factory can fire employees who work slowly, they can lower and change wages and benefits – they can do numerous things to their workforce to increase profit, which is why it’s variable capital.

In a casino, since employees have to be there 24/7, the labor force is treated more like constant capital – overhead – than a conventional employer views labor. From my experience working at a casino, the owners knew exactly how many people to have working, and not a single worker more. They employed 1,500 people, and there was constant turnover, but they determined mathematically how many people to hire biweekly to average the employee number out. All of this is to emphasize that at a casino, the workforce is treated the same as overhead. If it’s an especially slow week, you’ll still be there 40 hours every week.

This means that the profit-generation for a casino can be reduced to mostly one factor: how much money comes in to the casino. Every dollar that someone puts into a slot machine, the casino gets 70 cents. The more people put money into the machine, the more statistical outliers are mitigated (ie, if ten people are gambling and one hits a huge jackpot, it throws off income. If one person gets a jackpot out of a million, it’s nothing). In the most simple sense, every dollar that goes into a machine ends up making more money for the casino.

When casinos are reduced to the basic flow of money, they’re places where money enters, changes hands, sometimes many times repeatedly. Sometimes more money leaves than came in, but statistically, more money stays than leaves.

Now, let’s suppose there’s a pretty small city, maybe 50,000 people. Many of the jobs like manufacturing are now outsourced, and many other jobs are now automated. There’s very little fun to do in this town, and the casino is the only place to be open after like 6PM.

However, the casino owner realizes that even though some people in town are forking over their life savings, he could make a lot more profit if everyone in town gambled at his casino.

The casino owner then realizes that if he gave everyone in town a voucher for the casino, he’s turning the gamblers into capital itself. He would be investing into people, because their only function, to the capitalist, is generating more money.

Now, imagine a similar situation, but the casino owner is buddies with a guy who owns several restaurants in town, and a couple big time landlords in town. They realize how lucrative this casino voucher program is, and want in on it. They all agree that, rather than giving casino vouchers, they’ll give out cash. They figure people will spend some of the money elsewhere, but they have they calculate how much money circulates back into housing rent, dining out, and gambling, and determine enough money will circulate back to them.

In this situation, UBI benefits the capitalist class because they’re doing it to make more profit. These business owners who agree to give out money, are functionally in an inter-industry cartel. And the simple truth is, UBI will never exist in the United States (as it exists now) unless the general capitalist consensus is that it will, in fact, help business (ie profit), and it doesn’t give people anymore than enough to help profit.

Conclusion

The thing that all of this can be reduced to is the commodity form under capitalism. In capitalism, everything is reduced to a price, and that price is higher than the cost it took to make that commodity. The excess you pay – the difference between the cost and price – goes to the capitalist in the form of profit.

This dynamic is the key to every economic transaction that’s unique under capitalism. For example, under feudalism, before the capitalist class started gaining political power in city centers, all economic power was gained from land. If you were a land-owning aristocrat, you took value from the the things produced on your land by workers – not through transactions, like under capitalism.

In previous economic systems, the exchange of money still existed, but that’s not how the dominant class gained their power. Instead, market exchange was just a way for peasants to trade amongst themselves for necessities.

The capitalist class benefits every time something new is commodified. Every time a commodity is sold, a capitalist gets slightly richer. Every transaction feels like one person handing money to another, but this simple mechanism disguises a bunch of metaphorical tubes and valves, transferring money to near-anonymous capitalists, sometimes hundreds, or more, miles away from where the transaction takes place.

This means that UBI is a capitalist concept. It could exist outside of capitalism, but the basic formulation of the idea is that the capitalist class puts more free-flowing cash into the economy, so that people partake in more transactions. And remember, transactions are how the capitalist class makes money.

UBI wants us to like the capitalist mode of production. When people can’t buy commodities, half of the capitalist machine is broken; the commodities have no value to flow into, and so the value can’t flow back to the capitalist. Transactions are the valve that allows the value from the workers’ labor to flow back to the capitalist. UBI functions as a lubricant to the consumption side of that machine.

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