In Jacobin, Daniel Zamora has an essay criticizing basic income, a topic I’ve written about on this blog a number of times. I found Zamora’s argument unsatisfying, for reasons I outline briefly here:
1. Zamora points out that Guy Standing’s small UBI costs 6.5% of GDP without achieving a large reduction in the poverty rate, whereas the cost of eradicating poverty only amounts to around 1% of GDP. This is very odd, because Zamora is using the same trick as the UBI advocates who like to pretend the program would be cheap. A program that only brings people up to the poverty line is functionally equivalent to a UBI with 100% clawback at the poverty line. It’s not a realistic option, so it’s not a reasonable comparison.
2. Zamora complains that a UBI sufficient for a decent standard of living — the only kind worth considering, in his view — would be too expensive; in France, he figures this would cost about 35% of GDP. But this assumes that the full amount would be paid out to everyone (including children) and none of it would be recovered through a clawback rate or taxes. In other words, he only considers the least efficient implementation you could possibly come up with. This weakens the cost-based argument tremendously. A UBI with more realistic parameters would still be very expensive, but not that expensive; as I’ve discussed here before, it could be fully funded in Canada by raising the GST to roughly the same level as Denmark, Finland, Sweden and Norway.
3. Zamora complains that proposals for an UBI assume that the unemployed don’t want to work or that cash can compensate for unemployment. This is false. While some advocates of a UBI surely believe one or both of these claims, there is no necessary connection between them. A UBI solves the problem of being cash-poor (not having enough money) without solving the problem of being work-poor (not having valued employment), but so what? There’s no a priori reason why the same program has to address every dimension of poverty. Perhaps it’ll turn out that the best solution to being cash-poor will also solve the problem of being work-poor, but we can’t just assume that this is the case.
4. Early on, Zamora complains that a small UBI will not be sufficient to increase workers’ bargaining power, so the promise of transforming the labour market will remain unfulfilled. But then later on, he seems to forget that he thought a large UBI could increase workers’ bargaining power. If the division of labour in our society sucks and people don’t like it, a large UBI gives workers real leverage to change it. So the idea that a UBI necessarily props up an unacceptable division of labour doesn’t hold water.
5. Finally, maybe I’m just not in the target audience. Close to the very end, Zamora asks:
Isn’t the best way to fight against capitalism to limit the sphere in which it operates? Establishing a base income, by contrast, merely allows everyone to participate in the market.
As a social democrat, I don’t have a problem with capitalism in the minimal sense, i.e. an economy where there is some role for private ownership and market exchange. I just want it to be restricted to certain spheres (e.g. it’s good for candy bars and clothing, but not so good for health care and a just distribution of income and wealth) and everyone has opportunities for participation on fair terms. In other words, I don’t care if the best way to fight against capitalism as such is to indiscriminately limit the sphere in which it operates, because I don’t think capitalism as such is bad. If I did, I might be more sympathetic to Zamora’s argument.