Backing for UBI Is Growing. Let’s Push for the Most Progressive Version of It.

The idea of a universal basic income has been around for decades, but it is now growing in popularity as artificial intelligence threatens to make our economic future under neoliberal capitalism even more precarious. Yet, no one would argue that a universal basic income is a panacea to capitalism’s evils.

Moreover, there are different proposals for implementing a universal basic income, as renowned feminist and socialist economist Nancy Folbre — the author of several books includingMaking Care Work: Why Our Economy Should Put People First — points out in the interview that follows.

Folbre, who is professor emerita of economics and director of the Program on Gender and Care Work at the Political Economy Research Institute (PERI) at the University of Massachusetts Amherst, acknowledges that, given the balance of power between capital and labor in today’s world, the obstacles to implementing a fully progressive version of such a plan are enormous. Yet, societies must care for the well-being of citizens if they are to continue sustaining themselves. As Folbre says, a philosophy of every person for themselves philosophy “is a recipe for extinction.”

C.J. Polychroniou: Support for universal basic income (UBI) has grown rapidly over the past several years across Europe as well as in the United States. Of course, the idea of a universal basic income has a long history but has made a major comeback as a response to growing inequalities and concerns about the effects of automation. Still, no country has yet to implement a full UBI system, and there are many variations behind the idea. What are the defining features of UBI, and what would be the core arguments in favor of it?

Nancy Folbre: This concept implies just what it says — universal (everyone would get it) basic (not very much) income, to be provided on a regular basis, like once a month. The strongest ethical argument in its favor is that some basic level of support should be a human right. The strongest pragmatic argument in its favor is that it would buffer the effects of sustained high levels of unemployment that some (including the world’s first trillionaire-for-just-12-days Elon Musk) see as a serious threat from the expansion of artificial intelligence (AI).

What are the potential risks and complications behind implementing a UBI system in contemporary capitalist societies?

UBI and AI have something in common — they both have great potential to make us all better off, but their effects will be largely determined by who designs and controls them.

A UBI could be deployed in ways that reduce poverty, reward unpaid care, and increase the bargaining power of wage earners but it could also be used to co-opt dissent, justify cutbacks in public services, and enhance control over the population.

Historically, employers disliked the very idea of UBI because they thought it would reduce the supply of labor to employment, creating a permanent class of “free-loaders.”

In recent years, however, a number of privately funded small-scale experiments have explored the impact of a short-term “guaranteed income” on the community level, offering a relatively small payment (such as $500-$1,000 a month) for a year or two to a random sample of low-income persons in order to assess their effects. Reductions in employment that took place were small, and benefits to physical and mental health and subjective well-being were significant — especially for children.

However, it’s not clear that CEOs in the tech sector are enthusiastic about these social benefits, since they seem to believe that human workers will soon be redundant, anyway. They keep saying that a publicly funded UBI could compensate for job loss. If AI produces enormous wealth, concentrated among a few firms, some mechanism for redistribution might be necessary to avert political revolt. Hence the “benevolent oligarchy” strategy — give the masses just enough money to keep them alive and in line.

Would UBI necessarily replace all existing welfare programs?

Different answers to this question highlight the issue of design and control. A “progressive” UBI is framed as an add-on, complementing the provision of public services. A “libertarian” UBI is framed as a reallocation, using cash transfers as a replacement for public services.

Libertarian support for something like UBI has a long history. In his 1962 book, Capitalism and Freedom, the conservative economist Milton Friedman advocated for a negative income tax that was the forerunner (in spirit, if not precise design) of some UBI proposals today. He argued that cash assistance should replace much of the existing welfare bureaucracy, including many categorical assistance programs.

This argument lingers on in different forms. In his 2020 U.S. presidential campaign, Andrew Yang outlined a kind of compromise — a detailed UBI proposal that would have reallocated some but not all funds away from other programs. At least his proposal took financing and design seriously, unlike what followed.

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Elon Musk — despite his happy talk regarding a future Universal High Income (rather than a merely basic one) — has offered no details whatsoever regarding its design. However, given his actions as head of the “Department of Government Efficiency,” or DOGE (which would have been better titled the Department of Government Eradication), it’s pretty clear that he sees cash transfers as something between a sop and a bribe.

The progressive case for a UBI, by contrast, sees UBI as a universal income floor layered on top of existing social programs, rather than replacing all of them. While it would justify elimination of means-tested income transfers, it would not replace social insurance (such as pensions) or public services. Indeed, the most compelling vision of programmatic change to the “welfare state” calls for both UBI and Universal Basic Services (UBS) which would include health care, child care, and elder care.

These versions of UBI typically rely on progressive taxation — imposing higher taxes on those with higher incomes or wealth. Even the very rich would be eligible for a basic income, but it would be more than canceled out by the higher taxes they would be required to pay. This is what makes the net transfer strongly progressive.

Why are socialist feminists like yourself strong proponents of combining a basic income with basic services (UBI + UBS)?

A basic universal income recognizes the value of self-care and care for others as important economic activities that go unrewarded by the market. Family and community care of dependents like children, people with disabilities, and the frail elderly is costly in terms of both time and money. Today, these costs are disproportionately borne by women, but they are discouraging men as well as women from making family commitments.

The production, development, and maintenance of human capabilities is a vital component of our economic “output,” but it isn’t considered “productive” work or included in estimates of our Gross Domestic Product. I develop this point in more detail in my new book, Making Care Work: Why Our Economy Should Put People First.

A universal basic income would recognize this work — and it should go to children as well as adults, as an extra transfer to their caregivers, in recognition of the value created by unpaid family work. It would give all those working for a wage more flexibility to devote time as needed to family, friends, and neighbors.

On the other hand, universal basic services such as health care, child care, and elder care are necessary complements to family income. They provide access to technical expertise and valuable opportunities for socialization and learning outside the home, while also making it possible for people to earn the additional income they need.

Doesn’t a lot depend on how UBI and UBS are funded? Who should pay?

Yes, here again, the details really matter. I would say there’s a pretty strong consensus among advocates that funding should come from taxing income from capital, not from labor. This would require a transformation of the federal tax system that would include increasing the capital gains tax, eliminating the “carried interest” loophole, and increasing inheritance taxes.

However, the biggest problem with the federal income tax system is that the super-rich avoid earning income precisely because it is taxed. They can simply borrow money using their enormous wealth as collateral — and the rate of interest they pay is far less than their rate of taxation. You can find a very readable explanation in Ray Madoff’s recent book, The Second Estate: How the Tax Code Made an American Aristocracy.

In other words, the income tax itself has become rather toothless, which helps explain the growing popularity of state efforts and congressional proposals to tax wealth. These could be — and should be — linked to specific estimates of the potential revenue they would make available for public social spending. Keep in mind, however, that income transfers and services targeted especially to dependents and their caregivers entail a different kind of redistribution through taxation than one based entirely on class.

Is this a practical vision for change, or is it utopian to imagine that a capitalist system could ever accommodate measures that are so antithetical to maximizing profit and promoting capital accumulation?

I agree that the obstacles — both ideological and political — are enormous. But I don’t think any of us knows for sure what possibilities the future may offer. The very concept of universal basic income and services is subversive, because it suggests that most of us are suffering a lot of unnecessary economic stress. And, in the long run, no economy based purely on profit maximization can reproduce itself, because it disregards its own demographic and environmental future. Either we care more for ourselves or we disappear.

I will end with my favorite slogan: Every man for himself is a recipe for extinction. I think that any AI well-trained in human history would probably (though possibly secretly) agree.

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