Volume 50, Issue 3: Summer 2016

A friendly disagreement

CD talks with Nick Srnicek and Michal Rozworski

CGT demonstration in Marseille, May 26, 2016, part of nationwide strikes and protests against Hollande Socialist government’s antiunion labour bill. Posted on theguardian.com; By Bertrand Langlois/ AFP/Getty Images.

One of Canada’s leading young Left economists, MICHAL ROZWORSKI is co-author of a forthcoming Verso book on economic planning. He is a union researcher and writer and blogs at Political Eh-conomy. NICK SRNICEK is the author of Platform Capitalism (Polity 2016) and co-author of Inventing the Future: Postcapitalism and a World Without Work (Verso, 2015). He holds a PhD from the London School of Economics. CD’s Andrea Levy talks to both about Basic Income; the transcript has been edited for length, style and clarity.

Q: The Left has long been divided on the issue of Basic Income. The argument recurs every generation or so. In the last few years it has resumed throughout much of the global North, especially in the wake of campaigns and initiatives in Switzerland and Finland, for example. And the debate is now ablaze in Canada, where apparently serious interest in some form of BI is being expressed by the neoliberal governments of Kathleen Wynne in Ontario, Philippe Couillard in Québec, and Justin Trudeau at the federal level. Broadly speaking, what is your position on Basic Income?

Nick Srnicek: I think there are many reasons why a BI is a useful policy option. For instance, some point to the salutary effects of BI experiments on mental and physical health. For other mainstream proponents, the argument for BI tends primarily to be an economic one: they see it as a way to redistribute income in an era of high inequality and to provide the basic means of consumption to sustain consumer capitalism. My chief argument for supporting BI is a political one, however. If people are less dependent on the labour market for an income, they suddenly have much more political power. They can turn down jobs that are demeaning or unhealthy or simply too stressful. And they can withdraw their labour at any point and for an indefinite amount of time, rather than relying on a dwindling strike fund from the local union. None of this is revolutionary in itself, nor is it an endpoint in the struggle, but it does offer a major step forward from neoliberalism’s onslaught against workers.

Michal Rozworski: For me, there is a big difference between the idea of a universal BI in the abstract and what is concretely on offer. Even within the bounds of today’s slightly fraying neoliberal consensus, it is curious that BI is being embraced by various forces on the right and centre-right. This alone shouldn’t make us discount the idea, but it does say something about how it is liable to be implemented in our present political situation. For the right, BI is a means of extending markets and ousting the state from the role of providing social services such as healthcare and education. Because BI programs are so expensive if truly universal, they would only be funded today with enormous cuts to existing services. BI is a backdoor to commodifying social services and subjecting people further to the vagaries of the market. The Ontario Liberals, by the way, are likely to implement a “minimum income” that is simply a rationalization and reorganization of welfare. Like their “free tuition” policy, it is a way of putting a progressive spin on small potatoes.

Contrary to Nick, I doubt that BI would truly challenge the power disparity between labour and capital, particularly when labour is so weak. It can just as well be thought of as a subsidy to employers, giving workers some breathing room but potentially have little effect in the long term, especially if the new money is accompanied by new markets for previously free public services.

If the rallying cry of the Left has been to democratize more spheres of life, I worry that BI would actually diminish democracy by relegating more of our lives to the market and foreclosing even the possibility of popular control. All this doesn’t mean that labour and the Left shouldn’t make utopian demands, only that our demands should be strategic: more public services that take more dimensions of our lives off the market; workplace democracy; higher wages, full employment — these are demands that directly challenge capital. In this sense, my main reason to oppose BI at present is also political.

Basic Income vs. full employment

Q: One of the key arguments made for Basic Income is precisely the improbability if not impossibility of anything approaching full employment (defined here as ensuring that everyone who wants a decent job can have one). The trend in recent decades, especially in Canada, is toward the growth of nonstandard employment, including a significant amount of involuntary part-time and temporary employment, on top of an unemployment rate that remains higher than what it was prior to the financial crisis. Moreover, the technological displacement of work looks more and more to be a tidal wave, with jobs disappearing through automation (and not just low-skill jobs either) at a rate faster than new jobs are emerging. A higher minimum wage doesn’t amount to a living wage for the barista working 20 hours a week and isn’t much use to the translator whose job just disappeared because the federal government is now using machine translation to cut costs. Isn’t BI a worthwhile option in this context?

MR: Worries about technological unemployment are as old as capitalism itself. I recently saw a compendium of headlines from the last 200 years, all warning that this time really is different, this time the robots really are coming for all of our jobs. So far capitalism hasn’t had a problem finding new ways to keep us busy. Work isn’t just a technological process but a social relation.

In fact, the rise of temporary employment, involuntary part-time and such, while much-heralded in the press, is not that visible in the data in Canada or the U.S. The so-called gig economy remains a small part of the labour market, and in fact may be accentuated in popular perception because journalism is one of the fields that has seen a marked shift to contract work.

This isn’t to say that working conditions haven’t deteriorated and wages haven’t stagnated over the past several decades — they have enormously and across the global North. But this is a reflection of labour’s weakness and capital’s strength. The major transformations we are witnessing are not primarily in how work contracts are organized but how work itself is organized — its speed, the way tasks are assigned, how production (whether of goods or services) is managed, and so on. Globalized and ever more finely-grained supply chains have been instrumental to this.

Without looking to the root cause in the weakness of labour, demands like BI will play out in a neoliberal guise. We have to think about how to overturn the ability of capital to capture an ever greater part of the social surplus. Full employment, shorter working time for all and a rising share of national income for labour are the major risk to capital, not an increase in income security. With capitalism lately returning to its more conflictual roots, we should return to the original vision of the labour movement: less work for all and a socialization of the products of work as the way to harness the fruits of technology.

NS: I think there are two issues worth separating out here. One is whether we can imagine/design a universal BI that would be worth fighting for, and the other is whether that particular BI could be implemented. Most of Michal’s points here tend to emphasize the latter issue, and of course there are very legitimate concerns about how it would be implemented in the current context, and what it would mean for the nature of work. I think we could come to an agreement, though, about what a desirable BI would look like: it would be set at a high level (typically indexed to a country’s poverty level), it would be universal and not means-tested, and it would supplement most of the welfare state rather than replacing it. If those conditions were met, I think BI would bring about an immense power shift in favour of labour.

But the real question is what is achievable — what would a universal BI look like if it were implemented tomorrow, or in the next five years? And here I think Michal is right that we are looking at a largely neoliberal approach which deploys BI as a pretext to replace the welfare state and commodify ever greater swaths of the public sector. It might well go hand in hand with eliminating the minimum wage, thus serving as a wage supplement to business. I think that is a very likely outcome if there is a push to introduce BI right now. The question for me, then, is how do we build up the political power to implement a more meaningful universal BI?

That brings us to another important question, namely whether full employment is possible and desirable. Presumably, if we had the political power to implement a meaningful universal BI, we’d also have the political power to implement other desirable policies (like full employment or the extension of the welfare state). As important as it is to continue defending and extending the welfare state, this is not going to lead to social transformation. We would still remain bound to a system of wage labour and market dependency, and the welfare state doesn’t give labour any new means to exert power. So that’s one point. But perhaps we could imagine pushing for full employment? Here there are two points to be made.

First, capitalism does appear less and less able to produce good (secure and well-paying) jobs. In the U.K., for instance, after the 2008 crisis, over twothirds of net job growth was from self-employment that on average involves lower pay and longer hours. In the U.S., all of the net job growth since the crisis has been in contingent and non-standard employment arrangements of which the gig economy is only a small part. We’ve seen high levels of unemployment across Europe, and we’ve seen sluggish job growth globally since the crisis — remaining far below pre-crisis trends. All of which suggests that capitalism is not capable of producing full employment today. Second, let’s say we could press government to introduce massive stimulus programs to produce jobs (green jobs, for example). Here we run into the problem that full employment makes all the new automation technologies very desirable for capitalists. If workers are pushing for higher wages and there is a shortage of labour, that new robot will look like a very attractive investment, with the result that capitalists will start increasing business investment levels and raising productivity levels as they automate in the face of full employment. In this way full employment negates itself.

MR: There is much truth in the argument that if we were powerful enough to extract a socially progressive universal BI, we would be powerful enough to have a full employment economy and much else. But there remains the strategic question of how to acquire this power: which demands could start to create conditions that end up breaking the back of capital’s reign, of its domination of both the distribution of goods and the nature of work?

That capitalism doesn’t seem to be able to produce full employment today only seems novel because of the anomalous post-war period. This anomaly was complex in its origins, although it was in part about the subordination of the labour movement into a short-lived grand bargain that, as Nick points out, marginalized radicalism. But while I generally take full employment to mean a job for everyone who wants one, that says nothing about the length of the working day or average annual hours worked, nothing about the nature of work and nothing about the distribution of employment between private and socialized branches of the economy. Full (or approaching-full) employment would, of course, provoke capital to introduce more mechanized forms of production, but it would also give labour a greater share of national income, which would raise effective demand. This expansionary pressure and the need to produce investment goods would at least offset technological unemployment. Full employment also fulfills one of Nick’s goals for a BI: the ability of workers to hold out for better jobs. It gives workers greater power to press for more favourable working conditions, from reduced working time to workplace democracy. It is precisely because of this potential for transforming work that full employment is most dangerous.

NS: There is a fundamental philosophical divide here: I take it that waged work is what we want to eliminate, not produce more of! But even if one thinks work is a fundamental good, job growth is dependent on economic growth which is dependent on growth in greenhouse gas emissions. I think any future society that is going to deal with climate change will necessarily have to move towards less work, rather than job guarantees.

Further, if we can agree that full employment is unachievable, the problem then becomes how people interpret that inability to attain it. I think the most likely answer under current conditions is that people do not blame capitalism, but rather blame foreigners, laziness, and welfare-scrounging. I don’t see the demand for full employment as leading to anything that strengthens the hand of workers.

Now there’s an alternative way to reach full employment, and that’s through reducing the working week. I’m entirely in favour of this, and for a number of reasons I think it’s a more immediately achievable goal for the Left than a universal BI. But here’s a key issue that never seems to be raised when claims are made for full employment giving power to workers: namely, that we have empirical examples of hyper-employment societies — Japan and Germany in the 1960s — where unemployment was below 1 per cent and there were more jobs available than workers.

Yet even in these conditions of full employment, we did not see wages rise any higher than productivity. If labour was significantly stronger under full employment we would expect the gains from productivity to be distributed more in favour of labour, but they weren’t.

MR: I brought up full employment as a demand not because it is the pinnacle of my dreams if achieved, but because it can be used instrumentally. It is precisely because full employment may be unachievable, as Nick maintains, that it is useful. It exposes the system’s need for the heavy hand of the boss, for unemployment and for precarious life.

Put differently, it is easier for capitalism to accommodate BI than it is for it to accommodate any type of full employment for an extended period of time and especially within its metropolitan centres. The examples from the 1960s are short-lived, from a period of labour’s waning power as we’ve already discussed and with women still unabsorbed into the labour force. Today, on the other hand, it is primarily governments of the right that are experimenting with BI (or, more likely, minimum income schemes that are not universal and are clawed back against earnings and other sources of revenue). BI doesn’t challenge the fundamental dynamics of private ownership of capital and workplace exploitation central to capitalism the way full employment does.

Unconditional Basic Income in Montreuil, France, December 6, 2015. Posted by Revenue de base.

A unifying demand?

Q: Arguably one of the virtues of Basic Income is that it has the potential to appeal to constituencies beyond organized labour. A well-formulated demand for a reasonably robust universal BI that would not dispense with all other social programs could conceivably create a rallying point for a broad social movement. It could mobilize many women, for example, who may not wish to engage in full-time waged work, by recognizing and rewarding their unpaid reproductive labour (which remained unrecognized and uncompensated during the post-war period). Other significant groups who might welcome the prospect of a BI are the underemployed and precariously employed, and artists. Rather than rejecting BI for fear of a neoliberal contortion, mounting a dynamic Left campaign for a socially progressive BI could have real educational value, allowing us to talk, for instance, about who appropriates the returns on the social investment in technology and to undermine prevailing notions of labour market participation as the sole valuable activity.

MR: I completely agree that the post-war consensus continued the domination and discrimination of women, racialized minorities and others in significant ways. It was an anomaly and not something to which we can return. What it showed was the power that labour could have over capital. Rebuilding that power will require new strategies and new tools. I simply don’t see BI as a major fulcrum. Work has always been mostly precarious. This is the normal dynamic of capitalism. We should acknowledge this and not look for an easy out, especially in view of the risks associated with BI today. Talking in terms of cash transfers risks re-creating markets for those spheres of life we’ve managed to extricate from the market. A reduction in working time and more socialized investment and production also aim at the key goal of undermining the labour market.

NS: I agree with Michal about the overemphasis on precarity. Precarity is a long-standing feature of work under capitalism, not something particularly new. But I think the notion of precarity can usefully be applied to household finances, given that levels of household savings across many countries have been dropping for decades, and this has been accelerated by the crisis. Large numbers of people have no savings and would be unable to support themselves in the event of a financial emergency.

And I think Andrea’s point about the constituency that can get behind a universal BI is also important. Unlike full employment policies, we can see how students, stay-at-home parents, care givers, and other unwaged workers could immediately benefit from BI. And universality would make it harder to scuttle the program down the road. A significant body of research shows that universal programs are significantly more difficult to scrap once implemented, precisely because there exists a vast political constituency who benefits from it. A full-employment focus risks reinstating traditional divides between waged and unwaged workers.

MR: I think the constituency argument is important, but I would look in the other direction. BI has support among the charter school executives who would like to privatize education, the healthcare companies who would like to privatize hospitals and many right-wing ideologues who would like to extend the reach of the market to all spheres. This isn’t to imply guilt by association, but simply to point to a real danger. The Finnish BI pilot project, one of the more likely to get anywhere, explicitly makes the connection between BI and greater market provision.

I whole-heartedly agree with Nick that not only is universality a desideratum of social programs, but it also protects them from attrition. I worry though that BI can yet undermine the drive for deeper democracy by enlarging and extending the sphere of “one dollar, one vote” implicit in the market. New public programs that guarantee services as a right follow a different logic and offer greater openings for transformative change.

Finally, compare UBI to a campaign like the Fight for 15. The latter engages people not only as workers, but also as future workers (students) or as family members of workers or as dependents on the wage income of others. The challenge is to broaden the constituency and include the non-waged as community members, but with less concomitant risk of co-option from capital as this campaign challenges it directly. At best, campaigns like this can be infused with clear class content, open confrontation and real organizing (with the caveat that this is a reality not always lived up to).

The point, however, is not to pit demands and campaigns against one another. I think this debate is useful because it draws out the bigger picture of tensions within capitalism and the space for new movements to exploit them. A friend of mine recently remarked that while people make much of Marx’s musings on the tendency of rate of profit to fall, and on automation and technology, there is much less attention paid to his understanding of capitalism’s tendency to socialize production and ownership in the long run. The latter, though, may be more important to how we build a better world. It is also a reason why I focus so much on the work process and on the prospects for democratic control over direct distribution.

A cost-prohibitive reform?

Q: A final question on financing: We are right to worry when we hear about BI schemes that are “cost neutral,” which usually implies dismantling existing social programs. But there are certain programs that would be made redundant by a universal BI, such as means-tested welfare. Beyond that, various proposals have been put forward, such as a tax on financial transactions or the diversion of subsidies to ecologically- destructive activities. Is it impossible to imagine a viable approach to funding BI?

MR: If indeed BI is to be truly universal and provide for a liveable income without the sacrifice of public services, the cost would be enormous. My point here isn’t to sound like the right-wing economist spreading doom, but simply to raise awareness where it is often lacking. Much of what I’ve read about BI, and many of the private arguments I’ve had, have either neglected or dismissed this point out of hand. Even assuming less spending on health, police and other government services that are overused due to the ill effects of poverty, a decent BI would require a near doubling of government revenues in a province like Ontario. The social power necessary to extract these kinds of revenues from the wealthy (and the wealthier) is sorely lacking. The central question here again is that of power dynamics and of what strategy is most apt to change them in our favour.

I did a rough back-of-the-envelope calculation for Ontario. Even given the elimination of welfare, child benefits and low-income pension supplements (replaced by BI) plus a one-third reduction in healthcare and police budgets (due to less crime and improved health owing to poverty reduction), we would need nearly 20 per cent more of GDP to fund a universal BI guaranteeing every person $15,000 per year. These figures are just an example and we could quibble about details but they indicate the scale of the necessary expenditure. For comparison purposes, PERI at the University of Massachusetts- Amherst (a Left economic research institute) calculates that a viable financial transactions tax could raise 1.7 per cent of GDP in the U.S.; the figure is probably lower in Canada due to the smaller role of finance and the openness of our economy.

I’m all for increasing government expenditure, albeit while democratizing the state, but we have to understand the class battle that would be required to win a decent universal BI. I fear that few proponents are truly aware of the economics.

NS: Yes, it would cost lot of money to fund a universal BI, although for most countries, even with targeted benefit supplements, it would reach roughly the same percentage of GDP as the Scandinavian welfare states, which is not out of the realm of possibility. Of course, we all agree that it won’t happen anytime soon. But I think that as part of a broader push to reduce the amount of work we need to do, BI is an important goal, even if it is never fulfilled. Which brings me to a final point I want to make: universal BI tends to get pitched as a single cure-all policy. I think this is entirely wrong. It needs to be situated within a broader narrative that gives meaning to what its advocates hope it can help accomplish. If the aim is to help the worst off in society, that means that BI can’t eliminate targeted benefits and the provision of public goods. If, on the other hand, the intention is to diminish government intervention, then that may well mean demolishing the welfare state. If, by contrast, we hope that BI will contribute to reducing our reliance on the wage, then we start to get a properly Left vision of what it must mean. Universal BI is useful as a goal, and a potential policy, but only in the context of a much wider conversation about the role of wage labour in society. And that conversation has to address concerns about minimum wage and public ownership and workplace democracy.