You can’t go home again, particularly if your first address was Canberra. I was raised in this social democracy toy-town where sweet subsidies flowed from the federal hive until 1989. Since then, self-government has busied itself playing catch-up with an administrative West that worships the wisdom of business, and considers the future of the people a bit of a bother. This week, it seems the secular prayers of the private sector were answered when local government announced a partnership with Uber. Uber is the future, don’t you know?
Without an unflinching look at the way in which we organise our social and economic systems, Uber will be our future. Sure, it currently provides riders with a low-cost service and drivers with a wage. But this “hack” is already revealing its flaws. The US company, currently valued at US$65 billion, pays about the same tax in Australia as an individual heart surgeon. Its capacity to monitor both riders and drivers might even trouble Edward Snowden. It is bound to vanquish an unresponsive taxi industry and raise its prices after battle. As for all those contractors? Well, when most of the potentially deadly bugs are driven from its driverless cars, these impediments to profit will be forgotten in public conversation until such time as we remember that they vote. They’ll elect a hateful nationalist who was the only person to successfully lie about bringing jobs that no longer exist back, and we’ll call them stupid racists. Even the brown ones.
This is the possible dreadful future for the West. Another one looks nicer. The utopian imagination sees a world of driverless cars, automated farms and robot factories as providing peace and leisure — apolitical futurists like Ray Kurzweil have long predicted a time where we’d all just refine our yoga moves and produce sculptures on our 3D printers. But a society in which we are liberated from work by the technological gains of the capitalist era needs more than a few glossy ACT local government private sector partnerships to set it somewhere north of survival.
“The future currently looks like the Hunger Games,” said Professor Steve Keen, the Australian economist best known for predicting the global financial crisis (and for hiking up Mount Kosciuszko after famously losing a bet that Australian house prices would fall by 40%) and whom I have Skyped for his opinion on the thing most commonly known as Universal Basic Income (UBI), widely discussed by policy wonks of all flavours as the solution to a post-Uber world.
Yanis Varoufakis, the former Greek finance minister and a friend of Keen’s, also invokes the Hunger Games in his public discussion of the DiEM25 project. We can live like Katniss in a time of poverty and tribalism, or we can all board the Starship Enterprise and flourish in our rainbow outfits. Varoufakis, who, like Keen, has maintained a long and ardent interest in the future of labour, is fond of mentioning Star Trek, a future that can only be made possible, he says, with recourse to UBI.
[Fantasy budget 2015: abolish Centrelink and just give people money]
Varoufakis has taken the decision to be very upbeat in his public presentations, but Keen is a more restrained advocate for UBI — an idea he expresses as Basic Income Guarantee (BIG), that Milton Friedman described as Negative Income Tax and that the Australian Greens pop into their downplayed economic policy pages as Guaranteed Adequate Income. And, if you think that’s an odd collection of people to be advocating for a single idea, you’d be right. UBI, essentially an unconditional sum of money given to all citizens, has many champions.
“It’s not a panacea,” said Keen. But it is an idea whose time, it is largely agreed, has come. Even the thickest and most conservative economic thinkers concede that Fordism — Henry Ford famously paid his workers enough to ensure they could purchase the products they made — is as likely to return as the Model T. Uberism requires amendments if any of us are going to buy anything in a near future of high unemployment. As Keen said, “if you don’t distribute the income, the profitability itself gets challenged”.
Many Silicon Valley business leaders know this, and Elon Musk is among those advocating for UBI. Government tends not to listen to post-Keynesians like Varoufakis or Keen. Or Bernie Sanders, who, prior to his campaign commitment to bring jobs back to the rust belt (they’re not coming back) has considered UBI. But if the Tesla guy, the IPA and moderate economics writers in the Sydney Morning Herald are fighting for it on moral grounds — Peter Martin argues that it will keep people from doing “illegal jobs such as prostitution”, which is now known as sex work and is not illegal in NSW — it is quite likely to become policy.
So, it’s time for those of us with an interest in the future to ask questions about the shape of UBI, which ranges, in the IPA case, from the Friedman free-market model which sees all social services cut to pay for it to more Nordic dreams, such as those of Dr Louise Haagh, which presume no interruption to services, even an expansion of services, and that the rich, who will also receive the UBI, will be taxed to pay for it.
As Keen notes, UBI, which he prefers to know as BIG, left and right can agree on the idea, because they’re talking about very different things. The IPA believes that charitable organisations have always provided social services more efficiently, whereas the material left knows that to be horse shit. The right believes in low taxes and that companies like Uber should be rewarded for their ingenuity, whereas more centrist thinkers, like Canada’s Trudeau government which has approved pilot UBI experiments, still hold out some hope that the rich will agree to pay for a scheme, from which they’ll be beneficiaries.
If they think about it, the rich might. They’ll receive the UBI — we can’t possibly agree to give welfare only to the needy — on which they’ll accrue interest and they’ll still be able to sell to those existing on UBI alone.
I ask Keen if UBI will have an effect, if not on inflation — despite the best efforts of Western governments, desired inflation is currently impossible to achieve –then on cost of living for the people who most need UBI. “It may change price dynamics in some regions,” he said. And you can imagine this might be the case in rust-belt towns whose surviving supermarkets raise their prices.
There are problems with UBI. It may deepen the divide between classes of rent-seekers and renters. It may cause price hikes. It may tempt those companies who still employ people in the future to lower wages. It could worsen the corporate feudalism we see emerging in business models like Uber.
Keen, whose pessimism makes me trust him, reminds us that “capitalism is cyclical”. UBI/BIG is something he sees as a remedy to this stage of history. You have a massive overhang of debt and insecure employment, you must correct it. And, if you’ve given up on fantasies of revolution, you must keep correcting it.
Or you can just order an Uber and ask it to drive you to your childhood in Canberra. One where a patchwork of private and public sector solutions was not applied.
Thanks Helen! Perhaps not such a deeply shit idea after all? Or maybe still deeply shit, but somewhat less so than all the other remotely feasible options?
I must concede, it is only mildly shit!
(Good memory, by the way.)
Well done form1. I noted HR’s comment in an earlier essay and asked for further discussion from her.
Thanks Helen. I just think it’s an exciting idea. God knows, we were supposed to be the leisure generation, but like what Peter Costello did nationally, so many of us did individually, and for that very reason you and so many others can’t buy a home. The choice between leisure and apparent, but not real, relative wealth, was made, and as a society and a people, we made the poor choice.
Mind you, we were strongly prodded that way.
I see this as one possible way of breaking the cycle that leads to bloody revolution. Equally, the jobs for all of Bill Mitchell ain’t too bad either. Personally, I would have both, a Basic income guarantee and a jobs guarantee.
God knows, we could work as much as we wanted, or as little, possibly. A boy can dream.
This article explains in detail why a Job Guarantee is vastly superior to a Basic Income Guarantee. The author is Bill Mitchell, a Professor of Economics at the University of Newcastle.
http://bilbo.economicoutlook.net/blog/?p=34479
I know Bill’s blog. I personally think an abolition of private property guarantee is the way. A girl can dream.
I am confused by Helen’s statement that “Even the thickest and most conservative economic thinkers concede that Fordism — Henry Ford famously paid his workers enough to ensure they could purchase the products they made — is as likely to return as the Model T.”
What Henry paid his workers had nought to do with Fordism. Fordism has to do with Taylorism and assembly line production where the worker is deskilled and performs repetitive, low skilled, tasks and therefore paid as little as possible. The link to Marx’s ‘alienation’ is well known. Some industries have apparently entered a post-Fordist stage where workers are ‘organised according to the principles of flexible specialisation’. Tell that to the assembly line workers in developing countries who are still subjected to mind-numbing Fordist principles.
“Fordist capitalism” or “Fordism” is used by many writers to describe the whole she-bang. I am not saying it was wonderful, by any means. But it was designed to make its labourers customers, and it functioned like that for a while. Using it in this way does not minimise the alienation of labour. Which, as you know, afflicts all social relations of all people in the Marxist view, which is also my view.
But. Really. The amount he paid his workers really was a part of the model. It kept them in servitude. Not at all saying that is good.
Thank you Helen for this article.
I have concerns about basic income guarantee since it does not solve the problem of ‘meaning’ while it helps solve the problem of ‘poverty’.
I have been quite attracted to the idea of a ‘job guarantee’ (which is not the same as ‘work for the dole’) because gives both.
It will be much better for me to link you to the site that best articulates the Job versus income guarantee.
The second link compares the two guarantees (written in 2011).
Bill Mitchell’s Job Guarantee entries (last updated November 2016):
http://bilbo.economicoutlook.net/blog/?p=32498
Bill’s post that ‘Employment guarantees are better than income guarantees’ (2011):
http://bilbo.economicoutlook.net/blog/?p=13025
I have been very disappointed with Yanis Varoufakis.
He seems to stop short of actually doing or saying anything worthwhile.
Thanks again for bringing up this important topic for discussion.
I agree about “meaning”. People without jobs are often rather morose. Maybe people who work are too busy to ruminate on the meaninglessness of life, and are thus happier.
The Marxist view is that persons are naturally productive. Being a very lazy person, I was never convinced by this. But, still, the old fella was correct about a lot of stuff, so I am going to give him the benefit of the doubt. And you, too, with the claim that people are unhappy when they have no labour.
But, labour as we know it is a constructed thing, right? I have experienced unhappiness after getting the sack, but this was less to do with the fact that I didn’t have to tool around on the company CMS basically doing nothing but the fact that I was dreadfully embarrassed to be “unemployed”.
There is plenty of useful labour that robs people of happiness. Parenting, for example. Not the loving your kids bit, but the doing of all the things it takes to keep them from death bit. Domestic work makes loads of people unhappy, but I kind of enjoy it, despite my minimal skill. It may make more people happy if it was considered a job. And, actually, since it has been transformed into some totem of personal growth or whatever for high income earners, a lot of people seem to enjoy it more. Well, if all the cupcakes on Instagram are any guide.
My point being. I agree humans, like beagles, are generally more content when they have a task. But it doesn’t have to be “productive”.
We can broaden our concept of what a paid job can be so that people can do things that are meaningful and interesting to them, and useful to society in a broad sense of societal wellbeing, not a narrow sense of commercial profitability. A Job Guarantee can be designed to make paid work more fulfilling than it currently is for many people. It also responds directly to the expressed needs of the two million Australians who want to do more paid work, not less. A Basic Income Guarantee reduces people to consumption entities and denies people the experience of contribution and belonging that they seek.
But, whether they are production entities or consumption entities in the current understanding of these terms makes little difference. I think this moral urging to perform labour can end up being just as deleterious as the other.
As above, I am prepared to agree (kind of) that humans are naturally productive. But, where some people find that productivity in shopping. They really do. Look at the way in which many women, in particular, consume. It’s basically labour. Every bit as alienating.
This is not to say that I think humans “naturally” shop. Any more than I think they “naturally” sit down in factories and assemble one bit of a product. My point is, I think going back as far as possible to first principles is important with this debate. I will go back to Marx and agree that we “naturally” want to do stuff. That’s about it.
Oh. And that we are “naturally” social.