Sunday, 4 June 2017

Silcon Valley libertarians and the Universal Basic Income

As the UK general election campaign lurches to the left...
Futures Forum: Fairness and/or equality
Futures Forum: The general election in the West Country: the issues >>> role of the state

... the super rich in the United States are worrying about rising income inequality:

Mark Zuckerberg calls for universal basic income - YouTube

That's from a report from Fox News - with another from the even less sympathetic scourge of 'mainstream media':
Mark Zuckerberg Calls for Universal Basic Income in America - Breitbart

Mr Facebook was speaking in front of a lot of other very well-to-do folks at his alma mater Harvard:
Mark Zuckerberg Just Voiced His Support for Universal Basic Income
Mark Zuckerberg calls for a universal basic income amid rumours of presidential bid by Facebook founder | The Independent

This is all about the UBI - about which there's been some debate:
Futures Forum: Universal Basic Income and Negative Income Tax versus 'funding for the more deserving poor'
Futures Forum: Universal basic incomes >>> "Arguments for a state stipend payable to all citizens are being heard more widely"
Futures Forum: The universal basic income
Futures Forum: The unconditional basic income

And the likes of Zuckerberg are very interested:
Futures Forum: Silicon Valley Values @ Radio 4's Analysis
Futures Forum: The promises of technological innovation >>> "The Fourth Industrial Revolution" and the future of work
Futures Forum: The promises of technological innovation >>> "The rise of the techno-libertarians: the five most socially-destructive aspects of Silicon Valley"

We do live in interesting times, when 'libertarians' are taking on a key policy of the 'greens':

Universal basic income – and the other Green policies worth stealing

Karl McDonald Monday May 22nd 2017

The Green Party has launched its manifesto with ultra-progressive policies on everything from universal income to an overhaul of the voting system.

But not everyone's keen:

Basic income is the latest bad political idea that refuses to die

John Rentoul Monday 2 January 2017

The worst thing about the basic income is that it is a tragic misdirection of a compassionate and libertarian impulse: to do something about our counter-productive benefits system

Universal Basic Income from a libertarian perspective - A labour market analysis


In this article I'm going to consider Universal Basic Income (UBI) from a libertarian perspective, focusing mainly on analysis of the labour market, rather than the much more common libertarian "small state" argument in favour of UBI.

The crux of the article

The current labour market is terribly unfree as it is because it relies on coercion, workfare, sanctions, draconian anti-labour legislation etc. 

The introduction of Universal Basic Income would would create a much freer labour market (no more threat of destitution, sanctions or forced labour schemes, and much freer labour contracts between employers and employees), but this increased freedom for the majority would come at the expense of necessary measures in order to control inflation (which would rapidly destroy the project if left unchecked). 

The reduction in aggression against the majority of workers would outweigh the infringements on the current rights that rentiers have to exploit access to basic commodities in order to extract profit for themselves (which it can be argued is another form of aggression against the majority anyway). 

What is libertarianism?

Libertarianism covers a wide range of political stances, from left-libertarianism through to anarcho-capitalism. The thing they
have in common is that they promote freedom (although in completely different ways).

Many people are under the mistaken impression that the word "libertarian" refers exclusively to an extreme form of US free market fundamentalism associated with Ayn Rand, the Tea Party and the like. However the right-wing fringe in the US appropriated the word for their own use with little regard to the other inherent meanings it had before.

The origins of libertarianism can be traced to the 18th and 19th Century anarchist and and socialist movements in Europe, however it was quickly embraced and integrated into laissez-faire capitalist theory too.

One of the most famous left-libertarians was the American Henry George (1839-1897), who opposed rentierism, and argued in favour of Land Value Tax. Many Georgists have argued that the proceeds from Land Value Tax should be used to fund a citizens income, or Universal Basic Income.

Left-Libertarianism is not as famous as its rabid Ayn Rand inspired American cousin, but it is an increasingly popular political stance, and one which I personally embrace.

What is Universal Basic Income
[Main article]

If you're not fully versed on what Universal Basic Income (UBI) is, I suggest that you read my introductory article before coming back to finish this one. If you haven't got time for that, or you are reasonably clued up about what UBI is, I'll just provide a short summary.

UBI is an unconditional payment that is made to every qualifying individual within an economy. There is no means testing at all, other than determination that the individual is eligible (a citizen in the economy for example). Ideally the UBI is set at a rate which is sufficient to ensure that all recipients have access to basic human necessities (a home, sufficient food and water, basic energy needs ...).

This concept is generally appealing to libertarians on a basic level because it dispenses with almost all forms of state means testing, meaning a smaller, and less obtrusive state. In this article I'm not going to focus on this compelling "smaller state" argument for UBI, in favour of considering the libertarian case for UBI from a labour market perspective.

What makes the current labour market so unfree?
[Main article]

Labour is a fundamentally important factor in any economy. Orthodox economic theories tends to treat labour as if it is just some other kind of basic commodity, however, if it is to be referred to as a commodity at all, it must be recognised as a very special and distinct form of commodity, one that can be created at will, and which takes myriad potential forms.

The neoclassical orthodoxy fails to treat the labour market as utterly different to other commodities markets and it also fails to recognise the unequal nature of the market in labour, where the employer at a huge advantage over the employee. There are innumerable factors that put the buyer at an advantage of the seller in the labour market, but perhaps the most significant is the creation of false abundance via political policies aimed at retaining a constant pool of unemployment, the "reserve army of unemployment" as Marx defined it in the 19th century, or the "price worth paying" as it was described by former Tory Chancellor Norman Lamont in 1991.

In 1918 Bertrand Russell argued against this inequality in the labour market, proposing a kind of basic income so "the dread of unemployment and loss of livelihood will no longer haunt men like a nightmare".

The constant threat of destitution is a powerful means by which employers can drive down wages and working conditions, putting them at an unfair price advantage over the worker. If the scale of unemployment has been brought about via deliberate economic policies based on the equilibrium rate of unemployment, this is a clear case of the state trampling all over the libertarian non-aggression principle. If government policies result in your labour being coerced from you at a lower rate than you would be willing to sell it, solely because you fear destitution if you don't work for low wages, you're suffering aggression at the hands of the state.

The spectre of unemployment and impoverishment created by economic policies aimed at maintaining "extra capacity" in the labour market is not the only current example of aggressive coercion in the labour market.

Workfare blatantly violates the libertarian non-aggression principle
[Main article]

One of the starkest examples of a labour policy which violate the libertarian non-aggression principle is the kind of mandatory unpaid labour schemes for the unemployed collectively termed "Workfare".

These schemes coerce the unemployed, under threat of absolute destitution, into giving up their labour for free, often to highly profitable corporations.

It's bad enough that the state uses the threat of destitution (via welfare sanctions) to undermine the aggregate value of labour, but that ministers of the government openly declare that they believe that the state has "a right" to extract the labour of the individual for no wage at all, demonstrates an extremely illiberal attitude towards the labour rights of the individual.

These mandatory unpaid "Workfare" labour schemes demonstrate beyond doubt that the ministers involved in administering these schemes believe that the labour of the individual actually belongs to the state.
If your government acts as if it believes that your labour is a commodity which belongs to the state, and which can be extracted and distributed for free to favoured corporations, the labour market isn't just unfree, it is grotesquely authoritarian.

How would UBI make the labour market freer?

If every individual received an unconditional basic income sufficient to meet their fundamental human needs (housing, food and water, energy, health care ...) the threat of destitution would cease to necessitate people into accepting wages and working conditions they deem unfair.

An unconditional basic income would also render totally unworkable the draconian regime of "Workfare" labour extraction schemes enforced via draconian welfare sanctions regimes. If the individual has a right to an unconditional subsistence income, the state loses the power to coerce and intimidate the individual into giving up their labour for free with threats of destitution, starvation and homelessness.

Even if we accept the wrong-headed idea that labour is a basic commodity with a defined value (the national minimum wage for example), we have to accept that coerced unpaid labour represents theft, and a clear violation of the libertarian non-aggression principle. Universal Basic Income would render this form of theft by the state totally unworkable, because the state would have no right to revoke the unconditional incomes of those that won't comply with their unpaid labour extraction schemes.

How a freer labour market could benefit society and the economy

I've explained a how UBI could benefit society and the economy in the primer article on the subject, so I'll try to be concise here.

The free labour market that UBI would create if administered correctly, would benefit society by alleviating extreme poverty, which would lead to a fall in poverty related social problems such as crime and poverty related ill-health.

Another benefit to society would be that the existence of UBI would push up the cost of employing people to do undesirable jobs (disgusting, dangerous or debilitating work), meaning that in turn there would be much greater financial incentives for companies to invest in technology to automate such work. The development of technology to eliminate undesirable jobs would benefit society and the economy (fewer people working in undesirable jobs, greater demand for high-tech solutions).

UBI trials have shown that people generally don't stop working and laze about once their basic necessities are provided, in fact UBI works as an economic stimulus, because people have more time to invest in starting their own businesses, and the public has more money to spend on consumption. The only demographics to substantially reduce the hours they work are mothers with young children and young people in education, it is arguable that these reductions are actually beneficial in socio-economic terms.

Universal Basic Income from a libertarian perspective - A labour market analysis

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