Despite the key importance of size and implementation, the countless texts dedicated to establishing a UBI — including Srnicek and Williams’s work — rarely discuss the policy’s concrete details. Many of basic income’s benefits would only arrive if it provided a generous monthly amount, meaning that a moderate or low-amount version could have potentially negative effects. Guy Standing, a pioneer of basic income in the United Kingdom, currently defends the low-amount version. To advance his proposal, he points to the think tank Compass, which produced several micro-simulations to assess the effects and feasibility of the measure in the UK context. Compass’s study shows the risks of any basic income scheme that tries to replace existing means-tested benefits: such a “full scheme” would, in its simplest version, give every adult $392 (£292) each month while existing means-tested programs would be abolished. The results would be catastrophic: child poverty would increase by 10 percent, poverty among pensioners by 4 percent, and poverty among the working population by 3 percent. Compass also analyzed a “modified scheme,” with a monthly basic income of £284 ($380) for working-age adults (and smaller payments for others) that would stand alongside, rather than replace, most existing social programs. But it would also count as income when calculating recipients’ eligibility for those programs, as well as for tax purposes; this “add-on” structure makes the measure less expensive than it would otherwise be, since a large part of the cost is included in existing social spending. But that also dampens the total boost to the net income of the poor. Nevertheless, the total cost of this version — the amount of new taxes that would be needed — is £170 billion or 6.5 percent of the UK’s GDP. This is the version now promoted by Standing. Despite the fiscal effort that would go into implementing the new system — 6.5 percent of GDP, or nearly twice the share of GDP that the US currently spends on its military — the results are rather disappointing. Child poverty shrinks from 16 to 9 percent, but for working-age people it decreases less than 2 points (13.9 to 12 percent), and among pensioners it declines only 1 point (14.9 to 14.1 percent). The considerable sum of money mobilized has only a modest effect on poverty and doesn’t specifically benefit those who need it most. As economist Ian Gough writes, the idea looks like “a powerful new tax engine” that “pull[s] along a tiny cart.” This fact is even more striking when we consider that the cost of eradicating poverty in any developed country is around 1 percent of GDP. An individual unemployment benefit set at the poverty line (around $1,200 a month) and granted to all jobless individuals regardless of their place in the family structure would not only pull everyone out of poverty but also end workfare, challenge the normative dimensions of family structures, and fundamentally alter the labor market. All this, for somewhere between six to thirty-five times less money than a universal basic income (…) No existing economy can pay for a generous basic income without defunding everything else. We would either have to settle for the minimalist version — whose effects would be highly suspect — or we’d have to eliminate all other social expenditures, in effect creating Milton Friedman’s paradise. Faced with these facts, we should question UBI’s rationality; as Luke Martinelli put it: “an affordable UBI is inadequate, and an adequate UBI is unaffordable”. Until we profoundly transform our economies, we can’t implement a measure that would cost more than 35 percent of GDP in economies where the state already spends around 50 percent of GDP. The power relations needed to establish this level of UBI would constitute an exit from capitalism, pure and simple, rendering depictions of UBI as a “means” of social transformation nonsense. Indeed, many defenses of basic income can be classified as what Raymond Geuss called “nonrealist political philosophy”: ideas formulated in complete abstraction from the existing world and real people, completely “disjoined from real politics” — like to the Rawlsian model of justice that serves as an important inspiration to figures like Philippe Van Parijs. If UBI does take shape, current power relations will favor those who have economic power and want to profit by weakening the existing system of social protection and labor market regulations. Who will decide the monthly amount and who will dictate its terms and condition? Who do today’s power relations favor? Certainly not the worker.
Daniel Zamora in The Case Against a Basic Income (Jacobinmag)