Saturday, 11 April 2020
A few days ago I saw this Bloomberg snippet, claiming that Spain wants to roll out a basic income scheme: This is a popular idea among many who believe that the role of the state is to cosset people from cradle to grave. It’s a nice, feelgood kind of a thing; everybody is housed, everybody is fed and everybody stays warm. In theory.
The basic tenets of a Universal Basic Income are that it would be:
· Unconditional and Individual - everybody of the same age would receive the same basic income, regardless of gender, employment, family size, etc.
· Automatic - basic income would be automatically paid into your bank account.
· Non-withdrawable – that is UBI would not be means-tested and you would be free to earn whatever you wished on top of it.
· A right for every legal resident, following a minimum qualifying period of residency.
People think that the current furlough situation – 80% of normal income for those to whom it applies - is some illustration of what UBI would mean to many. But this is exceptional and unaffordable beyond a very brief period. Basic will only ever mean basic; breadline. It wouldn’t even cover current rents in our major cities. Basic would not cover entertainment, internet access, or any form of luxury; it would be penury.
Now some might say, hey, I’m already poor, bring it on. Okay, let’s take a look: There are currently almost 68 million officially in the population, approximately 53 million of them adults. National ‘Living Wage’ is currently £8.72 per hour. That’s £348.80 for a 40-hour week and thus £18,137.60 per annum. Multiply that by 53 million and we get an annual bill of £961 billion, almost half of GDP, which puts the current short-term rescue measures in the shade.
And of course, no taxes would be paid by the recipients, just as no ‘actual’ tax is paid by anybody earning from the public purse. All effective taxation is paid by private companies and individuals from the surplus they generate. UBI would reduce this private sector considerably as people find ways to pool their meagre incomes to live tolerably well, in much the same way as some people manage to milk the benefits system.
Universal Basic Income is, essentially, a socialist ideal and so, in the same way that socialism always ignores the real outcomes in favour of its fairy tale imaginings, there would be social consequences which would further break down the social contract which currently exists. That is, we go to work, pay taxes and behave ourselves and in return the state provides education, healthcare, law and order, defence and a basic system of care and welfare to look after those unable to look after themselves.
If the tax burden rises too high, people remove themselves from the UK tax regime. It’s a balance that one side of the political divide takes seriously and the other side would wantonly abuse. In the socialist mind UBI would liberate the proletariat from the daily grind and free their creative potential. In reality there would be an increase in idleness, squalor and all kinds of fraudulent and anti-social activity. This would lead to an even greater stratification in society and even greater levels of inequality.
Just as ‘real socialism’ has never worked in any country which has tried it, neither has UBI. And just as ‘real socialism’, they insist, has never been tried, everywhere a UBI trial has been implemented it has been introduced for a short term, to specific parts of the populace and with conditions attached; which means it is not ‘real UBI’ either. As with all forms of socialism, unable to encourage and empower the population to level up, instead it commands the population to level down.