LA Review of Books: Money for Nothing
The idea of a universal basic income, whereby the state or another such sovereign provides all citizens with regular cash payments to supplement earnings, has existed in various incarnations for centuries, even if it is not yet a reality. In recent decades prominent intellectual advocates, like the Belgian academic Philippe van Parijs and American ex-union leader Andy Stern, have argued its merits, but the universal basic income — known by the acronym UBI — is gaining new momentum amid fears that automation will continue displacing the traditional working class.
A June 2016 petition-driven referendum in Switzerland on whether to implement a UBI system only added to the hubbub. Though nearly 77 percent of Swiss voters rejected the plan — and the Swiss are not exactly radical, women did not obtain the right to vote until 1971 — the plebiscite nonetheless drew serious attention to a concept previously considered eccentric if not insane. In the meantime, the Finnish government launched a two-year pilot study on UBI, whereby recipients are picked at random from the country’s unemployed and get €560 (or about $590) per month with no strings attached. Similar trial runs are now underway in Scotland, and the idea has plenty of advocates in the hipster salons of Silicon Valley.
Among UBI’s more articulate recent advocates is Dutch journalist Rutger Bregman, who lays out a multipronged case in his new book Utopia for Realists, a title that evokes the shibboleth of 1968 student movements: “Be realistic, demand the impossible!”
The 29-year-old Bregman begins by asserting that it is a book about ideas not practicalities, an attempt to “fling open the windows of our minds.” Today, “almost everyone is rich, safe, and healthy” in historical terms, but we lack a “reason to get out of bed in the morning,” he says. Amid this collective malaise, it has become taboo to dream a better future. Instead, many of the brightest minds spend their time developing a slightly improved smartphone camera or creating algorithms that detect market anomalies milliseconds faster than the ones already in use. “Optimism and pessimism have become synonymous with consumer confidence or the lack thereof,” Bregman laments.
Our civilizational discontent comes, in part, because we tend not to recognize how many 21st-century realities were not so long ago dismissed as unrealistic and utopian themselves, Bregman says. There are two types of utopian thinking, he adds. “Blueprints” are bad as they tend to prescribe exact steps needed to achieve some predetermined end. This singular focus risks ignoring excesses and casualties along the way and has led to the high body count utopias of the Spanish Inquisition, Stalin, Pol Pot, Pinochet, and Jim Jones. As Chairman Mao once put it, “A revolution is not a dinner party.”
But the other kind utopian thinking — a vague outline, or what Bregman calls “guideposts” — is inspirational while mindful that the perfect is the enemy of the good, he says. In sum, moderate utopianism is necessary and visionary thinking has gotten a bad rap.
Bregman raises a number of individually provocative ideas — on how to end poverty, creating a 15-hour workweek, quantifying the value of liberal immigration policies and the myriad flaws of using Gross Domestic Product as a measure of economic health — but deploys them to argue on behalf of UBI. Comprised largely of a series of anecdotes and summaries of smaller-scale experimental runs, the evidence is convincing.
One pilot project he cites took place in London’s financial district in 2009. It began by calculating how much 13 homeless people living there cost the state each year. As it turned out, quite a lot. All told with police, court costs, and social services, about $400,000 annually. In the experiment, each homeless person received $4,000 cash up front, and were allowed to spend it on whatever they pleased. Contrary to stereotypes that would have them blow it all on booze and smokes, a year later they had spent just $1,050 each on average. After 18 months, seven of the 13 were no longer living on the streets and two more were about to move into a home. Several had attended substance abuse rehabilitation or enrolled in gardening or cooking classes. Such results came at about one-10th the cost it took to support those same people for a single year on the streets.
In general, Bregman’s argument for UBI is three-fold: contemporary society is rich enough to provide a basic income, UBI recipients will choose work over lethargy, and that existing welfare systems treat symptoms of poverty (via policing, emergency room medical care, and so forth) not the illness (a lack of money). The current welfare system is neither successful, nor cost-effective. As was the case with homeless living in London’s financial district, the status quo is expensive even if most people don’t see how much we are already spending. In other words, not implementing UBI is already costing us money.
Residents of the United States, France, and the Netherlands saw wealth increase by a factor of five by the turn of this century as compared to 1930. Despite this, our collective wealth is often deployed in comically inefficient ways, like the $300 million spent in 2009 laying a new fiber-optic cable between New York and London to speed up communications between two of the world’s leading financial markets by a mere 5.2 milliseconds. Meanwhile, one study at the University of California found that just $4,500 per year, on average, is needed to lift the average American family living below the poverty line, above it. The return on investment per child leads to 12.5 percent more hours worked, $3,000 in annual savings on welfare, between $50,000 and $100,000 more in lifetime earnings, and between $10,000 to $20,000 more in additional state tax revenues.
Empirically sound as Bregman’s argumentation is, his most difficult task is to convince readers the larger idea of UBI is not nearly as crazy as it sounds. To do so he solicits an unlikely ally: Richard Nixon, who at one time advocated, and nearly passed, a law that would have given every American family of four $1,600 per year in cash (the equivalent of $10,000 today). This is a brilliant — but obfuscating — rhetorical trick. On the surface, Bregman uses Tricky Dick to show UBI is a great deal less radical than it may first appear (if a stiff like Nixon supported it, so can you). At the same time, while Bregman generally casts his ideas as a paradigm-confronting reorientation of thought (this is still utopia after all), by drawing on Nixon he simultaneously seeks to paint UBI as nothing more than a tweak in public policy. That is, UBI is sort of like raising sales tax a percent or two, not a fundamental challenge to the dominant assumptions that drive contemporary capitalism.
Despite this shallowness of argument, there is no denying that Bregman’s book makes for enjoyable reading, and it is packed with colorful factual asides. For example, one study found the average North American child in the 1990s was more anxious than the average 1950s psychiatric patient. Elsewhere, in an attempt to rethink how certain professions are valued, and thus paid, he describes a 2009 study by the London-based New Economics Foundation, which found that for every pound sterling (about $1.30) earned by an advertising executive, they destroy another $9.20 in the form of stress, overconsumption, pollution, and debt. This is juxtaposed with every pound paid to a trash collector, which generates $15.85 in health and sustainability.
The author of three previous books, Bregman works at the innovative Dutch journalism platform De Correspondent. Utopia for Realists has been translated into 20 languages, and even in a second language, his bursts of wit are apparent. “If you were the GDP, your ideal citizen would be a compulsive gambler with cancer who’s going through a drawn-out divorce that he copes with by popping fistfuls of Prozac and going berserk on Black Friday,” Bregman writes in one particularly droll passage.
While his sympathies certainly lean socially liberal, and economically egalitarian, Bregman’s case does not easily align with existing partisan positioning on either side of the Atlantic. Though perhaps not in equal measure, nor with the same venom, his argument takes on some sacred cows of the traditional social democratic left. The current welfare state “has degenerated into a system of suspicion and shame” and “nobody knows” if foreign development actually works, he writes. In fact, his UBI argumentation has ample grounds for overlap with genuinely entrepreneurial-minded elements of the political right — though Bregman leaves direct appeals to political constituencies like this largely undeveloped.
If one believes existing welfare systems incentivize recipients to collect unemployment benefits instead of pursue low-paying work, couldn’t UBI push some of those people back into the workforce on the grounds that they would get to keep both revenue streams? Might others use their UBI money to educate themselves, get professional training, or start a business of their own — making UBI something of a nascent venture capital fund? Furthermore, if UBI were truly universal couldn’t we eliminate unemployment offices, case workers, or hours of unproductive time spent on paperwork processing welfare payments? That would slash the affiliated federal jobs (more than 1,000 work for the Department of Labor’s Employment and Training Administration alone, never mind state officials) and shutter offices (the California Employment Development Department has about 200 by itself), cutting into that free market bête noire of bureaucracy. In fact, even as contemporary capitalist dogma shuns ideas like UBI, none other than neoliberal pioneer Milton Friedman once supported the concept.
In the end, Bregman’s UBI argument is not particularly unreasonable or overly utopian, but his belief that ideas, not power, drives politics is naïve. Though the Trump-era United States presents a particularly egregious example of emotions and identity overwhelming ideas, there are few examples of idea-driven politics anywhere in the West today.
Indeed Bregman’s own closing argument overemphasizes the impact intellect has on public affairs. He opts to focus on the triumph of neoliberalism — let’s call it economics driven by privatization, deregulation, government austerity, and removing barriers to free trade — as a global paradigm in the late 20th century. In Bregman’s view, amid the economic crises of the 1970s, Milton Friedman and other disciples of the Austrian economist Friedrich Hayek were the only ones to present a coherent alternative (though the UBI component of his thinking gained little traction). “When that crisis occurs, the actions that are taken depend on the ideas that are lying around,” he quotes Friedman as saying. However, Bregman is not advocating UBI because it is an idea lying around, but because he contends it is the best idea — a utopian ideal within reach. The fact that he believes the latter also signifies he does not believe that contemporary neoliberalism is a manifestation of the best idea — meaning even in his own mind there must be some other explanation for why neoliberalism took hold of global politics and has proved so enduring.
Few would deny that neoliberal ideas have driven global affairs for 40-odd years, but their success is more a factor of tactical maneuvering and power relations than their merits as organizing principles. Constituents who favored banking deregulation, reduced taxes on imports and exports, or union busting, tended to be powerful and enabled neoliberalism out of self-interest. For the most part they marshaled resources, intellectual and otherwise, in favor of free trade or reduced capital gains taxes for selfish reasons. Friedman and Hayek may have been true believers, but neoliberalism’s most effective advocates did so in the cause of gaining and maintaining personal wealth.
To attribute the triumph of neoliberalism to coherence of thinking, intellectual preparation, and timely reaction to circumstance is to ignore the role of power in politics, not to mention a century or so of political economy and history. It is akin to attributing the success of the 1917 Bolshevik Revolution in Russia to the merits of communism as an idea. That argument would be that amid the chaotic collapse of the tsarist system Lenin had the best idea lying around. While he surely did offer a coherent worldview at an opportune time, Lenin did not succeed because his idea was the best, but rather because he was willing to do whatever necessary to see his idea implemented — as in kill, maim, or otherwise coerce anybody that stood in the way.
By using the triumph of neoliberalism as a parallel, Bregman exposes his earlier Nixonian dabblings as misdirection. Agree with its key tenets or not, but contemporary neoliberalism amounts to a far-reaching worldview that is generally hostile to UBI. There are public policies that result from that, but neoliberalism is an ideological force not a policy itself. So while Bregman justifies his own book by insinuating it is doing the yeoman’s work of challenging existing ideological norms à la Milton Friedman, he also contends that UBI is merely a sober, rational public policy choice. In unevenly claiming both, he absolves himself of fully delivering an argument on either one. By insisting he has written a book of ideas, he shirks explaining the practicalities of how UBI might be implemented (policy). By hinging his argument on empiricism and Richard Nixon, he also avoids rooting it in a larger, lucid worldview (philosophy or ideology).
This means that as entertaining and reasoned as his book is, Bregman is overly utopian in his belief in the significance of an isolated idea. While implementing policies are largely about details and power relations, tectonic shifts in how society is organized are anchored in more comprehensive theory. Utopia for Realists does not fully deliver on either, but should still make for good conversation at the next dinner party.