Proposals for freedom in the economy: unconditional basic income, cooperative ownership of enterprise, socialized health care.

In a little over a week, one of the editors of this blog, Alex Gourevitch, will be speaking at the Left Forum with Corey Robin and Doug Henwood on a panel on freedom and the economy. The panel is one of three organized under the general theme ‘reclaiming freedom for the left,’ in part inspired by this excellent article by Corey Robin. In anticipation of the panel, we thought we would try out some of the ideas that we will discuss at the Left Forum itself.

The impetus for the economics panel was the economic tendencies of the Occupy happenings, which bounced between anti-Fed, goldbug Ron Paulism and a general attack on corporate personhood. But instead of continue to criticize those economic tendencies, we thought it worth presenting something more positive – not exactly a utopian image of a radically transformed future, but three major economic changes that we believe would significantly increase human freedom. In what follows, we discuss the first: an unconditional basic income.

The idea of an unconditional basic income has floated around policy circles for ages. It has such strange bedfellows as post-Marxist Socialist Andre Gorz, legal theorist Bruce Ackerman, and right-wing crank Charles Murray. It can claim a tradition reaching as far back as Thomas Paine and Thomas Skidmore’s proposals to give all persons a land grant or equivalent value upon reaching adulthood. It is an idea floated at different times by famous socialists like Oscar Lange, left-libertarians like Philippe Van Parijs, and aggressively defended by her Mavericky Maverickness, Sarah Palin.

That’s right, you read that last bit correctly. Lost in the hubbub of the 2008 right-wing debate about whether Obama was a socialists, a fascist, or something worse, was the fact that Sarah Palin, as governor of Alaska, ruled over the only socialist state in the United States. The State of Alaskaowns the major means of production – the Alaskan oil pipeline – and uses the surplus generated from that pipeline to grant, unconditionally, a basic income to all Alaskan citizens. It is called the Alaska Permanent Fund Dividend and as governor, Palin not only happily presided over this economic arrangement, she voted to increase the basic income payout.

A basic income has multiple virtues. Unlike means-tested welfare payments, a basic income is extended to all citizens. This means that the horrible welfare bureaucracy would disappear, replaced by automatic monthly deposits in a bank account. That, in and of itself, would be a gain to human freedom. The USwelfare system can be unbelievably invasive – including unannounced searches of recipient apartments, which get as personal as checking underwear drawers for extra cash, and bathroom sinks for extra toothbrushes (if cohabitating with someone earning an income, you might be cheating the system.) Welfare recipients who need the income are dependent on the state, and must accept this sacrifice of personal freedom for welfare payments. The current welfare system serves more to regulate the poor and to create corrosive distinctions between the deserving  and undeserving poor, rather than deal with poverty itself. A basic income would eliminate that.

A further advantage of a basic income, especially if it were adequately large, would be the reduction of the economic dependence of workers on employers. Those afraid to resist crappy, overbearing, or downright mean employers, would find it much easier to leave a job, or contest conditions at work on equal terms. After all, no matter how ‘fair’ or reasonable a wage-contract is, they are still terms for the sale of one’s labor, and say little about the control one will have over one’s work. The virtue of a basic income is not just that a worker can leave work, but that the added bargaining power makes it harder to walk all over him or her in whatever job the worker happens to find. Here too, the basic income would reduce, if not eliminate, various relations of domination.

A basic income is no magic bullet, but it is more than just an anti-poverty measure. It is the best way to increase the actual and reasonable alternatives of most people, and thus their real freedom.

Jobs and Benefits, Short and Long Term

Two separate points, both on problems with Obama’s jobs bill – as it stands in its yet untrimmed, ‘uncompromised’ form.

First, defenders of Obama’s jobs program are touting this report by Macroeconomic Advisors that the bill is predicted to create 2.1 million jobs over the next two years, 1.3 in the first year alone. Possibly more. That’s better than nothing. Or is it? In the short-term, it’s undoubtedly a good thing (making the bad assumption here that the bill as presented is the one that gets passed.) However, there is the question of paying for it. Obama has promised slightly higher taxes on the wealthiest, but he also called, in his speech, for “making modest adjustments to health care programs like Medicare and Medicaid.” Whether the final bill makes modest or more serious adjustments, Obama is saying he wants to trade lasting cuts to an important entitlement for a middling jobs bill that will only have short-term benefits. As the same Macroeconomic Advisors report points out, since the different bits of the jobs plan will expire by the end of 2012, “GDP and employment effects are expected to be temporary.” So a short-term bump to employment – and Obama’s electoral fortunes – facilitates an attack on a more enduring, long-term benefit. A problem that could be amplified once Republicans get down with their subtractions to the bill. One step forward two steps back?

Second, in previous posts we suggested that a problem with the jobs bill is that it will treat unemployed as a distinct interested group from the employed. More generally our point was that people who have interests in common – unemployed and the employed, low-wage work and higher-wage work, underemployed and those with two jobs – are not addressed or mobilized as if they have shared interests. We were accused in comments of focusing only on ‘labels’ or discourse, rather than actual policy. So it’s worth pointing out that some of the actual policy is more or less in line with our initial worry – dividing up the interests of the working classes.

The usually Obama-boosting Wonkblog observes that there is a potential problem with a work-sharing provision in the jobs bill. This work-sharing system, borrowed from the Germans and already picked up by some states, is a system whereby the state subsidizes an employer’s decision to keep workers on at reduced hours, rather than fire some and keep the rest on. What Wonkblog observes is that this tends to work best before workers have already been fired – ie where we are now – and what’s more, it may have “positive effect on full-time employment but doesn’t help temporary employment, which could make it harder for those who are unemployed to reenter the workplace.” This worry is taken from another paper, by Cahuc and Carillo, who point out that

“But short-time compensation programmes are no panacea. They can induce inefficient reductions in working hours. Moreover, workers in permanent jobs have incentives to support such schemes in recessions in order to protect their jobs. Employers also have incentives to support short-time compensation programmes in countries where stringent job protection induces high firing costs. Therefore, there is a risk attached with using these programmes too intensively. The benefits of insiders can be at the expense of the outsiders whose entry into employment is made even more difficult.” (our underline)

So not only might this produce an inefficient allocation of labor, but it helps protect the jobs of those who have them more than helps those who don’t have them in the first place – a double whammy, since inefficient allocation of labor will also hold down growth, which also suppresses employment. Of course, the effects, given the small size of the proposed program, are likely to be very small or unobservable, at least at first. But this does create a division of interests – the full-time employed, committed to a new program that holds their jobs in place, and which is really unconnected to serious efforts at creating jobs for those who don’t have them. Somewhere down the line, one can imagine one or the other being on the chopping block, or some trade-off needing to be made, and two segments of a group that ought to be on the same side would be put in competition with each other.