THE BLOG
03/08/2018 09:05 BST | Updated 03/08/2018 09:05 BST

Instead Of Basic Income, Labour Must Commit To Mutuality

It fails to address or tackle the fundamental economic problem we are faced with

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The Labour Party has cultivated a bolder agenda then anything it has contemplated for years. Fundamentally anti-austerity, making a clear case for redistribution, committed to a mixed-economy with publicly-run utilities and committed to sweeping improvements to workers’ rights. For a certain kind of wonk, adding on support for introducing a Universal Basic Income is a logical next step. And though I can see why some people see Universal Basic Income, a fixed social security payment given to everybody, as a solution to many social and economic problems - I think the grand idea misses the mark.

It is not just that basic income would be either virtually unfundable or end up with derisory, small payments. Nor is it the fact that the idea has garnered support from an array of shifty and regressive characters. But instead it is that UBI fails to address or tackle the fundamental economic problem we are faced with.

We should be asking what a more social and more democratic economy would look like - and basic income does not adequately address questions around democracy in our daily lives, exploitation or vast inequalities of power.

Labour’s founder Keir Hardie highlighted back in 1910 the divide in society between the “owners of property and the producers of property” that defines our economy. For Hardie, and many others, the fundamental divide was around control of industry. Economic sovereignty was key.

It is now worth suggesting that Hardie was on the right track by concluding that structural economic change was necessary to resolve this vast social division. The Cooperative Movement, especially when it is radical in its commitment to democracy, is an essential route towards eroding this divide. Basic income on the other hand does not directly address these questions.

As in the modern era wealth has become more and more concentrated at the top, so has capital. A basic income could redistribute income, but why not redistribute capital? Socialism has never meant tax and spend, it’s a movement about control and the structure of the economy.

Labour’s agenda since 2015 has sought to expose austerity as a social and economic mistake, make a moral case for income redistribution, fight working poverty and promote universal public services. Though all of these areas are key battlegrounds for the wider movement, few of them address questions around economic power or the very structure of the economy.

It is not just that our economic system had bred large-scale inequalities, but that as an economic system it is not conducive to personal autonomy or democratic control of our daily lives. After all top-down control of the economy by barely-accountable companies does not sit well with any vision of a society run by the people. With an economy that’s so unaccountable to both the individual and the collective, we get little autonomy or solidarity when we need both.

A universal basic income does offer a relatively attractive solution to these problems. But basic income falls into the trap of seeing social spending, presumably funded via progressive taxation, as the solution. It belongs to the mentality that income inequality is the underlying problem, when it would be more apt to diagnose inequalities of wealth, capital and power as the underlying issues. In that vein a basic income takes aim at the symptoms not the cause.

Nor does a basic income look like it could convincingly do what it’s supposed to. What is to stop landlords jacking up rents because their tenants have more income, or the big six, the water companies or any firm from doing the same. On the employee’s side, what would prevent a basic income from turning into a subsidy for low pay? Enacting a basic income would scarcely challenge or alter power relations in society, or the structure and basis of the economy, the policy is overhyped and off the mark.

If we are to accept the principle of one person, one vote as the basis of a functional democracy, then it is difficult to accept a situation in which a small number of billionaires and gigantic firms have so much of a say over our economic lives. Unless you are capable of believing a billionaire has just as much say in the marketplace as a working class mum then it is a colossal hurdle to believe that our economic system follows democratic principles. If we want democracy to become fully realised then we need to acknowledge that our economy does not correspond to same principles.

The co-operative movement, industrial democracy and social ownership more widely do however show one potential path toward fulfilling democratic principles - and applying them to the structure of our economy. The next more difficult question is what concrete, achievable steps can be taken to enshrine this agenda into the party’s platform?

John McDonnell has pledged a right for staff to own private companies and to in effect devolve power down to working people. What is in effect a beefed-up version of Italy’s Marcora Law, which the EU has predictably tried to dismantle, is a great starting point - but it’s also not enough. A new government department to promote mutually-owned firms, grants for workers to buy stakes in their workplaces and measures to promote and renew industrial democracy could be significant starting points.

A few firms changed here and there is good work but it is not a rupture with a past characterised by disempowerment and disenfranchisement. Labour has the capacity to, and ought to, build up a set of policies and demands around building a new economy and transforming the old one. There is no good reason for the party to forget the audacity and optimism of 1918’s Clause IV.