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What Ed Miliband Did Next: Part I - “What’s Inside the Enchilada?” - on Universal Basic Income

Former Labour leader Ed Miliband has recently launched a new podcast series, Reasons to be Cheerful, looking at big ideas for the future of the left. Martin O'Neill of Renewal caught up with Ed for a chat, on a train journey from Leeds to Preston, where Ed was heading to see the work on community wealth-building being done by Matthew Brown and his colleagues at Preston City Council. Our discussion ranges over some ideas for the future of the left, and with some of Ed's hopes for the next Labour government. In the first part of our conversation, we discuss the case for Universal Basic Income (UBI).

Martin O’Neill: You’ve stated a new podcast series that’s looking at political ideas and reasons that we might have to be optimistic about the future…

Ed Miliband: Yes… Reasons to be Cheerful! Available on all good podcast platforms.

MO’N: Can you tell the readers of Renewal a little bit about the genesis of this podcast series?

Ed M: I think that following the election there is now a real space to develop radical and rigorous ideas for the future. And I think that all of us have the obligation to build that space. Geoff Lloyd, who used to be a presenter on Absolute Radio, came to me a few months ago – actually before the election – with the idea. We think that there are important, radical ideas out there, and we wanted to find a way to get them across to people in an accessible way. I was very enthusiastic about the podcast as a way to do this. The election intervened of course, but now it’s up and running I’m really enjoying it. It’s a great way to discuss ideas and to try to get ideas across to people. Hopefully there’s some funny stuff in there, but the main purpose of it is a fundamentally serious purpose, which is to showcase big ideas for the future.

MO’N: So, among the topics you’ve discussed already are Universal Basic Income (UBI). Can I ask you what you make of proposals for UBI? I listened to the podcast and thought that you seemed guardedly optimistic.

Ed M: That’s a good way of putting it. I’m not yet a total convert, but I think that UBI could definitely be worth trying, and I definitely want the next Labour government to have a commitment to a pilot scheme for UBI. To pilot it effectively – as they’re currently doing in Finland – you really require the contribution of central government. So, while I don’t think that UBI in its full-fledged form will be in Labour’s next manifesto, I think it’s something that we’ll need to think seriously about for the future beyond that. There are some issues that we’ll need to solve, including with regard to questions relating to work – for example, what would a UBI do in terms of work incentives? Might it put people off working? In order to answer those questions, we need to be able to look at the effects of implementing a UBI in practice, and so I think that a pilot form of UBI is something that we should be committing to doing when we come to power.

MO’N: Brian Barry had a very nice phrase about UBI. He said that asking about the pros and cons of basic income as such is rather like asking about the pros and cons of keeping a feline as a pet without distinguishing between a tiger and a tabby. His point was that basic income has very different characteristics at different levels, depending on the design of the policy, what other policies ran alongside it, how it was all funded, and so on. (See Barry 2000)

And so UBI might a tabby cat, or it might be a tiger. And until you know the details of the kind of UBI scheme that you’re talking about …

Ed M: …. and until you know the price of cat food …

MO’N: … exactly. Until you know the details, you can’t say that much about whether UBI is a good idea. You could see UBI as the name for quite a wide variety of possible schemes

Ed M:  Yes, that’s a good point.

MO’N: OK, so one thing that struck me in your podcast was that you talked to Scott Santens, who is an advocate of UBI, and who’s one of the UBI advocates who is coming from that world of northern Californian tech entrepreneurs, and so on. And you pushed him on the kinds of things that UBI might allow people to do. And the two examples he gave were that, first, a UBI might allow a woman who has had a baby to take time off work and, second, that people could use a UBI to help to fund themselves through university. But if you’ve got a well-functioning welfare state, these things should already be taken care of elsewhere in the system – you shouldn’t need UBI for these reasons if you have a proper system of maternity leave, or if the state helps young people to go to university.

Ed M: Right. I think some of this is context-specific, and of course Scott Santens was thinking in terms of the US system. One thing we asked him about – and I think this may have got cut from the final version – was whether there isn’t a huge opportunity cost to concentrating on UBI. Shouldn’t we instead be putting our efforts into advocating for a higher minimum wage, decent housing or, in the US context, single-payer healthcare? So, yes, I agree that we have to guard against the advocacy of UBI becoming a kind of libertarian trope, or a libertarian Trojan horse. We can rightly be somewhat suspicious of UBI proposals when we see that Mark Zuckerberg and Elon Musk are in favour of it. But although there are some people whose motives one might suspect who are in favour of UBI, or because some people might want to turn it into something problematic, that isn’t a reason to rule it out.

Look, in the end, I agree with the RSA view – the idea of ‘the power to create’, expanding people’s opportunities for what they can do in different spheres (Painter and Thuong 2015; Painter 2017), and getting rid of a mean, nasty, intrusive welfare system. Our welfare system is horrible for the claimants, and it doesn’t command popular confidence. Finding some way to break that logjam is definitely worth thinking about. And while we shouldn’t get carried away with this idea of the rise of the robots – of robots taking all our jobs away – UBI proposals also speak to those issues.

MO’N: So there’s a recent critique of UBI that I’ve heard made by Alex Gourevitch, a political theorist at Brown University and Lucas Stanczyk of Harvard University (Gourevitch 2016; Gourevitch and Stanczyk nd). And it’s basically a political critique. If you think about the level that UBI would have to be at in order to do what you want of it – to get rid of welfare conditionality, and to give people much more control over their time – then it would have to be tremendously costly. A UBI at 30% of average income would cost 30% of GDP – that’s just an accounting identity. So if you want to fund a UBI at 30% of average income, you’d need to socialise 30% of GDP. And the thought, then, is that UBI looks like the kind of policy that you might endorse if you were just magically able to point a magic wand at any possible policy outcome, or (to mix metaphors) if all the levers of power were available and worked completely smoothly. But to get a UBI that’s really worth having, you have to realise what has to be done in terms of raising taxation to a very high level, and expropriating many of the current holders of wealth. To have a UBI that really made enough of a difference, in terms of the hope you have for the policy, there are going to be insurmountable political problems involved with coming up against the interests of those who would have to be taxed to pay for it. And so Gourevitch’s point is that the debate on the left about UBI is a massive distraction. We need to be thinking about real gains that real working people can make, and about building the power that working people can have against the holders of capital. And it’s no use just thinking about pie-in-the-sky policies that we can’t hope to have while the wealthy have so much power in our societies. UBI is a policy that, if it were to be enacted in a form that really did what its advocates want it to do, would be a policy that the powerful simply would not accept, and we need to be realistic about that.

Ed M: Well, that’s going to be true of anything where you hope to fundamentally alter the ‘terms of trade’ in our society. I’m not sure that UBI is more vulnerable to that than are many other policies that we might want to do. I’m freed from the shackles of office now, and so I’m reluctant to rule out policies by saying that they’re too ambitious.

MO’N:  OK. Well, to take a related issue with UBI, it might pose particular problems because it’s in one sense an individualistic policy, and it doesn’t bring with it any specific political constituency. If you think about workers organising for better pay and conditions, or people organising in favour of any of the more familiar redistributive policies we’d associate with progressive politics, we have aims that bring a political coalition with them already. But UBI doesn’t seem to generate its own political coalition like this – it doesn’t come with its own politics in the way that struggles for better pay or better union rights do.

Ed M:  So, does that make you a sceptic about UBI?

MO’N: Well, yes, although a sympathetic sceptic.

Ed M: On a scale of 1 to 10?

MO’N: I guess I’d be a 7.

Ed M: Where 10 is Philippe Van Parijs and 0 is Theresa May? On that scale I think I’m probably a 7 too.

MO’N: I think I share something like Brian Barry’s view. UBI of some kind could be an important element within a mix of progressive politics, but it’s a mistake to put all our eggs in one basket, or (mixing metaphors again) to think of it as a silver bullet. Stuart White talks about the idea of an ‘egalitarian toolkit’, in thinking about the full range of possible egalitarian policies, and you can think of UBI as part of that toolkit, but only as one part of it (White 2015). But I think probably one of the most important aspect of any UBI proposal is to think about how it’s being funded – is this something that’s coming out of general taxation, and so competing with other elements of the welfare state, or is this something that’s going to be funded in a different way, like the kind of citizens’ dividend that you see with the Alaskan Permanent Fund?

Ed M: Right… that was Hillary Clinton’s idea that she didn’t actually follow in the end. The idea of an Alaskan type dividend for all Americans.

MO'N: So I wonder if the debate should move more onto the territory of thinking about the best ways for funding UBI? James Meade, as you know, advocated a “Citizen’s Trust” that would be funded by through what he called a ‘National Asset’ (what we’d now call a Sovereign Wealth Fund), so his idea was very much on the Alaskan model (Meade 1964; see also O’Neill 2015; O'Neill 2016; O'Neill 2017). And interestingly that’s a long-run proposal that would involve the progressive socialisation of large holdings of capital, through creating and expanding a state sovereign wealth fund that grew its holding of equities over time.

Ed M: Right, and there have been other really interesting recent proposals on funding UBI, such as the idea of scrip taxes (i.e. corporation taxes to be paid in the form of share issues rather than money) discussed by Mathew Lawrence at the IPPR (see Lawrence 2014; see also Holtham 2014)

MO’N: Yes, that seems like a really interesting proposal. These alternative funding models seem especially promising because, if UBI is just going to be funded out of current taxation, and if it’s going to be in direct competition with other valuable forms of social spending, then it would seem vulnerable to being run down in favour of these other forms of spending

Ed M: I think that we need to be practical about these different approaches. There are some things that UBI might do – in terms of effects on health and wellbeing – that we might not fully know about until we conduct a large-scale pilot and see what happens. If we can do a sizeable pilot, and if UBI can be seen working, then some of the barriers to getting support for it and enacting it might just fall away. Of course if the pilot just turned out to be hopeless, then it would be a case of going back and thinking again about how best to design a scheme and how best to fund it.

Lots of people are talking about UBI now, and I think the reason that it’s become such a fashionable idea has to do with scale. It’s because it really is a big idea.

MO’N: I think that must be right. People really are looking for a transformative big idea.

Ed M: A big enchilada.

MO’N: But what worries me …

Ed M: Is it what’s inside the enchilada?

MO’N: (chuckles) Right. And does this big idea end up stopping people from looking at other better options.

Ed M: Tacos, fajitas, …

MO’N: Which nicely brings us onto discussing some of these other good ideas – these ‘reasons to be cheerful’ – that you’re going to be looking at…

 

More on What Ed Miliband Did Next continues in Part II of this conversation, "On Facebook and Standard Oil: Regulating the Tech Industry". With thanks to Alex Feis-Bryce.

Reasons to be Cheerful, Ed Miliband’s podcast series with Geoff Lloyd, on progressive ideas for the future, is available via iTunes and all good podcast platforms.

 

References and Further Reading:

Barry, B. (2010), ‘UBI and the Work Ethic’, Boston Review, forum on Philippe Van Parijs's 'A Basic Income for All'

Gourevitch, A. (2016), ‘The Limits of a Basic Income: Means and Ends of Workplace Democracy’, Basic Income Studies, 11 (1), 17-28

Gourevitch, A. and Stanczyk, L. (nd), 'Fantasy in the Politics of Basic Income', forthcoming.

Holtham, G. (2014), 'Payment for Goods: Addressing the social democrat's dilemma', Juncture, (IPPR, London)

Lawrence, M. (2014), Defancialisation: a Democratic Reform of Finance, (IPPR, London)

Meade, J. (1964), Equality, Efficiency and the Ownership of Property, (London: Routledge)

O'Neill, M. (2015), 'James Meade and Predistribution: 50 Years Before His Time', Policy Network (London)

O'Neill, M. (2016), 'Piketty, Meade and Predistribution,' in H. Farrell, ed., Crooked Timber Seminar on Thomas Piketty’s Capital in the Twenty-First Century.

O’Neill, M. (2017), ‘Survey Article: Philosophy and Public Policy after Piketty,Journal of Political Philosophy, 25 (3), 343-75.

Painter, A. and Thuong, C. (2015), Creative Citizen, Creative State, (RSA, London)

Painter, A. (2017), 'Basic Income - from Utopian Vision to Policy Proposition to Movement,' (RSA, London)

Van Parijs, P. (1995), Real Freedom for All: What (if Anything) Can Justify Capitalism? (Oxford: Oxford University Press)

Van Parijs, P. (2000), 'A Basic Income for All', Boston Review forum.

Van Parijs, P. and Vanderborght, Y. (2017), Basic Income: A Radical Proposal for a Free Society and a Sane Economy, (Cambridge, MA: Harvard University Press)

White, S. (2015), ‘Basic Capital in the Egalitarian Toolkit,’ Journal of Applied Philosophy, 32 (4), 417-431

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