Four (more) arguments against real-world basic income

With the Ontario Liberals rolling out their basic income pilot project to much fanfare this week, it’s an opportune time to dive into the debates around BI once again.

1 Political aspects of unemployment

A few weeks ago I attended a debate on basic income and the left in Toronto hosted by The Leap. During the debate, the proponents of BI returned again and again to those who are outside the labour force. This focus is important. Welfare in Ontario and elsewhere is equivalent to poverty. And those outside the labour market are central to the current plans for basic income, which are more replacements for welfare rather than the kind of universal schemes argued for by some on the left. What BI fans forget is that even those outside the labor force have important functions under capitalism. While there was much said about people who can’t for various reasons participate in the labour market, there was scant attention to their position within our economic system.

A number, primarily women, are “outside the labour force” but performing the invisible, difficult, unpaid labour that makes the system tick: childcare, housework, non-market food production. Their work is valuable for society but needs to remain unpaid as long as it isn’t done for profit. The other part of those of working age but outside the labour force are key in a different way. They are a reminder that those of us don’t have any wealth have to work for a wage to survive…or else. John Clarke, who has been consistently critical of neoliberal BI schemes, made the point early in the debate that unemployment, poverty and homelessness have a political function in capitalism: they are part of the apparatus of economic coercion. People become examples for others: “Don’t want to end up on the streets/in dire poverty/…? Better get to work.”

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Jonathan Kay advises the left

Jonathan Kay knows what’s hurting the poor. Is it absurdly low welfare rates and social supports? Perhaps it is lack of access to affordable housing? Poverty wages? Food insecurity? Over-policing? No, says Kay, the honest broker of politics, the inconvenient truth-speaker, it’s the left’s political correctness that’s really keeping the poor down.

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Kay supports this claim with a jumble of obvious facts, unexamined assumptions and misrepresentations held together like the remnants of the fraying neoliberal consensus. In his most recent Walrus editorial, Kay jumps from (1) houses in Vancouver cost too much (true) to (2) it’s all the fault of the Chinese (nope) to (3) the left doesn’t care about class or the poor (wtf), all in the span of under 900 words! Here’s the punchline, complete with the obligatory reference to “things I’ve seen on social media”:

The left now has a golden opportunity to push for bold policies that would go to the heart of income inequality in our class-based society: guaranteed income, universal access to care for those suffering from mental illness, and, yes, tax and regulatory policies that discourage hot money from overinflating local real-estate markets. But from what I’ve read on social media and in Walrus editorial submissions, many activists and pundits seem far more comfortable striking positions on highly compartmentalized identity-politics issues that can be reduced to succinct, tweet-able messages.

For someone who has so much sage advice for the left on class politics, Kay is utterly oblivious to how class operates. Kay castigates Vancouver mayor Gregor Robertson for not speaking out against the real estate bubble ballooning under his watch and blames it on steadfast anti-racism. Is Robertson a bleeding heart liberal hopelessly in the clutches of radical dogmas or is it rather that he is the leader of a party that received hundreds of thousands of dollars in campaign contributions from real estate developers in the city?

There’s no point in citing the innumerable left articles, speeches, rallies, occupations, forums, talks and leaflets on the topics of “socio-economic stratification, poverty, and income inequality” that Kay claims are missing. What better proof that the left has managed to get all of these issues onto the agenda than the fact that clueless elite scribes like Kay are forced to treat them seriously?

Then again, here’s just one example, from this very blog back in 2014 on the same topic of Vancouver’s unaffordable housing:

The growth of inequality, attacks on pensions, increases in lifespans, aggressive tax cuts – all of these factors have moved wealthier Canadian households to look for new investment opportunities. Investment in real estate has been helped by low mortgage rates, a supply of new housing skewed towards small, high-end condominiums as well as existing equity available to those who lucked out and grew rich on the initial housing boom that started in Vancouver in the 1980s.

As absurd as it is to say it explicitly, it’s not a hegemonic anti-racism that’s driving millennials and the poor out of cities like Vancouver. It is the combination of record low interest rates and money pumping pushing up asset prices all over the world. Art auctions are breaking records and condos are selling like hot cakes because the rich have won—they no longer have to make productive investments that will boost the wages of regular folks alongside boosting their wealth. It is also government at all levels completely abandoning the project of house-building. The Liberals in the 1990s announced that the Canadian government was “not in the business of housing” and turned to driving private mortgage finance instead.

It is a global glut of too much money chasing too little tangible wealth. Just by virtue of proximity, money from mainland China plays some role in the housing bubbles in Hong Kong, Sydney or Vancouver. But is money from mainland China pricing people out of New York City? out of London? out of Amsterdam? Everywhere it is the wealthy who are pushing out the poor. Developer-funded crocodile tears, not anti-racism, are stopping meaningful reform that would include progressively taxing wealth, wherever its owners are domiciled.

Kay mentions that the average individual income in Vancouver is $43,000. The average for recent immigrants is about half that. The overall median is closer to $30,000. Here’s an opportunity for class and anti-racist politics; the kind already pushing for a higher minimum wage and pushing back against developers. It’s one where the poor, the working class and the racialized have autonomy over solutions rather than being told inequality is a big problem elites should solve. Maybe Kay’s protests and lamentations about Uberization or union weakness would be more believable if they didn’t come from an avid fan of Uber who “won’t go back to cabs” (and whose big solution is to cash out cabbies with a one-time payment) or someone who has wasted hundreds of column inches attacking unions of all stripes.

The truly blind to the class politics screwing workers and the poor are those like Jonathan Kay whose complaints take political cues from service to elites.

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Is Canada the Sweden of anything?

There was an odd article last week on the explainer site Vox that argued Sweden doesn’t achieve its relative equality with very progressive, “soak the rich” taxation. While Matt Bruenig and Mike Konczal have already provided excellent, US-centred rebuttals to this argument, I thought this would be a good occasion to take a look at some comparative facts about Canadian inequality and overall redistribution.

First, notice that on the chart in the original article, Canada is very close to the US, as being among the “least redistributive”. This goes against the national image of a kinder, gentler capitalism more akin to the various North European countries clustered around the middle and top of the chart.

Source: Vox.
Source: Vox.

The chart, however, is based on an odd measure of redistribution: the percentage of total income tax paid by the richest households (the Vox article doesn’t specify exactly, but it could be this OECD measure of tax revenue paid by the top 10%).  As Bruenig and Konczal both point out, defining the degree of redistribution like this has many problems: for example, it can make a very unequal society with low and flat(ish) taxes appear to be much more redistributive than a fairly equal society with high and progressive taxes. In many ways, the Vox article is simply measuring the degree of inequality in multiple ways rather than relating it to tax progressivity.

In light of this, what does it mean that Canada is right down there clustered with the US as a country that supposedly taxes progressively but doesn’t redistribute? Is this something the chart nevertheless gets right? Is it that while Canada is often presented a kinder, gentler state that can be set alongside its Northern European counterparts (themselves no absolute paragons and eroding slowly), the gap between it and the US is really not that wide? (more…)

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