How Universal Basic Income Can Help Build a Solidarity Economy

UNTITLED, FROM THE SERIES “CAPITALISM IS KILLING US/BLACK UTOPIAS” BY AISHA SHILLINGFORD/WWW.INTELLIGENTMISCHIEF.COM

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 Editors’ Note: This article comes from the Summer 2021 edition of the Nonprofit Quarterly, “The World We Want: In Search of New Economic Paradigms.”

 

I am now convinced that the simplest approach will prove to be the most effective—the solution to poverty is to abolish it directly by a now widely discussed measure: the guaranteed income.—Martin Luther King, Jr.¹

At a time when humankind and the global ecosystem confront overlapping existential crises,² growing numbers of us realize that systemic change is essential, and that we must agitate for an expansion of social ownership and democratic workers/community control of our economy.

These conceptions of a new social system go under many names: eco-socialism,³ cooperative commonwealth, pluralist commonwealth,⁴ among others. Here I will use the broad term solidarity economy as shorthand to describe these various visions of a postcapitalist organization of society.

Although these visions have important differences among them, they are all predicated on the notion that better options exist than either continuing to accept the capitalist status quo or supporting the twentieth-century “command economy” alternatives to capitalism that, like it or not, have been popularly associated with the terms “socialism” or “communism.” Solidarity economy advocates insist that it is not only possible but also imperative for working people to organize to bring the economy under genuine democratic control to meet their needs and restore health to our contaminated environment.

The exciting theoretical and systems-design work is being undertaken by organizations that include The Democracy Collaborative⁵ and its Next System Project,⁶ Democracy at Work,⁷ and the Green Eco-Socialist Network.⁸ But this work is not being conducted in a vacuum. It reflects, and is aligned with, developments at the grassroots level. Around the world, people are organizing democratic, community-based organizations to meet their material needs. These institutions include but are not limited to worker-owned or producers’ cooperatives, consumer cooperatives, public banks, community land trusts, alternative currencies, and time banks. In many communities, advocates for these institutions have formed coalitions or networks of mutual support, such as Cooperation Jackson,⁹ Cooperation Humboldt,¹⁰ and the Chicago-based Kola Nut Collaborative.¹¹ These efforts are backed by such national networks as the U.S. Solidarity Economy Network (USSEN),¹² the Center for Economic Democracy,¹³ the New Economy Coalition,¹⁴ and Transition US.¹⁵

I have argued elsewhere that the solidarity economy movement must enter the terrain of electoral politics and seek to win some measure of state power.¹⁶ A full exposition of the reasons for doing so is beyond the scope of the present article, but there are three principal reasons:

1. It will be extraordinarily difficult for the solidarity economy movement to overcome capitalism by competing head-to-head with the established banks and corporations that now predominate, unless the economic playing field is altered.
2. A strategy of just “building more co-ops” and the like without embracing a goal of social reorganization will not be sufficient to overcome the internal logic and destructive practices of capitalism as a system. In other words, we do not want “democratic worker control” of oil and natural gas extraction, private health insurance, prisons, or financial trading.
3. There are categories of reforms that can help facilitate the growth of solidarity economy institutions—for example, legislation to create public banks; monetary reform; making it easier for co-ops to organize; reforms to help redirect labor to environmental restoration like the Green New Deal; and taking on the military-industrial complex.

To this list, I would add a fourth reason, and the focus of this article: There are categories of reforms that can help unify and empower the working class and give it the breathing space it needs to build systemic economic alternatives. I submit that universal basic income (UBI) falls into this category.

What Is Universal Basic Income?

Initiating a comprehensive series of papers on UBI for the Great Transition Initiative, founding member and honorary copresident of the Basic Income Earth Network (BIEN) Guy Standing has provided a concise definition of UBI:

A basic income system would aim to assure basic economic security to all, independent of employment, by providing every legal resident of a country with an equal monthly sum of money, without conditions, as an economic right. Such unconditionality is what distinguishes a basic income from other welfare programs. A modest basic income would be paid to individuals as individuals, regardless of household arrangements, work status, or prior contributions. Importantly, it would be guaranteed to all regardless of other income, thus bypassing the stigmatizing and exclusionary means-testing intrinsic to many welfare programs.¹⁷

The Chicago Resilient Families Task Force, which aims to launch a pilot UBI program in that city, has provided a useful set of criteria or design principles that distinguish UBI from similar proposals (although it uses the term guaranteed income rather than UBI):

• The amount of income provided should support a basic standard of living.
• The income is a regular fixed amount.
• The income is distributed at regular intervals.
• The income is provided for a sustained period of time.
• The income is given with no strings attached; it is unconditional.
• Eligibility is usually simple—recipients simply need to be a resident in a predefined geographic region, such as a city or a state. Otherwise, it is unrestricted.¹⁸

To this I would add only that the criterion of “sustained period of time” should encompass programs that are intended to be ongoing or of indefinite duration, and that the “geographic region” contemplated should include programs of national and global scale. Considering economies of scale and the federal government’s unique capacity to create money, the focus should be to establish a UBI program at the national level.¹⁹ 

Principal (and Principled) Reasons to Support UBI

UBI would not directly create a postcapitalist society. In fact, insofar as it would alleviate human suffering under the capitalist status quo, an argument could be made that it might help preserve capitalism, much as the New Deal was intended by FDR to “to protect the system of private property and free enterprise by correcting such injustices and inequalities as arise from it”—that is, to “reform” in order to “preserve.”²⁰ The fact that UBI was embraced by such libertarian/neoliberal economists as Friedrich Hayek and Milton Friedman²¹ and is being given serious consideration by the International Monetary Fund²² does nothing to allay this concern.

Of course, the argument that UBI should be rejected because it might help preserve capitalism could be applied to virtually any type of social-welfare measure. Applying the same logic could lead one to the untenable proposition that perhaps activists should advocate for dismantling existing remedial programs like unemployment insurance, SNAP, and Social Security, on the theory that greater immiseration will help “speed the revolution.” No serious advocate for social progress would support such a strategy.

Even granting the possibility that UBI could help prolong the existence of capitalism, there are some compelling reasons why solidarity economy advocates should support UBI:

I. UBI is consonant with core solidarity economy principles and will help build the solidarity essential to a successful transition to a postcapitalist economy.

As defined by USSEN, the solidarity economy “constitutes an alternative development framework” that is “grounded in practice and the following principles:

• solidarity, mutualism, and cooperation
• equity in all dimensions: race/ethnicity/ nationality, class, gender, LGBTQ
• the primacy of social welfare over profits and the unfettered rule of the market
• sustainability
• social and economic democracy
• pluralism and organic approach, allowing for different forms in different contexts
• and open to continual change driven from the bottom up.”²³

UBI surely fits within this set of values. It promotes solidarity, since every member of society would be entitled to its benefits. UBI would especially help improve conditions for and help liberate marginalized peoples—for example, women, and especially women of color, who tend to be disproportionately engaged in unpaid care work, and women trapped in abusive or oppressive relationships for economic reasons—as was noted in the initial findings of the Stockton [California] Economic Empowerment Demonstration.²⁴

The potential for building solidarity could be enhanced if a movement-based demand for UBI were to include a component for paying reparations. In other words, the level of income support provided in a UBI program could be adjusted to provide additional income—a reparations sur-payment, if you will—for descendants of enslaved people, Native Americans, and others directly harmed by colonialism and structural racism.

By its very nature, capitalism exploits all workers, but it has systematically oppressed some more than others. Therefore, all should be able to unite around a demand that the same ruling class that has accumulated obscene levels of wealth from the exploitation of wage labor should begin to make amends to all workers—while at the same time recognizing that some merit additional compensation for additional layers of historic brutal oppression and subjugation.

Perhaps most important, activists should embrace the demand for UBI because it would directly and substantively address one of the principal reasons for the solidarity economy movement’s existence—ending senseless and avoidable human suffering. We want a solidarity economy because we want a society and governing bodies that care about people and that will put an end to privation and suffering as a first order of business.

It is shameful—and it speaks volumes about capitalism—that poverty and human suffering persist, and in some respects have grown worse, in the richest nation in the world. Official poverty in the United States, which notoriously understates the actual level of poverty, has fluctuated between 10 and 15 percent for over fifty years.²⁵ A deeper analysis of Census data by the Kairos Center for Religions, Rights & Social Justice and the Poor People’s Campaign: A National Call for Moral Revival concluded that 43.5 percent of the U.S. population—140 million people—are poor or low-income in the United States today.²⁶ That number has surely grown larger during the pandemic-induced recession.

The wealthiest nation in the world should be able to guarantee a basic “floor” for its people. A fundamental purpose of any government worthy of public support is to ensure the economic security and well-being of its people. UBI is a simple and straightforward means of fulfilling that purpose.

Moving forward, UBI would help address the growing crisis caused by the ongoing mass displacement of labor from productive and gainful employment into the ranks of the unemployed or underemployed. Computerization, automation, and robotization are continuing to eliminate industrial and even some service employment, consigning more and more workers to lower-paying jobs in the “guard labor” sector,²⁷ the gig economy,²⁸ or other marginal employment.

UBI would not only help working people survive periods of unemployment immediately, it would also stimulate the economy. Applying a Keynesian macroeconomic model to a hypothetical UBI of $1,000 a month to all adults in the United States, economists Michalis Nikiforos, Marshall Steinbaum, and Gennaro Zezza of the Roosevelt Institute conclude that it would expand the economy by 12.56 percent over the baseline after eight years, and that “even when the policy is tax- rather than debt-financed, there is an increase in output, employment, prices, and wages.”²⁹

As a side benefit—but one underscored by COVID-19—a real UBI program (unlike the paltry relief checks that Congress reluctantly sent out to most Americans) would allow society to respond much more effectively to public-health emergencies, allowing workers to shelter in place as needed without major suffering.

Ending poverty, homelessness, and hunger is a moral imperative. By raising and supporting the demand for UBI at a level sufficient to eliminate poverty, solidarity economy activists would be siding with the 140 million-plus workers suffering from poverty or near-poverty today. It is difficult to imagine any other single act of solidarity that could rival that in magnitude.

II. Since UBI would both reduce unemployment and reduce workers’ need to rely on the sale of their labor power in the capitalist economy as their sole means of survival, it would allow them to devote more time to caring for loved ones, education, and doing work to advance a solidarity economy.

Contrary to the shopworn myths that UBI, like other social-welfare programs, would promote laziness, real-world experience demonstrates that the opposite is true. In the Stockton experiment, for example, only 28 percent of recipients had full-time employment at the inception of the program, but the percentage rose to 40 percent after one year, a level substantially higher than gains realized by the control group.³⁰ Standing writes that “Finland’s basic income experiment found that removing the condition that the unemployed had to search for jobs made no difference to employment. In fact, recipients had slightly more days in employment than the control group.”³¹ Other studies have shown, at most, only slight decreases in paid work time—with most of those decreases accounted for by recipients devoting more time to such pursuits as providing family care, education, or searching for better employment.³²

In short, there is no factual basis for the canard that UBI would somehow rob people of ambition. What it would do is give working people more and better choices as to how they opt to spend their productive time. Tim Hollo, executive director of the Green Institute, writes,

[At] heart, what UBI does is decommodify us. Labor is the central commodification in our economy and society, and it commodifies everything else by ensuring that the vast majority of us are kept too busy to engage in non-market activities—growing food, sharing and repairing, building social connection, taking part in collective decision making. If we transform that relation of power, what we will do is create space for the non-market economy to flourish. […] Fundamentally, if we are to transform our society away from its extractive basis, we must sever the connection between paid labor and the capacity to survive. The clearest way to do this is through some form of UBI or social dividend.³³

Hollo also points out that, whereas stringent means-tested social-welfare programs—or, “Targeted support, with the necessary punitive and surveillance-based mechanisms to apply that targeting”—are “inherently divisive,” trials of UBI have “shown that people feel (correctly) that society wants to include them, and they repay that inclusion through contribution and participation. Universalist approaches breed trust by demonstrating trust.”³⁴

Jeremy Lent, founder of the Liology Institute, reaches a similar conclusion:

A true UBI would transform the relationship between labor and capital and weaken the power of the wealthy elite to control the population.

[…]

Work is not something people try to avoid; on the contrary, purposeful work is an integral part of human flourishing. If people were liberated by UBI from the daily necessity to sell their labor for survival, they would reinvest their time in crucial parts of the economy that, as Kate Raworth outlines in Doughnut Economics, have mostly been hidden from view—the household and the commons. They would care for loved ones, build community, and dare to do whatever it is that inspires them. The domination of the economy by the market would inevitably decline while those other, life-affirming sectors would be strengthened.³⁵

In sum, although UBI does not directly aid the transformation of the economic basis of society from capitalism to a solidarity economy, it can indirectly aid that transformation in two respects: (1) It can give some workers badly needed breathing space, so that they can turn some of their attention to social issues and organizing for social change instead of having to devote all of their time and energy to a daily struggle to survive; and (2) it can give workers more freedom in how they use their productive time, allowing them to refuse jobs that are socially or environmentally destructive or wasteful, accept employment in the solidarity economy sector or in positions that are otherwise socially beneficial (if less remunerative), and/or devote more time to productive pursuits outside of formal employment, including education and caring for others.

III. UBI would be an immense improvement over existing, means-tested social-welfare programs.

Because it would be universal, UBI would allow government to eliminate a great deal of the wasteful bureaucracy and the time-consuming and often humiliating means-testing practices that accompany most current welfare programs.

This is something of a double-edged sword. Some critics raise the specter of UBI being used as an opportunity for right-wing or rightward-leaning legislators to cut existing social-welfare programs.³⁶ Here again, though, the same criticism could be leveled against any proposed social-welfare reform. Yes, reactionary elites will always have the inclination to intentionally underfund or otherwise undermine a beneficial reform, but that is not a legitimate objection to advocating for the reform in the first place.

This criticism fails to recognize that the benefits of any such reform measure always depend upon political will. For example, just because public funding of higher education in the United States has been inadequate for decades, this does not make higher education a bad idea. The public housing system in the United States is horrible, but that does not make public housing a bad idea. The success of any reform always depends, in the final analysis, on sufficient mobilization to not only win the gain but also maintain it over time.

Therefore, the only legitimate aspect of this criticism of reforms like UBI is that the political mobilization needed to obtain it and sustain it over time will divert time and energy from other projects that may more directly advance us toward a solidarity economy. In short, it comes down to a judgment call on whether work on this reform merits the expenditure of time, effort, and political capital needed to secure it versus other projects that would advance the ball.

I submit that it does merit such expenditure, especially considering the dire straits that millions of people are in today, exacerbated by the pandemic-related recession. There is a desperate need in the here and now to “raise the floor” beneath the 140 million-plus Americans who are struggling to make ends meet, and afford them some badly needed breathing space to imagine an economy where principles of solidarity truly become the norm.

There is good news here. The solidarity economy is beginning to emerge as a viable alternative to the status quo for growing numbers of unemployed and low-income workers. But the key word here is beginning. To build support, advocates for a solidarity economy would do well to demand UBI. We have an historic opportunity to once again stand with Dr. King and follow his advice from half a century ago to abolish poverty—simply and directly.

Notes

1. Martin Luther King, Jr., Where Do We Go From Here: Chaos or Community? (New York: Harper & Row, 1967).
2. John Mecklin, ed., “This is your COVID wake-up call: It is 100 seconds to midnight,” Bulletin of the Atomic Scientists, Science and Security Board, January 27, 2021.
3. “About,” Green Eco-Socialist Network, accessed May 26, 2021.
4. Gar Alperovitz, “Principles of a Pluralist Commonwealth,” The Next System Project, June 28, 2017.
5. The Democracy Collaborative, accessed May 26, 2021.
6. The Next System Project, accessed May 26, 2021.
7. Democracy at Work, accessed May 26, 2021.
8. “Organizing to replace capitalism with the solidarity economy,” Green Eco-Socialist Network, accessed May 26, 2021.
9. “Building a solidarity economy in Jackson, Mississippi, anchored by a network of cooperatives and worker-owned, democratically self-managed enterprises,” Cooperation Jackson, accessed May 26, 2021.
10. “Building a Solidarity Economy on California’s North Coast,” Cooperation Humboldt, accessed May 26, 2021.
11. “Our Abundant Social Infrastructure Made Visible,” The Kola Nut Collaborative, accessed May 26, 2021.
12. “What is Solidarity Economy?,” USSEN, accessed May 26, 2021.
13. Center for Economic Democracy, accessed May 26, 2021.
14. “Another World Is Happening,” New Economy Coalition, accessed May 26, 2021.
15. “Join a movement of communities reimagining and rebuilding our world,” Transition US, accessed May 26, 2021.
16. Rich Whitney, presentation at Post-Capitalism Conference, Humboldt State University, April 22, 2021.
17. Guy Standing, “The Case for a Basic Income,” opening essay for GTI Forum, “Universal Basic Income: Has the Time Come?,” Great Transition Initiative, November 2020.
18. Amy Rynell, Big Shoulders, Bold Solutions: Economic Security for Chicagoans: Chicago Resilient Families Task Force Report (Chicago: Chicago Resilient Families Initiative Task Force, February 2019), 38.
19. Addressing the “How are you going to pay for it?” question is beyond the scope of the present article. However, a number of clearly workable fiscal and monetary policy vehicles have been suggested. See, for example, Ellen Brown, “A Universal Basic Income Is Essential and Will Work,” The Web of Debt (blog), April 19, 2020; and Scott Santens, “Why Should We Support the Idea of Universal Basic Income?,” Huffington Post, last modified December 6, 2017. See also Michalis Nikiforos, Marshall Steinbaum, and Gennaro Zezza, Modeling the Macroeconomic Effects of a Universal Basic Income (New York: Roosevelt Institute, August 2017), 3.
20. Franklin Delano Roosevelt, “Address at the Democratic State Convention, Syracuse, N.Y.,” The American Presidency Project, September 29, 1936.
21. Kody Carmody, “The Resurgence of Universal Basic Income: Concerns about the effects of automation have brought an old policy proposal back into the limelight,” Econ Focus, Federal Reserve Bank of Richmond, Third Quarter 2017.
22. Maura Francese and Delphine Prady, “Universal Basic Income: Debate and Impact Assessment,” IMF Working Papers, December 10, 2018.
23. “What is Solidarity Economy?,” USSEN.
24. Stacia West et al., Preliminary Analysis: SEED’s First Year (Stockton, CA: Stockton Economic Empowerment Demonstration, March 3, 2021), 13–14, 19. See also Karl Widerquist, “The Basic Income Guarantee Experiments of the 1970s: a quick summary of results,” Basic Income Earth Network (BIEN), December 3, 2017.
25. Ajay Chaudry et al., Poverty in the United States: 50-Year Trends and Safety Net Impacts (Washington, D.C.: Office of Human Services Policy, Office of the Assistant Secretary for Planning and Evaluation, U.S. Department of Health and Human Services, March 2016), 10. See also Jessica Semega et al., Income and Poverty in the United States: 2019, United States Census Bureau, Current Population Reports, P60-270 (Washington, D.C.: U.S. Government Publishing Office, September 2020), 12.
26. Shailly Gupta Barnes, “Explaining the 140 million: Breaking Down the Numbers Behind the Moral Budget,” The Kairos Center for Religions, Rights & Social Justice, June 26, 2019.
27. See, for example, Richard Florida, “America’s Growing ‘Guard Labor’ Force: Many large urban areas in the U.S. now have more ‘guard labor’ than teachers,” Bloomberg CityLab, March 13, 2018. See also “Occupational Employment and Wages, May 2020: 33-9032 Security Guards,” Occupational Employment and Wage Statistics, U.S. Bureau of Labor Statistics.
28. Estimates of the size of the gig economy vary wildly, partly due to a lack of uniform definitions. Compare, for example, Erik Sherman, “New Count of the Gig Economy Says Old Employment Has Nothing to Worry About,” , January 18, 2017, (which argues that the numbers have been greatly exaggerated and that the gig economy only employs a small fraction of the work force); Greg Iacurci, “The gig economy has ballooned by 6 million people since 2010. Financial worries may follow,” CNBC, February 4, 2020, (a study that finds a 15 percent rise in gig employment in the last decade); I. Mitic, “Gig Economy Statistics: The New Normal in the Workplace,” Fortunly, February 12, 2021, (which asserts that 36 percent of U.S. workers participate in the gig economy today, with 29 percent as their primary job); and Richard Fang, “The Gig Economy Is Growing and Why The Tech Industry Is Loving It: 60% of the US workforce will be independent by 2027,” Start it up, Medium, November 22, 2020, (which reports that the gig economy employs one-third of the global labor force today and projects that it will comprise 60 percent of the U.S. workforce by 2027). It will have to suffice to say that there is a lack of uniform and reliable data, and that the only safe assumption is that a growing percentage of U.S. workers have come to rely on the gig economy sector.
29. Nikiforos, Steinbaum, and Zezza, Modeling the Macroeconomic Effects of a Universal Basic Income.
30. Stacia West et al., Preliminary Analysis, 20.
31. Standing, “The Case for a Basic Income,” citing “Results of Finland’s basic income experiment: small employment effects, better perceived economic security and mental wellbeing,” Kela, June 5, 2020. See also Kela.fi, “Two Year Study on Universal Basic Income Shows Success,” PopularResistance.org, May 7, 2020.
32. See generally, Rutger Bregman, “Has the time finally come for universal basic income?,” The Correspondent, April 2, 2020; and Gar Alperovitz, “Technological Inheritance and the Case for a Basic Income,” Economic Security Project, December 16, 2016.
33. Tim Hollo, “Embracing Universality,” contribution to GTI Forum, “Universal Basic Income: Has the Time Come?,” Great Transition Initiative, November 2020.
34. Ibid.
35. Jeremy Lent, “A Cornerstone of a Moral Economy,” contribution to GTI Forum, “Universal Basic Income: Has the Time Come?,” Great Transition Initiative, November 2020. In the same series of papers, Azfar Khan, formerly of the International Labour Organization, makes an equally compelling argument that UBI would help elevate “personal dignity, enabling freedom from control and the reawakening of a solidaristic culture,” in “A Call for Dignity and Solidarity,” contribution to GTI Forum, “Universal Basic Income: Has the Time Come?,” Great Transition Initiative, November 2020.
36. See, for example, James Murphy, “The progressive case against UBI,” RSA, November 8, 2018; and Anna Coote, “Strengthen the Welfare State,” contribution to GTI Forum, “Universal Basic Income: Has the Time Come?,” Great Transition Initiative, November 2020.