The best books on Universal Basic Income

For anyone who is not familiar with the concept of basic income, can you explain what it is?

Basic income is a regular, secure, predictable, modest payment made to citizens by the state. It’s a form of social security that’s paid to people who are in work, as well as those who are out of work. It’s basically paid unconditionally, with the exception of people who, say, commit serious crimes or have caused harm to society. It turns our current, conditional welfare system on its head and provides everybody with social security.

Given the percentage of government spending that already goes on social security in many countries, why make payments to people who don’t need the money?

Although it goes to all citizens, most people wouldn’t see a massive increase in their income. For the majority of people, the overall amount of money available in their bank accounts would only change slightly, because the payment would be recouped through the tax system.

Basic income is a highly redistributive measure that gives money to those who really need it, and that includes many middle-income Britons whose incomes fluctuate wildly. Our conditional system, as it currently stands, doesn’t do that effectively or efficiently. The administration of it costs hundreds of billions, and it still fails to provide the predictable and secure forms of welfare that we all need in order to plan our lives.

Increasingly, people who are in work are suffering from extreme financial insecurity and resource scarcity. The notion that social security is there for people who are out of work or have serious disability just runs aground on the reality of modern Britain, in which it is increasingly impossible to sustain ourselves through various forms of employment.

Basic income really deals with the issue of unfairness to those who are in work, and ensures that money is predictably and securely there for all of us when we need it. And, for large numbers of Britons, the income that they currently receive is not just precarious, it’s insecure. There are people who are earning, say, £50,000-70,000 and living on a nice estate who, if they were to lose their jobs, would lose their houses. They’d rent in perpetuity. The cost of doing that is enormous. That loss of income in the short term will have compounding effects, not just on them, but on their kids.

Basic Income is a way of protecting all of us in ways that our current system just fails to.

One of the counterarguments, of course, is that people will have an incentive not to work. How do you argue back against that?

The reality is that the conditional system creates perverse incentives for inactivity. If you are currently in receipt of welfare, you have a financial interest in not being active. As soon as you’ve demonstrated your capacity to work, you lose your disability benefits, and it’s increasingly difficult to get those benefits back. The consequence of that loss of income is then existential.

The reality of work for millions and millions of modern Britons is that work is precarious. It’s insecure. It doesn’t pay people what they need in order to sustain themselves. So our conditional system actually increases incentives not to do the things that we need to do in order to be healthy and to develop the kind of economic activity that we need within our communities. In general, it just creates a stagnating series of communities in which people aren’t given the platform they and we need in order for them to do the things which would actually re-energise and add dynamism to large parts of our country.

Okay, I’ve got a few more questions, but I’m going to ask them as we discuss the books and articles you’re recommending. First up is The German Ideology by Karl Marx. Why is this book important for understanding basic income?

I think what Marx does really effectively is to emphasise that our understanding of the world is shaped largely by our material conditions. There’s this belief—which has become increasingly popular, certainly in my lifetime—that we’ve got unconstrained agency, and our ability to pursue forms of life independent of material conditions is limitless. What Marx makes perfectly clear is that if we want to transform society, we need to transform the material conditions under which people live.

Basic income is an extremely effective and transformative policy in that regard. By giving everybody social security, it really does change everything. By enabling people to satisfy their needs independently of sometimes quite exploitative forms of labor, it gives people the ability to plan different ways of living, move in and out of the marketplace, increase their bargaining power, and engage in economic activity that our communities need, but which isn’t currently supported by the market.
So I think The German Ideology is really important in terms of its emphasis on changing material conditions. Our view of the world is shaped by material conditions.

Does Marx talk about basic income specifically?

He talks about the need to ensure that people’s needs are satisfied, and that people aren’t rewarded arbitrarily according to their skills or their attributes as opposed to their fundamental shared human needs. That’s something that underpins basic income very clearly, that it’s a recognition of need rather than attribute. So that’s really important.

Next, we’re going to the opposite end of the political spectrum and a book much loved by the right. Please tell us about The Road to Serfdom by the Austrian-British philosopher and economist Friedrich Hayek (1899-1992) and why it’s important.

The way in which our society has been reformed over the last four decades really does stem from the work of Friedrich Hayek and The Road to Serfdom in particular. In effect, it calls for the slimming down of the state, for the removal of large-scale state involvement in the economy, for a reduction in taxation, and for liberating individuals from the role of the state in their lives.

When The Road to Serfdom was written in the 1940s, it was an outlying articulation of concern about the way in which Europe and the world would be rebuilt over the following decades. It was seen for decades as crank economic analysis. The concern of people like Hayek about the potential for the state to become increasingly oppressive and tyrannical was slightly hysterical at the time. When we think about the way in which Britain was successfully rebuilt in the post-war period—the achievements that were seen in increasing people’s lifespan and their health, in improving educational outcomes and economic activity through to the early 1970s—we can see the state was absolutely pivotal to that.

What we can see from the 1980s onwards is that after the UK government adopted this view of society and the economy that Hayek endorsed, there was a long-term reduction in growth. We’ve seen a reduction in life expectancy in recent years. We see an increase in inequality, in poverty, in the need for charities and food banks—essentially to subsidize roles that the state used to take on. Britain is in a mess precisely because it adopted the work of Hayek along with others, such as Milton Friedman, who, ironically, benefited individually from state employment support during the New Deal era.

What’s really interesting about The Road to Serfdom is that in many different respects, Hayek isn’t fundamentally concerned about the outcomes that neoliberalism produces. His primary concern is reducing coercion—that people ought not to be used as means to other people’s ends. His belief is that the creation of a welfare state, of large-scale nationalized industry, and all these state-led enterprises, is coercive because they have to be paid for through taxation. So if you get rid of them and reduce taxation, you reduce coercion and make society more just.

The afterthought in Hayek’s work is something that looks very much like basic income. He says all of these things about the need for a largely unconstrained free market and a much smaller state, and then says, “There can be no doubt that some minimum of food, shelter, and clothing, sufficient to preserve health and the capacity to work, can be assured to everybody.” There is always this caveat with neoliberal accounts of reform: the market can provide for us all dynamically and effectively, but in the background, we need this quite robust form of universal social security.

So what you find in Hayek and other neoliberal thinkers is an endorsement of something like basic income, a recognition that actually the market can’t provide for us all securely, so we do need these mechanisms. And, of course, if we’ve got those guarantees, we have to fund them through taxation. So in the end, we see this internal contradiction in the work of people like Hayek: we have to demolish the state, but, actually, we then need it to be much larger and invasive in its provision of social security than it has ever been in Anglophone countries. Proponents of neoliberalism always focus on the former without recognizing the latter or, indeed, the contradictions in Hayek’s work.

So it’s really important that when we think about the way in which Hayek has been adopted and the policies that have been pursued, that he himself recognizes the need for forms of social security that are currently being done away with in his name.

Finally, in terms of political philosophy books, you’ve chosen Republicanism: A Theory of Freedom and Government by the political theorist Philip Pettit. What does this book bring to the picture?

Philip Pettit is, I think, the key respondent to Hayek. Hayek has this belief that we ought to avoid coercion, no matter what the consequences of taxing people to regenerate a society may be. What Petit demonstrates is that what we ought to be concerned with is what he calls ‘resilient non-interference’. This is freedom from domination – that is to say, from people making arbitrary decisions about our core interests—whether that be in the home, through domestic violence, or the workplace, with people being forced to do demeaning things in order to be paid. We see a lot of that in the care sector, in sex work, and any number of different areas of our society.

What Pettit argues is that instruments like basic income free us from domination. They produce that resilient non-interference. People can’t just make decisions that affect our fundamental interests without reference to those interests, and that’s a much more important and salient form of freedom than just not being taxed, which is essentially Hayek’s primary concern. Pettit says that we can have taxation and that introducing controls on the market are perfectly acceptable, so long as you produce from that a society in which you are free from domination. That’s a significant intellectual development, and one that is salient in our current context.

Let’s move on to your next book, The Precariat: The New Dangerous Class by Guy Standing, who is a professor at SOAS. It came out about a decade ago, or is it more recent?

The Precariat came out in 2011 and was quite a prescient account of the way in which labor market conditions were changing, and the increasing role of precarious, insecure labor in our economy. During the coalition government (2010-2015), there was an increased concern about zero-hour contracts and forms of employment that were not just demeaning, but dangerous and incapable of enabling people to satisfy their basic needs.

What the book does is identify a series of economic conditions that call for basic income. Guy Standing has probably done more in this country than anyone to advance the case for basic income. His account of the labor market really was transformative. Here we have people who are often well-qualified—whose parents had clearly advanced their interest across the course of their lives—increasingly doing work that was low paid, insecure, and incapable of leading to property, family, and forms of success that their parents would have assumed would fall naturally from being graduates or working in various different professions.

This was all largely unpredictable. People did not expect there would be such a large-scale diminution in the interests of a generation in material terms, but it’s become clear that baby boomers are an outlying generation in terms of wealth. They’ve had more wealth than their parents, and they’ve got more wealth than their kids. Younger people, essentially anyone under 50, really are dealing with different material conditions.

It’s very difficult for older people to understand the way in which the labor market works now. What Standing does is to articulate those particular conditions to a much wider audience.

Could you give me an example from the book that’s particularly shocking to the average person to hear about?

What’s shocking is the way in which understandings of labor and work have been inverted. Throughout human history, there’s been a broad diversity of activities that have been recognized as valuable in societies. Caring roles, for example, have always been seen as extremely important because they’re integral to producing a healthy next generation to take forward the species and society, and, incidentally, look after older people as part of ensuring that society can function. Increasingly, what’s come to pass is that unless those activities are paid, they’re regarded as worthless. There’s this sense in which someone can legitimately care for somebody, but only if they’re employed as a carer. If someone is looking after their kids or their parents, which has been regarded as essential since the development of our species, it is now seen as worthless. That’s extremely damaging to society.

Standing also emphasizes the way in which essential labor is treated with contempt, while superfluous labor is regarded as somehow worthy of additional labor market remuneration. So if you think about the pandemic, the essential workers were the workers who were needed in order for society to function: people who stacked shelves, cleaned, and cared for people. They’re precisely the professions that we treat with contempt, that we see as not being worthy of proper remuneration. When we talk about social mobility, we don’t talk about increasing pay to those professions; we talk about people leaving those jobs and getting jobs that could be done away with with little social cost. So there’s a bizarre sense in which an IT recruitment manager or an HR professional is seen as entitled to more money than a carer, a cleaner, or a police officer—who really are essential to the functioning of society. Standing highlights these contradictions really quite effectively.

In terms of the practicalities of going ahead with basic income,  your book, Basic Income: The Policy That Changes Everything—which you’ve just published with other authors—is very much focused on that. Could you tell me a bit about it?

The book really does set out the way in which introducing a scheme like this transforms everything. By increasing the amount of resources that people at the bottom end of society have access to, we massively improve nutrition, housing, and the satisfaction of other basic needs. By increasing security of payment, we enable people to leave abusive and exploitative situations in the home and in the workplace, and by increasing predictability of payment, we enable people to invest in the long term.

There are three pathways that have a transformative impact across society. A large proportion of the health crisis that we face today is due to health-related behavior, and that’s related to stress. It’s related to not having the resources needed in order to eat well. A large amount of dysfunction that we have in society is associated with people not being able to see the long term. If you’re constantly faced with the threat of destitution, that constitutes an extrinsic mortality cue—an almost subconscious one—which suggests that you’ve got a threat to your existence. And under those circumstances, people don’t invest in the long-term. It’s not rational to invest in long-term, so you get some very short-termist, hedonistic behaviour.

What we’re able to show is that, by working through this logic model, these three pathways filter through not just to various different outcomes in health, education, employment, and crime, but they have a compound effect. They mutually reinforce one another and produce a benefit to society that is social and economic in nature. The returns on the investment that we get from something like basic income, if it’s properly designed, are really quite considerable and start to pay for themselves.

One of the main arguments against it is that the welfare state is already cripplingly expensive—how could the government possibly afford to pay for basic income?

Well, tax rich people. This is supposedly a rich society, in which rewards from working are reducing relative to rewards from wealth. Even relatively centrist figures like Neil Kinnock are now endorsing forms of wealth taxation that we think are the only means, frankly, of producing the tax yields needed to invest in rebuilding Britain.

The alternative is something we genuinely can’t afford. The fiscal restraint that’s been exercised over the last 15 years has contributed to a downward spiral in which any savings from reduction in public spending have been swallowed up by the cost of dealing with consequences downstream in different departments: through the NHS, through the criminal justice system, through all of these other parts of government. That seems to be much more expensive in the long term than just investing upstream in the first place. So when we say we can’t afford the welfare state, the reality is, we can’t afford not to have it.

But wouldn’t more government spending—and more taxation to pay for that spending—be enough to reverse a lot of those things? Do we really need to move all the way to basic income to deal with inequality? Why not pay more via existing systems, by (say) setting Universal Credit at a higher level?

Universal Credit is not there when we need it. It can’t possibly respond in the way that we need it to, given the fluctuation and volatility that people see in their incomes. It doesn’t provide people with the security they need in order to engage in longer-term planning and health-promoting activity.

Universal Credit is rightly seen as an out-group issue for the vast majority of workers. They see Universal Credit as something that isn’t for them. They see it as an example of resources being taken from people in employment and being given to people out of employment. That fairness deficit is one of the key reasons why people have historically been open to a reduction in welfare spending.

If we want a welfare system that’s resilient and actually gives people what they need at the time they need it, we need something that is much more universal, and is there ready for us in our bank accounts when the worst happens.

I think the notion that it’s viable to increase Universal Credit politically is dubious. If you look at the popularity of schemes such as basic income compared to an increase in Universal Credit, people generally prefer basic income schemes because they see the specific benefit to them. They don’t necessarily see the benefit of Universal Credit.

So basic income seems fairer to people, because everybody gets it.

Yes, people can see clearly that they’re not being disadvantaged by it.

And if you’re earning a modest, decent salary, you would end up paying the extra income back through the tax system. In other words, the only people keeping the basic income payment are the ones who, for whatever reason, have not been able to earn that year. Is that how it would work?

Yes, but the number of people who benefit from it in terms of levelling out their income volatility is much greater than just the redistributive effect. One of the key pieces of evidence that’s emerging on income volatility is that that itself is a source of anxiety and depression. Many incomes these days—including among barristers and other relatively well-paid workers—are volatile. Our current system can’t provide people with the levelling out of incomes that we need in order to address our crises in health and inactivity in general.

So how much would it cost? Is it a crazy amount?

What would be a crazy amount, Sophie?

Is it an amount that would make our finance minister, Rachel Reeves, pass out?

Any amount would make Rachel Reeves pass out! That’s one of the reasons why she’s not a suitable Chancellor. When you look at chancellors who’ve been successful historically, they’ve not just had the courage of their convictions; they’ve actually recognized that substantive reform is required in order to avoid absolutely disastrous outcomes. You can see that Rachel Reeves intuitively understands that Britain cannot possibly be rebuilt without quite significant public spending, but also hasn’t got the courage of her convictions to produce anything meaningful. It’s the inability to commit to large-scale spending that produces the most damaging outcomes.

It’s not the case that public spending is a bad thing. It is the case that public spending, without narration and explanation, is seen as a risky endeavour. What we’ve lacked from Rachel Reeves is a commitment to actually explaining to the country and to the market that, without massive public spending, we’re never going to be able to achieve significant growth.

We haven’t got the infrastructure to secure private investment. We’re never going to be able to achieve growth without massively investing in social security upstream, because the cost of dealing with the lack of that investment downstream is enormous. She doesn’t really understand the way in which outcomes are produced upstream in that way. The welfare reforms are indicative of this – minute projected savings that are outweighed several fold by the downstream consequences on health, crime, and the economy.

So I think any figure that’s given at the minute is regarded as terrifying. And that’s a reason why she shouldn’t be Chancellor: we need large-scale investment.

If large-scale investment is the solution, just taxing the wealthy doesn’t raise enough, though, does it? There would need to be taxation across the board for it to raise enough money to pay for basic income or other measures to help people who really need it.

We think we can pay for a modest basic income straight away. In Act Now: A Vision for a New Social Contract and a Better Future, we show that it’s possible to raise well over £150 billion quickly by relatively modest progressive changes to income tax, including equalizing rates for dividends and other forms of income and bundling regressive national insurance into marginal rates, increasing corporation tax to German levels at 30%, introducing a proportional and progressive wealth tax on wealth over £2m and frequent flyer charges, reversing fuel duty freezes and eliminating the most morally and economically indefensible reliefs. Even accounting for avoidance, that is an enormous sum of money.

The argument that the wealthy will leave is predicated on the notion that Britain is not a place worth living in, which only becomes more true the more government fails to invest. Britain is still somewhere that people want to live in, and we need to stop suggesting that there’ll be the same response to wealth taxes here as there would be in a low- to middle-income country. We’re patriotic – we want Britain to be the best place in the world to live in. Decades of economic reform to bribe the wealthy into staying here have only made it much, much worse without any sign of loyalty from the people we’ve bribed.

Finally, I asked for some data on how basic income has worked in practice, and you’ve recommended a couple of articles. I don’t think any country has tried it out on a large scale, but what’s the evidence so far?

There have been a large number of trials and pilots around the world, including lots in the US in the 70s and 80s. There are examples of periodic transfers of wealth by dividend schemes. There have also been trials of basic income, including welfare changes in Catalonia.

We’ve got the Welsh pilot of basic income at the moment. The Welsh government report I’ve recommended summarizes the results from the most recent UK pilot. The sample size is small, so we’ve got to be circumspect about the outcomes, but there is a sense that it has an effect on anxiety and depression.

There’s also the report from What Works Scotland, which is a systematic review of pilots. It looks in depth at the evidence emerging from a whole range of basic income-like schemes across the world, including the US and various other places.

What are the conclusions so far?

In the vast majority of cases where there’s a periodic, modest, and secure payment made to people, you get an increase in mental health, a reduction in anxiety and depression, and an increase in activity that’s needed in left behind communities in particular. So there’s entrepreneurial activity and retraining, that kind of thing. You also get the subsidization of caring roles, and given the increase in costs around social care, it’s important to recognize that familial involvement in caring is really quite an important socio-economic activity and contribution to a country. You see improvements in all of those things. The schemes are always short-term, so the longer-term impacts of physical health are less clearly established, but the evidence from studies of changes in income suggests significant improvements.

Where you see potential harms is when people are given large sums of money on a one-off basis. In the Alaska dividend scheme, people often get really quite big cash payouts every 12 months. There is an increase in bingeing activity under those circumstances. As you can imagine, you’ve suddenly got this whacking great amount of money in your account, and this can produce lottery win-style behaviour. Nobody who’s in favor of basic income is suggesting that we ought to do that. It ought to be modest, secure, and predictable.

Is there any other argument you have to persuade people that basic income is the solution to our problems?

There is no alternative. People keep suggesting we just tweak Universal Credit, or provide training schemes, or better ad hoc responses to things as they get worse. There’s no evidence that that’s ever been able to deal with the kind of challenges that we face at the minute, including economic inactivity associated with conditional welfare schemes. Reducing the amount of income that people have access to will only make people’s health and other outcomes worse. We see that with the cost-of-living crisis and its impact on people’s health.

It’s not clear that there is any existing system that can cope with the scale of the challenge that we’ve got. Britain has been run down over the course of several decades and hasn’t been given the investment it needs in order to function. We are so low now that we cannot afford not to make a massive investment in ourselves. A business would be bankrupt by this stage through its constantly selling off its assets and running down its workforce. We really have to choose whether to invest and survive or not invest and see our society get worse and worse.

In terms of the authors of Basic Income: The Policy That Changes Everything, the contributors are academics from a variety of disciplines, is that right?

Yes, the Common Sense Policy Group is an interdisciplinary research team, and we come from a range of different backgrounds. My background is in politics. Daniel Nettle, who wrote the majority of the book, is a behavioural scientist. Kate Pickett is an epidemiologist and co-author of The Spirit Level. Howard Reed is an economist, Elliott Johnson has a background in public policy, and Ian Robson in social work. The book brings together those different perspectives to create what we think is a fairly coherent account of what would happen were basic income to be introduced.

Is the Common Sense Policy Group basic income focused?

We’ve got a focus on basic income as a response to social insecurity, but we’ve got a much broader range of interests in public policy. Act Now examines a whole range of different challenges in infrastructure, capital spending, taxation, and dealing with the climate crisis, all these sorts of areas. It shows the way in which basic income has to be accompanied by much broader changes to the investment that we make as a society.

By infrastructure, do you mean trains and roads?

Trains, roads, energy generation, the national grid, the shift away from carbon production etc.