Universal Basic Income: Pennies from Heaven by Paul O’Brien – review

Mar 16, 2018 1 Comment by

This book contains many arguments in favour of a universal basic income (or UBI), which would provide everyone with enough money to live in a modest way, with no strings attached and the right to work if you want to do so.

It begins with an interesting exploration of the reasons why we work. O’Brien lists some questions that he believes should be asked about work:

1. Do I like to do it?
2. Is it something that develops my abilities and positive qualities (creative, caring, intellectual, problem-solving, and so on)?
3. Does it help – or at least refrain from causing harm to – society and the environment?
4. Would I do it, or something like it, if I didn’t have to rely on it for a living?

He draws on Weber’s suggestion that we have an irrational attachment to work that probably derives from Protestant theology – we’re supposed to keep ourselves busy in order to avoid religious doubts. This moral argument, based on a view of human nature for which the evidence is dubious at best, is entirely separate from the need to work in order to survive.

As O’Brien points out, some of the most valuable work, such as raising children in the home, is currently unpaid and undervalued, and effectively becomes invisible to the more powerful decision-makers. Conversely, compulsory retirement can force some people to stop working when they love what they’re doing and are good at it. Basic income would help to overcome the rigidity of the current employment system.

He discusses the convoluted nature of existing social services, with enormous time and energy being devoted to determining who is or isn’t eligible for particular benefits. Basic income need not result in a loss of benefits or income for those who are already eligible, but it would ensure that nobody fell through the cracks.

He mentions that full employment is frequently held to be an important goal and yet it’s impossible from an ecological point of view, and also undesirable given current working conditions for many people. I thought his critique of modern economies was pretty apt: “instead of giving us the security of socialism combined with the freedom of capitalism, the capitalist state ends up giving us the opposite: the security of capitalism combined with the freedom of socialism. Thus, we end up with the worst of both worlds.” p49

He argues that UBI would be very difficult to dislodge, once it was introduced. It could help to support gender rights and struggling small farmers, although it wouldn’t automatically deliver those things by itself.

Among other rationales for basic income he includes compensation for past wrongs. Those whose ancestors were forced off the land by the enclosure movement, or into slavery, or who had to deal with other injustices that were imposed by the elite, would clearly benefit from a share in the common good. Naturally this wouldn’t represent total justice or compensation but it would be step in the right direction (in much the same way as CapGlobalCarbon would be a step towards climate justice). O’Brien comments that giving money to people in those circumstances seems far more morally justifiable than the unearned income from inheritance or dividends that tends to be accepted without question at present. It would also overcome poverty traps.

O’Brien describes the precarity of many current jobs, and the growing income gap between an elite, who manage the new technology, and everyone else. He also mentions the link between social and economic instability and extreme political ideologies such as fascism.

He makes the common assumption that much labour in the future economy will be carried out by robots. As he points out, if we continue along the trend towards a robot-powered economy, it seems probable that this would result in mass unemployment. Unless an effort is made to make sure that the unemployed have access to money, the whole economy could collapse because spending power would not be widely enough distributed to enable manufacturers to sell their products: “things that are good for individual capitalists (such as cutting back on the number of employees) may be bad for the system as a whole.”(p31)

Personally I’m not convinced that automation will play such a big role in the future economy. O’Brien comments that “it’s difficult to see how such a future [of widespread automation] could be avoided even if it were desirable to avoid it. There’s too much money to be made.” (p30) But money can only be made if enough energy is available to fuel economic activity. The embedded energy necessary for automated manufacturing can be huge – much greater than for human labour. Since we urgently need to move towards a fossil-fuel-free economy, since the remaining fossil fuels are in any case getting harder and harder to extract, and since renewables are intermittent and limited in their scope, it’s very difficult to see how the current pace of automation of the economy can be maintained – it seems much more likely to me that it will instead be curtailed, perhaps within a very short time period.

I don’t consider automation as vital to the argument in favour of basic income, though. The instability caused by manufacturers cutting back on jobs in order to save money, and thus undermining the purchasing power of their customers, applies to a non-automated economy as well. And indeed, there is another, scarier threat that could lead to mass unemployment.

A big worry is that we may face a catastrophic collapse of the global economy at any time, due to its over-reliance on fossil fuels, its extreme interconnectedness and complexity, its long and fragile supply chains, and the high volatility of the global financial system. Such a collapse could cause widespread bankruptcies, panic and a lurch towards far-right politics.

Basic income, particularly if funded by resource taxes such as land value tax (rather than by a tax on labour – more about this below), would help to ground the economy and prevent extreme hardship. It couldn’t ‘heal’ the economy of all its ecological and social ills by itself but it would make the other adjustments that are needed (some of which are described further down) far more digestible, and perhaps even enjoyable in some cases.

Work and consumerism

The ‘idolisation’ of work mentioned above is, O’Brien argues, an obstacle to establishing a basic income, but he believes consumerism is a more serious obstacle nowadays. He critiques the consumerist society in general and GDP as a measure of progress in particular.

Where does the urge to over-consume come from? The book touches briefly on the relationship between growth and the fact that the global economy is based on debt (p112). I think it could have benefited from some more exploration of this relationship. To me it seems crucial to any discussion of over-consumption to recognise that the global financial system is currently dependent on ever-increasing GDP, and would collapse were the economy to contract. This puts enormous pressure on companies to constantly expand their output and is probably a major reason for the bloated nature of the PR and advertising industries.

Similarly, while O’Brien may well be right in suggesting that the Calvinist link between work and divine favour was a powerful impetus towards the accumulation of capital, it seems likely also that the increasing reliance, from the Renaissance era onwards, on debt-based, private-bank-issued money as the main lubricant of the economy played a role.

What of the prevalent assumption that over-consumption is a kind of addiction – something that stems from insatiable desires? (See for example here.) O’Brien touches on this idea here and there in his book. For example, at one point he suggests that children are the only group in society who retain some measure of freedom from bureaucracy and the need to make money, but that a major threat to their freedom at present is their ‘ubiquitous’ attraction to mobile phones and computer games(p34).

From what I can tell, most children, in industrialised countries at least, aren’t actually all that free right now, and this may in fact be at the root of their apparent addiction to screens. O’Brien does (rightly) critique education for being too rigid and standardised, but he also writes about ‘a blissful ‘pre-capitalist’ world…where [children] are free to play and dream as they wish’ (p 162). Unfortunately this blissful world is constantly being encroached upon by our economy’s need to as move as much stuff as possible around in the shortest time possible. Many small children have little freedom of movement and little access to nature – both of which are vital to healthy development – because of the need to keep them safe from traffic and pollution, and they often have to be shuttled around by car. This is yet another reason to move away from a growth-based economy.

Indeed, evidence suggests that any kind of addictive behaviour, whether to screens, shopping, alcohol, illegal drugs or anything else, derives from stress, including difficulty in processing past traumas.

Screens and smartphones’ pervasiveness among teenagers – and adults – while certainly annoying at times, therefore wouldn’t in itself be the root cause of addicted behaviour. And indeed, there is reason to believe that in general, much over-consumption actually stems from a feeling of alienation and loss of control over one’s life. So who knows – it might just die back by itself, to an extent at least, under the right conditions, as happened in the US for example when a large majority of Vietnam war veterans who had become addicted to heroin while in South-East Asia were ‘magically’ able to overcome their addictions once they got home.

What could help basic income to work?

O’Brien takes pains to point out that UBI would not be a panacea. While it could help support gender rights and the environment, it could conceivably also undermine those things in some circumstances. On that topic, I’d consider it vital (as a Feasta climate group member) that a basic income be accompanied by a binding cap on fossil fuel production and measures to eliminate other sources of greenhouse gas emissions. This would ensure that the work we all chose to do went with the flow of the energy transition, rather than against it.

Additionally, for reasons mentioned above, there will need to be a shift away from debt-based money which relies on economic growth for its existence. Money will instead need to be issued on a debt-free basis. Some also argue that if private banks are to continue being responsible for issuing money, they should be obliged to buy licenses for the privilege, and the revenue from the licences could go towards basic income.

A third, very important complement to basic income would be a land value tax, for reasons I’ll explain further below.

Friends of mine are concerned that UBI would increase dependency on the state, and on the large corporations that provide tax revenue for the state. As O’Brien points out though, many of us are already just as dependent on the state because of needing welfare assistance, and the empowerment provided by UBI should actually help to promote the wellbeing of the poor, by pushing wages up.

I was surprised that O’Brien didn’t discuss the risk of a basic income triggering inflation. He does argue that extra measures would need to be taken in some circumstances to ensure the UBI could be effective. One such circumstance, mentioned by him, is the housing crisis in Dublin.

However, the inflation issue runs deeper than that. It’s true that a 2015 study of existing cash transfer programmes in the Global South (whereby money is given directly to vulnerable people) seemed to indicate that inflation was not a serious problem. It needs to be borne in mind, though, that such programmes are modest in scope and don’t generally provide enough money for people to live on.

As Hillel Steiner argued at the World Basic Income conference in February 2017, land value tax would be an important measure to introduce to counter any inflation on land values that could be triggered by a basic income, and it would have the added benefit of generating revenue in such a way as to avoid penalising labour or improvements to property. This revenue could then, rather elegantly, go towards the basic income. There’s some number-crunching on how this could play out in the US here.

The potential of basic income

Basic income, as O’Brien says, would sever the link between work and money and working hours could be shorter. After all, hunter-gatherers work only a two or three hours a day, and medieval peasants had about half the year off on vacation. Why should those of us who live in so-called advanced economies settle for less?

Basic income would not eliminate the tired old choice between capitalism and socialism, right and left, but as O’Brien puts it, it would create a more ‘humane framework’ in which to make our political decisions.

All in all it’s an exciting idea, and this book is well worth reading if you’re even mildly curious to learn more about its potential.

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Universal Basic Income: Pennies from Heaven was published by The History Press in September 2017: https://www.thehistorypress.co.uk/publication/universal-basic-income/9781845883676/.

Featured image: “Casswheel”. Author: Ginger Garvey. Source: https://www.freeimages.com/photo/casswheel-1469006 Source: https://www.freeimages.com/photo/casswheel-1469006

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About the author

Caroline Whyte has been involved with Feasta since 2002. She studied ecological economics at Mälardalen University in Sweden, writing a masters thesis on the relationship between central banking and sustainability. She contributed to Feasta's books Fleeing Vesuvius and Sharing for Survival. Along with four other Feasta climate group members she helped to launch the CapGlobalCarbon initative at the COP-21 summit in Paris in December 2015. In February 2017 she participated in the World Basic Income conference in Manchester, discussing the potential for climate action to contribute to reducing poverty and inequality worldwide. She lives in central France, from where she edits the Feasta website.

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One Response to “Universal Basic Income: Pennies from Heaven by Paul O’Brien – review”

  1. Felix FitzRoy says:

    See my article ‘Basic income and a public sector job offer’ on combining BI and JG, in Journal of Poverty and Social Justice’, 2018,
    https://doi.org/10.1332/175982718X15200701225179