Reorienting the welfare state

The UBI has acquired increasing acceptance in policy circles as a tool to curb poverty

Utopia For Realists

And How We Can Get There

Rutger Bregman

Bloomsbury

316 pages; Rs 499

In recent times, the Universal Basic Income (UBI) has acquired increasing acceptance in policy circles as a tool to curb poverty. With successful pilot projects in Canada and some European countries, UBI is being looked upon as a more efficient measure than the subsidies that have long underpinned the welfare state.

In the book under review, Rutger Bregman, a Dutch journalist, makes the case for UBI by collating evidence from history, philosophy, and, of course, economics. Mr Bregman clinically destroys the myth that the UBI would unleash a generation of no-good loafers leeching off the state. On the contrary, he asserts, experiments have shown that the UBI improves quality of life for everyone in the community by reducing the cost of providing social services to the economically depressed.

The most interesting data point he presents is that of Utah, where the director of the Homeless Task Force decided in 2005 to provide free housing to those living on the street. Within 10 years, chronic homelessness in the state — a subset that includes homelessness among the most vulnerable, such as the mentally ill — had declined by a whopping 91 per cent. The success of the project led neighbouring Wyoming as well as the Netherlands to offer similar programmes.

Mr Bregman tackles his subject from several vantage points, dipping into politics of the left and the right to call for bipartisan support for the UBI. His contention: Capitalism has made the West so rich that it can afford to provide a basic income to everyone, irrespective of work done or service rendered. While the idea might not seem intuitive, it has a long history.

The eight-hour work week, which is the global standard today, is a 20th-century invention. Championed by the likes of Henry Ford, reduced working hours were seen to directly improve productivity. Keynes, too, was of the opinion that a century from his time, people would have to barely work to make a living, since the coming age would be one of unimaginable prosperity.

Yet, even as poverty has declined globally, we are no closer to achieving the work-leisure equation envisaged by Ford and Keynes. On the contrary, what we have is rising inequality where a tiny minority owns a large share of capital, while the majority struggles to make ends meet. While communism has failed spectacularly, we are now witness to the depredations of capitalism.

Mr Bregman is particularly, and most effectively, scathing, in his criticism of how capitalism has spawned a state of affairs where jobs that shift, rather than create, wealth net the best salaries. He compares the nearly unnoticed 1970 bankers’ strike in Ireland with the havoc-causing 1931 New York sanitation workers’ strike to drive home how the “agents of prosperity — the teachers, the police officers, the nurses — are paid so poorly, while the unimportant, superfluous, and even destructive shifters do so well.” 

The answer, Mr Bregman maintains, is the UBI. Not just because leisure and the ability to indulge in civic activities is an important human need, but because the welfare state, that great leveler of animal spirits, has failed to yield results. What it has done, on the other hand, is engender a devastating spiral where your ability to stay depressed is rewarded by the state. 

Mr Bregman is on weaker ground when championing immigration. Directly addressing the votaries of Brexit and Donald Trump, he refutes the notion that immigrants are terrorists or rapists, offering real stories from the pool of the 11 million illegal aliens in the US. Yet, he fails to offer a political solution to the crisis overtaking the West. The UBI, for all its benefits, will fail to eliminate the social fissures that arise out of diverse populations fighting for the same spoils.

While most of Mr Bregman’s analysis is focused on the West and, to a smaller extent, Africa, the UBI can find much use in the larger developing world. In India, for example, politicians like Baijayant 'Jay' Panda have advocated the UBI in place of the slew of subsidies that the government provides the poor. Apart from allowing the poor to choose what they wish to do with their money, the UBI would eliminate the discretionary nature of subsidy grants that, in spite of the JAM ecosystem now in place, continues to blight subsidy distribution.

Ideas that once seemed impossible, Mr Bregman is fond of saying, become inevitable in due course. Even the strongest proponents of the welfare state may balk at the prospect of distributing free money, but if there is one thing that events of the last year have taught us, it is that the system as it exists has failed to alleviate large-scale suffering. Mr Bregman’s book is a well-researched call to implement, if only in fits and starts, an idea that is no worse than those that brought us where we are in the first place.