Universal Basic Income Is A Trojan Horse

Earlier this month, Sam Altman––CEO of OpenAI––proposed giving the US government a 5% stake in the firm. This proposal was framed in the language of public interest; it is a chance for all Americans to benefit from the benefits of the AI boom. In reality, Altman’s move was tactical: by making the state (and public) co-investors in OpenAI’s success, he aligns their interests.

This is a point worth remembering when the likes of Elon Musk and Bill Gates start espousing their belief in Universal Basic Income (UBI).

I used to find UBI a compelling prospect – I wrote and debated at length about Andrew Yang’s advocacy specifically. It seemed a decent counterbalance to the automating away of jobs. Yet over the past few years I’ve come to sour on the idea. I see now that billionaire advocacy of UBI is not evidence of compassion – it’s more complicated. Setting aside the considerable debates about its funding, UBI contains deeper structural issues.

Not All UBI is Created Equal

UBI is not a single policy. A liveable basic income––payments sufficient for people to live on––would transform the relationship between labour and capital. By drastically decommodifying labour, workers could refuse undesirable jobs. However, this version is structurally impossible within capitalist relations. If workers can say no to work then the supply of labour drastically tightens, wages rise, profits squeeze, investment falls and the tax base that funds UBI payments begins to collapse. Liveable basic income undermines its own funding model.

What most proponents of UBI advocate for is what one might call a non-liveable basic income (NLBI) – payments low enough that workers remain at least partially dependent on wage labour.

NLBI is hugely beneficial to firm owners like those I mentioned earlier. This is particularly true for the AI firms (like Anthropic and OpenAI) who are driving this current wave of automation. Businesses built on replacing workers with capital have two competing needs: fewer wages to pay, but a need for enough people with money in their pockets to keep up demand. NLBI assuages both these issues by absorbing automation-engendered unemployment and maintaining a level of consumer demand to sustain AI markets.

Such a policy would maintain what Marx called the ‘double-freedom’ of capitalism: that workers are free to sell their labour, but equally ‘free’ to starve if they refuse. Markets don’t force anyone to work; they simply create an environment where not working is a route to destitution, so the ‘choice’ to sell your labour barely functions as a choice at all.

NLBI actually has the potential to negatively impact wages. If firms know that everyone has a state income, there would be less pressure to offer decent wages, because workers could survive on being paid less. NLBI doesn’t raise the income floor. It simply subsidises low wages.

NLBI’s real value to those backing it is less its economic function than its ideological one. It takes what is essentially a structural crisis––that being mass structural unemployment engineered for profit––and reframes it as a welfare issue. Mass unemployment stops being the result of decisions made by particular people and firms and starts looking like a simple inevitability, a fact of the economy. And so, the unfolding crisis is something to administer and respond to on an individual basis, instead of something collective and systemic which ought to be meaningfully confronted.

Milton Friedman––perhaps the economic pole to Marx––wrote himself in 1967 that guaranteed income was a ‘Trojan Horse’ by which the welfare state could be dismantled. By universalising payments, one can justify eradicating not just targeted benefits but also labour protections and collective rights. Furthermore, a UBI policy would likely become similar to the ‘triple lock’ pensions in the UK – politically untouchable. Even if the policy required reform, it would be toxic for any actor to change a direct transfer payment which has a constituency comprising essentially every voter.

Citizens vs. Consumers

I think a particularly instructive case about the social framing of economic policy is that of Uber. When the app launched in Denmark – it faced backlash due to taxation issues. The company was forced to leave in 2017, primarily because Danish unions were able to frame the firm’s issues as of national importance, appealing ‘to voters as (tax-paying) citizens rather than (convenience-loving) consumers’. For the Danish public, Uber’s model was incompatible with a universalist welfare state where everyone must contribute a fair share. Compare this to the United States, where the divided local regulatory structure allowed for Uber to frame its product as a pro-consumer innovation that the burdensome state was obstructing.

This distinction––of communal citizen versus private consumer––is illustrative of the UBI debate. Danish unions succeeded by asserting that Uber and its drivers were part of a collective; Uber won in the US by framing its drivers and users as individual consumers making free choices. NLBI isn’t a generous provision – it seeks to convert citizens who might demand rights, protections and meaningful labour, into passive recipients of automation funded subsistence.

If funding is directly linked to the success of AI firms – it has the perverted side effect of aligning individuals’ material conditions with soft-touch regulation to allow for continuous accumulation by the very firms that displaced them. Upton Sinclair said that it was hard to get a man to understand what his salary required him to ignore. Imagine how hard it would be to get a citizen to resist what his subsistence requires him to support.

I’m no Luddite, but as a young person I find our prospects especially concerning in a climate where British youth unemployment is at twice the rate of Germany. Students are already saddled with debt and housing costs mean rent is a structural transfer of wealth to those who already own property. In light of this – it seems partly reasonable to advocate for the stability and redistribution that basic income might provide. But the policy fails to address the structural conditions producing our current economic settlement. It simply socialises the losses wrought by these firms’ private gains.

Some of the ‘post-work’ left do believe that forms of basic income would be emancipatory in a sense. I don’t, barring environmental concerns, see an inherent problem with automating boring, unrewarding work if it ends up freeing people to spend their time in more fulfilling ways. But automation has not reduced working hours yet – it seems naïve to think things will change now. Productivity gains have historically translated into higher output rather than significantly shorter working weeks. And those British communities hollowed out by de-industrialisation did not become liberated, self-actualised creatives.

Work, and I feel this is qualitatively distinct to labour, is key for many people – not because of wages but because of what else it can provide: a reason to get up in the morning, a skill one is recognised for, dignity by contributing to a community, and basic social integration. This is obviously an ideal, and a substantial number of jobs don’t provide dignity or meaning. But regardless, simply giving people money cannot replace certain qualities of earning money. It does not bring structure, identity, dignity nor connection. I’m less confident that a post-work world would be some utopia than it would be a dystopia of endless ‘entertainment’ and data harvesting.

UBI in a form that can functionally exist offers neither decommodification nor meaningful financial security. It makes mass unemployment more palatable.

We need to be highly conscious of who is proposing certain welfare policies. Not only do the details matter, but we need to focus on how these policies are framed and how they reshape social relations. Does the union-busting Elon Musk really want to help individuals? Maybe. But I find it more likely that UBI benefits him, stabilising the political and economic order which he profits from wreaking havoc upon. It seeks to neutralise unrest that may threaten those who have the most to lose.

The Sam Altman proposal is a reminder that firms are not naïve about their own position. When owners of capital become the loudest advocates of a policy historically associated with the Left, the question is no longer whether UBI is benevolent. It is why those with the most to gain from automation have become the policy’s greatest champions.

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