Photo: Albert Hirschman (left), German Jew, economist, and lifelong anti-fascist, pictured at the 1945 war-crime trial of German general Anton Dostler. Image via Wikimedia. Edited by Inroads Journal.
A basic income recognizes unpaid work – and it’s cheaper than poverty.
Albert Hirschman lived a fascinating life. A German Jew, he fought in the Spanish Civil War and later helped the Emergency Rescue Committee in its efforts to help people like himself – Hannah Arendt, Marc Chagall, Max Ernst – escape Nazi-occupied Europe. He too became an émigré, making it to the United States. The political economist and moral philosopher found himself at Berkeley before joining the U.S. Army and the Office of Strategic Services, forerunner of the CIA. Hirschman ultimately ended up at Harvard and the Institute for Advanced Study in Princeton, NJ.1
In The Rhetoric of Reaction (1991), Hirschman argued that supporters of any big new social policy idea can count on being assailed for three reasons. As his title implied, he was principally analyzing attacks from the right – scarcely surprising in light of his early life and general political leaning. Yet when it comes to mounting interest in a Basic Livable Income (hereafter BI), the assault is just as likely to come from the left.
Hirschman described reactionary arguments as based on jeopardy, futility and perversity: jeopardy in that the proposal would imperil other goals, futility in the sense that it wouldn’t work, and perversity because it is undesirable and generates unintended consequences.2
All three of these categories come into play in arguments against BI. With respect to jeopardy, hand-wringing by mild social democrats and many liberals reflects a defensive attitude – stoked by four decades of attacks by market fundamentalists – toward what remains of the paternalistic welfare state. This is backed by a canard: the old debating tactic of setting up a straw person, in this case the claim that BI boosters believe that a cash payment will solve all our woes. No thoughtful BI advocate ever uses this “silver bullet” argument.
Futility arguments describe BI as simply unaffordable. End of story. This even though there are myriad proposals for funding BI, the devil being in the details – a crucial one being reversing neoliberal attacks on progressive taxation via thoroughgoing tax reform.
Perversity arguments suggest that BI would give indolent slackers something for nothing. More on this below, but think for a moment of those of us who stand to get something for nothing when an inheritance comes our way. Canada is among a small number of rich countries with no inheritance tax. The deficit is inching toward $400 billion. The iconoclastic former bank economist Jeff Rubin figures that taxes will be going up: “The question is, who is going to pay them?”3
Here we address two of the principal objections to basic income: that it’s just too costly and that it will make people lazy.
We can’t afford it
This argument usually comes from the right. From this perspective, any (apparently) new government spending that does not support their own objectives is, ipso facto, bad. This critique fails to consider a brutal fact: we already pay mightily for poverty.
In 2019, Feed Ontario (formerly known as the Ontario Association of Food Banks) conservatively estimated that the annual financial cost of poverty in Ontario is somewhere between $27.1 billion and $33 billion. Its estimate of the total bill included health care costs, justice system expenses and the opportunity cost of forgone tax revenue. These costs are compounded many times over when children grow up poor. Others have estimated that the cost of reducing poverty is less than half of the estimated cost of doing nothing.4 Of course, none of these estimates considers the incalculable cost of the human suffering associated with poverty.
Perhaps it goes without saying that the way governments spend is always a matter of political priorities and tradeoffs. (Apparently, we can afford to buy pipelines to transport oil and subsidize the oil and gas industry, although the future of the planet depends on a rapid move away from a carbon-based economy.)
However, different kinds of BI have different costs. Just as the pandemic hit, the Basic Income Canada Network used the Statistics Canada SPSD model to estimate the costs of three basic income proposals. It found that with even mildly progressive tax reform, the current level of taxation is sufficient to provide all those who need it with an income floor of $22,000 for a single person aged 18–64. Beyond that, costs would increase dramatically to either include seniors or provide a basic income to all Canadians.
In the “negative income tax” model covering those ages 18–64, those in the top half of the income distribution would pay more, while all those in the bottom half would benefit from redistribution. Reallocation of funds from social and disability assistance and several refundable and nonrefundable tax credits means that the proposals would be almost self-financing.5 This model of basic income is different from a “universal” model – that is, a payment all citizens receive and then pay back if they don’t need it. Instead, the negative income tax would be universally and unconditionally available to all who need it – meaning anyone below an income cutoff – just as Medicare is available to all who need it. We support this BI model. Given the costs of poverty and the savings we could reap by eliminating it, we argue that this approach not only is affordable but would save us money in the longer term. As if we need an economic argument to resolve a moral and ethical issue.
It will make people lazy
Interestingly, this argument against BI seems to come from the right and the left. And while it rarely comes from those who have experienced poverty themselves, it is sometimes used by people living in poverty or close to it in an effort to show their own worth and avoid a stigmatized category, the undeserving poor. This can create moral distance from “those” people who would surely take advantage of a BI by loafing. The working poor are sometimes vociferous in expressing such beliefs: “I may be poor, but I have a job.”
Right-wing politicians have used this trope consistently in an era of growing job insecurity. In 1995 Mike Harris’s market fundamentalist Common Sense Revolution campaign in Ontario leaned heavily – and successfully – on a simple work-for-welfare message.
Zygmunt Bauman, like Hirschman an émigré intellectual, distinguished between producer societies, in which people’s identities were bound up with their role as workers, and the consumer societies that have developed since the 1970s. In a producer society, he noted, the poor could redeem themselves through displays of frenetic activity such as keeping a spotless home, thereby separating themselves from the “undeserving” poor who, apparently, were poor because they were lazy. In a consumer society, those living in poverty generally have no way to redeem themselves, because social status depends on consumption, which requires money.6
Living in poverty is hard and stressful work in and of itself. Juggling bills. Struggling to figure out how to put food on the table. Walking to and from medical appointments, the food bank and the grocery store. Moving house without a vehicle. Filing endless paperwork. When asked if BI would make him lazy, one participant in a Queen’s University research project, who was homeless, replied,
I don’t even have a chance to be lazy, right? I gotta carry around a big huge bag. I’m kind of sleepwalking from place to place. People that think it’ll make us lazy, I would say, try to come down here… it’s pretty rough. Even coming down for, you know, a couple hours a day, for a week, would be probably too much… I don’t think it would make us lazy. I think it would make us grateful.7
Yet the old moral objection of “laziness” lingers on. Never mind that an estimated 70 per cent of those living in poverty and 65 per cent of those who are food-insecure have paid employment – it is just inadequate to keep them above the poverty line and out of food insecurity. With the rise of the gig economy and precarious employment, many of the working poor have two or three jobs and still can’t make ends meet.8
In the aftermath of the 2008 global meltdown, McMaster University researchers, in collaboration with Toronto’s United Way, published a series of groundbreaking studies under the rubric of Poverty and Employment Precarity in Southern Ontario (PEPSO). Their investigation of growing inequality focused on the new labour landscape, which has been marked by a catastrophic decline in working-class power and the rise of humiliatingly precarious labour.
The data were conclusive. Based on more than ten thousand surveys and a hundred interviews over the course of seven years, the studies highlighted the alarming emergence of polarized income during a period of sustained economic growth. A split-level labour market had fractured Canada’s industrial heartland. The social scientists abandoned their usually cautious tone, describing how the “shocking portrait” and “stark picture” of the regional labour market had become clear. Only half of working adults reported being in classic “full employment” – the secure, full-time jobs with benefits that so many White working-class men had been able to secure in the postwar era that was now clearly over.
The data showed young people struggling with the brave new world of work as well as longstanding discrimination against women – particularly racialized women. PEPSO found that, among those who managed to get 30 to 40 hours of weekly work, women were paid 88 per cent of men’s annual wages. Racialized women earned 67 per cent of men’s wages. This was especially important in the Toronto-Hamilton area, where half the residents had been born outside Canada and 43 per cent were racialized.9
When Doug Ford’s new government cancelled the Ontario Basic Income Pilot (OBIP) a few weeks after coming to power in 2018, it destroyed the opportunity to systematically understand labour force attachment while on BI. During the election campaign, Ford had promised to see the OBIP through,10 while saying, “I believe in letting the market dictate.”
When researchers from McMaster University surveyed a convenience sample of about 21 per cent of the southern Ontario participants in the OBIP, they found that 80 per cent reported improvements in overall health, with 86 per cent reporting less stress or anxiety at home, 83 per cent reporting less depression, and 86 per cent feeling more positive about life in general.11 Given the high rates of mental illness associated with poverty and food insecurity,12 mental illness could easily be confused with “lazy.” The McMaster researchers quoted a 37-year-old woman who compared her mental health before and during the Pilot. Before the Pilot, she said,
(My mental illness) would really cause me to stay in bed or drain me of any will to do anything. When I got basic income, the stress was gone, and it was just easier … Knowing I had a purpose, and being able to make a plan, because the extra financial resources allowed me to do that, does something profound to your mental health.
The researchers also found that those who were employed before joining the OBIP continued to work while receiving basic income. For some, the security of basic income allowed them to take a chance to move to higher-paying, more secure jobs with better working conditions. They concluded, “For a significant number of participants, basic income purportedly proved to be transformational, fundamentally reshaping their living standards as well as their sense of self-worth and hope for a better future.” Hardly a recipe for laziness.
The results from the McMaster study fit with the results of every other BI pilot or cash transfer program. When people in poverty receive unconditional cash, they know how to spend it to best meet their needs and improve their situation. In the 1970s Mincome experiment in Manitoba, only two groups decreased their attachment to the workforce: new mothers stayed home with their infants and young men completed high school rather than dropping out to take a job to help support their families. Other research has shown that low-income Canadian families that receive cash transfers in the form of the Canada Child Benefit increase their purchases of childcare, food, rent and transportation, and decrease their purchases for self-medication – tobacco and alcohol.13
Conventionally, academic models of public policy change assert a rational process by which policy is made, and changed, on the basis of sound, objective scientific evidence. Increasingly it is clear that such models are naive; policy is more often made to fit existing ideological frameworks. Elected officials who believe that government and taxation are inherently “bad” and that the private market will fix everything will not be inclined toward measures that support public goods. Scientific “evidence” rarely serves to counteract ideologically driven beliefs; in fact, some research even shows, counterintuitively, that evidence that doesn’t fit with our existing ideological framework strengthens our existing beliefs, rather than changing our minds.
The idea that giving people money will make them lazy is a predictable outcome of the logic of the ideology of the rational, competitive economic man. This doctrine has it that “if people got what they needed without being forced to compete for it, then there wouldn’t be a reason for them to be disciplined. Therefore, it is immoral to give people things according to their need rather than pushing them to work for it. It is an incentive for people to be less than what they can be, and that does them a disservice. We are all rational, and if we build a system where it is rational to be lazy – then that’s the society we’ll get.”14 According to this logic, paid work means dignity.
Never mind that dignity is inherent in human nature. Or in unpaid labour, for that matter. Or that economics – particularly the neoliberal model, hegemonic for some four decades – has been built on highly questionable assumptions. For the most part, human actions are not the result of rational decisions based strictly on individual self-interest. That’s why we’re prey to a massive advertising industry designed to entice us to buy stuff we don’t need.
Recognizing unpaid work
Feminist economists have for decades pointed out that “the economy,” as measured in the GDP, ignores a whole other economy – invisible, taken-for-granted and usually uncounted. Canada is an exception. In the late 20th century, Statscan conducted national time use surveys, attempting to account for households’ unpaid labour. In 1998, Canadians spent more than 30 billion hours on unpaid labour, equivalent to an average of 24 hours per week for everyone over the age of 14 and accounting for the equivalent of 33 per cent of the Gross Domestic Product. This includes almost two billion hours of unpaid volunteer and community work. Almost two thirds of this unpaid labour was carried out by women.15
In a witty excoriation of conventional economic logic, feminist writer Katrine Marçal asks, “Who cooked Adam Smith’s dinner?” She points out that Smith failed to recognize that his mother cooked his dinner every night out of love, not self-interest. Her unrecognized labour allowed him to write the treatises that became the basis of the field of economics, including his famous notion that the butchers, brewers and bakers provided dinner not from benevolence but from self-interest. (Smith was also a moral philosopher whose Theory of Moral Sentiments emphasized empathy – rarely a factor in the equations of today’s econometric models.)
In the early 1970s, when the idea of a guaranteed annual income was popular, some feminists argued for “wages for housework” to recognize women’s unpaid household “labours of love.” White liberal feminists rejected the idea, being more concerned with access to the labour force, equal pay and abortion rights. Steeped in the doctrines of “economic man,” they actively sought to distance themselves from unpaid care work in the home.16
Yet although it is commonplace to explain that the word economics is derived from the Greek oikos, meaning home, mainstream economics has generally been uninterested in what happens at home. This despite gradual and encouraging recognition of household economics. The dominant approach tends to erase universal realities. Our welfare depends on bodies – human bodies that get hungry, sick or injured. Bodies that bleed, reproduce and age. Bodies that need sleep, cleaning and care. And let’s not leave out soul, that indispensable emotional and spiritual care – “Body and Soul” being more than a jazz standard immortalized by Coleman Hawkins.
Feminists have argued that the model of rational, self-interested economic man is an escape from these messy realities – an escape from dependency, insecurity, need, weakness, vulnerability, emotion. If you account for all the jobs a stay-at-home mother does, her median salary would have been about $235,000 CAD in 2019.17 A basic income would of course never adequately compensate for the unpaid labour of Canadians, but it would be another step in recognizing its invaluable contributions to families, neighbourhoods and communities, as well as “the economy.”
A century or so ago, Bertrand Russell – himself a proponent of a basic income – and John Maynard Keynes imagined that the day would come when we were wealthy enough that we would no longer need to work. We could focus instead on living a “good life.” Keynes calculated that by 2030, we would only need to work 15 hours per week, devoting the rest of our time to enjoying life, creating art, engaging in philosophy and admiring the lilies of the field (Lord Keynes was also likely counting on someone else doing the housework and cooking). In his famous essay “In Praise of Idleness,” Russell argued that “a great deal of harm is being done in the modern world by the belief in the virtuousness of work, and … the road to happiness and prosperity lies in an organized diminution of work.”18
Real change has often centred on ideas whose time has come, ideas commonplace today that were once scorned as utopian. An end to slavery. Votes for men without property. Votes for women. Votes for Indigenous people. Universal health care. In his essay “The Soul of Man Under Socialism,” Oscar Wilde wrote that “a map of the world that does not include Utopia is not worth even glancing at … Progress is the realization of Utopias.”19
Elaine Power is a professor in the School of Kinesiology and Health Studies at Queen’s University in Kingston, Ontario. Her research focuses on poverty, food insecurity and health. Jamie Swift is a writer based in Kingston and the author of a dozen books, including The Vimy Trap (2017) with Ian McKay. Together they have written The Case for Basic Income: Freedom, Security, Justice, published in May by Between the Lines.
“Work, Idleness and Basic Income” is part of a larger debate in our Basic Income section of this issue of Inroads Journal. To read the other side of the debate, check out Basic Income Provides Dubious Benefits at a High Cost.