“Unconditional guaranteed income” – Capitalism with a human face? Ruthless Criticism

“Unconditional guaranteed income” –
Capitalism with a human face?

[Translation of a radio broadcast by GegenStandpunkt – Kein Kommentar! February 1, 2006]

In reaction to unemployment and wage cuts, the idea has recently become popular that the state should guarantee every citizen a secure financial basis, thus a monthly guaranteed income. In left-wing circles, among recognized economists and sociologists, up to the Federal President, this idea has climbed the social ladder. The income that every citizen receives should be “unconditional” – regardless of how much income or property he has. This demand, appearing in the midst of the German Hartz IV society [translator's note: Hartz IV was a series of reforms enacted in Germany in 2005 that reduced short-term unemployment insurance and abolished long-term unemployment insurance for an entitlement that provides a bare minimum], seems at first glance socially unthinkable: people should get money without having to work for it, and without even a means test. Instead of being surprised by such a demand, however, one could also take a radical lesson from it: there are people who notice that the ruling economic system does not secure the existence of millions of members of society, despite the vast wealth in existence. However, they do not draw the conclusion that this economic system should be replaced by one that guarantees exactly what the current one does not: the livelihood of all at a level justified by the level of the productive forces. Rather, they retain the existing mode of production in which there are some people with property and some without, and in which the livelihood of the latter depends on receiving wage labor only if their labor is worthwhile for the accumulation of private property. However, because the labor of a growing number of people is not in demand, and they therefore have no income, they should be held above water by a state-financed basic income. So, despite the continued existence of unemployment, the survival of everyone, even the (permanently) unemployed, is guaranteed – at least this is what its advocates believe – and thus they make it clear that they want to stick with this economic system in which the livelihood of people without property fundamentally depends on doing work that increases the wealth of the rich.

“There is enough for all!” the leftist group Attac assures, and advertises with its campaign of the same name for the realism of the demand for a basic income. On the one hand, the advancing productivity of the economy makes more and more people unemployed; but on the other hand, it creates an abundance of goods which could easily supply this society – and not only this one – if this abundance were only properly distributed. A nice thought, you might say, if the proponents of a basic income did not at the same time hold to the principle that production depends on profitability. That is, capitalist enterprises can only produce and pay for the necessary work time if they promise themselves a surplus above production costs; the critical spirits of Attac maintain that this is a “reality” which one “can’t get around.” They hold that the rationalizations, which the capitalists undertake in order to assert themselves in competition by saving on paid labor, are “reasonable” on the one hand because they increase wealth, were it not on the other hand for the ugly consequence that those laid-off become so destitute. Thus the state should merely ensure that no one is destitute, then the economy could continue as magnificently as before.

This idea also has business supporters, such as the drugstore chain founder, Götz Werner:

“The economy does not have the task of creating jobs. On the contrary. The task of the economy is to liberate people from work. And we have grandly succeeded in this during the last 50 years.” (Stuttgarter Zeitung, June 2, 2005)

If he stresses that the economy is not responsible for the creation of jobs, then, on the one hand, he divulges a self-evident fact about the market economy: entrepreneurs are responsible for profit and the means for it is paid labor. Only when it can be employed profitably will there be paid labor, and otherwise not. On the other hand, he is also against the central ideology of the “responsibility of the economy for jobs.” If, in fact, it turns out that sections of the working population are permanently no longer needed as wage laborers, then the economy should no longer bother with this requirement. This fits in elegantly with the ideological progress of these new realities: he simply states as a task of the economy what it does all the time anyway, namely makes living labor superfluous by ever newer waves of rationalization, and overlays it with the positive sounding term “liberate people from work.” Certainly, this is just as little true as the former ideology, but it enables him to make a grand success out of a supposed failure of the economy. To appreciate this success, one only needs to forget its harsh content: the “grand success” of the economy “during the last 50 years,” the reduction of paid work by the dismissal of people who are no longer needed for profit because of the rise in productivity and with it the elimination of their income. It is exactly then that the fine consumer goods become ever more mass produced and ever cheaper – and those who produce them ever poorer because they become “liberated from work,” as Götz Werner fancies to reinterpret this. Meanwhile, the people who remain working are subject to the same calculation: by the use of more productive machinery, their employer gets more products out of them for every paid working hour, the work is ever more compressed through intensification and is extended through lengthening the work time for capital’s side of the oh-so profitable relation. Nothing here edges towards a “liberation” from work, even though the very useful goods can be produced more quickly: because these goods are produced solely for the profit that is to be obtained with them, it never happens in capitalism that an increase in productivity makes the necessary work shorter and easier for everyone and life more pleasant. If the economy really was about supplying people with useful goods and the most comfortable working and living conditions, capitalism would be the stupidest way of doing this.

But the advocates of an unconditional basic income see it quite differently:

"Now we come to the second task: the economy must not only produce goods. You also need people with enough money to consume them.” (Götz Werner, ibid.)

Clearly, this makes sense: first, establish a production of goods that aims only at making profits in the form of money, so it produces at the lowest possible cost – especially the lowest labor costs! –; create a lot of paupers with and without jobs who lack the money to live; and afterwards, this same economy should supply “people with enough money to consume” – the same people who it earlier “liberated from work,” thus separating from their income for consumption because their payment is not worthwhile for the profitability of production.

Economists like Thomas Straubhaar of the Hamburg World Economic Institute – also a proponent of an unconditional basic income – get to the point with a flourish:

"Non-wage costs are the dominant problem of the labor market. I want to break this open. […] Wages are to be freed from social-political ballast […] Social protection expenses are to be disconnected from wages. This is the basic income." (Stuttgarter Zeitung, November 15, 2005)

He does not want to arouse the suspicion that the basic income would be a grandiose social act to set the penniless to work. In his eyes, “the economy” is the suffering subject, because the state increasingly puts a strain on the cost of paying wages by the compulsory contributions to its social security funds. Therefore, with the introduction of a basic income and the simultaneous elimination of all existing social spending, which is financed by “surcharges” to net earnings (“non-wage costs”), the state is also responsible for ensuring that the “economy” pays only for the time in which it needs the work force for its profit, but not – through social spending – the time in which they are not needed, whether temporarily (due to illness) or at all (lay offs, old age). However, because the state notoriously suffers from empty coffers – as a thoroughly realistic scientist, one does not particularly need to stress this – the amount of this basic income is quite obviously given by this criterion:

“At present the legally fixed subsistence level lies at 7.664 euros a year. This would be the upper limit. … In return, all other social benefits would cease, including the pension and unemployment benefits. It is really no bed of roses to live on this money in Germany.” (Straubhaar, ibid.)

“No bed of roses” downplays the condition that would signify a profit-compatible basic income for those dependent on it. It should strictly not be enough “to finance the average standard of living of the population, but should exclusively ensure existence.” In the middle of a society that has "produced unprecedented abundance" (Götz Werner) there would be people who, because they do not find work, have to live only on the basic income at a standard of living fixed just above the level of bare survival – and this will also be presented as a great proposition: "We are not in the jungle where there is only survival." Thank you, Professor Straubhaar!

The learned man also gives away the reason for this “generosity”: “Of course, it always looks like it will debilitate work effort if we guarantee that no one starves.” But not much more than this can be guaranteed in capitalism if one wants to compel a work effort that is unprofitable for those who perform it. Only with the constantly threatened loss of the “average living standard of the population” can they be reliably extorted to constantly increase the work efforts with which they increase the property of their “employers,” from which they themselves remain permanently excluded. No wonder that economists like Straubhaar want to see the “statutory minimum existence” fixed at an order of magnitude that does not “restrain” this motivation for the work effort which capitalism depends on: just at the level of “an absolute minimum existence.” Only a “basic income” or a “living wage” that, at best, protects a mere physical existence guarantees the success of extortion in the service of someone else’s property. The basic income must be so low that it suggests to all “recipients” that they cannot avoid looking for wage labor if they want to live decently. Even though the starting point for taking the basic income into consideration is the “grand success” of Goetz Werner and his “colleagues” in “the economy” in having liberated ever more people from work – that's why there are not enough jobs for everyone who needs to ensure their standard of living!