The Greens’ right-wing way to help the unemployed

Milton Friedman, godfather of neo-liberalism, was an early supporter of UBI.

Milton Friedman, godfather of neo-liberalism, was an early supporter of UBI. AAP

Greens leader Richard di Natale reeled off plenty of radical ideas in his Canberra Press Club speech on Wednesday, but none harder to sell than the ‘universal basic income‘.

The universal basic income, or UBI, is not new to the Greens’ platform, but is now being promoted in a new context – the Greens policies are looking more ‘big government’ and ‘interventionist’ than ever before.

So if the Greens are lurching to the left to differentiate themselves from Labor, the UBI must be socialist policy, right?

Actually no. The idea of paying every member of society a fixed monthly amount, and doing away with the dole, pensions, disability pensions and so on, found early support with small-government, right-wing economist Milton Friedman.

In his 1962 book Capitalism and Freedom, he argued in favour of a UBI – or ‘negative income tax’ as he called it – as a way to solve a number of problems.

Firstly, it would be much cheaper to administer than the current “rag bag” of welfare measures, as Mr Friedman put it.

Secondly, it would remove the ‘disincentive’ to find work that current welfare recipients face – earning extra money is less attractive because of the benefits they lose at the same time.

But perhaps the point most relevant to the current world of insecure work and structural unemployment is one he made in a 1968 interview: “One of the great virtues of the negative income tax … is that by taking off the mass burden of income maintenance it would make it possible for private charitable organisations to do [more charity work].”

That comment is right at the heart of the UBI debate, because as Senator Di Natale said in his speech, a key reason for having the UBI is the disappearance of ‘jobs’.

He argued that “the rise of digital and automated technologies means that up to five million existing jobs in this country will be lost within the next 10 years”.

The question is: How many ‘new’ types of jobs will be created to keep those five million workers busy and prosperous?

Critics of the UBI idea predict, probably wrongly, that those people would just stay home eking out an existence on their UBI payment.

But that line of reasoning confuses two types of work: ‘paid’ jobs, and jobs that need doing.

Jim Stanford, director of the Centre for Future Work in Sydney, tells me that most people hold contradictory beliefs about ‘jobs’.

On the one hand, everyone would like better roads, better parks, better childcare, better aged care and so on, but on the other hand believe ‘there will be no jobs in future’ – ignoring the fact that matching workers with ‘things that need doing’ will make the nation a better place.

So the UBI changes the economics of what Mr Friedman called ‘charity’ work.

Any member of those five million displaced workers is ripe for recruitment by ‘charities’ – that is, non-commercial groups that produce a public good – to work in the community food garden, help as a teaching assistant, rehabilitate a degraded wetland or whatever.

Moreover, when specific projects really need attention, the government can help to fund extra payments to such workers without affecting their ‘benefits’, because they have no ‘benefits’ to lose – only the UBI payment or ‘negative tax bill’.

The reason some right-leaning economists love the ‘negative income tax’ is precisely because it harnesses the natural human tendency to want ‘more’ – when hoeing the community garden gets boring, there is no disincentive to seek more paid work, or even a more fulfilling ‘charity’ role.

That’s not to say a UBI will be politically sellable any time soon.

Mr Stanford thinks a more obvious place to start is to strengthen that ‘rag bag’ of benefits so the already-displaced workers can live a dignified life.

He would also like to see more directly funded government jobs doing the kinds of things the right would like ‘charities’ to do with UBI-funded labour.

So if we are to see millions of jobs vanish, the long-term political question is which solution the voting public can come around to most easily – strengthening a clunky social security system and creating millions of public sector jobs, or getting the UBI up and letting ‘charities’ give workers a fulfilling life.

Faced with that choice, the UBI may well become the most sellable option in the uncertain years ahead.

Stay informed, daily
A FREE subscription to The New Daily arrives every morning and evening.
The New Daily is a trusted source of national news and information and is provided free for all Australians. Read our editorial charter
Copyright © 2024 The New Daily.
All rights reserved.