UBI & UBS – advantages, disadvantages and potential synergies

Aug 10, 2020 by

Ian Gough started his lecture on Universal Basic Services by addressing the climate and social crisis we are currently facing, which he called the “twin dilemma”. He pointed out that the world’s richest 10% are responsible for 50% of consumption emissions, yet the worst consequences of emissions have to be borne by the poor countries, which is a double injustice.  In addition, there is a risk that some decarbonization policies might increase inequalities and affect the most vulnerable which he described as a concept of the “triple injustice”. He stressed that our environmental and social crises are interlinked and that it is not possible to address the one without the other. In order to achieve that, we need to decouple emissions from GDP, change to low-carbon consumption of only necessary goods and services, and reverse growth. Since an unconditional Universal Basic Income assists in none of these ways of addressing the twin dilemma, it is an inappropriate measure, according to Ian Gough. Ian Gough argues against Universal Basic Income on three basic points, values, costs and politics. Instead he proposes Universal Basic Services to address these issues, combined with a guaranteed minimum income. The UBS would introduce eco-social policies such as green jobs, retrofitting houses, investing in public transport and decarbonizing food systems. For recomposing consumption Ian Gough proposes to “Improve”, “Shift” and “Avoid”. Taking the example of transportation, improve could be E-Cars, shift could be Walking or public transportation and avoid could be Telework. In Addition, Ian Gough proposes the use of a Needs theory, with choice of Satisfiers developed through democratic dialogues of citizens and experts.

As an example, on democratic dialogues in practice he mentioned the French Climate Policy Dialogues. Basic Needs could then be e.g. Health, Food, Shelter, Education and Security. These should be provided for through the UBS and an expansion of public provision. Ian Gough also argues against using the UBI and UBS together for the financial reason and given UBI’s inefficiency in satisfying the needs of people. There is a nice statement he provides as a concise argumentation of his point: “An affordable UBI is inadequate and an adequate UBI is not affordable”.

Maximilian Kasy was talking about Universal Basic Income and right in the beginning he made clear that there are many different understandings of it. There are, e.g. proponents of UBI from the political right, who argue that UBI should be a substitute for all other social insurance programs. He is in favor of an UBI that is not unconditional but combined with a progressive income tax. This would mean that no one could fall below a minimum income. That would be closer to what Ian Gough meant with a guaranteed minimum income, but during their discussions, it did not seem that they could agree on a common definition. Maximilian Kasy argues for the UBI for four reasons. The first reason is the magic bucket theory. This comes down to the fact that one Euro is worth more for a poor person, than for a rich one. The argument is that people would not be incentivized to do the low-paid work they are unwilling to. Whereas, in status-quo they have to do this work due to the conditionality of the subsidies they receive. Thereby it would give the power to decide back to the workers, who then can choose what is best for them (a privilege only richer people enjoy in the current system). The second argument is that the UBI would shift bargaining power back to the workers by providing an unlimited strike fund. This would lead to better wages and working conditions. The third argument is freedom from oppression, including the possibility to leave abusive romantic relationships or resist harassment through employers or exploitation due to financial independence. The last argument for UBI is universality and political sustainability, as universal programs lead to a strong democratic support through the wide range of the population who benefit from it.

In the discussion it was evident that the positions of Ian Gough and Maximilian Kasy are closer than they seem at first glance as Ian Gough proposes a guaranteed minimum income. The UBI proposed by Kasy, which is combined with a progressive income tax would consequently be less cost intensive and he would also appreciate a combination of both. A difference, though between the two approaches is, that Ian Goughs  attached greater significance to the environmental impacts of the UBS and income policy proposals, trying to address the triple injustice, while Maximilian Kasy stated, that the UBI is not a “silver bullet” for everything, including the environmental problems, that in turn have to be tackled separately.

Written by: Konrad and Jakob

Based on the session with Maximilian Kasy and Ian Gough during the AEMS 2020.