Why These Leftists Oppose Free Money

Why These Leftists Oppose Free Money

A conversation with Daniel Zamora Vargas and Anton Jäger about why a “basic income” isn’t such a progressive welfare idea. 

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The idea of a “basic income,” a stipend that a government provides its citizens to ensure their livelihood, is an old one, often traced back to ancient Rome and Publius Clodius Pulcher’s establishment of a regular allotment of free grain for Roman citizens. Daniel Zamora Vargas and Anton Jäger’s aim in Welfare for Markets: A Global History of Basic Income is to provide an intellectual and social history of basic income from antiquity to the present. A fundamental question emerges from their historical accounting: They show that a surprising range of people—from neoliberals (Milton Friedman), neoconservatives (Daniel Patrick Moynihan), and racist reactionaries (Charles Murray) to continental philosophers (Michel Foucault) and civil right leaders (most notably Martin Luther King Jr.)—have all embraced some version of the basic income. Indeed, the idea has proved attractive not only to certain Marxist thinkers but also to tech moguls like Mark Zuckerburg.

Zamora Vargas, a professor of sociology at the Université Libre de Bruxelles, and Jäger, a historian of political thought at the Katholieke Universiteit Leuven, do not see the ideological diversity of the basic income’s supporters as a sign of its incoherence. Rather, they suggest that what unites these various thinkers and schools of thought is their attempt to imagine welfare as part of the market rather than a service that exists outside of it. Put differently, they suggest that the recent history of the basic income suggests a market-friendly alternative to the postwar welfare state.

I spoke with Zamora Vargas and Jäger about the 20th-century neoliberal origins of the universal basic income, the current revival of interest in the subject today, and what it says about contemporary thinking on the welfare state’s role in society. Our conversation has been edited for length and clarity.

—Daniel Steinmetz-Jenkins

Daniel Steinmetz-Jenkins: Is the universal basic income a coherent idea? I ask this because, as your book explains, it has attracted rather strange bedfellows, many of whom would have viewed each other with suspicion in other realms. I’m thinking of the fact that Martin Luther King Jr. embraced UBI, as does Charles Murray, the coauthor of the infamous The Bell Curve, who is widely seen as a racist. Moreover, Michel Foucault—someone typically beloved on the left—promoted something like the idea, as did Daniel Patrick Moynihan, who is often condemned by the left. What holds the idea together given its wide array of defenders?

Anton Jäger: That is, indeed, the perennial question. To put it differently: Given that UBI has such a wide range of defenders, is there even a coherent “unit idea” that we could baptize as the universal basic income?

The book approaches this problem from a different, but potentially more rewarding, angle. We take a step back: Rather than seeing UBI as a stand-alone policy with defenders and detractors, we zoom out on the proposal as belonging to a particular family of policies. This can be seen as that of “cash transfers.” UBI is only a subspecies in that group. Here, cash transfers are best understood in contrast to that other package of welfare policies we know from the 20th century—forms of social provision that actively decommodify parts of the economy. Whether it’s health care, public transit, or schooling, this model relies on the idea that the state should provide these services for free or at relatively low cost.

Cast in this setting, the thread connecting cash transfers becomes visible. In all versions we see an opposition, or at least profound uneasiness, about forms of welfare that center work and employment and collectively determined needs. The UBI is partial to the same uneasiness. Despite its wide range of applications, what unites all the boosters is an attempt to provide welfare in rather than outside the market. Each of the figures you cite do so in their own way, with their own motivations and reasons. And there are undeniable differences between left- and right-wing conceptions. But it is also undeniable that the proposal of a UBI entails an attitude to the market which is more concessionary than the older strategies of decommodification. In that sense, the basic income uncomfortably united right and left in their desire to think out “welfare without the welfare state.”

DSJ: For those who know a bit about UBI, they probably associate it with Milton Friedman’s negative income tax. In the book, you mention that such a shift was part of a broader transformation in how we understood freedom.

Daniel Zamora Vargas: The contemporary appeal for a basic income comes in part from a highly reductive account of freedom. Classical ideas of freedom, which in part did inspire figures such as [the British social economist] William Beveridge in his full-employment report, involved a greater popular control over the economy and the use of state power to enhance collective welfare. Friedman, on the other side, along with most neoliberals, narrowly redefined freedom as the absence of state coercion. This implied that economic exchanges were of course noncoercive. Coercion was something intentionally imposed on us and therefore couldn’t apply to the impersonal workings of the price system. In this perspective, the idea of defining human needs politically and satisfying them through collective provision appears as a threat to individual freedom. Being free means therefore being able to fully enjoy the consumer society rather than to deliberate on how and what to produce. It should come as no surprise that the idea of a basic income has thrived in an era when being free denotes essentially to be free in the market rather than from the market.

DSJ: Your book also makes a major historical intervention by suggesting that the rise of social policy’s fiscal turn, typical of cash transfers, occurred during the John F. Kennedy and Lyndon Johnson years, not with Richard Nixon’s administration.

DZV: Most accounts of the debates around a guaranteed income generally take Nixon’s plan as a starting point. But as we show, the real shift happens under Kennedy’s presidency, in 1962, following the publication of Michael Harrington’s The Other America and Milton Friedman’s Capitalism and Freedom. Before that, poverty wasn’t really perceived as a specific problem separate from the labor question. And the strategy on that matter generally implied the expansion of a service-based program. But by the late 1950s, poverty was increasingly conceptualized in narrow monetary terms, which rendered Friedman’s idea of guaranteeing a floor of income through the fiscal apparatus more attractive.

The proposal would also find a quite favorable environment within Kennedy’s Council of Economic Advisers, which had been advocating for a so-called “privatized” form of Keynesianism. Sometimes dubbed “bastard Keynesianism,” this approach to public policy stipulated that to stimulate the economy, the government had to promote tax cuts rather than government spending. In other words, while classical Keynesians would address unemployment through public works programs, modernized Keynesians focused on boosting private investment and individual consumption.

Basic income schemes enjoyed a natural boost in the wake of this policy shift. Rather than spending on housing, schools, hospitals, and public works programs, we could simply send cash to the poor. Such an approach marked an important break with the New Deal and its emphasis on the balance between public and private services and goods. By 1967, even though Lyndon Johnson had been extremely reluctant to embrace the proposal—warning about the fact that it was supported “by some of the sturdiest defenders of free enterprise”—he established a Commission on Income Maintenance Programs and, under the initiative of Sargent Shriver, launched the first of several large-scale basic income experiments in New Jersey. By the late ’60s, it was already clear that the distinction between Keynesians and non-Keynesians had become less significant after the neoclassical revolution launched by Paul Samuelson.

DSJ: Of course, at the same time, the civil rights movement reached its apogee under the leadership of Martin Luther King Jr. At this time, King himself moved away from the welfare state as a solution to Black unemployment and promoted a guaranteed income centered on “poor people.” Can you explain this transition? More generally, would it be accurate to say that UBI at this time was driven by the concern, across the political spectrum, that the welfare state had failed Black Americans?

DZV: Martin Luther King’s plea for a guaranteed income in 1967 does indeed mark a broader shift within the civil rights movement itself. For someone like A. Philip Randolph, who was one of the most prominent labor organizers of his generation and had led the 1964 March on Washington, full employment was at the center of his struggle. “No greater wrong has been committed against the Negro,” he famously argued in 1944, “than the denial to him of the right to work.” Let’s not forget that the march itself was “for jobs and freedom.” But the persistence of unemployment pushed some toward a less jobs-oriented agenda. King himself, during the late ’60s, would launch his Poor People’s Campaign and advocated that we focus our attention from “putting people to work to enabling people to consume.” Moreover, within the new generation of activists, the universalist strategy of the postwar period was increasingly rejected. Claims for racial autonomy went hand in hand with a criticism of the welfare state’s failures.The pursuit of institutional expansion was then seen as paternalistic and an obstacle to Black liberation, while proposals such as a guaranteed income could offer a kind of alternative to the New Deal’s work-centered institutions.

Behind such a transition was more than just a debate about full employment. It was the way activists understood politics and structural change: They were less concerned with coalition building and mass politics and moving toward, as Adolph Reed has noted, a “more expressive and hortatory” kind of activism.

AJ: One of our book’s main aims is to situate the genesis of the UBI squarely in the 20th century. It is not, in fact, an “age-old” idea. One answer is to relate the idea’s rise to the relative absorption capacity of different economic sectors. In a world in which most people are employed in agriculture, the proposal is hard to imagine, let alone defend. Once industrialization takes off and factories begin to absorb labor, you already have some ideas tending toward a UBI, but they remain highly marginal.

With the onset of deindustrialization in the 1950s and ’60s in the United States, you arrive at a situation in which neither the industrial nor the agricultural sector is capable of properly absorbing the supply of labor. A new form of unemployment, different from the spasmodic bouts of inactivity in an industrial economy, becomes visible. After the Second World War, America’s Black workforce was ejected from the Southern sharecropping economy. Yet they arrived in Northern factories which were already shedding labor, and they arrived much later than white workers. This greatly complicated their integration into a Cold War economy centered on the male breadwinner.

This shift is visible in one of the most significant critics of full employment at the time, the labor activist James Boggs. Born to Alabama farmworkers of modest means, Boggs joined the exodus from the Cotton Belt of the South to the Rust Belt of the North in 1937, at age 18, following the mechanization of Southern agriculture during the New Deal. This journey, undertaken by millions of other rural Black Americans, led him to industrial Detroit, where he became an autoworker at Chrysler in 1940.

Boggs claimed that automation had radically transformed the labor movement. It created a situation where the mass worker wouldn’t be the base of society anymore. In such a setting, Boggs argued that for this new generation of “workless people,” especially Black workers, “the simple formula of more schools and more education and more training [was] already outmoded.” The labor wing of the civil rights movement had its own non-cash vision of how to approach this crisis. Yet for Boggs, it was unsurprising that thinkers both left and right would address the crisis through guaranteed-income schemes.

DSJ: Interest in a basic income in Europe took off during the 1970s and ’80s. One thinker who embraced the idea was Michel Foucault. Why did Foucault become attracted to basic income?

DZV: Foucault’s genuine interest in Friedman’s negative income tax goes back to his 1979 lessons on biopolitics. Described as less bureaucratic and disciplinary than a system focused on full employment, he saw the idea as an alternative to the welfare state. Remember that Foucault was by that time quite convinced that we were slowly moving away from struggles organized around exploitation and large economic structures toward the more diffuse power differentials that seek to shape our subjectivity. And a negative income tax could guarantee a certain level of welfare without imposing a defined anthropological model. It would involve, in that sense, not a retreat of the state per se, but of its invasive and coercive techniques of subjectification.

DSJ: Your book also shows that even Marxist intellectuals during the 1970s and ’80s were attracted to something like a basic income. This is also the decade that neoliberal economic policies established themselves under the Thatcher and Reagan administrations. Given that UBI has deep roots in neoliberal thought, how do you make sense of its embrace by the left?

AJ: The second half of the book focuses on a conceptual transformation in left-wing thought in the ’70s and ’80s. Foucault, we might say, is but one striking expression of the shift. This transformation had socioeconomic preconditions, such as deindustrialization and the disintegration of the classical labor movement. Crystallized in ideas, they created a receptive environment for cash-transfer thinking in traditions seemingly hostile to it before. As deindustrialization takes off in the ’60s and ’70s and the industrial proletariat begins to shrink or moves overseas, certain Western Marxists entertain the idea that developed societies are in a state of abundance that has eliminated the need for labor. More concretely, however, it is tied to the idea of a so-called “integration thesis,” or the notion that Western workers have ceded their revolutionary mandate and are now fully integrated in capitalist society.

The French Marxist André Gorz remains a powerful but also ambiguous expression of this tendency. For someone like Philippe Van Parijs, deeply indebted to Gorz, it also goes hand in hand with extending Marxist theory using tools from neoclassical economics and neoliberal thought. This revolution then received a policy complement: Basic income could act as a wedge that would move the left beyond its calcified attachment to the “traditional” labor movement and offer a less paternalist version of social rights—once again, “welfare without the welfare state.”

DSJ: I think most people today think of UBI in relation to tech and venture capital, and specifically people like Andrew Yang. You refer to it yourselves as the “California Welfare Ideology.” What is behind the tech world’s specific attraction to UBI?

AJ: It’s a multifarious yet revealing attachment. Mark Zuckerberg himself has called for a universal basic income as a “new social contract” emerging out of “conservative principles” rather than the idea of a larger social safety net. The fact that the tech world works with a highly casualized and mobile labor force in cities with high rental costs makes its interest in the proposal cynically understandable. If wages in the service sector are to remain low, and rents need to be paid, cash transfers fill in a useful gap.

There is a broader philosophical account here, however. The example of Chris Hughes, cofounder of Facebook, is particularly telling. When Hughes retired from his company in 2007, he wanted, as many before him did, to “end extreme poverty internationally.” But he wasn’t convinced by much of the top-down kind of marketization that was in vogue at the time. So Hughes quite naturally embraced the idea of a basic income. And by August 2012, he had joined the board of GiveDirectly, one of the most successful development start-ups promoting cash transfers in the Global South. The money, sent to mobile phones, was to be given with no strings attached. Hughes was taken with the idea: Here was the “confidently liberal and market-oriented” strategy he was looking for all along, elegant and improbable in its simplicity. Contrary to the ’90s top-down approach (which was promoted by the likes of economist Jeffery Sachs), this new vision fitted perfectly with Silicon Valley’s instincts for “decentralization” and “empowerment.” It was also eminently market-friendly. In the age of direct digital communication on social media, Silicon Valley likes cash transfers as a type of bottom-up marketization, cutting out the intermediaries and other potential institutional mediators.

DSJ: Generally speaking, what does the rise of the “transfer state”—the idea that the state distributes income through the tax system rather than by socializing investments and expanding public services—tell us about how we relate to politics today? And more generally, what does it say about our contemporary understanding of the state?

AJ: The cardinal questions! It took us a while to realize this, but the book basically uses the basic income as a prism to illustrate a set of developments that we see as more revealing than the proposal itself. So what does the proposal reflect?

I’d highlight several things. The first is a deep change in how societies and states interact at the close of the 20th century. Neoliberalism is but one part of this story. During the inflationary 1970s, capital initiates an offensive on civil society to restore its profit margins. This releases it from the growth model dominant in the postwar period, but it also has highly destabilizing effects on society as a whole. Not only on the left, but also on the right, the intermediary institutions that determined an individual’s relationship and access to the state begin to shrivel. Instead of listening to this civil society, the state increasingly delegates power to technocrats. This also means that the institutions which previously constituted and politicized needs to the state and society wither. Hence, we witness an individualization of the notion of needs not just in economics, but in public discourse itself. Society finds it harder to discuss and agree on what its needs are. Rather than directing investment to respond to those politically defined needs, to the priorities set by society, we see an increase in the use of the fiscal apparatus to alter income redistribution rather than direct investment.

In that sense, the cash-transfer vision not only shows a profound change in the philosophy of welfare and its institutional arrangements, but also a society in which politics as a human activity is in profound crisis. It seems that the market has become the go-to metaphor for human action across the spectrum, an anthropology faute de mieux, as the French say. For those committed to socialism’s original vision, that might read as a depressing diagnosis.

DZV: In a broader sense, we could also say that the rise of the transfer state does mark the shift, during the second half of the 20th century, from a state that acted on the sphere of production to one that only acts on the sphere of distribution. Along the way, it’s the socialist vision that lost its appeal. It’s no surprise that Marx had vehemently opposed what he called a “vulgar socialism” that would consider the question of distribution “as independent of the mode of production and hence the presentation of socialism as turning principally on distribution.” This is something Harry Braverman had already pointed out in his classic Labor and Monopoly Capital, noting that, intimidated by the scale and complexity of capitalist production, the left slowly abandoned its ambition to control production and focused its action on labor’s share in the product. This displacement was obviously not just a technical matter. What we mean when we ask for a better redistribution of income is essentially a society with more equal consumers. The ideal of self-government at the core of the socialist project progressively withered. Rather than allowing us to have something to say about what and how we want to produce, we’d rather argue about how we share the existing cake.

DSJ: If UBI is so friendly to the market and so attractive to capitalism, one might wonder why it hasn’t happened. Your book explains why it has become so popular, but one might wonder why it always fails to become reality.

AJ: In the book, we see basic income as the “asymptotic” limit of a new welfare world. By this we mean that the proposal always seems to be on the verge of happening, but it never quite gets there. Why haven’t we got there?

Some critics of the book have accused us of pretending that the proposal already is a policy reality. But that is not what we argue. The eternal contradiction of basic income proposals is that affordable schemes are insufficient, and sufficient schemes are unaffordable. This not only holds for the fiscal firepower required to finance it: A truly generous basic income would indeed facilitate a retreat from the labor market that would allow for increased bargaining power for workers. The Trump and Biden pandemic checks made it clear how even temporary cash relief has this effect, even if it has no clear consequences for labor organizing and might not stimulate collective action.

Despite dreams of impending automation, capital still needs workers and therefore has no desire to weaken labor discipline. The incremental “cashification” of social-welfare schemes is a better option: replace existing service models with cash, thereby granting companies new markets, but without ever handing out enough cash to allow people to permanently leave the labor market. I’m not sure that we’ll see the implementation of a full basic income in our lifetime in a world in which capital still calls the shots, precisely because the automation revolution has not happened.

DSJ: You two are clearly critics of UBI. Are you suggesting that we return to an older, more traditional vision of social policy? What is your alternative?

AJ: I think attentive readers will have no difficulty discerning our own sympathies. It is hard to avoid the impression that we positively contrast the older, mid-century welfare state with the current transfer model. And indeed, between public health care or job guarantees and basic income, our choice will be relatively easy.

But part of the book’s argument is also to make clear what made the “old” welfare state possible. Reclaiming this tradition cannot be a purely intellectual exercise. We might want to return to the vision of a fully decommodified life that some welfare-state advocates promised. But they could work with an active and densely organized civil society on the left that would push these policy proposals. There is now interesting work, for instance, examining the so-called “welfare workforce,” or the key roles that unions have played in shaping social states both in Europe and the United States.

We all know that those institutions have declined precipitously precisely in the last 30 years—a period that, unsurprisingly, also saw the triumph of the transfer state. Reviving that old welfare tradition does not entail blindness to the exclusionary patterns within it—for instance, its restrictively normative view of what a family looks like. Yet there are still welfare states in Europe which, partly due to union strength, have maintained those older visions while rendering them more inclusive. There is no reason to think that American public health care could not be accepting of other lifestyles if states are pushed to do so.

If Americans decide to collectively provision health care as a social right and not simply pay to go see a private doctor, that will require a collective discussion on what counts as “health.” That remains as tricky a question as it was in the 20th century. The legacy discussed in the book should certainly inform our discussions about what life looks like beyond the market in the 21st century.

DZV: I think our book is also an invitation to think about how we can imagine a better society that goes beyond simple income redistribution—especially in the era of Trump, war, climate breakdown, and inflation, in which it seems irrevocably obvious that narrow claims for cash won’t deliver any return to an illusory normality. It’s only by creating institutions that allow society to collectively shape its own destiny that we could perhaps offer a true end to the “end of history.”

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