Breaking the Chain (of Payments)

The response to the coronavirus pandemic has demonstrated that austerity was always a policy choice and not a necessity. States can step in and spend on a massive scale when needed. When the rich and corporations are scared for the very survival of their system, they even drop false pretenses. Governments have taken on debt so that people — and the capitalist system — can survive for another day. And they have done so with the blessing of the Organisation for Economic Co-operation and Development and the International Monetary Fund.

The point, however, of all this out-of-the-ordinary spending was to keep things going as normal as possible. Workers and the unemployed were being paid to stay home to stop the spread of the virus, but also to stop the economy from seizing up from a cascade of unpaid rents and bills, unbought goods and services. The goal was to break the chain of infection while not breaking the chain of payments.

If I can’t pay the grocer, then they can’t pay the wholesaler, who in turn can’t pay the producer. All of them can’t pay their landlords, who, if they have mortgages, then can’t pay the banks. And so on in an endless spiral that ends with mass bankruptcies and unemployment. Income supports let people survive by greasing the wheels of commerce that would otherwise grind to a disastrous halt. They are not about altering the distribution of resources in any more fundamental way.

This is exactly what the right-wingers like Milton Friedman who embraced the idea of UBI had in mind: maintain, even extend, commercial society. To argue that the pandemic shows the necessity of UBI either fundamentally misunderstands what governments are doing by providing income supports during the pandemic or shows a willingness to go along with a market-friendly vision.

If anything, the pandemic has confirmed that UBI can be very much of the status quo. The Right’s version would be insufficient and involve ripping the remainder of the welfare state to shreds. However, support for the policy from the likes of Milton Friedman or the flag-bearers of progressive neoliberalism like Canada’s Liberal Party and the World Economic Forum (where it is stated that UBI “would increase the incentive to take whatever jobs become available,” thus helping with post-pandemic unemployment) should at least raise eyebrows.

The pandemic has also shown that achieving any meaningful UBI would require a crisis of the existing order larger than that engulfing us today. But if we had the power to force that kind of a crisis, would we not want more far-reaching change?

Universal Minimum Income

To be clear: income supports during the pandemic are unambiguously good. They have prevented mass unemployment, kept people from losing their homes, and maintained access to the basics of life — and yes, this includes whatever people want to spend their support money on, especially to deal with the everyday stress of this infernal time. Supports must remain in place for as long as it takes.

But as far-reaching as they have been, pandemic supports have not been a test run for UBI. Across much of the Global North, they have been much closer to a minimum income.

In Europe, states have primarily taken over payrolls: workers not deemed essential and unable to work from home are being paid the majority of their wages regardless. Trying to stem unemployment at the source, European countries have replaced wages in the background so that on paper things look as they did before. Millions of workers, particularly in nonessential services, are effectively being paid to do the job of staying home by the government. Those who can work from home continue to be paid by employers.

In the United States and Canada, unemployment schemes that look much more like quasi-UBI are doing the heavy lifting. In the United States, the CARES Act created one of the biggest expansions of welfare the country has seen. Never mind that it was the result of a particularly American cocktail of incompetence and meanness: the $600 per week extra for the unemployed was decided upon because the computer systems that run state unemployment systems are too old and unreliable to handle complex benefit formulas, and unemployment payments in some states are so low that only such a big expansion would ensure people could still pay their bills.

Regardless, it was accidentally the biggest poverty reduction program in a generation, essentially putting a floor under incomes. Total wages and benefits in the United States in July 2020 were higher than they had been in February, demonstrating more than anything how low wages were before the pandemic struck.

Canada meanwhile continues to pay unemployed workers, carers, and those sick with COVID $2,000 per month. This also creates a de facto minimum income — almost, anyway. Importantly, many on welfare who need the extra income most are excluded. The obvious solution is to make the minimum floor universal, undoing decades of welfare reform that have gone in the opposite direction, eroding benefits and increasing conditionality.

The pandemic has shown how deeply inadequate and punitive our systems of income support and social welfare were in “normal” times. Both unemployment insurance and welfare need to be transformed into stigma-free entitlements for all who need them, not punitive scraps reserved for the deserving poor. The UK’s New Economics Foundation, for example, has developed plans for a minimum income that would cover everyone who has fallen through the gaps of the pandemic safety net at a cost that is low when compared with total pandemic spending.

That the policy response of capitalist states has not actually been a harbinger of UBI does not of course mean that nothing good can come of it. But looking more closely at the lessons of the pandemic and what openings it has produced for the Left shows these to be very different from what advocates of UBI would want to see.

Collective Goods Versus Individual Checks

The pandemic has not only exposed all the existing irrationalities and inequalities of our world, it has cemented the need for collective solutions to our problems. The market won’t find its way out of a pandemic. That is the lesson we can generalize for an era of climate breakdown and galloping inequality.

For now, a slightly different world has been regulated into existence in short order: the question of who works and who doesn’t, what economic activity goes ahead and what doesn’t, is no longer entirely up to the market. Explicit economic planning has taken center stage like the world hasn’t seen since the world wars.

This new disposition, however, is only temporary and designed to enable a return to the status quo. While some things like income supports have been positive, many people have unnecessarily suffered disease, unemployment, eviction, or worse because governments have been too afraid to deviate more decisively from the economic status quo. And many more are sure to lose jobs, homes, and health for the same reason as we come out of the pandemic.

While the pandemic has demonstrated the truism that giving poor people money reduces poverty, it has also demonstrated that we desperately need more public services and public goods. Income supports are being vacuumed up by landlords and debt repayments, just as wages were. The pandemic has shown that in the long term we need to invest in collective solutions, not just cut individual checks.

This includes public health care systems that are truly universal, comprehensive, and have spare capacity to deal with emergencies. It also includes high-quality, public elder care. The criminal failure of privatized elder care has been a commonality across too many countries. At the other end of the age spectrum, the pandemic has only underlined for the millions suddenly forced to care for children at home the importance of high-quality, accessible childcare and public education. Smaller class sizes not only limit the spread of infection, they increase the dispersion of opportunities for learning.

The list goes on. When housing people who are homeless became a public health necessity, it turned out there were vacant sites at the ready to provide shelter. Empty hotels and even empty flats were transformed into homes. More broadly, it showed that we don’t have to treat housing as an investment, but can focus on it as a home. A mass build-out of affordable public housing would generalize this principle, while additionally helping eliminate the cramped conditions in low-income neighborhoods that contributed to unequal infection rates.

The pandemic has shown tiny glimpses of a world where we do things differently. Alongside investment in immediate needs like health, education, and housing, any just exit from the pandemic will require a long period of reconstruction once the worst is over. The climate crisis is waiting at the gates and the case for a Green New Deal of public investment and economic conversion is only stronger today.

One way into these bigger questions is to build on the reevaluation of essential work and essential workers that the pandemic has opened up. People are asking who really produces value: Is it the banker or the delivery driver? Is it the insurance manager or the nurse?

The Left needs to push on this door. Before us stands an opening for renewed struggle over what has value and who decides. The radical and emancipatory counterpoint to the crisis emerging from this pandemic should be a collectively-decided and collectively-provided life.