Since economic Armageddon seems to be the next stop after the Pandemic, fringe economic theories are edging their way closer to the centre of politics. One such theory is the proposal for a Universal Basic Income, or UBI. According to its supporters, UBI would deliver the sort of profound social transformation that churches pray for. So is it time for churches to join with others in calling for the government to implement UBI?
UBI would work like this: every adult, literally every adult, would receive from the state an income, which is enough to exist on, but only at a basic level. Most people, it is hoped, would choose to do paid work on top of this, but not everyone would, nor would they be pressured to do so. Presumably, one could live reasonably comfortably from the basic income plus earnings from a part-time job, though many, it is envisaged, would work full-time, out of professional or financial motivation. So some people would be much richer than others, but no one would be unable to get by. With virtually every citizen immune from poverty, society would flourish as millions of people were set free, should they so wish, to do creative or socially useful work, with no fear of starvation or homelessness.
Since being out of work wouldn’t lead to starvation or homelessness, employers would have to entice people to work in their call centres, warehouses or shops, by paying them more, and making their working lives more secure, safe and enjoyable, or at least less soul destroying. UBI would greatly benefit family life, especially during children’s early years. Anyone trying to write a novel or make it as a musician or actor is going to love an idea like this. And it’s easy to see why this apparent new Jerusalem appeals to churches.
UBI is counter-intuitive. A common first reaction is to ask how the hell you could do this without bankrupting the country. And yet among UBI’s fervent supporters are economists with serious credentials. They claim that you can do this and see the economy grow.
The initial financial outlay would be vast, but the Pandemic has created conditions in which massive borrowing is not only necessary, it is very cheap, so the political weather is, for now, favourable to governments that borrow large. But UBI couldn’t all be paid for by borrowing, because once growth returns to rival economies, the price of government borrowing will increase, as investors look to park their money where it will be returned with galloping interest.
So a good chunk of the money needed would have to come from taxing the rich more. Perhaps this is the most optimistic claim that UBI’s supporters make. They believe they could succeed where everyone else has failed, by not only raising taxes on the rich, but getting multinationals and billionaires to actually cough up, rather than move their money abroad or into freshly created absurd yet legal tax avoidance schemes.
There would be savings as well as costs, it is claimed, since giving everyone enough money to live on would, at a stroke, make most of the giant dysfunctional bureaucracy that is our welfare state unnecessary. Relieved of much of this burden, the state would then concentrate on actively and competently supporting the very few people who still wouldn’t be able to make a go of it under UBI. As things are, we throw money at social problems without solving them. With UBI, it is claimed, these problems would be tackled effectively at source, ergo UBI would not be as expensive as it first seems.
Seriously, from a church point of view, what’s not to like? Why wouldn’t we take an interest? But some church leaders, and other prominent Christians, are actually calling for the government and/or the opposition to commit to implementing this policy now. I think this is a mistake and here’s why.
Firstly, it should be admitted that UBI is not exactly apolitical. It comes from the left, and not the centre-left at that. Millions of churchgoers, and tens of millions of potential churchgoers will be opposed, and possibly horrified, by the prospect of such a radical economic change. After Brexit, then Covid, do churches really need another issue to divide their congregations, and alienate half or more of the community that they serve?
Then there’s how hubristic it can look for church leaders to be telling politicians which economic policy they should follow. Let’s not imagine that we have some sort of hold on society as though we were medieval churchmen. With our dwindling congregations, and our struggle to get a hearing from most people, the few who actually notice us calling for UBI are likely to think that we have too many problems of our own to be offering economic advice to politicians.
And this is all without considering the possible downsides of UBI, should it come to pass. It sounds like win-win, but what about all the unintended consequences that inevitably flow from such a profound change? We’re not economists, nor are we sociologists, but even if we were, how well could we predict how things would actually work out under UBI?
One obvious concern is that putting so much extra money in people’s pockets would quickly lead to levels of inflation that would cancel out the effect of the free money. This would leave the government having to either keep increasing the level of the UBI, to keep up with rising prices, or to legislate for price controls - something that rarely ends well.
The actual social effects are harder to predict. How might relations between teenagers and their parents or teachers change once young people can expect a guaranteed income from their 18th birthday onward? Maybe it would be a change for the better, but have we even considered this question? How many young people would complete apprenticeships or FE qualifications under UBI? How would attitudes towards University education change? Again, it’s hard to say and that’s the point, we just don’t know.
Would the UK’s population become more or less skilled under UBI? My hunch is that there would be an uptick in the sort of knowledge and skills that are very enjoyable to have, but contribute little or nothing to the economy. (Skills such as mine, I might add!) Would we produce enough key workers under UBI? Or would we have to rely on overseas workers even more than we do now? This isn’t just a domestic question, but an ethical dilemma in respect of the countries from which we recruit doctors and nurses
There would be no shortage of tough questions for any government introducing UBI. Not least of these would concern who could and couldn’t qualify, viz a viz immigration. What would be the consequences of either giving, or not giving, the basic income automatically to those who come to live in the UK from abroad?
We may like the idea that employers would have to work harder to recruit us, but is this what would happen? How would churches respond if businesses looked to import cheap labour rather than pay more to attract homegrown talent?
UBI makes certain assumptions about how humans will behave in given circumstances, and so the debate strays slightly into our territory. But only slightly. Otherwise, we are amateur observers, and we can’t agree on the theological questions about human nature any more than economists agree on the merits of UBI, or any other policy matter.
And that’s the critical point. Economics is like theology: there is never a consensus. This really matters. The church has a duty to speak out on the aims and outcomes of government policy. But it is unqualified to judge between Professors of Economics who differ sharply on the specific technical means through which aims and objectives are to be realised.
This does not mean that churches must never comment on the ‘how’ of government policy, but this should be done with deference to the consensus among experts. And where there is no consensus we must tread very, very lightly. This principle matters a great deal, and ignoring it would be costly. The expertise and eminence of some proponents of UBI is not in doubt, but they are still a minority, and that’s not something we can afford to ignore.
When in the past it was successfully argued that homosexuality should no longer be classified as a psychiatric disorder, this was achieved, in part, by pointing to the consensus among experts - in this case psychiatrists.
When, today, churches call for governments to urgently address climate change, they do so with reference to the overwhelming scientific consensus. If we start to advocate positions based on a minority of experts, no matter how eminent they may be, we enter dangerous territory. If we can dispense with the expertise of the many experts who say UBI would be a disaster, then why not do the same when it comes to global warming?
There isn’t, as yet, a complete scientific consensus on Covid, but still we must stand behind the strong majority of those whose knowledge and experience trumps our own. We can’t make an exception to this rule when it comes to adopting radical economic theories. Backing the minority of pro-UBI economists against majority opinion would be akin to Nigel Farage’s support for the Great Barrington Declaration. It’s hard to see how we could justify one and condemn the other.
We can, and we must speak out on economic outcomes. It is our duty to keep telling the government that the population must have health and security, and should not be starved or humiliated by poverty. This is absolutely our business, and when these outcomes have not been delivered we have a duty to point this out loudly. But what can we ever really say about how these outcomes are achieved, when there are such divergent economic theories aiming for the same outcomes?
Does this mean that churches should keep schtum about UBI? Not at all. Recently, some Unitarians have been calling for more studies of UBI, rather than saying it should be immediately implemented as though it were already a copper bottomed theory. This is absolutely the right way to go. If it can work then we need to know about it as soon as possible. And if it can’t, then we need that evidence too.
But this raises what is, for Unitarians, a rather ticklish question. If it is right to seriously investigate UBI, should we not also investigate the claims of other radical economic theories, which also offer profound and wide spread benefits, and also seem too good to be true? Specifically, should we not consider the merits of a Flat Tax?
The simple idea behind the Flat Tax proposal is that everybody, again, literally everybody (apart from children and pensioners) pays the same very low tax rate. Advocates often say this should be set at 10%, This is every bit as counter-intuitive as UBI. Seeing how our hospitals and schools struggle, despite enormous investment, we ask how any government could hope to fund vital services if it only taxes billionaires and multinationals at the rate of 10%?
But Flat Tax advocates claim that taxing everyone less, including well-off individuals and businesses, would actually mean more money for the NHS and other public services. A low tax economy, it is claimed, would attract so much capital investment to the UK, that a tax take of 10% of the resulting larger profits would bring in higher returns for HMRC than our current much higher tax rates do. According to the theory, tax evasion would almost become a thing of the past, and wealthy individuals and businesses would spend their increased wealth within the UK economy, creating more jobs, leading to more tax returns, which would mean yet more money for the NHS. It is also anticipated that the wealthier population would give more to good causes than it currently does. In this low tax generated boom there would be jobs a plenty, meaning wages and working conditions would improve as employers compete to attract and retain employees who are increasingly able to pick and choose who they work for. It sounds like something between paradise and nonsense, but what if it really worked?
UBI and the Flat Tax come from opposite sides of the political spectrum, yet they have much in common. They are both simple and universal in their application, and they both promise lavish, transformational results. They both seem too good to be true, and yet they are both proposed by some very serious economists, with masses of data and theory to support their case. If either of these radical theories really do work, then shouldn’t churches be urging our government to adopt them at the earliest opportunity?
There have been some small trials which suggest that both these theories might work, but they have yet to be tried in any sustained and large scale way, so for now we can only speculate on whether either can actually do what it says on the tin. Any economist could give you a well argued opinion on this, but would ten, never mind a hundred, equally well qualified economists give you the same answer?
UBI is so much more attractive to us than a Flat Tax and it’s not hard to see why. The thought of asking the wealthiest to pay the same rate as the poorest sticks in the craw. How can we ask so little of them? But UBI also throws up its own troubling details. Paying the same basic income to Binmen and Billionaires alike doesn’t exactly smell right either.
Left leaning churches could maybe ponder what they would do if it was somehow proved, without a shadow of doubt, that UBI was not likely to succeed, but a Flat Tax would improve the lives of the most vulnerable in society, as well as the filthy rich?
Equally, how might right wing churches, that are keen on a Flat Tax of 10%, respond if they received a note from heaven saying that a Flat Tax would enrich a few but lead to widespread poverty and social disintegration, whereas a Universal Basic Income would pay for itself and make a more equal, secure and happy society?
Let us acknowledge that whether inclined to the left or the right, we are predisposed to conclude that attractive ideas are more likely to be true than ideas that repulse us on some intuitive or emotional level. Why is it that a certain type of Christian will be keen to believe that UBI will work, another will be keen on a Flat Tax, and others will be suspicious of both? It brings to mind Paul’s words in his letter to Timothy, when he describes those church members who are a bit too willing to entertain exotic ideas as having ‘itching ears’.
Can we recognise ourselves in this description? I think we can, and we should, myself included. We are all drawn to certain ideas, not because we are convinced they are true, but because they are alluring. And we are predisposed to believe some propositions more than others, simply because we find them more agreeable. This really won’t do. We owe it to our poor and miserable fellow citizens to look at all possible ways of relieving their burden. They matter too much for the churches to do anything less.
Very interesting Fran. Thank you.
ReplyDeleteThanks. Glad you liked it.
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