A new idea for how to strengthen social democracy.
In March, Michael D. Higgins, the president of Ireland, reflected on the impact of the coronavirus on an Irish talk show. He acknowledged the pain and difficulty involved, but also expressed hope that “there will be a wonderful opportunity to do things better.”
“What’s going to emerge globally is the unanswerable case [for] having universal basic services,” he said, “a floor of basic services that will be there to protect us in the future.”
The notion of “universal basic services” (UBS) is a relatively new entrant in the debate over social democratic policy. Much more familiar is the idea of a universal basic income, which would distribute cash payments to every citizen. That once-obscure proposal has recently had a moment in the spotlight, popularized by the presidential campaign of entrepreneur Andrew Yang.
Another familiar notion is a universal job guarantee, which would provide a job for any citizen who wants or needs one. I spoke to Pavlina Tcherneva, an economist advocating for a job guarantee, a few weeks ago.
UBS begins in a different place. Rather than focusing on direct benefits to individuals, it focuses on the social infrastructure that enables individuals to reach their potential. Building on universal, publicly funded services like education and (at least in most countries) health care, it proposes to expand the range of such services to include other building blocks of life in a modern society: food and shelter, housing, access to digital information, and more.
Collectively funding these necessary services would do more to increase disposable income and opportunity for those in need than any kind of cash distribution, UBS advocates claim. And it would protect people better in a crisis.
The formal proposal for UBS traces back to a 2017 report from the Institute for Global Prosperity, which was followed by a supportive literature review in 2019 and, this year, a book: The Case for Universal Basic Services.
Andrew Percy, the director of the Social Prosperity Network at the Institute for Global Prosperity, co-authored the book with Anna Coote of the New Economics Foundation. He was also co-author on both reports and has been working on the UBS idea for years.
I reached him at his home in London on May 30. We talked about why public services are better than public cash, what types of services might be guaranteed, how they would be administered and paid for, and why empowering ordinary workers is the only way to grow the economy in the 21st century.
Our conversation has been edited for length and clarity.
When people think “universal basic,” they typically think about universal basic income — giving people money and allowing them to choose how to satisfy their own needs. Universal basic services starts from a somewhat different philosophy. Can you explain the difference?
A lot depends on your objective. We start off by saying that what we’re trying to achieve is a safety net in society that allows people to reach their potential.
The basic income suffers from a number of flaws it can’t get away from. The first is that it’s either too big, so it’s unaffordable, or it’s too small, so it doesn’t make a difference. In Europe, certainly in the UK, most of the basic income schemes that are advanced here, we’re talking about something equivalent to $85 a week. While that’s going to make a difference to some people, it’s not going to fundamentally change the life choices of the people it’s supposedly targeting.
If the objective is to emancipate people, then [a UBI] has to be close to $1,000, possibly $2,000 a month. At those levels, we’re talking about tripling the federal budget. No one’s really considering that a reasonable proposal. So it suffers from a sort of catch-22.
You’re saying that one of UBI’s big selling points — it’s universal, not means-tested — is also its downfall. Without some targeting, it can’t get big enough to do what it’s supposed to do.
One argument against means-tested social services is that they rob recipients of dignity. They force people to jump through bureaucratic hoops to satisfy basic needs. One interesting argument you make is that public services are naturally means-tested — they are naturally used most by those who need them most.
Exactly. That goes to the another point I would make about [UBI]. There are lots of factors that cause people not to reach their potential that are not solvable through a reasonable individual cash distribution, because they are social infrastructure.
Social infrastructure services flow naturally to basic needs. If low-cost social housing is available, it flows to people who need it rather than people who can afford a larger house. We have a free national health care service here in the UK — people don’t just turn up at the doctor for fun, because it’s free. They go when they’re sick. People go into education programs when they need retraining. Basic social infrastructure is accessed by people at the time of need.
The point of universal basic services is to increase people’s disposable income. It is to enable choice and freedom. You’re meeting costs that provide no marginal utility in emancipation or freedom through public service provision, and therefore you’re liberating disposable income.
Which services have you and your co-author deemed essential? Why those and not others? And who makes the decisions?
We defined seven basic categories of essential services that meet three criteria. For someone to meet their full potential, they need safety, opportunity, and participation. So that is individual safety, opportunity to use their skills and abilities to improve their own lives, and ability to participate in the democracy.
What does that take, in a modern sense? They need somewhere safe to live, access to food, health care access, education, access to digital information and communication systems, and access to a transport system. Our seventh category we call legal, by which we mean access to the institutional mechanisms of democracy and society.
That is not a terribly prescriptive list.
How do you administer all those services to everyone in a country like the US without a large and unwieldy bureaucracy?
America actually runs the largest public health care systems in the world already, through Medicare and the Veterans Administration, which are larger than our NHS here in the UK. Administration is itself a skill within a society, a set of abilities you build up. We shouldn’t be scared of it. We do administer large programs already.
This isn’t about someone in an office in Washington, DC, auditing the Community Food Program in Santa Cruz, or defining how housing is going to run in Seattle. There are two things you need to do at the highest level [of government] possible. One is create rights of citizens to access basic services, however you define those rights, and the second is to raise the money to pay for these services. Then you push those rights and money down through your administrative systems to the lowest level possible. Because in the end, housing has to be administered as a local service; to most people, health care is a primary doctor. It’s much more community-defined.
As long as there’s some ability for a citizen to put their hand up and say, I don’t have access to housing and my local community is unresponsive, and there’s some way to put pressure back on that community, that’s the mechanism: democracy.
How many of these publicly provisioned services would replace markets? Where’s the line where public services should end and markets take over?
The proposal for universal basic services is not a proposal for universal [public] provision. It is not that everybody will live in highly energy-efficient, low-cost, government-provided housing. It is that access to housing is available.
If you go on to the average university campus, you will see what looks very much like a universal basic services system. The university is providing a room in a shared environment, where you share a kitchen with someone. If you’ve got more money and you want to go and live in independent housing, then you move out into a house down the street.
So it’s not a replacement for any of these services. There’s still a private market and it would probably be the majority of consumption, but the expectation is that you’re creating a base floor within that market. And that would stimulate the quality of the market and enable more innovation in the rest of the marketplace.
How would a society like the UK or the US have responded differently to the virus lockdown if UBS were in place?
I would focus on two things.
We sent all the kids home. Out of school, 30 percent of the kids in the UK do not have sufficient access to digital services at home to be able to access remote learning. We have just had this massive impact on one-third of our children, because we couldn’t get it together to provide something that is right there in the street outside, under the pavement.
The second thing is, we see massive lines outside food banks in the United States. If communities all over the United States had invested in community kitchens that provided healthy meals for their schools and meals-on-wheels for housebound, disabled, or elderly people — if that kind of infrastructure already existed — we would have been able to attend to food insecurity in the crisis in a much more effective manner than the scramble we’ve had.
It seems like what you’re arguing for is not that far off from social democracy — simply a more robust public sector.
Right in the nub of this discussion is less the nuances of individual services than a philosophical picking of a direction for the next few decades. You need some story to tell about how we’re going to grow our way out of this.
The sustainable growth potential in advanced developed economies is in some level of redistribution from the top 10 percent to the bottom 90 percent. Are we going to do the classic tax and redistribute, on a cash basis? Or are we going to invest in the infrastructure of our society and the social safety net?
We argue for the latter: Invest in the collective and shared infrastructure of society. That will enable choice and freedom much more effectively.
If you look into the history of 20th century reactions to [economic downturns], the response has always been a step up in public provision. We invest in social infrastructure, we roll out large public service programs. This is just the next step, extending the service range to include things like transport and digital, to supplement the stuff we started doing after in the middle of the 20th century.
I interviewed an economist a few weeks ago who is advocating for a universal job guarantee. Why does a job not qualify as essential?
The trouble I have with the job guarantee system is that it assumes a 20th century attachment to work, that the way for an individual to reach their potential is through an activity that is given to them by the government or the owner of capital.
One of the strongest ways that people derive meaning and value in their life is through the execution of work and their involvement with their community. The question becomes, how do you enable that?
A job with no health care is not much good. A job when your kids can’t go to school, not much good. A job if your kids are stuck at home, but you don’t have internet at home, as a lot of people have discovered during this crisis, is not much good.
The job doesn’t change the basic factors that are causing poor quality of life and poor execution of potential. It’s those social infrastructure services. If you do those properly, you have created an environment in which people are able to execute their labor in pursuit of monetary reward the way they choose. So I would argue that universal basic services includes an implicit job guarantee. It’s just that those jobs aren’t defined by somebody else, they’re defined by individuals.
If you deal with the collective needs in society, you will have created an environment that enables free labor.
The most common American debate of all is: How do you pay for it?
Our original proposal in 2017, which didn’t include social care and child care, was just over 2 percent of GDP. If we wrap more care services in, which we’ve advocated in the book, then you’re probably doubling that, looking at something more like 5 percent of GDP.
That’s a 15 percent tax rise in the United States, and something closer to a 10 or 12 percent tax rise in many other advanced developed countries. That is accessible, but it requires a political narrative to sell.
We modeled our original proposal. For the vast majority of the population, everybody earning median incomes and below, there’s a net positive. People right at the bottom are having something like 60 to 80 percent of their normal costs replaced by public services. That leaves them money in their pocket.
Around the median, there’s a small net benefit, and then at the higher end, we’re talking about net contributions that are in the dozens of dollars a month. But to put society on a sustainable path, we need to get to a higher level of responsibility and pay for the society we want. That means slightly higher levels of tax.
Some people will say, I don’t want to pay more tax. And I say, well, what society do you want? Do you want to sit and enjoy your gated community in your bulletproof house? Good luck to you. That’s not the society I want to live in.
Everyone is free to do whatever they think is democratically appropriate for their society. But the message is: If you want to live in a free and democratic society with a dynamic economy, you’re going to have to invest in social infrastructure.
This case draws on cooperative values — we should be in this together and take care of one another. Something like 30 percent of the US public doesn’t seem to share those values.
I’m trying to make a slightly different case, one that speaks to that 30 percent.
It’s about who’s on the bus with the private, individualized version of society, and who’s still off the bus or running to get onto it. A lot of the people who are on the bus are the ones who are most resistant to [social services], right? “I’ve already spent a lifetime, I’ve contributed to my pensions, I paid my taxes. You guys just need to get off your asses and work harder.”
The argument I’m trying to make to those people is, I know it looks like that to you. But it’s not going to work out. The levels of debt and financialization you’ve created in your society are going to destroy your savings. The signs are already there, that these debts are unresolvable and that finance is corrupting even the things you want done. Do you want to live in a burning planet?
We are trying to create our own little personal reserves of safety and security by amassing personal wealth, but we are corrupting the economy.
We’ve seen societies that have been where we are, with these massive levels of debt and massive imbalances between different portions of society. They only get resolved in three ways: through large-scale bankruptcy, through violence, whether internal or external war, or politically.
So the argument is not so much, you should care more, or be more open-hearted. It’s just straight mechanical realities of the economy. That argument is not going to get everybody in that 30 percent, but there is a portion of people who are tuned in enough to see: You’re not asking me to change my heart, you’re asking me to use my head.
We have faced that choice many times throughout human history — cooperate more, chip in a little more for each other, and prosper, or descend into factional conflict — and we’ve chosen conflict again and again. I’m not asking you to answer for human irrationality, I’m just very pessimistic.
I want to counter and say that there is a history and a pedigree of American society rising to this challenge. When push comes to shove, American society has proved in the past that it has the wherewithal to see the problem and institute changes in the balance of social relationships. Otherwise, it would have collapsed by now.
The 1930s is probably the easiest for people to grasp. The New Deal saved the country. And then in the post-war era, returning GIs got the GI Bill. In each of those cases, America took a step up in collective action, without destroying capitalism and without abandoning democracy. Americans could do it again.
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Author: David Roberts