You can’t go home again, particularly if your first address was Canberra. I was raised in this social democracy toy-town where sweet subsidies flowed from the federal hive until 1989. Since then, self-government has busied itself playing catch-up with an administrative West that worships the wisdom of business, and considers the future of the people a bit of a bother. This week, it seems the secular prayers of the private sector were answered when local government announced a partnership with Uber. Uber is the future, don’t you know?
Without an unflinching look at the way in which we organise our social and economic systems, Uber will be our future. Sure, it currently provides riders with a low-cost service and drivers with a wage. But this “hack” is already revealing its flaws. The US company, currently valued at US$65 billion, pays about the same tax in Australia as an individual heart surgeon. Its capacity to monitor both riders and drivers might even trouble Edward Snowden. It is bound to vanquish an unresponsive taxi industry and raise its prices after battle. As for all those contractors? Well, when most of the potentially deadly bugs are driven from its driverless cars, these impediments to profit will be forgotten in public conversation until such time as we remember that they vote. They’ll elect a hateful nationalist who was the only person to successfully lie about bringing jobs that no longer exist back, and we’ll call them stupid racists. Even the brown ones.
This is the possible dreadful future for the West. Another one looks nicer. The utopian imagination sees a world of driverless cars, automated farms and robot factories as providing peace and leisure — apolitical futurists like Ray Kurzweil have long predicted a time where we’d all just refine our yoga moves and produce sculptures on our 3D printers. But a society in which we are liberated from work by the technological gains of the capitalist era needs more than a few glossy ACT local government private sector partnerships to set it somewhere north of survival.
“The future currently looks like the Hunger Games,” said Professor Steve Keen, the Australian economist best known for predicting the global financial crisis (and for hiking up Mount Kosciuszko after famously losing a bet that Australian house prices would fall by 40%) and whom I have Skyped for his opinion on the thing most commonly known as Universal Basic Income (UBI), widely discussed by policy wonks of all flavours as the solution to a post-Uber world.
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Yanis Varoufakis, the former Greek finance minister and a friend of Keen’s, also invokes the Hunger Games in his public discussion of the DiEM25 project. We can live like Katniss in a time of poverty and tribalism, or we can all board the Starship Enterprise and flourish in our rainbow outfits. Varoufakis, who, like Keen, has maintained a long and ardent interest in the future of labour, is fond of mentioning Star Trek, a future that can only be made possible, he says, with recourse to UBI.
[Fantasy budget 2015: abolish Centrelink and just give people money]
Varoufakis has taken the decision to be very upbeat in his public presentations, but Keen is a more restrained advocate for UBI — an idea he expresses as Basic Income Guarantee (BIG), that Milton Friedman described as Negative Income Tax and that the Australian Greens pop into their downplayed economic policy pages as Guaranteed Adequate Income. And, if you think that’s an odd collection of people to be advocating for a single idea, you’d be right. UBI, essentially an unconditional sum of money given to all citizens, has many champions.
“It’s not a panacea,” said Keen. But it is an idea whose time, it is largely agreed, has come. Even the thickest and most conservative economic thinkers concede that Fordism — Henry Ford famously paid his workers enough to ensure they could purchase the products they made — is as likely to return as the Model T. Uberism requires amendments if any of us are going to buy anything in a near future of high unemployment. As Keen said, “if you don’t distribute the income, the profitability itself gets challenged”.
Many Silicon Valley business leaders know this, and Elon Musk is among those advocating for UBI. Government tends not to listen to post-Keynesians like Varoufakis or Keen. Or Bernie Sanders, who, prior to his campaign commitment to bring jobs back to the rust belt (they’re not coming back) has considered UBI. But if the Tesla guy, the IPA and moderate economics writers in the Sydney Morning Herald are fighting for it on moral grounds — Peter Martin argues that it will keep people from doing “illegal jobs such as prostitution”, which is now known as sex work and is not illegal in NSW — it is quite likely to become policy.
So, it’s time for those of us with an interest in the future to ask questions about the shape of UBI, which ranges, in the IPA case, from the Friedman free-market model which sees all social services cut to pay for it to more Nordic dreams, such as those of Dr Louise Haagh, which presume no interruption to services, even an expansion of services, and that the rich, who will also receive the UBI, will be taxed to pay for it.
As Keen notes, UBI, which he prefers to know as BIG, left and right can agree on the idea, because they’re talking about very different things. The IPA believes that charitable organisations have always provided social services more efficiently, whereas the material left knows that to be horse shit. The right believes in low taxes and that companies like Uber should be rewarded for their ingenuity, whereas more centrist thinkers, like Canada’s Trudeau government which has approved pilot UBI experiments, still hold out some hope that the rich will agree to pay for a scheme, from which they’ll be beneficiaries.
If they think about it, the rich might. They’ll receive the UBI — we can’t possibly agree to give welfare only to the needy — on which they’ll accrue interest and they’ll still be able to sell to those existing on UBI alone.
I ask Keen if UBI will have an effect, if not on inflation — despite the best efforts of Western governments, desired inflation is currently impossible to achieve –then on cost of living for the people who most need UBI. “It may change price dynamics in some regions,” he said. And you can imagine this might be the case in rust-belt towns whose surviving supermarkets raise their prices.
There are problems with UBI. It may deepen the divide between classes of rent-seekers and renters. It may cause price hikes. It may tempt those companies who still employ people in the future to lower wages. It could worsen the corporate feudalism we see emerging in business models like Uber.
Keen, whose pessimism makes me trust him, reminds us that “capitalism is cyclical”. UBI/BIG is something he sees as a remedy to this stage of history. You have a massive overhang of debt and insecure employment, you must correct it. And, if you’ve given up on fantasies of revolution, you must keep correcting it.
Or you can just order an Uber and ask it to drive you to your childhood in Canberra. One where a patchwork of private and public sector solutions was not applied.