Guaranteed Income, Universal Basic Wage or the Abolition of the Wages System?

Posted: December 25, 2016 by Admin in 'Counter-insurgency', Alienation, At the coalface, Capitalist ideology, Class Matters, Economics, Limits of capitalism, Political & economic power, Poverty & Inequality, State capitalism, Workers' rights, World economy

download-1This is a translation of an article in issue 177, July–August 2016, of Lutte de Classe (Class Struggle), the magazine of Lutte Ouvrière (Workers Struggle), a significant revolutionary Marxist organisation in France.  We have taken it from the site of LO’s co-thinkers in the United States, here.  While the original article naturally uses mainly French examples, this is a discussion which is going on in New Zealand at present and that anti-capitalists need to think carefully about.

Over the last few months, there has been a lot of debate about two ideas that appear similar but, in reality, are miles apart: “guaranteed income” and “universal basic wage.” The first is defended not only by left-wing or ecology activists, but also by self-proclaimed reactionaries. The second, seemingly closer to Marxism, stems from the works of Bernard Friot, a sociologist and member of the French Communist Party (PCF).

downloadFriot’s thesis is quite popular among young people and the various milieus that make up the Nuit debout movement (Up All Night, similar to the Occupy Movement in the U.S.). It may appear more attractive at first glance than the other proposals – but it is not, as we will see, any more revolutionary than the others. They are all stamped with a political ideology that is the complete opposite of ours.

“Universal Income” and its Various Forms

A referendum held in Switzerland on June 5, 2016, put the idea of “guaranteed income” in the spotlight. The question was whether the State would pay the entire population a fixed sum of 2,260 euros per month for adults and €565 for children, from birth to death, working or not. The project, called “unconditional basic income” in Switzerland, was rejected by the majority of Swiss voters. But there was much talk about this idea, which has been promoted for many years by a number of very diverse political currents.

In France, the French Senate set up a fact-finding committee to investigate the usefulness and possible forms that a basic income might have. During the week of June 13, the committee held a hearing with presentations by people who defend such a project: members of numerous associations such as the French Movement for a Basic Income and the Association for the Establishment of Subsistence Income.

It is fair to say that, if the Senate is interested in the proposed measure, whatever its name, it is neither revolutionary nor even radical. The measure is, moreover, fervently defended by the very Catholic and reactionary Christine Boutin (who calls it “universal dividend”), by a former minister who served under Sarkozy, Frédéric Lefebvre, by the libertarian, Alain Madelin, as well as by a large number of the clergy from all denominations and several Masonic lodges.

On the Left, the idea is also defended by the Left Party (Parti de gauche), part of the PCF, the ecologists, Attac and by the publishers of Le Monde diplomatique.

The idea is simple: do away with all government provided income support programs and benefits and replace them with a single government payment to everyone. The amount to be paid differs according to the group defending the idea, some proposing 450 euros per month, others 800. Some want to get rid of all government benefits, including for low income families and aid for housing ; some just want to get rid of some of them. But, whatever the format, the idea is that everyone gets a check from the government, whether they are rich or poor, workers who are employed or unemployed, stockholders or minimum wage earners, adults or children.

This idea is not new: it dates back to the 18th century. In 1795, Thomas Paine, who was probably the first to develop a theory on the subject, termed it “basic natural rights income.” It had a new lease on life in the 1970s among ecologists, and more recently, with the surge of “anti-growth” currents.

During the 1960s and 1970s, the same idea was defended by so-called “neo-liberal” – that is, conservative – economists such as Milton Friedmann and Friedrich Hayek. But Keynesian economists were also supporters of the idea that consumer spending would stimulate an economic upturn, convinced as they were that a basic income would provide buying power to the poorest levels of society, which would benefit the market.

A Measure That Even the Bosses Defend

In reality – and this is what makes it difficult to understand – the idea of providing a basic income is defended by people with very different motives. Some are obviously guided by generosity and wish to ensure that poor people do not sink deeper into poverty. For the anti-growth activists, it means finding ideas that will permit emancipation from work. For others, it will simply be a way to cut costs. Frédéric Lefebvre and Julien Bayou gave this very cynical explanation in Le Figaro: “The state of Utah in the American West, which has provided housing to homeless people, calculated the cost of a homeless person, taking into account the direct and indirect costs (prison, emergency hospitalization, destruction of public facilities), at $16,870. By giving them a roof over their head and a social worker to follow up their case seven days a week, the cost is one-third lower, i.e. $11,000! Ten years later, 75 % of the homeless in Utah are in housing, have someone to follow their case, and all for a lower cost.”

For still others, it means boosting consumer spending without the bosses having to increase wages. Introducing basic income would provide purchasing power to people who now have none; for example those under 25 who are out of work who, at present, do not receive anything. If we take Christine Boutin’s proposal (200 euros per month for those under 18 and then 400 euros per month), this means that a young person who spends none of his or her allowance will have savings of 43,200 euros when they reach 18 years of age! It is easy to imagine that capitalists, as long as it doesn’t cost them anything, would welcome several million young consumers with savings in their bank accounts.

There are quite a few big bosses in the United States who are starting to defend the idea of a universal basic income, for reasons that are in no way philanthropic. Some have been very frank about it, like the billionaire Albert Wenger, head of Union Square Ventures, a venture capital company. He argues that with the unavoidable rise in unemployment, setting up a universal basic income would play a useful role as a social “buffer” against revolt. It would also compensate for the destruction of the few remaining workers’ rights as a result of recent labor law “reforms” and for increasing job insecurity brought about by such “reforms.” Bosses like Wenger dream of a society where workers would have a small nest egg guaranteed by the State, where capitalists could employ such workers when and where it suits them, with no obligations for the bosses and no protection for the workers.

Paid for by the Population

One thing that the different forms of “guaranteed income” have in common is that none of them considers financing this measure by reducing the huge profits of the corporations or by taking it from the capitalists’ fortunes. For everyone who defends this idea, it is a question of reorganizing taxes and social benefits. Implementing guaranteed income would indeed cost several hundred billion euros. In Germany, for example, its defenders reckon the cost to be 580 billion euros per year. There are any number of ideas on how to finance the measure. Some suggest a single-rate income tax of 25 per cent for everyone. Others suggest increasing the Social Security tax rate to 40 per cent, compensated for by the abolition of all other worker and employer payments into the fund. Others propose a sharp VAT (sales tax) increase. In all these proposals, the workers themselves will be the ones to finance such an allowance. It’s hardly surprising. Given the social divisions in our society, there are only two ways to finance public spending: by taking the money out of profits, or out of workers’ pockets.

It is currently impossible to say if any of these proposals will be tested and applied, whether on a national level or more locally (there is apparently a project under study in several regions of France). It is possible that some experiments may positively affect the poorest or even the population as a whole. Ultimately, Social Security was invented for the greater benefit of capitalists. But this does not mean that it is not useful to the population.

Whatever the case, it will at best be an adjustment to capitalism in crisis, when once again a new crutch is invented to boost consumer spending without touching shareholder profits. This is nothing new, it’s just another version of the proletariat that the patricians of ancient Rome created 2,000 years ago: an impoverished social class to which bread and games were offered in place of a decent life.

Bernard Friot’s Thesis

Even if they are often confused with one another, the proposals made by the various defenders of “guaranteed income” are nothing like the “universal basic wage” or “lifelong wage” proposed by Bernard Friot.

Bernard Friot, a member of the French Communist Party (PCF) since the beginning of the 1970s, says that his ideas are based on Marx and Engels’s economic analysis of capitalism. This is true to a certain extent. He is popular because he is outspoken and does not hesitate, during televised debates, to put his reactionary detractors in their place. He points out the obvious facts: capitalists produce no riches, all profits are produced by wage workers, rich people live thanks to workers and not the other way round, and capitalists are not and have never been anything but parasites on human labor. These ideas are self-evident, but in current times, when so many social values have been lost, they are well worth repeating. Friot is also right when he points out that “universal basic income” is a “crutch for capitalism.”

He has developed his ideas over several years through a militant network called Réseau salariat(Wage Workers Network) and they have been well received in some circles, particularly the Nuit debout movement. For Friot, it is not a question of redistributing taxes to everyone in the form of a monthly amount. He recommends something which seems far more radical – universalizing and nationalizing wages. Everyone would receive wages “from 18 years of age until death,” according to a scale similar to that applied in public service, “where you are not paid according to your job but according to your grade.”

For Bernard Friot, there are two types of property: “property for profit” and “property for use.” The first corresponds, among other things, to ownership of the means of production and also to ownership of any property that is used to make a profit, e.g. a property that is rented out. The second is that of any object owned by a person, e.g. a car or a toothbrush, that is used but not for profit. Friot proposes to transform all property for profit into property for use and thus make all workers “co-owners for use” of all factories. The total sum of surplus value from factories would be shared among several “funds” (along the lines of the national health service or family allowance), in the following manner: 60 per cent into a wage fund, 15 per cent into “enterprise self-financing,” 15 per cent to fund investments and 10 per cent into a “free contributions” fund that would finance free public services (water, energy, transport, health, etc.). The money in the wage fund would be shared among all adults over 18, sorted into four “grades” depending on their qualification. They would receive between 1,500 and 6,000 euros per month. With an average of 2,200 euros per month, Friot calculates the annual expenditure of this fund at 1,250 trillion euros per year.

Friot explains that, thanks to this system, the notion of employment would disappear and, along with it, the fear of losing employment: “Everyone would be liberated from employment,” explains a pedagogical video produced by Réseau salariat. “Wages would be paid out of a special fund financed by contributions. Because everyone is recognized as having the political status of producer, everyone participates in the choice of investments, labor and distribution. [Citizens] are no longer afraid: they all know that their wages will be paid throughout their life, according to their personal qualification.”

If words have any sense, “to expropriate all property for profit” can only mean social revolution. However, neither the term “social revolution” nor the concept are to be found anywhere in Bernard Friot’s program. Worse still, he brandishes these ideas as immediately realizable demands. In a Réseau salariat pamphlet addressed to the Nuit debout movement, Friot’s partisans asserted:“Defending Labor code good, end of the job market better!” In a situation where the working class is not contesting the capitalist class in a mass struggle, what does it mean? For Friot, it just means that such measures could be implemented not through a revolutionary process, but from the top.

What about Revolution?

For Bernard Friot, nothing really needs to be invented. He would use what he calls “the already there,” i.e. Social Security, specifically the part for old-age pensions. He explains that a lifelong wage already exists because retirees receive a monthly amount, even if they are not employed. For him, Social Security represents partial socialization of the riches produced. It is only necessary to extend this to all “surplus value” produced on a national scale, and our troubles are over.

That’s where the problem lies. Nowhere in Bernard Friot’s works can anything be found on how to go from a more or less attractive utopia to a serious political theory. Nothing on how “property for profit” can be expropriated.

The plan that Friot advocates could be one of the ideas to test after a victorious revolution and the expropriation of the bourgeoisie. No definitive theory exists on how exactly society will be organized socially after the revolution. It is likely that, when that stage is reached, a lot of ideas will emerge, numerous systems will be tested. Before it is possible to achieve the total abolition of wage labor, i.e. communism, there will have to be transition phases during which the market will not necessarily disappear right away.

The problem is that such a process plays no part in what Bernard Friot proposes. He does not claim to be a theoretician of post-social revolution. In one sense, he is like the utopian socialists of the 19th century – Fourier, Owen, Cabet, etc. – who, prior to Marx and Engels, imagined perfect socialist societies and even sometimes tried to create them in colonies. These men were socialists, even if their methods, as Marx has shown, were erroneous in that they tried to describe ideal societies without first understanding how capitalism functions and how it can be overthrown. Bernard Friot, however, remains a true reformist: revolution is quite simply absent from his system.

Of course he brandishes certain notions of Marxism and uses some of Marx’s vocabulary, but quite often in a very haphazard way. For example, a large part of his argument is based on the case of retired people. He explains that they, like public servants, “produce value” and are paid with wages. How ridiculous! Even if people who are retired are voluntary workers in charitable organizations or in their own garden, they do not produce value in the capitalist sense of the word. As Marx explains, only the workers who “work for the self-expansion of capital” are productive workers within the capitalist system, i.e. who produce surplus value. It is worth noting that the term “surplus value” does not appear in the works of Friot, who prefers to substitute ideas of his own invention that are not always clear.

There are numerous similar approximations. But Friot really pushes the limit when he gives details about his vision of the process that leads to expropriation and to the running of society by the workers themselves.

For Friot, the best proof that his system is possible is that it has already been tested in part. To those who do not believe workers capable of managing trust funds of hundreds of billions of euros, Friot’s answer is that this has already occurred. Is he talking about the Russian Revolution when the working class took power in Russia? Far from it! He means in 1945 when Social Security was created in France because, he explains, at that time “workers” ran a fund whose budget was comparable to the State budget.

The “workers,” seriously? And this is where we see Friot for what he really is: a reformist who learned the lessons of Stalinism well. The “workers” have never run Social Security, even when it was run (before 1967) exclusively by the unions. Confusing “workers” with union bureaucrats who used to and continue to run Social Security – with profound respect for capitalist property – is not just stupid, it reveals a bureaucratic and Stalinist vision of society and politics. He confuses the working class with its “representatives,” its delegates, even if they are fully integrated in the bourgeois system, or ministers in De Gaulle’s government … or leaders of the Soviet Union!

The Soviet Union and the Eastern bloc countries were also – in the misleading phraseology of the Stalinists – countries “led by workers,” where the factories supposedly belonged to all the workers. This phraseology was a vain attempt to hide the fact that the workers were cruelly oppressed by a caste of bureaucrats who governed the workers “for their own good.”

Bernard Friot idealizes the creation of Social Security, considering it a revolutionary victory. In an interview, Friot got very worked up about the fact that there is no recognition of the “revolutionary militants” who left us “revolutionary institutions” like Social Security. It should not be forgotten that the eminent “revolutionaries” of 1945, the leaders of the PCF, Maurice Thorez and Ambrose Croizat among others, were De Gaulle’s ministers who fought against strikes, which they termed “weapons of the trusts” because they would harm “national reconstruction,” and who covered up appalling massacres committed by the French army in the colonies, from Setif to Madagascar.

The rare cases where Friot attempts to define the way forward for his system show just how much his reasoning is reformist: “We could start [to apply the universal basic wage] with 18–25 year olds” then “bring the retirement age back to 55, then to 50….” This boils down to pushing capitalism back bit by bit just as the “great revolutionaries” of 1945 did… when they were part of the government. But Friot knows perfectly well that the reforms of 1945 (nationalization, Social Security, factory committees, etc.) were never meant to “push back” capitalism, but rather to save and strengthen it.

We really hope that a system of nationalized profits and fair wages for all will see the light of day before society has put an end to exploitation and abolished the wage system. But this can only come about after a phase of social revolution, led by the masses, on the strength of a conscious and armed proletariat. It will certainly not come through a change in government, even a government led by the PCF influenced by Friot’s ideas, even a government that drives change in the Constitution, to which Friot is of course favorable. The expropriation of the bourgeoisie will not happen without revolution. And, if the revolution is to be successful, it cannot be on the scale of one country alone. But thanks to the logic he has inherited from the PCF, Friot does not think beyond the frontiers of France which, in his view, is already half way there thanks to Maurice Thorez.

The world of labor, the proletariat, is absent from Friot’s theories and logic; the proletariat is not an active force for him, is not consciously active in carrying out social transformation. It is only present as a possible beneficiary of proposed reforms, called for and applied by others. This more than anything is what separates us from his theories.

We cannot foresee whether “guaranteed income” as set out at the beginning of this article will one day be set up by capitalists as a crutch for their dying system. We are however quite sure that Friot’s form of “universal basic wage” will never become a reality unless there is a social revolution led by the working class, a revolution of which Bernard Friot is obviously no partisan.


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