Universal Basic income or Abolition of the Wages System?

Universal Basic income or Abolition of the Wages System?

Capitalism is creating more and more problems for politicians. They have not been able to solve the problem of poverty. Austerity has been imposed on a large section of the working class. Rather than admitting the game is up and there is no solution to poverty in capitalism, politicians are now turning their attention to the introduction of an unconditional basic income, or UBI, or “social wage”.

As a policy, UBI, has already been introduced in some countries, such as India and Brazil while Utrecht in the Netherlands is experimenting with giving unconditional payments for those living on benefits.

There are now several political parties saying that they want it introduced in the UK. The Green Party has supported UBS for many years. At its spring conference in March 2016, the Scottish National party passed a motion supporting the idea that:

… basic or universal income can potentially provide a foundation to eradicate poverty, make work pay and ensure all our citizens can live in dignity” (GUARDIAN 13th April 2016).

Some Labour MPs, including the Shadow Chancellor, John MacDonnell, support UBI’s introduction as being cheaper than the current system of social security. UBI is also seen as a response to the replacement of lower-skilled jobs by robots, which exacerbate inequality, social tensions and violence. UBI would be paid to everyone, whether or not they were in work.

John McDonnell said the research from the Labour group, Compass:

…makes an interesting case for a universal and unconditional payment to all, which could prepare our country for any revolution in jobs and technology to come – it is an idea Labour will be closely looking at over the next few years” (GUARDIAN, 6th June 2016).

UBI is not new. In 1795 the magistrates of Speenhamland in Berkshire began a policy under which farm labourers on low wages had their income supplemented by the poor law. The meeting at the pelican Inn, Speenhamland on 6th May, 1795 was originally convened to fix a minimum wage after concern about:

…the miserable state of the labourers and the necessity of increasing their wages to subsistence level, instead of leaving them to resort to the parish officer for support for their families” (THE VILLAGE LABOURER, Volumes I and II, Hammond and Hammond, 1947, p. 138).

However, the resolution of a minimum wage was not carried. What was passed was a resolution which linked a minimum income to the price of a loaf of bread. In short, minimum incomes guarantee.

The consequence was predictable; Farmers continued to pay low wages using the poor-rates as a wage subsidy. As a result, In-work-benefits went out of political fashion when the Poor Law Reform of 1834 put an end to the Speenhamland System – the rich property owners saw no reason to subsidise the wages of farm labourers - until 1971, when Family Income Supplement was introduced as an anti-poverty measure. After 1834, the workhouse system was bought in, partly as a deterrent, partly to make benefits pay. So reducing the cost to the taxpayer.

And surely this will be the consequence of Universal Benefit Income – a downward-pressure on wages.

Reformers do not or will not understand the social system in which they enact their social reforms. They erroneously believe capitalism can be reformed into something it is not. They believe social problems like poverty can be resolved by the right social reform by the right enlightened politician. They cannot. Capitalism causes poverty because workers and their families are excluded from the means to making a living.

Social reforms take place within capitalism, a system in which the means of production and distribution are owned by the capitalist class to the exclusion of the working class majority. Commodity production takes place for profit, not to meet human needs. Governments are not disinterested referees but serve the interest of the capitalist class. They might try but cannot pass legislation that would threaten the ability of capitalists to compete on world markets or threaten their ability to make profits.

What happened to the Family Income Supplement introduced by the Tory Government of 1971? It did not end poverty because it was never intended to – being set at a very low basic subsistence level. And it was watered down, replaced by the Social Security Act by another Tory government in 1986 as unworkable and inefficient only to be replaced again by Family Credit.

As the Socialist Party of Great Britain pointed out in its pamphlet: FAMILY ALLOWANCES; A SOCIALIST ANALYSIS (1943):

The claim that schemes for social reform can eradicate some or all of the worst evils of Capitalism has often been made in the past and just as often proved to be false” (page. 2).

And it is worth recalling what was said by the 19th century Poor Law reformers and by Lord Beveridge; that at no time should state benefits enable those on benefits to live better than the worst paid labourers.

While in the pamphlet, BEVERIDGE RE-ORGANISES POVERTY (1943), the SPGB commented that social reforms around social security would only “Re-Organise” poverty, not solve it. And the same will be true if, and it is a big “if”, UBI is introduced throughout the UK.

What of UBI in relation to the increasing introduction of artificial Intelligence and robots into the production and the service sectors of the economy? Surely it is irrelevant. The point is the ownership of the robots, what they are used for and for what purpose. Robots, AI and all the means of production and distribution should become the common property of all society under democratic control. Production should not be about making profits but directly meeting human needs. Instead of tinkering with UBI and other so-called “welfare” schemes, socialists urge workers to introduce socialism.

In socialism there would be no poverty, no government hand-outs, no labour market and no wages system with deliberate rationing based on income. The cooperative production of abundance and the elimination of waste would ensure the needs of all society are met.

Social reformers do not learn from history. They introduce reforms on an ad hoc basis to avoid telling the working class the truth – i.e. that the capitalist system cannot be run in the interest of all society. Surely the very fact that social reform have to be continually introduced in an attempt to eradicate or minimise poverty shows that the problems capitalism causes are immune from political interference. The reason why politicians persist with social reform is a political one – they do not want workers to consider the alternative – social revolution.

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Object and Declaration of Principles


The establishment of a system of society based upon the common ownership and democratic control of the means and instruments for producing and distributing wealth by and in the interest of the whole community.

Declaration of Principles


1. That society as at present constituted is based upon the ownership of the means of living (ie land, factories, railways, etc.) by the capitalist or master class, and the consequent enslavement of the working class, by whose labour alone wealth is produced.

2. That in society, therefore, there is an antagonism of interests, manifesting itself as a class struggle, between those who possess but do not produce and those who produce but do not possess.

3.That this antagonism can be abolished only by the emancipation of the working class from the domination of the master class, by the conversion into common property of society of the means of production and distribution, and their democratic control by the whole people.

4. That as in the order of social evolution the working class is the last class to achieve its freedom, the emancipation of the working class will involve the emancipation of all mankind without distinction of race or sex.

5. That this emancipation must be the work of the working class itself.

6. That as the machinery of government, including the armed forces of the nation, exists only to conserve the monopoly by the capitalist class of the wealth taken from the workers, the working class must organise consciously and politically for the conquest of the powers of government, national and local, in order that this machinery, including these forces, may be converted from an instrument of oppression into the agent of emancipation and the overthrow of privilege, aristocratic and plutocratic.

7. That as all political parties are but the expression of class interests, and as the interest of the working class is diametrically opposed to the interests of all sections of the master class, the party seeking working class emancipation must be hostile to every other party.

8. The Socialist Party of Great Britain, therefore, enters the field of political action determined to wage war against all other political parties, whether alleged labour or avowedly capitalist, and calls upon the members of the working class of this country to muster under its banner to the end that a speedy termination may be wrought to the system which deprives them of the fruits of their labour, and that poverty may give place to comfort, privilege to equality, and slavery to freedom.