We need to rethink the parameters of the discussion of a national minimum wage with regard to the Universal Basic Income. While we cannot doubt that the introduction of a Universal Basic Income is a reforming tool, it does have the ability to act as a short to medium term tool to address current structural conditions. There is also the consideration that the introduction of a UBI would have very significant positive net effects. What do we mean by a ‘Universal Basic Income’? A UBI is an income given to everyone irregardless of their employment status, their current income levels or their level of wealth. As a UBI would tend to be in the lower range, it is unlikely that that the wealthy and high income earners will bother to go through the administration of drawing a UBI. We can safely say to a fair degree of certainty that a UBI will provide more assistance to the poor and working classes.
The UBI will have many advantages. Firstly, it will assist in improving the standard of living for all. People will have the income and means to pull themselves out of degrading situations, out of marginalization and assist them in becoming relevant. Secondly, it will assist job seekers insofar as it will provide income security while job seekers negotiate on the labour market. Thirdly, it will assist in re-distributing wealth by specifically taxing wealthy and privileged sectors of society. Fourthly, as the number of spenders with substantial money will be dramatically increased, we will experience a stimulus in the goods market, which in turn will fuel investment and growth in agriculture, industry and manufacturing. This will have a knock-on effect through stimulus – growth in jobs and these sectors will in turn create more jobs, creating more spending, and creating a snowball effect. Fifth, by providing income security, we will see a massive increase in the number of small businesses and co-operatives.
The specific trick of the UBI is to ensure that it is funded primarily through wealth re-distribution. To this end, my proposal is that we impose the following measures:
- A 10% tax on all JSE transactions;
- We raise the effective tax rate on businesses listed on the JSE and those worth more than R10-million to 60%;
- We raise the effective tax rate on all income generated by businesses greater than R10-million/per annum from 38% to 60%;
- We tax all earnings generated by individuals greater than R1-million per annum at an effective rate of 75%.
There is also a strong theoretical level to this discussion, in particular two points that I would like to take up. The first regards the provision of labour. In the current relationships of labour, the workers are forced to sell their labour on the open labour market, and labour becomes a compulsory feature of life. The workers have no choice but to sell their labour, on the open market labour, where capital can influence the supply and demand of labour, thus effectively setting the price of labour: in any profit-seeking system what will tend to happen is that labour will become heavily discounted. The introduction of a UBI will serve to provide workers with a real choice, and allow them to act as effective agents in the open labour market. As a result of their ability to make real labour choices, as a result of income security, workers can obtain in wages the full value of their labour. Work and the type of work no longer are forced choices but the worker is able to gain full control of their labour. Secondly, is the consideration that a UBI is a rental mechanism – essentially it provides people with a rent from the government. Here we need to look carefully at the Grundrisse and admit that Marx made a mistake in thinking that a system that relied on rent, and not fully on labour, would not be able to sustain capitalism. In the current systems of rent production, we see that rent has become the predominant force in capitalist modes of production – IT and digital technology are forms of pure rent; indeed even resources are seen more and more in terms of rental production and not in terms of the labour production of value. Specifically Marx was not able to see the extent to which rent could become privatized, a reality that we currently find ourselves in. The UBI attempts to defuse the monopoly of the rental mechanism, by creating an alternative system of rent. What we do in this process is undermine the very system of capitalist rental mechanisms by providing the population with a system to effectively negate the capitalist benefits of rent.