Marx and a Universal Basic Income (UBI)

Marx, as far as I know, did not explicitly write about the impact on capitalism of the widespread introduction of a universal basic income.

He did however, (in chapter 33 of Capital, Vol 1) write about an equivalent situation: the economics of the early Australian and American colonies.

Because the land was unowned, it was possible for new, penniless immigrants to rapidly acquire a homestead for themselves and their families, making them effectively self-sufficient.

"Free Americans, who cultivate the soil, follow many other occupations. Some portion of the furniture and tools which they use is commonly made by themselves. They frequently build their own houses, and carry to market, at whatever distance, the produce of their own industry. They are spinners and weavers; they make soap and candles, as well as, in many cases, shoes and clothes for their own use. In America the cultivation of land is often the secondary pursuit of a blacksmith, a miller or a shopkeeper.”

This makes capitalist production difficult.

"The absolute population here increases much more quickly than in the mother-country, because many labourers enter this world as ready-made adults, and yet the labour-market is always understocked. The law of supply and demand of labour falls to pieces.

On the one hand, the old world constantly throws in capital, thirsting after exploitation ...; on the other, the regular reproduction of the wage labourer as wage labourer comes into collision with impediments the most impertinent and in part invincible. ...

The wage-worker of to-day is to-morrow an independent peasant, or artisan, working for himself. He vanishes from the labour-market, but not into the workhouse. This constant transformation of the wage-labourers into independent producers, who work for themselves instead of for capital, and enrich themselves instead of the capitalist gentry, reacts in its turn very perversely on the conditions of the labour-market. ...

It avails him [the capitalist] nothing, if he is so cunning as to import from Europe, with his own capital, his own wage-workers. They soon “cease ... to be labourers for hire; they... become independent landowners, if not competitors with their former masters in the labour-market.” ...

“Our capital,” says one of the characters in the melodrama, "was ready for many operations which require a considerable period of time for their completion; but we could not begin such operations with labour which, we knew, would soon leave us. If we had been sure of retaining the labour of such emigrants, we should have been glad to have engaged it at once, and for a high price: and we should have engaged it, even though we had been sure it would leave us, provided we had been sure of a fresh supply whenever we might need it.”

But sadly not. This little difficulty in kick-starting American capitalism was, however, only temporary.

"On the one hand, the enormous and ceaseless stream of men, year after year driven upon America, leaves behind a stationary sediment in the east of the United States, the wave of immigration from Europe throwing men on the labour-market there more rapidly than the wave of emigration westwards can wash them away.

On the other hand, the American Civil War brought in its train a colossal national debt, and, with it, pressure of taxes, the rise of the vilest financial aristocracy, the squandering of a huge part of the public land on speculative companies for the exploitation of railways, mines, &c., in brief, the most rapid centralisation of capital.

The great republic has, therefore, ceased to be the promised land for emigrant labourers. Capitalistic production advances there with giant strides, even though the lowering of wages and the dependence of the wage-worker are yet far from being brought down to the normal European level."

In Marx's time, the mid-nineteenth century, working class factory life was truly horrendous. This is well-documented in the later chapters of Capital Vol 1.

What lessons can we learn for the twenty first century?

If people can genuinely acquire the necessities of life without labouring for wages then most - given a free choice - won't be signing up as employees. They may do voluntary work or various leisure activities .. but clocking in every day? Forget it .. though work that was interesting and not coercive might still attract a few economically-self-supporting individuals.

I offer you the example of the recently-retired on good pensions.

Taken in the round a UBI set at the level of the average wage would be strongly subversive of the continued operation of a capitalist economy. Pitched at a subsistence level as a variant of welfare, it's a different story.

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Capital Volume 1, which I've just completed, is an eclectic book. The first four chapters are rather abstract, dry and repetitious although not too intellectually demanding. They are necessary, however, to establish the foundation for the rest of the book.

Subsequent chapters alternate between conceptual analysis (interesting but quite repetitive) and detailed anthropological/statistical studies buttressing and illustrating the economics. Generally they come down to the appalling conditions of the working class of the time, mostly in England.

The last part of the volume is a very interesting account of the process of capitalist rise from the ashes of feudalism. Broadly answering the question: where did the working class and the capitalist class actually come from?

Marx is a very verbal thinker, avoiding mathematics and equations. Everything is explained in words which can help understanding while simultaneously hindering it. If only he had formalised his concepts while retaining the helpfully-tutorial explanations; most modern accounts do that.

I personally found it useful to have Marx's reproduction equations in mind as I read the volume.

Next is Volume 2, where we move from production to exchange.