WELCOME to the first debate hosted by Welsh Voice – the voice of the National Liberal Party in Wales.

It’s fairly well-known that the National Liberal Party wholeheartedly supports the idea of social justice for all. For most Welsh folk, social justice means that there should be a fair and just relationship between the individual and the nation. But how do we achieve it?

One answer may be the introduction of some form of Universal Basic Income – UBI. This means that each individual living in a country would receive some form of regular income from their government. This money would be issued on an ‘unconditional’ basis, which means that it would not involve a means test.

With this in mind our attention was recently drawn to an interesting article – https://www.newyorker.com/magazine/2018/07/09/who-really-stands-to-win-from-universal-basic-income– by Nathan Heller which appeared earlier this year in The New Yorker.

We invite our readers to share their thoughts when this article is reproduced on our Facebook site https://www.facebook.com/groups/52739504313/ It goes without sayin that there are no official links between Nathan Heller, The New Yorker, Welsh Voice and the National Liberal Party. Please note that Welsh Voice has kept the original US spelling and phrases as they are.

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Who Really Stands To Win From Universal Basic Income?

It has enthusiasts on both the left and the right. Maybe that’s the giveaway.

Welsh Voice asks - Would the people of Wales benefit from the introduction of Universal Basic Income?

IN 1795, a group of magistrates gathered in the English village of Speenhamland to try to solve a social crisis brought on by the rising price of grain. The challenge was an increase in poverty, even among the employed. The social system at the time, which came to be known as Elizabethan Poor Law, divided indigent adults into three groups: those who could work, those who could not, and those – the “idle poor” – who seemed not to want to. The able and disabled received work or aid through local parishes. The idle poor were forced into labor or rounded up and beaten for being bums. As grain prices increased, the parishes became overwhelmed with supplicants. Terrorizing idle people turned into a vast, unmanageable task.

The magistrates at Speenhamland devised a way of offering families measured help. Household incomes were topped up to cover the cost of living. A man got enough to buy three gallon loaves a week (about eight and a half pounds of bread), plus a loaf and a half for every other member of his household. This meant that a couple with three children could bring home the equivalent of more than twenty-five pounds a week—a lot of bread. The plan let men receive a living wage by working for small payments or by not working at all.

Economics is at heart a narrative art, a frame across which data points are woven into stories about how the world should work. As the Speenhamland system took hold and spread across England, it turned into a parable of caution. The population nearly doubled. Thomas Malthus posited that the poverty subsidies allowed couples to rear families before their actual earnings allowed it. His contemporary David Ricardo complained that the Speenhamland model was a prosperity drain, inviting “imprudence, by offering it a portion of the wages of prudence and industry.” Karl Marx attacked the system years later, in “Das Kapital,” suggesting that it had kept labor wages low, while Karl Polanyi, the economic historian, cast Speenhamland as the original sin of industrial capitalism, making lower classes irrelevant to the labor market just as new production mechanisms were being built. When the Speenhamland system ended, in 1834, people were plunged into a labor machine in which they had no role or say. The commission that repealed the system replaced it with Dickensian workhouses—a corrective, at the opposite extreme, for a program that everyone agreed had failed.

In 1969, Richard Nixon (1) was preparing a radical new poverty-alleviation program when an adviser sent him a memo of material about the Speenhamland experiment. The story freaked Nixon out in a way that only Nixon could be freaked out, and although his specific anxiety was allayed, related concerns lingered. According to Daniel P. Moynihan, another Nixon adviser, who, in 1973, published a book about the effort, Speenhamland was the beginning of a push that led the President’s program, the Family Assistance Plan, toward a work requirement—an element that he had not included until then.

Nixon had originally intended that every poor family of four in America with zero income would receive sixteen hundred dollars a year (the equivalent of about eleven thousand dollars today), plus food stamps; the supplement would fade out as earnings increased. He sought to be the President to lift the lower classes. The plan died in the Senate, under both Republican and Democratic opposition, and the only thing to survive was Nixon’s late-breaking, Speenhamland-inspired fear of being seen to indulge the idle poor. By the end of his Administration, a previously obscure concept called moral hazard—the idea that people behave more profligately when they’re shielded from consequences—had become a guiding doctrine of the right. A work requirement stuck around, first in the earned-income tax credit, and then in Bill Clinton’s welfare reforms. The core of Nixon’s plan—what Moynihan, in The Politics of a Guaranteed Income (2), called “a quantum leap in social policy”—was buried among his more flamboyant flops.

1. https://www.newyorker.com/tag/richard-nixon
2. https://www.amazon.co.uk/dp/0394463544/ref=as_at?slotNum=0&linkCode=g12&imprToken=RP6RGFyjA-TIzb0w3e3yZQ&creativeASIN=0394463544&tag=tnyuk-21