A Radical Critique Of Universal Basic Income

Authored by Charles Hugh Smith via OfTwoMinds blog,

This critique reveals the unintended consequences of UBI.

Readers have been asking me what I thought of Universal Basic Income (UBI) as the solution to the systemic problem of jobs being replaced by automation. To answer this question, I realized I had to start by taking a fresh look at work and its role in human life and society. And since UBI is fundamentally a distribution of money, I also needed to take a fresh look at our system of money.

That led to a radical critique of Universal Basic Income (UBI) and an outline for a much more sustainable and just system of money and work than we have now. To adequately explore these critical topics, I ended up writing a 50,000 word book, Money and Work Unchained.

Universal Basic Income (UBI) is increasingly being held up as the solution to automation's displacement of human labor. UBI combines two powerful incentives: self-interest (who couldn't use an extra $1,000 per month) and an idealistic commitment to guaranteeing everyone material security and reducing the rising income inequality that threatens our social contract--a topic I've addressed many times over the past decade.

UBI's goals - guaranteeing material security and reducing income inequality - are not just worthy; they are essential. The question then becomes: how do we achieve these goals?

The conventional critiques of UBI focus on the practicalities of funding such a substantial universal entitlement. Where will the trillions of extra dollars required come from? Can we pay for UBI by "taxing the robots" or borrowing/ printing more currency?

But a radical critique must go much, much further, and ask: is UBI the best that we can do? If we provide the basics of material security--the bottom level of Maslow's hierarchy of human needs--what about all the higher needs for positive social roles, meaningful work, and the opportunity to build capital?

This critique reveals the unintended consequences of UBI: rather than deliver a Utopia, UBI institutionalizes serfdom and a two-class neofeudalism in which the bottom 95% scrape by on UBI while the top 5% hoard what every human wants and needs: positive social roles in our community, meaningful work that makes us feel needed, and the opportunity to build capital in all its manifestations.

UBI is the last gasp of a broken, dying system, a "solution" that institutionalizes all the injustices of serfdom under the guise of aiding those left behind by automation. We can do better--we must do better--and I lay out how to do so in this book.

A radical critique must also examine the widely accepted assumption that automation will destroy most jobs. Is this assumption valid? It turns out this assumption rests on a completely false understanding of the nature of work, the economics of automation and the presumed stability of an unsustainable global economy.

Read the first section for free in PDF format.

*  *  *

I'm offering Money and Work Unchained to my readers at a 25% discount ($7.45 for the Kindle ebook and $15 for the print edition) through Saturday, December 9, after which the price goes up to retail ($9.95 and $20). If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.


Endgame Napoleon RationalLuddite Wed, 12/06/2017 - 19:12 Permalink

His posts are great. This book is probably good, too. I have wondered when someone would go into the “unintended consequences,” which are always there in the wake of implementation of most social programs, particularly the non-contributory ones.

Thing is, we already have the UBI for citizens and immigrants who reproduce while staying below the income limit for free rent, free EBT groceries, free electricity, monthly cash assistance and refundable child tax credits between $3,400 (one child) and $6,318 (3 kids).

THIS socialism for some, too, undermines work and drives wages and work hours down for all of the citizens who are not paid by government for sex and reproduction and who lack spousal income, leaving them with more work “opportunities” that do not come close to covering the cost of major household bills. The pay-per-birth crowd does not care; their major bills are covered by in increasing amounts per child produced. They are fine with part-time jobs that pay beans, and that is exactly why job quality has declined so much.

In reply to by RationalLuddite

MEFOBILLS Radical Marijuana Wed, 12/06/2017 - 20:12 Permalink

Charles Hughs Smith is well meaning.  He let's the cat out of the bag for his philosophy on page 100 of his book, "Automation, Technology and Jobs for all."  The below quotes from his book indicate to me that he doesn't fully understand the differences between money and credit.  This then leads him astray.Quote:If we want to connect the creation and distribution of money/credit with productivity, we must issue money directly to those creating value and boosting productivity, bypassing the few in central and private banks.andBy concentrating wealth and power, centrally issued money doesn't just subvert democracy.  It also optimizes inequality, monopoly, croynism, stagnation, low social mobility, stagnation...etc.NOTE Smith's conflation of money and credit, when they are two different things.  Clifford Hughes Douglas, Social Credit theory deconvolutes Credit and Money AND uses the price system for distribution.  Social Credit Theory is also in alignment with the fact that money's true nature is law.  So, Charles is well meaning, but there is already a system invented that "redistributes" but does so by lowering prices for goods at point of sale.  This then lowers the access prices for goods. and hence even a low paying job will allow one to live.  In a Social Credit system, if robots are doing all the work, then the price of goods will drop to very low levels.Social credit system requires debt free money, which then goes on to become savings, which then allows people to pool their money and bypass banks.  In other words central issuance of money actually decentralizes the economy.  Small businesses then begin to form.  Debt free money is pumped into price system at point of sale (to lower prices and liquidate goods), is later taxed away from producers (factories) and then injected into the base of the population, so the cycle can renew.  Producers are getting price feedback about the whether or not their goods are wanted, and hence have data to act on.  If money is injected at family formation, then civilization can renew itself.Yes, it can be a mind twister, but Douglas was a first peer Genius that history has ignored.  There is a ((cabal)) intent on holding onto their money power.The real propblem is usury on money, and various rent schemes (rents are buried in high prices) ... and that also requires a vigilant civilization, which in turn has morality encoded in their law.  The use of force needs to be like TCells in the body, targeted at the criminals. Another thing Smith is confused about is assuming Central Banks are the head of the pyramid.  They are not, Central Banks operate post facto, to provide reserves and liquidity to the corporate private banking system.  Oligarchs buried in TBTF banks and Bond Holders (Debt Holders) are the ones making exponential claims.

In reply to by Radical Marijuana

conraddobler MEFOBILLS Wed, 12/06/2017 - 20:37 Permalink

It's the debt free part that is a non-starter as our current system is attempting to financialize the planet.Money and credit are two different things but spend the same into the system, it's the payback that strips wealth out of the hands of the lower classes into the upper classes, that and inflation but I agree it's in tandem and they are two distinct things.Currently we have adminstrative costs of state, debt service costs and inflation that are all mining the productive class which will soon be replaced by the robot / AI class to the extent technologically possible.None of this really has anything to do with basic humanity other than it's being outsourced at the earliest possible moment to the greatest extent possible at all times.At some point the administrative state class will be thrown over the bank just like us only the military will remain until it's fully automated and then it too will go over the bank.It's like a human farm wind down and before you wind down such a thing you probably have a few buffets that the animal stock won't like.

In reply to by MEFOBILLS

MEFOBILLS conraddobler Wed, 12/06/2017 - 20:42 Permalink

Agree.  Financialization of the planet, which then leads to the worst people in charge.  Kakistocracyhttps://en.wikipedia.org/wiki/KakistocracyImmigration of disparate people is part of Kakistocracy, to then keep a country divided and fighting amongst themselves.  A boot on your neck forever.The outsourcing is due to credit "capital" wanting to return its loan price and make gains.  Immigration of low wage people is for wage arbitrage, and export of jobs (to China, etc.) is for wage arbitrage.

In reply to by conraddobler

conraddobler MEFOBILLS Thu, 12/07/2017 - 01:30 Permalink

Exactly!!I think of all the posters on here I enjoy reading your posts the most as I know you understand exactly what is going on.  The worst are put in charge many times they don't even understand why, many times they think they are good at what they do.They are put in charge as henchmen for the sole reason that they will make passage of any good people past them impossible and also because they will do whatever they are told with no scruples.It will implode on itself, this much is obvious as more and more compentent people are driven from the field no one will be left to actually do anything or produce anything.   It's very Bolschevick in it's makeup I think too.  They will just get the produciton out of slaves or robots and if the slaves shirk they'll just be tossed in favor of automation.I often think though there has to be a few elites who know this won't work though.  They are building a society they don't know how to run, at that point their power will evaporate and those that built it "with tech they have almost no comprehension of" will steal it from them. I wonder if they understand this?Do they understand you can't bribe, intimidate, threaten, cajole, beg, gas light, make depressed, or use sex to get your way with drones and bots?I think they are starting to understand massive data that never forgets forever is a double edged sword that you can't turn only on your enemies, it can turn on you too.Whoever programmed it and built it controls it and you only control the controller until they can usurp you.You as the wealthy elite but otherwise normal person who doesn't understand tech would have NO PRAYER OF DOING ANYTHING ABOUT THIS....UUUUUUGGGGGGGGGGGGGHHHH!Reminds me of the cartoon where the coyote unleashes TAZ on the sheep dog and it just turns around and mauls him.   

In reply to by MEFOBILLS

Zorba's idea Wed, 12/06/2017 - 18:55 Permalink

Get all the names and addresses for the .01%...then get bank accounts for all their offshore bank accounts...then make em an offer they cant refuse. Oh yeah, End the FED!

Spielbank Wed, 12/06/2017 - 18:55 Permalink

In my eyes, UBI can be used to teach people more self-relianceIt's not about Maslow or anything alike, rather here's 1000 USD - period. Go and spend it, but don't come back and ask for more 

Endgame Napoleon Spielbank Wed, 12/06/2017 - 19:23 Permalink

The UBI is a LOT more fair to single, childless workers than pay-per-birth welfare and child tax credits. It also might increase the marriage rate, which has declined greatly since single motherhood became a financial advantage due to our welfare and tax-welfare systems.

I do wonder whether a UBI is financially feasible for any country.

Although many people could easily occupy themselves with avocations to find the fulfillment that careers provide, I also wonder about the social friction caused by idleness.

There is already a lot of it, but social friction is also magnified when jobs are mostly part-time, low-wage, temporary and churn-mobile, with some of the people working those inadequate jobs receiving [layers] of welfare and lump-sum child tax credits that enable “independent” living financed by government, while many others, including many grown men, are living in un-dignified situations under the thumbs of their mommas.

Many bad, bad social trends are emerging due to this deeply unfair system.

For one thing, we have 5% of the world’s population and 25% of its incarcerated humans.

In reply to by Spielbank

Mazzy Wed, 12/06/2017 - 18:57 Permalink

If I am a seller of goods and/or a provider of services, and I KNOW that every single customer and potential customer out there has this additional UBI....I'm going to charge more in order to get a piece of that pie.And guess what...so is every other businessman.What?  You think your rent is going to go DOWN when you have UBI coming in?  Sorry, but if you pay 30-40% (or more?) of your income in rent now, you're going to pay that when every landlord in the country knows you have this UBI floating in.  So tell me, how is that going to help the poor? Do you think auto manufacturers, dealers, leasors, lenders, etc. are going to pass up a piece of your pie?  Nope.  Do you think grocery stores are going to merely charge the same for food?  Nope.  And the American consumer won't help themselves either.  The average person is not frugal.  The average person loves to spend, spend, spend to the max. Every retailer and provider of goods and services already knows that if you make 2k per month and you spend it all now that you're also going to spend it all when you "make" 3k per month.  Example: people who have a $400/mo. car payment now are going to be willing to spend on a $600 a month payment.  No change in percentage terms, but the average brokewad won't care.

Spielbank Mazzy Wed, 12/06/2017 - 19:03 Permalink

That has to be avoided - if it's an additional income then it's just for the bin, straight up. Think it might work in replacement context of all entitlement payments. Gotta ditch all of these and pay everyone the same amount - I'd give people or employers the option to opt and donate that instead

In reply to by Mazzy

Endgame Napoleon Mazzy Wed, 12/06/2017 - 19:28 Permalink

Yes, in suburbs around here where pay is a little higher, you will see that landlords have taken note and vice versa. So, if you look at the rent in a certain suburb, thinking hey I could maybe afford that without any pay-per-birth freebies from Uncle Sam, you will see that the jobs pay less in that area.

In reply to by Mazzy

One of these i… Wed, 12/06/2017 - 19:00 Permalink

What we need to do is change the focus of society form exploring our desires to exploring our contentment.Ban advertising for a start.Replace it with legislation that makes filing a false product review a felony, and we'll over night replace the consumer economy with a user economy, where a new product will only gain traction in the marketplace if it is incontrovertibly better than the old one.Prize durabilty, and promote the refurbishment/re-use paradigm instead of the "throw it away and get a new one" system that we currently have.I could go on, but these sorts of ideas never gain much traction do they...

Endgame Napoleon homiegot Wed, 12/06/2017 - 19:34 Permalink

Oh yes it does for those with productive wombs. Until their kids turn 18, they most certainly do get [a lot] of something for nothing from Uncle Sam and the US Tresury Department, and these moms also get a lot for free at work, where they take frequent mornings, afternoons, days and weeks off with no consequences, even when they do not meet quotas. It is because they form back-watching crony cliques of fellow moms at work. It is also because their spousal income, child support checks or free rent, free EBT food and child tax credit checks between $3,400 and $6,318 enable them to work for very low wages, reducing the labor costs of employers who like to employ mom workers who have “somethin’ comin’ in” to quote one of them from an interview.

In reply to by homiegot

Mazzy Endgame Napoleon Wed, 12/06/2017 - 20:40 Permalink

I know a lawyer in New Jersey who employs 14 women in his office (for him and two partners) where MORE THAN HALF are single moms.  They can do this for the price of 3 or 4 real workers.  Gotta love it.  "Here ladies, take the company card on this Friday afternoon and treat yourselves to some lunch and a couple margaritas"....keeps them coming back to work the following Monday and morale is improved.You don't need a wage that pays New Jersey priced rent when you have child support, WIC, EBT, TANF, and the MacDaddy (pun intended) Section 8 voucher if you can score it.  You cannot get male workers to work for those wages in that type of environment, and even if they could the henhouse would belittle him for not being an Alpha lawyer.

In reply to by Endgame Napoleon

insanelysane Wed, 12/06/2017 - 19:04 Permalink

The problem with UBI is that there are low level jobs that automation can't do but society needs the jobs done.  With UBI you can get paid to do nothing or you can make the same or a little more going to work every day and doing some shit job.  What happens then?

Spielbank insanelysane Wed, 12/06/2017 - 19:09 Permalink

So you are saying it may as well incentivize crappy jobs even more - interesting thought. I'm from Austria where you have a very very socially secure environment, I think here you wouldn't have that problem as everyone already gets money for nothing, but you need big government to verify and calculate...don't know if UBI what be such a good idea in EM countries tho. Super intrigued by that topic

In reply to by insanelysane

ElTerco Spielbank Wed, 12/06/2017 - 20:51 Permalink

I think he's saying that the crappy jobs that have to be done won't be done at all.

Yes, wages for crappy jobs would be pushed up, but in the end those new wages may actually buy less than if no UBI had existed in the first place, requiring UBI to be pushed up to a higher annual amount. Rinse, repeat.

In reply to by Spielbank

rf80412 insanelysane Wed, 12/06/2017 - 19:17 Permalink

Depends on whether UBI would be like SS in that you get it no matter how much you make, so if you still work your low skill job you can take home as much as twice what you did before, with no additional hours or anything.  How's that for an incentive to work?The rich will still make millions in their sleep off of economic rents, while an educated professional might use their UBI as mad money rather than for paying bills.

In reply to by insanelysane

rf80412 Wed, 12/06/2017 - 19:08 Permalink

positive social roles in our community, meaningful work that makes us feel needed, and the opportunity to build capital in all its manifestations

Most people don't have these things anyway.If they can convince you to give up the right or opportunity to have something that you don't have anyway, and in exchange they give you something else that you also don't have, does that count as a free lunch?

Kalki Wed, 12/06/2017 - 19:12 Permalink

Universal Basic IncomeThe first thing that enslavers of mankind do is to subvert language.Income has to be earned - if it's given it cannot be income.It can be welfare, charity, pocket-money etc. If you give your child 20 bucks for the month, it's pocket money. If you give your child 20 bucks to mow the lawn, it's income.Call it Universal Basic Welfare (UBW or UBC or UBP-M) and suddenly it sounds so un-worthy. But call it "income" - then aha! You have the likes of Mark Zuckerberg gushing over it.It's a farce.Kalki 

Anteater Kalki Wed, 12/06/2017 - 19:38 Permalink

You've obviously never seen the corpses of starved childrenfloating down the Amazon River, or experienced the hordesof starving children mobbing you in the Philippines provinces.But you soon will. You won't be able to afford rice and beans.And you will have to hide your good-looking children from the Uber pedophiles cruising the school yards and game parlors.Every 3W disease today, you will experience within a decade.You will abandon your parents, then your children, in the end.

In reply to by Kalki

DEMIZEN Anteater Thu, 12/07/2017 - 02:40 Permalink

if you rent a dual sport and ride into the jungle you'll see armies of drowsy kwashiorkors with swarms of flies orbiting their heads. in the Philippines too, in uncounted numbers, scavenge for worms and fruits. same in indochina or any other SE or SA country.  Those lean big-city teen peddlers with 6packs swarming the taxis are the "elites", the fittest of them.we used to handout around $20 splits in local change but they remembered us and followed us to the hotels and camped in front until one of us showed up. Now my wife asks the driver to stop at random location so she can give incognito and not be followed, but then the driver is pissed - he wants that money for his own kids. life is a cock hungry whore.

In reply to by Anteater

Anteater nmewn Wed, 12/06/2017 - 19:32 Permalink

Rather than deliver a Utopia, importing 1,000,000 H-3B Hindus into USA every year institutionalizes serfdom and a two-class neofeudalism, in which the bottom 95% scrape by on fumes, while the Brahmans hoard what every 0.1% Uber wants and needs: moar. There was a guy passed out on the sidewalk on theroad project I'm working on. It was 32F outside, sowe called the cops. He'd OD'd. The ambulance puthim on a gurney, administered Narcane antidote,waited until he stablized, then laid him back on thesidewalk with a blanket over him, during rush hour. He finally staggered to his feet, kicked the wall ofa coffee hootch because she wouldn't open the window, then stomped off screaming at the world. Now imagine 95,000,000 jobless and/or homelessAmericans, with 1,000,000s of H-3B Hindus flyingover the border every year to steal more jobs away.Imagine your nightly commute through the jungle. Taxes are serfdom. Let the Pentagon hold a bake sale.

In reply to by nmewn

HRH of Aquitaine 2.0 Wed, 12/06/2017 - 19:38 Permalink

I downloaded the PDF. Thanks CHS for the free chapters. On page two, he starts off with the worn mantra about "life being fair." I grew up with parents that were smart enough to teach me, from a young age, this one thing: "life is not fair and anyone who tells you it is, is lying to you."

Sorry, Charlie, life is not fair. Life will never be fair. And no government scheme will ensure equal results for everyone because, I know this is a shocking thing to say, but people are not equal with regard to their abilities and interests.

Ideals are one thing. Paying for those ideals is something else.

I have some advice. Shut down all tax-exempt groups. All of them. I remember learning that the NFL was tax exempt. The NFL? What a joke!

Once Scientology was included in the tax-exempt realm it was clear that this was a scam. If you played the scam well, you could profit. If not? Well no 301C status for you!

And I mean stop this status for everyone. Including universities with huge endowments. Harvard wants poor students to attend? Great! Fund them yourself. End all university tax exemptions, especially for their endowments. End government aid for education. Let kids earn a scholarship or get a job or pay full price.

And oh yes, I say end all tax exempt status for every church. Stop it now.

If people want to talk about radical tax reform that will not happen until all of these cut outs and special exemptions are closed. Same for the stupid foundations. Nothing but virtue signaling.

I cannot believe how Marxist philosophy has tainted western civilization and corrupted our youth to the point where our society may cease to function!


Let the markets self destruct. It can't happen soon enough. The strong will survive and the weak will die. Oh well.

Endgame Napoleon HRH of Aquitaine 2.0 Wed, 12/06/2017 - 20:05 Permalink

List of Free Things for Citizens and Non Citizens With Productive Wombs:

1] $450 (average) to $800 (max) in monthly free EBT groceries;

2] free-to-$35-per-month Section 8 rent or $100 or more off of rent per child in mixed-income units, which are nicer apartments in safer areas of cities than most single, childless college grads can afford, with the developers getting a free, per-unit tax credit to build those things for the “poor” single moms;

3] electricity;

4] Headstart daycare that costs $25, although the moms still get to count that as an expense when their child tax credits are tabulated;

5] monthly cash assistance in the hundreds for kids born within time restrictions, assuming the father(s) are named to the Department of Human Services worker;

6] refundable child tax credit, a check between $3,400 (average for 1 child) and $6,318 (average for 3 kids).

All the single moms or sole, male breadwinners in immigrant households with US-born kids have to do to get these free things is work a part-time, low-wage job, making sure that they do not exceed the income limit for welfare [or] submit proof that they are looking for the required 20 hours of work per week / per welfare “reform.”

That is a big reason why most jobs do not pay enough to cover rent for the majority of humans who cannot reproduce their way into free major household bills.

In the era before most moms worked, wages were higher for breadwinners. Double the workforce by adding all women, and you dilute the wage pool immeasurably, destroying the middle class and the incentive to work. At the top, assortative mates also hoard the few good-paying jobs under a few roofs. That, too, has shrunk the middle class. If most of those moms raised their own children instead of taking a job, the number of middle class households would double, as would the number of households with employer-provided health insurance, which is actually funded via a $260 billion tax exclusion for employers.

NO, feminism is not good for work.

It is not good for kids, either.

Since moms stopped raising their kids, leaving that [work] to elderly grandparents, $10-per-hour daycare attendants and $9-per-hour babysitters with NannyCams, we have seen the following trends:

1) a massive increase in incarceration to the point where we have 5% of the world’s population and 25% of its prisoners;

2) a 300% increase in mass shootings;

3) a middle class in sharp decline;

4) lower life expectancy for whites.

Not good.

In reply to by HRH of Aquitaine 2.0

Enginer01 Wed, 12/06/2017 - 19:53 Permalink

The Bell Curve can be a useful tool to examine the number of people at both ends of the wealth spectrum.  Although many persons at the "lower" end are poor because of poor motivation, inbread laziness, and physical dissability, it is very true that many are held back because of lack of access to good jobs or capital. At the other end of the spectrum many wealthy people and families are exisitng on a self-perpetuating system of Harvard lawyers and high-paid B-school MBA's, All Tax deductible.  As an example of an unlevel playing field, how many people below the poverty level can afford to hire a qualified accountant to overrsee their tax filing.Inequality.  Unearned wealth.  We need to sudenly tilt the playing field higher on the high end, so all that wealth suddenly gets redistributed.  No need for gillotines.   Just a sort of....Jubile   That's it!  God was right in the first place...Leviticus 25:1-4, 8-10.