Economic Update with Richard D. Wolff
Episode: Beyond Basic Universal Income
Date: December 19, 2019
Episode Overview
In this episode, economist Richard D. Wolff provides a deep dive into Universal Basic Income (UBI)—its origins, applications, and underlying economic structures. Wolff critiques current approaches to poverty and unemployment, examines real-world experiments with UBI (notably Alaska’s Permanent Fund), and challenges listeners to imagine alternatives beyond simply distributing cash, focusing instead on how technological progress could benefit everyone through expanded leisure. The episode ultimately questions whether UBI is the best systemic solution, or merely a stopgap for deeper flaws in capitalist economies.
Key Discussion Points & Insights
The Problem with Welfare and Minimum Income Programs
- Traditional Welfare: Existing systems provide financial assistance solely to the poor or unemployed.
- Issues:
- Divide between those who work and those who receive welfare (00:55).
- Creates social tensions, "jealousies, envies, tensions and bitternesses" (01:35).
- Politically exploited—workers resent paying taxes to support non-working individuals (02:35).
- Debate over funding—rich/corporations resist being taxed, shifting the burden to workers (03:05).
- Issues:
Universal Basic Income: History and Implementation
- Definition: UBI provides everyone with a flat sum of money solely for being a member of the society, not based on need or employment status (04:10).
- "You don't give poor people money because they're poor ... you give everyone a flat lump sum." (04:22)
- Aims to avoid social division by making payments universal and equal (04:45).
Notable Experiments
-
Alaska Permanent Fund (06:05):
- Established in 1982 by taxing oil resources; revenues invested, and annual dividends distributed equally to all state residents.
- Payment ranges from ~$800 to $2,000 per person/year; significant support even among all political parties.
- In 2015, "a family of four, a little bit over $8,000 was simply given to them and to everybody else equally." (07:17)
- Research shows no measurable effect on employment rates (09:08).
“Doing this had no effect on employment ... crystal clearly that nothing like that happened in Alaska. You gave people money, they didn't stop working or reduce their work commitment at all.”
— Richard D. Wolff (09:03) -
International Examples:
- Brief mention of Finnish experiments; idea itself is "not new or radical" (05:17).
Arguments For UBI
- Reduces inequality and extreme poverty (10:20).
- Utilizes unearned natural resources for public good.
- Lessens economic anxiety during times of technological unemployment.
Arguments Against UBI
- May serve as a band-aid for deeper systemic issues.
- Often funded in a manner that may maintain or worsen inequality unless wealth is properly taxed.
UBI in the Age of Technological Change (Automation & AI)
-
Automation fears:
- Estimations that up to 47% of jobs could vanish in coming years due to automation, AI, and robotics (12:15).
- Capitalist advances increase productivity but often lead to loss of jobs, threatening the system's stability (13:00).
“Capitalism is a system that… seems to accompany technological advance with plunging masses of people into unemployment, which by the way is a profound criticism of capitalism.”
— Richard D. Wolff (13:19) -
UBI as a Pacification Tool:
- Used to prevent societal unrest by softening the blow of mass unemployment (13:40).
Challenging Capitalist Responses: Is UBI the Best We Can Imagine?
- The False Binary:
- Wolff likens debates limited to UBI vs. nothing to being told, “I’m either going to stab you to take your money or I’m going to shoot you to take your money. But it’s your free choice.” (15:18)
- Urges consideration of broader, more transformative alternatives.
Technological Progress: Who Should Benefit?
The Capitalist Model
-
Example: Productivity doubles via technology, half the workforce is laid off, profits go to the owner, surplus labor becomes poor and reliant on welfare/UBI (17:30).
“He [the employer] doesn't need them. He can produce just as much … but his profits have gone way up.”
— Richard D. Wolff (18:55) -
Workers are rightfully skeptical of "progress"—it often means job loss and lower wages (20:00).
The Alternative: Sharing the Gains through Leisure
-
Democratized Solution:
- Rather than layoffs, keep all employees but cut hours—everyone now works half-time but retains full wages and productivity (22:40).
- Productivity gains translate into more leisure for everyone, not just profits for a few.
“If there were a democratic choice, the majority being workers, you can bet would use productivity to produce leisure for themselves rather than profits for the minority.”
— Richard D. Wolff (24:04) -
Benefits:
- No social division between employed and unemployed.
- Right-wing political exploitation is weakened.
- Workers would support productivity advances—improves quality of life for all.
- "If you cut everybody's work hours... all those tensions disappear. Everybody works." (25:25)
-
Ideal System: Worker co-operatives institutionalizing productivity for expanded leisure rather than enhanced profit for owners (27:10).
“Worker co-ops would be institutions that would institutionalize using productivity for leisure and not for the profits of a few.”
— Richard D. Wolff (28:05)
Notable Quotes & Memorable Moments
-
Alaska as a Model:
“We're what Alaska did, anyone can do. Any one of the other 49 states can do it too. … You tax land, you tax corporate profits, you tax wealthy people, you put together a fund, you invest the fund, and then you distribute the amount of money one person gets, the same as every other person.”
(10:57) -
On the Limits of Choice:
“If someone accosted you on the street and said, I'm going to give you free choice, I'm either going to stab you to take your money or I'm going to shoot you to take your money. But it's your free choice. You wouldn't be excited about the freedom of choice because you don't want that choice.”
(15:18) -
On Truly Benefitting from Technology:
“If all the workers understood that every improvement in productivity enhanced their leisure… my guess, we'd have much more improvements in productivity if everybody was on the same page as gaining from it.”
(27:32)
Important Timestamps
- 00:10–05:12: Introduction to welfare, basic income, and their social consequences
- 05:13–11:22: Alaska Permanent Fund—history, operation, and research findings
- 11:23–14:59: Automation's threat to employment and the resurgence of UBI discussions
- 15:00–17:30: Critique of limited policy choices (UBI/welfare as the only options)
- 17:31–22:38: Breakdown of the capitalist model for handling technological advancement
- 22:39–27:40: Wolff’s alternative: using productivity for shared leisure rather than greater profit
- 27:41–29:10: Worker co-ops as systemic solution and episode conclusion
Final Summary
Richard D. Wolff’s “Beyond Basic Universal Income” critically examines popular support for UBI, exposing its strengths and limitations through clear examples and historical experiments like the Alaska Permanent Fund. Ultimately, Wolff argues for systemic transformation: rather than settling for UBI as a palliative measure, society should seek ways to share the benefits of technological progress—especially through reduced work hours and worker control—so that increased productivity translates into more leisure and a higher quality of life for all, not just profits for the few.