Economic Update with Richard D. Wolff — "Beyond Universal Basic Income" (March 28, 2019)

Episode Overview

In this episode, Professor Richard D. Wolff takes a critical look at Universal Basic Income (UBI), examining its history, rationale, and limits. Moving beyond standard debates, he digs into the systemic roots of economic insecurity—particularly under capitalism—and introduces the idea of alternative ways to organize work and distribute the gains of productivity. Wolff's central argument: while UBI addresses some symptoms of inequality, genuine progress requires a larger, systemic shift in how we structure our economy and work.

Key Discussion Points & Insights

1. The Origins and Rationale for Welfare & UBI

• Defining the Problem:
  • Societies have long faced the challenge of supporting "the people for whom such work is not provided" (01:00)—whether due to unemployment or insufficient wages.
  • Traditional welfare models provide targeted assistance, but create social divides between wage earners and recipients of aid.
• Problems with Welfare:
  • Welfare systems create "jealousies, envies, tensions and bitternesses" (02:20) and become political targets, especially when funding comes from taxes on workers rather than corporations or the wealthy.
• The Shift to Universal Basic Income:
  • UBI proposes a flat payment to all citizens, aiming to remove stigma and undercut divisive narratives: "Everybody gets a basic amount of money, and they get that because they're a citizen" (05:00).

2. UBI in Practice: The Alaska Example

• Alaska Permanent Fund:
  • Since 1982, Alaska has distributed oil revenue to all residents (~$2,072 per person at its 2015 peak) (07:20).
  • Funded by natural resource taxes, not income taxes.
  • Significant for family incomes and for reducing inequality.
• Research On Effects:
  • Damon Jones (U. Chicago) & Ioanna Marinescu (U. Penn): Found "no effect on employment" (09:10) after Alaska implemented UBI.
  • Counters critics' claims that UBI discourages work.
• Takeaway:
  • "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" (13:00).

3. The Modern UBI Debate: The Automation Threat

• Technological Change & Fears of Mass Unemployment:
  • Recent interest in UBI is fueled by the threat of automation, AI, and robotics, potentially eliminating up to "47% of jobs that exist today" (15:13).
  • Capitalism, historically, turns technological progress into threats to job security: "The byproduct is unemployment" (14:10).
• Critical Question:
  • "Could we not have an economic system that was able to capture the benefits of technological change...but that didn't have to accompany that good thing with a really bad one, namely the kinds of unemployment, the kinds of deprivation, the kinds of poverty?" (19:10).

4. Challenging the Systemic Roots: Beyond Cash Transfers

• Historical Trend in Labor:
  • In 1950s, >35% of US workers were in agriculture or manufacturing; now 10% (22:45). Technological advances have driven productivity but shed jobs.
• The Logic of Capitalism:
  • Employers have "an incentive" to layoff workers after adopting labor-saving technology, pocketing the difference as profit (26:20).
  • Permanent Tension: Productivity improvements—intended as progress—often harm workers who are laid off or forced into lower-wage work.
  • "Progress in productivity renders people poor, who then become recipients of welfare or the very people pointed to as the reason for a universal basic income" (30:00).
• A Democratic Alternative:
  • Rather than layoffs, distribute work: "Every worker keeps his or her job and works half as many hours per day...the workers have gained. What they've all gained is half a workday off" (32:15).
  • This approach would let the gains from productivity manifest as "leisure" for the many, instead of profits for a few.

5. Worker Co-ops and Real Systemic Alternatives

• A Systemic Proposal:
  • If workers ran enterprises democratically, productivity gains could be used to benefit all: "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" (34:24).
  • Worker cooperatives exemplify such models.
• Benefits:
  • Avoids underemployment, social division, and wasted potential.
  • Would make workers advocates for technological progress ("Every worker would get more leisure. The capitalists would not lose any profit. What an arrangement." (37:40)).

Notable Quotes & Memorable Moments

• UBI Reduces Social Tension:
  • "You don't give poor people money because they're poor...Instead, you give everyone a flat lump sum of money. By the way, is this idea not some more, some less? No. Everybody gets a basic amount of money." (05:05)
• Alaska as Leading Example:
  • "In 1982, the state of Alaska made a decision to do something which it has done ever since...The fund was then invested...Every citizen of Alaska the same amount each." (07:00)
• UBI Criticisms:
  • "Whatever you think about the goods or bads of doing something like this here, here's a fundamental...Do we have to have a system, an economic system, in which the good thing, technological advance...is there a way to take advantage of that that doesn't throw large numbers of people out of work?" (19:10)
• The Capitalist Work/Profit Tradeoff:
  • "In a capitalist enterprise...the employer fires half the people...But his profits have gone way up." (26:29)
• Proposed Alternative System:
  • "Every worker keeps his or her job and works half as many hours per day...The majority of people who are workers have benefited from progress. They have four free hours every day that they never had before." (32:18)
• Systemic Critique:
  • "There is no excuse, neither moral, nor ethical, nor democratic, nor logical, to continue with a capitalist system that so badly uses and abuses technical change as the one we have." (39:05)

Important Timestamps

• 01:00 — Introduction of UBI and welfare context
• 07:00 — Alaska Permanent Fund explained
• 09:10 — Research results: UBI's effect on employment
• 13:00 — Alaska-type model as blueprint for other states
• 14:10 — Automation and the threat to jobs
• 19:10 — Questioning if poverty linked to progress is necessary
• 22:45 — Historical context: Labor shift from farm/factory to services
• 26:20 — How productivity improvements create inequality under capitalism
• 32:15 — Alternate model: share work, increase leisure
• 34:24 — Democratically-run enterprises as better stewards of productivity
• 39:05 — Conclusion: Systemic critique of capitalism

Tone & Language

Wolff’s tone is analytical, passionate, and accessible, with a focus on empowering listeners to see the systemic roots of economic injustice—and imagine better alternatives.

Summary Takeaway

This episode is not just a primer on UBI, but a springboard for debate about the very structure of economic life. Wolff contends that while UBI can address some economic pain, the real solution is to democratize the workplace—ensuring everyone shares in the benefits of progress, not just the costs.