The Oligarchs’ ‘Guaranteed Basic Income’ Scam

A number of the reigning oligarchs—among them Mark Zuckerberg (net worth $64.1 billion), Elon Musk (net worth $20.8 billion), Richard Branson (net worth $5.1 billion) and Stewart Butterfield (net worth $1.6 billion)—are calling for a guaranteed basic income. It looks progressive. They couch their proposals in the moral language of caring for the destitute and the less fortunate. But behind this is the stark awareness, especially in Silicon Valley, that the world these oligarchs have helped create is so lopsided that future consumers, plagued by job insecurity, substandard wages, automation and crippling debt peonage, will be unable to pay for the products and services offered by the big corporations.

The oligarchs do not propose structural change. They do not want businesses and the marketplace regulated. They do not support labor unions. They will not pay a living wage to their bonded labor in the developing world or the American workers in their warehouses and shipping centers or driving their delivery vehicles. They have no intention of establishing free college education, universal government health or adequate pensions. They seek, rather, a mechanism to continue to exploit desperate workers earning subsistence wages and whom they can hire and fire at will. The hellish factories and sweatshops in China and the developing world where workers earn less than a dollar an hour will continue to churn out the oligarchs’ products and swell their obscene wealth. America will continue to be transformed into a deindustrialized wasteland. The architects of our neofeudalism call on the government to pay a guaranteed basic income so they can continue to feed upon us like swarms of longnose lancetfish, which devour others in their own species.

“Increasing the minimum wage or creating a basic income will amount to naught if hedge funds buy up foreclosed houses and pharmaceutical patents and raise prices (in some cases astronomically) to line their own pockets out of the increased effective demand exercised by the population,” David Harvey writes in “Marx, Capital, and the Madness of Economic Reason.” “Increasing college tuitions, usurious interest rates on credit cards, all sorts of hidden charges on telephone bills and medical insurance could steal away the benefits. A population might be better served by strict regulatory intervention to control these living expenses, to limit the vast amount of wealth appropriation occurring at the point of realisation. It is not surprising to find there is strong sentiment among the venture capitalists of Silicon Valley to also support basic minimum income proposals. They know their technologies are putting people out of work by the millions and that those millions will not form a market for their products if they have no income.”

The call for a guaranteed basic income is a classic example of Karl Marx and Antonio Gramsci’s understanding that when capitalists have surplus capital and labor they use mass culture and ideology, in this case neoliberalism, to reconfigure the habits of a society to absorb the surpluses.

In the wake of World War II, for example, the capitalists’ problem was solved by heavy investments in the military and war industry, ideologically justified by Red baiting and the Cold War, and by massive infrastructure projects, including the building of highways, bridges and houses, to move people out of cities into suburbs, where consumption rose. The social engineering projects were done in the name of national security and progress. And they made the oligarchs of that day richer.

“The development of a whole new suburban lifestyle (acclaimed in popular TV sitcoms like The Brady Bunch and I love Lucy which celebrated a certain kind of ‘daily life of peoples’) along with all sorts of propaganda for the ‘American Dream’ of individualized homeownership stood at the centre of a huge campaign to construct new wants, needs and desires, a totally new lifestyle, in the population at large,” Harvey says in his book. “Well-paid jobs were required to support the effective demand. Labour and capital came to an uneasy compromise at the urging of the state apparatus in which a white working class made economic gains, even as minorities were left out.”

This phase of capitalism ended once industry moved overseas and wages stagnated or declined. The well-paying unionized jobs disappeared. Jobs became menial and inadequately compensated. Poverty expanded. The oligarchs began to mine government social services, including education, health care, the military, intelligence gathering, prisons and utilities such as electricity and water, for profit. As a publication of the San Francisco Federal Reserve reportedly noted, the country—and by extension the oligarchs—could no longer get out of crises “by building houses and filling them with things.” The United States shifted in the 1970s from what the historian Charles Maier called an “empire of production” to “an empire of consumption.” In short, we began to borrow to maintain a lifestyle and an empire we could no longer afford.

Profit in the “empire of consumption” is extracted not by producing products but by privatizing and pushing up the costs of the basic services we need to survive and allowing banks and hedge funds to impose punishing debt peonage on the public and gamble on tech, student debt and housing bubbles. The old ideology of the New Deal, of government orchestrating huge social engineering projects under the Public Works Administration or in the War on Poverty, was replaced by a new ideology to justify another form of predatory capitalism.

In Harvey’s book “A Brief History of Neoliberalism” he defines neoliberalism as “a project to achieve the restoration of class power” in the wake of the economic crisis of the 1970s and what the political scientist Samuel Huntington said was America’s “excess of democracy” in the 1960s and the 1970s. It achieved its aim.

Neoliberalism, Harvey wrote, is “a theory of political economic practices that proposes that human well-being can best be advanced by liberating individual entrepreneurial freedoms and skills within an institutional framework characterized by strong private property rights, free markets, and free trade.”

American oligarchs discredited the populist movements of the 1960s and 1970s that had played a vital role in forcing government to carry out programs for the common good and restricting corporate pillage. They demonized government, which as John Ralston Saul writes, “is the only organized mechanism that makes possible that level of shared disinterest known as the public good.” Suddenly—as Margaret Thatcher and Ronald Reagan, two of the principal political proponents of neoliberalism, insisted—government was the problem. The neoliberal propaganda campaign successfully indoctrinated large segments of the population to call for their own enslavement.

The ideology of neoliberalism never made sense. It was a con. No society can effectively govern itself by basing its decisions and policies on the dictates of the marketplace. The marketplace became God. Everything and everyone was sacrificed on its altar in the name of progress. Social inequality soared. Amid the destruction, the proponents of neoliberalism preached the arrival of a new Eden once we got through the pain and disruption. The ideology of neoliberalism was utopian, if we use the word “utopia” as Thomas More intended—the Greek words for “no” and “place.” “To live within ideology, with utopian expectations, is to live in no place, to live in limbo,” Saul writes in “The Unconscious Civilization.” “To live nowhere. To live in a void where the illusion of reality is usually created by highly sophisticated rational constructs.”

Corporations used their wealth and power to make this ideology the reigning doctrine. They established well-funded centers of propaganda such as The Heritage Foundation, took over university economic departments and amplified the voices of their courtiers in the media. Those who questioned the doctrine were cast out like medieval heretics, their careers blocked and their voices muted or silenced. The contradictions, lies and destruction within neoliberal ideology were ignored by those who dominated the national discourse, leading to mounting frustration and rage among a populace that had been abandoned and betrayed.

The propagandists for neoliberalism blamed the other—Muslims, undocumented workers, African-Americans, gays, feminists, liberals, intellectuals and, of course, government—for the downward spiral. Politicians who served the interests of the corporate oligarchs told dispossessed white workers their suffering was caused by the ascendancy of these marginalized groups and a cultural assault on their national identity and values, not corporate pillage. It was only a matter of time before this lie spawned the xenophobic, racist hate speech that dominates American political life and led to the rise of imbecilic and dangerous demagogues such as Donald Trump.

“Each of Globalization’s strengths has somehow turned out to have an opposing meaning,” Saul writes in “The Collapse of Globalization and the Reinvention of the World.” “The lowering of national residency requirements for corporations has morphed into a tool for massive tax evasion. The idea of a global economic system mysteriously made local poverty seem unreal, even normal. The decline of the middle class—the very basis of democracy—seemed to be just one of those things that happen, unfortunate but inevitable. That the working class and lower middle class, even parts of the middle class, could only survive with more than one job per person seemed to be the expected punishment for not keeping up. The contrast between unprecedented bonuses for mere managers at the top and the four-job family below them seemed inevitable in a globalized world. For two decades an elite consensus insisted that unsustainable third-world debts could not be put aside in a sort of bad debt reserve without betraying Globalism’s essential principles and moral obligations, which included unwavering respect for the sanctity of international contracts. It took the same people about two weeks to abandon sanctity and propose bad debt banks for their own far larger debts in 2009.”

The oligarchs mask their cruelty and greed with an empty moralism. They claim to champion women’s rights, diversity and inclusivity, as long as women and people of color serve the corporate neoliberal project. An example of this moralism occurred last Tuesday when NPR’s Ari Shapiro interviewed Lyft co-founder and President John Zimmer and former Obama administration official Valerie Jarrett, a member of the company’s board, about diversity and gender equality in the workplace. Shapiro asked about Lyft offering free rides to those marching against gun violence and donating to the ACLU.

“We serve our drivers, we serve our passengers, and we serve the employees that work for us,” Zimmer said in the interview. “And when it comes to [resisting gun] violence, when it comes to equality, those are things that we’re going to stand up for.”

America’s “gig economy,” as I wrote last week in my column, is a new form of serfdom. Corporations such as Lyft use lobbyists and campaign donations to free themselves from regulatory control. They force poorly paid temporary workers, who lack benefits, to work 16 hours a day in a race to the bottom. This neoliberal economic model destroys regulated taxi and livery services, forcing drivers who were once able to make a decent income into poverty, bankruptcy, foreclosures, evictions and occasionally suicide. By fighting gender, sexual and racial inequality in the workplace rather than economic inequality, by denouncing mass shootings rather than out-of-control police violence and mass incarceration, these corporations hide their complicity in societal disintegration. Their empty moralism and faux compassion is an updated version of the publicity stunt that John D. Rockefeller, whose personal fortune was $900 million in 1913, or $189.6 billion in today’s terms, used when he handed out shiny new dimes to strangers.

Neoliberalism heralds a return to the worst days of unregulated capitalism, after the Industrial Revolution when workers were denied a living wage and decent, safe working conditions. Oligarchs have not changed. They are out for themselves. They do not see government as an institution to defend and promote the rights and needs of citizens. They see it as an impediment to unrestricted exploitation and profit. Human beings, to oligarchs, are commodities. They are used to increase wealth and then discarded. Oligarchs don’t propose programs such as a guaranteed basic income unless they intend to profit from it. This is how they are wired. Don’t be fooled by the grins and oily promises of these human versions of the Cheshire Cat. The object is to spread confusion while they increase levels of exploitation.

“Alice asked the Cheshire Cat, who was sitting in a tree, ‘What road do I take?’ ” Lewis Carroll wrote. “The cat asked, ‘Where do you want to go?’ ‘I don’t know,’ Alice answered. ‘Then,’ said the cat, ‘it really doesn’t matter, does it?’ ”

The longer the elites keep us in darkness with their ideological tricks and empty moralism, the longer we refuse to mobilize to break their grip on power, the worse it will get.