One argument from the hard left, who want the state to control everything, is that UBI supporters want to scrap state education, NHS and so on and replace it with vouchers for the private sector to soak up. Some neo-liberals clearly want to do this - so they sold off council housing at undervalue and are now overpaying Housing Benefit to the people who snapped it up.
But this is clearly untrue for most mainstream UBI supporters, who tend to be centre-left, centre-Georgist or centre-right.
I had to deal with such an objection on behalf of the Citizen's Basic Income Trust recently.
To clarify our/their position, I drafted the following article, which will hopefully be added to their FAQs soon:
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Would UBI replace other public services?
Like most countries, the UK provides 'free' state education and 'free' (or very low cost) healthcare. These are similar to a UBI. They are universal, non-means tested, non-taxable, easy to access and there is no stigma attached.
There are clear social and economic advantages to this:
- If left to the private sector, the quality would probably improve for those who can afford it, but the cost to parents and patients would double or treble (see US healthcare system and UK private schools). Lower income households would clearly lose out.
- Health and education businesses can make super profits (a form of 'rent'), because the value of healthcare or education is vastly greater than the cost of providing them. As a near-monopoly provider, the government can keep costs low and pass on the savings to the general population.
- Health and education are public goods and merit goods. We all benefit from everybody else having a reasonable level of education. Employers benefit from having healthy workers, as do members of patients' families. Even if you have no children, it is worth paying some extra tax to pay for other children's education (who will be paying for your state pension1)
So the answer is, no, of course not!
The UBI we envisage would primarily replace existing non benefits which are paid out in cash. The UBI would cover the costs of things which the private sector can provide more efficiently, at lower cost or at higher quality than the government - such as food, utilities, clothing, mobile telephones...
The UBI should not be earmarked for particular items (such as food vouchers or travel passes for the over-60s). For most households, the UBI would only be a small part of their total disposable income, and each individual household is in a far better position to decide how to spend it than the government. The mix changes every week and as children grow up. Some areas have good public transport, so a travel pass in London is worth much more than a travel pass in a rural village with an infrequent bus service.
The other downside of earmarked benefits is that the private sector will respond by increasing prices to soak them up if prices are not capped, so private providers will extract super-profits or rent.
For example, the UK has gone from a situation where over a quarter of households lived in social housing to mainly private provision. In the 1970s, social tenants paid affordable rents and local councils made a modest profit. This was replaced with Housing Benefit after much of the social housing stock was sold off. So instead of the council incurring the modest annual maintenance costs for a council house occupied by a low income household claiming rent relief, the government pays five times that amount to a largely unregulated private landlord, a huge cost to the taxpayer.
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