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Freedom from the Market

Today's announcement that Labour will back Universal Basic Services in the next election is a landmark in the fight to curb the influence of the market over our lives.

A flourishing and prosperous society that works for all, not just a privileged few, requires a foundation of universally accessible goods and services. For generations, this concept appeared to be gaining traction in the UK and around the world. Popular demand and tireless organising led to the introduction of education, healthcare, and other universal services, as well as infrastructure and facilities that were publicly owned and accessible to all.

However, in recent decades these gains have been under attack. The neoliberal experiment holds universalism and public ownership in contempt. It envisions a world in which the market is embedded in every aspect of people’s lives and everything is a commodity to be bought and sold. As part of this experiment, some public services have been dismantled and sold off to the private sector. Others have seen steep rises in user fees and means testing for access. The results have been both predictable and devastating. Rising economic and social inequality, entrenched poverty, deteriorating infrastructure, and environmental devastation to name but a few.

People are increasingly fighting back against this failed experiment. Goods and services that have been privatised are being brought back into public ownership in cities and countries around the world; and the public sector is advancing into new areas (for instance, high-speed internet provision in the United States).

The Labour Party is at the forefront of this global movement. In the 2017 manifesto and its Alternative Models of Ownership report, the party committed to democratic public ownership in a variety of sectors, including the post office, banking, water, energy, and transportation, as well as cooperative and other forms of mutual ownership. In his speech today, John McDonnell has taken the next step and announced the Labour Party’s commitment to the concept of Universal Basic Services.

Also known as decommodification, the concept of making public services free at the point of use and universally accessible has a long history in British politics, most famously through the Beveridge report and the creation of the National Health Service by the postwar Labour government under Nye Bevan.

The founder of the NHS would eventually resign over the introduction of prescription charges, a policy which violates the NHS principle of being free at the point of use, and one that Labour now proposes to finally do away with. While the concept is not new, the phrase “Universal Basic Services” was popularised by a highly influential report from UCL’s Institute for Global Prosperity.

Labour’s paper on the subject explains that “free, universal public services aren’t just about tackling poverty. They are about enabling us all to lead full lives and realising our potential.” It goes on to contend that Universal Basic Services can play an important role in the radical systemic change that is necessary to confront looming threats, such as climate change and automation.

If elected, Labour would roll back the frontier of the market and decommodify services that were previously unavailable on a universal basis. At this conference it has been announced that personal social care and prescription drugs would become part of Universal Basic Services under a socialist Labour government, providing access to medicines and comfort in old age to millions who struggled with costs in the past.

A strong foundation of social security institutions will also be restored as a pillar of Labour economic policy, scrapping cruel sanctions and the shambolic universal credit system. In a capitalist society where so many things are still commodified, welfare rights and social security are still a necessary component of a humane public sector – and those who cannot work due to disability, sickness, or economic frictions should not be humiliated and deprived by a hostile bureaucracy, as portrayed so clearly in I, Daniel Blake.

But the bedrock of Universal Basic Services also provides protection for the unemployed by ensuring that, even when someone falls through the cracks, they have access to the same basic services as everybody else. Its message is: we must decommodify the things people need to survive.

The vision of Universal Basic Services necessarily involves an increase in the size of the democratically planned and publicly owned economy. A truly socialist policy cannot allow the rich to pay for better services than anybody else – which is why the Labour Party is now also committed to ending the educational privileges of the obscenely wealthy through nationalising and integrating private schools.

No more will the Boris Johnsons and David Camerons of the world get a headstart in life – and if the wealthy and powerful want their children to have a good education, they will need to advocate and secure more funding for comprehensive schools. Universalism can build better services for the majority of society by ending the two-tier system where the well-off can simply access higher quality services on the private market. In a Labour society they will use the same services as the rest of us – they will enjoy them, if they are good, and experience them if they are underfunded.

McDonnell has also committed to cutting out profit motives from public services, by taking PFI contracts back inhouse and democratising public ownership of new and existing nationalised industries. This is necessary when we roll back the frontiers of the market – we cannot replace rule by competitive markets with rule by unaccountable technocrats. Instead, our universal public services should be democratically governed by the public they serve and the workers who provide them.

Labour’s paper on Universal Basic Services also argues against the notion that a Universal Basic Income (UBI) can replace the provision of public services, free at the point of use. This marks a sharp departure from the widespread and regressive Silicon Valley conception of UBI as expounded in the United States by presidential candidate Andrew Yang. In this view, Basic Income is a replacement for the welfare system and a top-up for workers’ wages so that they can access needed services like transport, social care and housing in a time of stagnating labor income and job losses, primarily caused by automation. But, unlike Universal Basic Services, this approach would increase the market’s role in our lives, creating more consumption of private services while limiting the size of the public sphere.

The evidence that automation will herald an inevitable age of near-universal unemployment is scant. The reality is that unemployment in our society remains a political choice. There is an immense amount of necessary work which is not being done because of political choices, especially around health and social care, early childhood, university and lifelong education, the building of new green public housing and the retrofitting and renovation of existing buildings. A Labour industrial strategy can be built around expanding public services as well as a Green New Deal – creating millions of unionised green jobs for workers in Britain.

Importantly, though, the party’s proposal on Universal Basic Services does not rule out all forms of UBI – the case for a top-up UBI as a dividend on a citizens’ wealth fund, or a small UBI as a sort of “universal disposable income” on top of a comprehensive suite of universal basic services, is left up to other policymaking processes. But without decommodified services, a universal increase in cash incomes could be mostly captured by increases in the price of necessities like transport, social care, and housing (though Labour does not propose to decommodify housing in its first term, it does commit to controlling rents and building many homes for social rent).

Opponents of Universal Basic Services often claim that it is possible to provide needed services to the poorest in society at a lower cost than is needed to provide a truly universal service – and that we should not concern ourselves with providing services to those who could otherwise afford them. This argument for means-testing, however, fails to understand that “services for the poor” all too often become poor services.

We live and work in the United States, where the non-universal healthcare system is completely dysfunctional. It is one of the most expensive healthcare systems in the world, yet it delivers relatively poor outcomes compared to many other countries. Moreover, millions of people in the country go bankrupt due to medical debt and people are dying every day from lack of access and treatment. The Medicaid and Medicare systems theoretically provide free health insurance to the most needy and the elderly respectively. However, they are under continuous assault as Republicans try to exclude as many people and services as possible through means testing, partial privatisation, and other approaches.

This could be the future of the UK under another Tory government – the gradual erosion of the principle of “free at the point of use” and its replacement with theoretically free services for the poor that are bureaucratic and inaccessible, and of a lower quality than those provided to the rich even when someone manages to jump through all the hoops. The future of the NHS and our existing public services will be determined at the next election.

Labour points out that “there is no inherent limit to where the principle of “free at the point of use” should extend, other than where we as a society set it, and the next Labour Government will extend the scope of our ambition in unprecedented ways.” Over time, a program of extending universal basic services, coupled with a radical democratisation of the ownership and control of the economy, moves us towards a horizon where production is democratically planned, everyone contributes to the best of their abilities, and everyone receives everything that they need.

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About the Author

Peter Gowan is a senior policy associate at the Democracy Collaborative.

Thomas M. Hanna is Research Director at the Democracy Collaborative and author of Our Common Wealth: The Return of Public Ownership in the United States.