This essay is written to address a different way to look at the relationship between slave/master and employer/employee. This comes from a deep place in me that recognizes the monstrous mendacity, the hyper-hypocrisy, and ubiquitous criminality of a failing capitalist system. This is system built on the exploitation and de-humanization of the worker in exchange for larger shareholder profits. In this essay, I highlight one of Germany’s greatest philosophers, Georg Hegel. My goal is to explain how his dialectic of the master/slave relationship coincides with today’s perilous employer/employee relationship.

We have frequently printed the word Democracy, yet I cannot too often repeat that it is a word the real gist of which still sleeps, quite unawakened, notwithstanding the resonance and the many angry tempests out of which its syllables have come, from a pen or tongue. It is a great word, whose history, I suppose, remains unwritten, because that history has yet to be enacted. – Walt Whitman Democratic Vistas (1871)

The mistake has been to imagine, that because the master dominates the slave, the line of dependency is in one direction, that the slave depends on the master, the master orders, controls, directs, and literally owns the slave. The point Hegel wants to make is that this is only a one-sided perspective. It turns out that it runs the other way too. What I mean is this: the master is dependent on the slave.

Here’s how it works. Precisely because the master can get the slave to do virtually everything he needs; the master becomes dependent on the slave doing everything for him.  And thereby, the very mastery of the slave makes the master the slave of the slave. The slave of his own dependence on the slave. The line of dependency runs both ways. The illusion of the master, that he is in charge is smashed the minute the slave declares he’s not going to do it anymore. He refuses to continue to be a slave whereupon the master discovers his dependence on the slave. And in that act of rebellion, the slave confronts what Hegel is teaching: that the dependence runs both ways, that the slave and the master are caught in a relationship they both depend on.

Now why does Hegel talk about this? Because it gives us an insight into how capitalism works. The capitalist needs the worker. But the capitalist also dominates the worker. The capitalist decides whether the worker has a job or not. That’s an enormous power. The capitalist pays the worker, or not. The capitalist profits from the worker. The worker is dependent for income, for the work, for his/her position in the world, ability to feed their children. The dependence of the worker on the capitalist can appear to be one-sided, slavish in many respects and many workers have felt that. And indeed, the capitalist acts in a dominating way toward the employee all the time. Capitalists are forever trying to replace workers with machines to save having to pay the worker any wages by replacing the costly worker with a less costly computer or a less costly robot. The capitalist is always (in a way) threatening the worker by unemployment by having the worker replaced with a machine. Likewise, the worker is threatened by his/her employer because the employer has the power to relocate production. That capitalist, for example, can relocate to where wages are lower, or threaten your job by moving to China, India, or Brazil, or Mexico.

There’s another way the capitalist can threaten your job. If he chooses not to move the production to another country to catch the low wages there, he can bring the low wage people here and get away with paying them less money for the work that he would have had to pay a native-born person here. So capitalists are always threatening, squeezing, calculating, and conniving to save on labor costs which threaten the worker. The system compels capitalists to do that; they’re competing with other capitalists who are doing it, so they have to also. They depend on profits to stay in business and profits can be enhanced by automating the workers or relocating to lower wages.

But here comes now the other side that Hegel alerts us to look for. The more successful the employer is (replacing workers with machines, moving production out of the country), and the more the capitalist does, he is forced to confront his dependency as a capitalist on the workers. Because having cut the wages or removed the wages of workers, the workers lack the ability to buy. To buy what? To buy what the capitalist has to sell to stay in business. Here in lies what Hegel calls the contradiction: the two-way relationship of dependence. The worker depends on the capitalist to be sure like the slave depends on the master, but the reverse also holds, the capitalist depends on the workers, he depends on the workers to produce whatever it is he has to sell, but he also depends on workers to buy what it is he has to sell. And if they cannot, or if they do not, then the capitalist is as destroyed as the master would be destroyed if the slaves were unable or unwilling to work.

And you know it runs the other way. Workers know that in some sense, even if they can’t say it in so many words, that that capitalist depends on them. That in a way, they have the upper-hand, even though it seems as though that the capitalist does. How do workers have the upper-hand? How do workers make capitalist depend on them?

Well, first of all the workers are the majority, the capitalists are the minority. As it was with masters and slaves and workers long ago who struggled to get universal suffrage, to be able to vote, make political leadership at least subject to one-person-one-vote. And that gives the masses the power through the vote to confront the masters, the employers, and workers use that power, who often choose someone for government that the employers were at best neutral about or very skeptical about. That’s what the workers in England did when they voted to leave the European Union. And that’s what many workers did in this country when they voted for Mr. Trump after the business establishment made it clear that they were at best of mixed minds about him.

Here’s another way capitalists depend on workers. The vast bulk of the police and the army, the enforcers of the rules of capitalism are working people, they are not themselves capitalists. So the capitalists depend on the army functioning the way they want and the police functioning the way they want – and that’s a dependence of the capitalist on the power of enforcement that are workers.

Here’s another way that workers reveal the dependence of the capitalists. They can go on strike. They can say to the capitalist “we won’t work, and you know what Mr. Capitalist, if we don’t work, you don’t make any money, you don’t make any profit, you depend on us for your survival.” Rather like a master depends on the slave whom he has enslaved to do everything for that master.

Then there is that last item, that historically needs to be included. Workers can sabotage the production process. And here the way to explain is it so provide you a history of the word. Sabotage comes from the French word Sabot. And that was the word for the wooden shoes that people in Northern France and Northern Europe used to wear. And when workers who were angry at their capitalist employers, they were known, secretly and quietly, to throw one of their wooden shoes into the machinery in the factory. And thereby to commit sabotage. In other words, it’s another way to remind the capitalist that he isn’t in charge all together. He depends on the workers too.

Well what’s the message and the lesson of Hegel’s teaching? ‘Master and slave’ therefore is not the ‘master in control’ and the ‘slave all together dependent’. The dependency runs both ways, between the lord and the serf in feudalism and now between capitalist and worker, the same two-way dependency. What happens in this system is that you have two choices. You can continue the endless conflict, the endless struggle, the master, trying in everyway to dominate control and profit from the slave, and the slave finding ways to use the dependence of the master to relieve their suffering to impose costs on the master. And the same back-and-forth between lord and serf. And the same back and forth between employer and employee. The struggle can last forever, and take up your whole life, or you can try to make a resolution, what Hegel calls a synthesis of the two opposites: solve the problem of endless conflict between master and slave, lord and serf, employer and employee, by overcoming that relationship.

And what that means in economics is a democratic worker cooperative. Make the workers both the employer and employee. End the struggle between two groups, each dependent on and trying to overcome this dependency and not recognizing that they were locked into a relationship and that the escape from the dependency and the endless struggle requires fundamentally changing the relationship. That’s why as far back as ancient slave society and throughout the history of feudalism, and throughout the history of capitalism, human beings have tried to escape from those tensions, those oppositions, those contradictory struggles to form cooperatives to produce goods in a collective way that did not pit master/slave, lord/serf, employer/employee.

Hegel’s teaching is a way to understand both what ails us in a conflict ridden economic system, and where the escape, the future, the better economic system lies. It lies with an overcoming of the contradictions that beleaguered slavery, feudalism and capitalism. It lies with the democratization of a cooperative community organization of work. Together with the same kind of democratic community organization of the residential neighborhoods and communities where we live.

Wes Fornes

This essay was inspired from readings by economists such as Yanis Varoufakis and Robert Reich. My goal with this essay is to articulate an argument that defends the rational for a universal basic income.

I have a deep belief in the capacity for human minds to work things out for themselves if they don’t have to live in terror.

A basic income is not a question of whether we like it or not, for it will be a major part of any attempt to civilize capitalism. What we are seeing today is capitalism going through a spasm caused by its own generation’s technology undermining itself. In the 20^th century, we had the stabilization and civilization of capitalism through the rise of Social Democracy through the New Deal in the U.S. and the social democratic developments in Europe. But this paradigm is finished and it cannot be revived; but let us remind ourselves of what the Social Democratic and New Deal tradition is all about. First, redistribution of income within waged labour, a kind of insurance for the working class. Let us consider the National Distribution Insurance scheme in Britain after the WWII, and unemployment insurance in the U.S., same with health provision, pension, etc. These were important redistributive measures with regards to insuring and redistribution within the working class. Second, the redistribution between capital and labour, between the rents and labor. This takes the form in minimum wages that are negotiated by the state, and a process of collective bargaining – usually triangular involving trade unions, employers, and the state. And of course taxation: transfers through the taxation system.

This economic transition is dying in the water mainly because of two earthquakes on both sides of the Atlantic. First, the process of financialization which created a huge wedge between capital and labor; creating a new form of capital: financialized capital. This essentially depleted both labor and industrial capital. And this inexorable financialization drive erupted in 2008. So in 1991 socialism died with the fall of the collapse of the Soviet Union, and then after 2008 Capitalism died. We have a new regime now: Bankruptocracy. It’s rules by bankrupt banks. The more bankrupt banks the greater its capacity to mobilize and usurp economic grants and economic value from the rest of society. And the problem with bankruptocracy is that we have a cynical massive transfer of wealth from income and value from production to the financialized and financial sector that remains insolvent in reality, despite the cynical transfer. This has created two things. First, deflationary enforces. Ask anyone working in the central bank of Switzerland today, or the bank of Japan or the bank of England, or the FED – they can’t sleep at night about the fact that about half of the global economy now is languishing now in negative interest rate, and this is a reflection of the collapse of the social democratic and New Deal bargain of the 20^th century. The world after 2008 cannot be understood in terms that made since to the world before 2008 – just like the world after 1929 cannot be understood in terms that made sense in the gold exchange era prior to 1929.

With the deflationary process, we have now the first plank of Social Democratic system dead in the water because the working class can no longer insure itself. Its result is stagnate wages and now its young people are caught up in a duel labor market. The insurance amongst wage laborers is simply not possible because wages have stagnated to such an extent that it is impossible for the working class to insure itself. Furthermore, redistribution between capital and labor is becoming increasingly impossible for a main reason: the politics that have become quite toxic, whether its Greece and Troika, and the Congress vetoing the White House and the White House vetoing Congress. The Social Democratic ideal requires political governance and Europe and the U.S. are ungovernable as we speak.

The second earthquake is artificial intelligence (AI). AI will very soon consume over-repetitive routine work or algorithmic work – especially once machine pass the Turing Test. Once this happens it will impossible for you or I to understand if the person we are speaking with on the phone is a human or machine. Once we have that, we are going to have a massive displacement effect, which, for the first time in human history is going to overwhelm the job creation effect. The net result will be more job destruction than job creation, because, remember the bankruptocracy that I referred to came at the tail end of a 30-year replacement of manufacturing jobs in the developing world with low-wage repetitive work. Thus, the bulk of the jobs created to replace the jobs lost after 2008, 1975 and 1983 were low-waged routine jobs that will be cut immediately once AI overcomes the Touring Test. This displacement is going to reinforce the deflationary forces that keep are central bankers awake at night because it will eliminate a significant measure of aggregate demand. Moreover, it will create an even greater level of income inequality, and a disparity between savings and investment. This disparity between savings and investment will force the rate of interest even below its current low levels.

So this is why a basic income will become a necessary part of civilization and stabilizing the country. This struggle is an ethical one, and an ethical one that doesn’t just simply spring out of a position from the “have’s” but also from a position of the “have not’s”. From Social Democrats, from Leftists, from those whose own since of dignity responds naturally against the idea of something for nothing. This is why it’s important to couch basic income as what it is: it is the idea that we are going to overturn the current narrative of life under Capitalism. The current narrative, the dominant paradigm is what? That we have private production of wealth which is then appropriated by the state for social purposes. In reality, our wealth production is collective, it is social, and only then is it privately appropriated. Unless we make this shift in the narrative, we are not going to be able to succeed or even convince those who would benefit from basic income that it is worthwhile struggling for it.

Take an IPhone, pick it up, and open it. What do you find in it? You find a variety of technologies and each one of them was created by a government grant. None of them was produced by Apple, none by Google – all were produced from some government grant. This is why I’m referring to the collective production of wealth which is then privately appropriated. If you begin thinking of it in this way, then it is easier to start to think of basic income as a dividend. A dividend that goes to the collective that was responsible for collectively producing the wealth, and the gadgets, and the products, and the markets. Because this false and illusory separation between the market and the state, needs to be dissolved. There would have been no markets if there were no states, there is no Capitalism if there were no state, no Apple or Google if there were no state; and similarly there would be no state if there are no private entrepreneurs and no state if there were no firms, we need to dissolve this false division.

And we have to attack the narrative head on: basic income is about giving money to the underserving, it is about giving money to the rich, it is about giving money to the beach bums. So we should not be sidetracked simply talking about good people getting money that they deserve; we should talk about underserving people that get money courtesy of the fact that they are members of a society that is collectively producing wealth. And on top of this, we need to add to the narrative stabilization. Think about it, in Europe and U.S. today, a basic income would really help central bankers go to sleep at night. It will be counter deflationary, it will be a unique defense against the slow burning recessionary impact of 2008.

Now there are decent arguments against basic income that we must not avoid. For instance, the rich do not need a basic income. Sure, but they don’t need to have the first ten-thousand dollars that they make being tax exempt either. And nobody’s worried about that. Surely, we hear, “it is better to target the money we have around those that are deserving.” Yes, but you have to think about the other side of the coin. To separate the deserving from the undeserving you need a bureaucracy whose purpose is to do that. Bbureaucracies tend to replicate itself, bureaucrats love to replicate themselves and to reproduce their power over society and to do so by producing a stigma attached to those whom they consider to be undeserving. It is very similar to psychiatry, remember Michael Foucault, the story about the madhouse where he illustrates how you create a narrative of reason and unreason and a power structure; and the person who has the certificate to be the psychiatrist has the power to say who is sane and who has the right to be a free citizen.

Another argument says that people should have the right to a job but not a right to basic income. And that we should be promoting work, not sloth.  Well, I think there are two points here that should be said: (1) Nothing stops us in society from censoring those who are idle. But why should we have them starve? (2) The right to turn down a job is essential for a well-functioning labour market and for a civilized society. And to have the right, a genuine right to turn down a job you must have an outside option; because desperate people will accept to do desperate things. Janitors on college campuses, for instance, in decades past use to know the faculty, they were part of the institution. And then what happened? They were sub-contracted by firms who hire by night people who are faceless, and turned-over all the time, paid less, and not institutionally connected. But why did this process spin out of control? It did because the janitors had no outside option. No right to say “no” to the sub-contracted contractors.

Here are some essential points, from a social perspective, not just a macro-economic perspective. The micro and the sociological level needs to be addressed.  Social Democracy put forth the idea a social safety net. Well we need to counter this. Nets are very good about catching you when you are falling. But when you are caught in them, it is often very difficult to get out of them. So think of basic income as a foundation, not a net. A floor on which to stand. Libertarian economist and theorists who claim that liberty is a driving force define liberty in a negative sense, in the sense of the absence of constraints, of volunteerism. If you say “yes” to a contract that contract must be a free contract, therefore it must be some act of free will. Well it’s not. The mafia loves to give us offers we can’t refuse. The fact that we say “yes” to them doesn’t mean that they were chosen freely. The fact that the Greek government said “yes” to Troika does not mean that it was a voluntary transaction. To have a free contract, each side must have the capacity to say “no.” Freedom in action requires a basic income.

Finally, a basic income will allow for creative work. To replace the kind of routine, algorithmic work, that is anyway being replaced by AI. So we need to ameliorate the ill effects of capitalism undermining itself by producing gadgets that itself cannot survive. Then we need to create a system whereby society stakes claim to the return of aggregate capital and this claim becomes an income stream that goes to everyone. I don’t see why myself, or my future children have a right to a trust fund, why Paris Hilton when nobody else does? Think of basic income as a trust fund for all of our children to be financed by dividends from our aggregate capital which was after-all created collectively.

~ Wes Fornes