Universal Basic Income Is Not a Road to Communism

From the Great Depression to the digital age, critics of capitalism have imagined gentler futures. The schemes differ from planned economies, welfare states, to universal stipends, but the storyline remains the same: capitalism will civilize itself. It will trade domination for balance, profit for parity, work for leisure. The appeal lies in the promise of continuity: transformation without rupture. Yet the record of modern history points elsewhere. When economic systems reach their limits, they do not melt into something new; they break, reconfigure, and begin again under different rules. The fantasy of a road beyond capitalism (paved with stipends, algorithms, or good intentions) mistakes equilibrium for evolution.

Every decade or so, capitalism’s critics rediscover the dream of a universal basic income (UBI), a stipend for all. The latest revival [1] goes further: what if this modest reform could turn capitalism into its opposite? In a recent academic proposal, unconditional basic income is imagined as a “capitalist road to communism.” If people no longer had to sell their labor to survive, the system itself, the authors suggest, would evolve peacefully beyond markets and profit.

It’s a tidy idea: bloodless, elegant, the sort of transition you can model in a spreadsheet. Unfortunately, it confuses the symptoms of capitalism with its cause. Capitalism isn’t powered by wages. It’s powered by accumulation.

The Real Engine of Capitalism

For two centuries, the system’s logic has been remarkably consistent: whoever controls the reinvestment of surplus controls the future. Whether that surplus is extracted from wage labor, digital platforms, or automated production lines matters less than the direction it flows.

UBI doesn’t challenge that flow. It merely lubricates it. It keeps consumption alive when wages stagnate and demand weakens. During the pandemic, emergency checks and subsidies saved capitalism from its own freeze, not by undermining it but by sustaining the cycle of spending and profit. A permanent income floor would do the same: a social shock absorber for an economy that refuses to slow down.

That’s why Silicon Valley libertarians and progressive economists often converge on UBI. One sees it as a smoother for automation shocks, the other as a humane redistribution. Both assume the system continues running. Neither offers a mechanism for transformation.

The Piketty Mirage

The academic case for UBI-as-transition often borrows moral authority from Thomas Piketty’s celebrated inequality charts. Since capital’s share of income has risen while labor’s share has fallen, the argument goes, the resources for a universal stipend are there for the taking. But Piketty’s “law” [2] , which states that the return on capital tends to exceed growth, isn’t really a law at all. It’s a historical phase.

After World War II, labor’s share soared; in the 1980s, capital rebounded; since 2008, both have been squeezed by slowing productivity and cheap money. The pattern is cyclical, not inevitable. There are many capitalisms within capitalism (Fordist, financial, digital) each with its own ratio of returns and redistribution.

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Figure 1. Labor Share of US GDP from 1950–2014. Source: https://ercouncil.org/2019/chart-of-the-week-week-7-2019/

UBI depends on an assumption that the wealth of the few can permanently fund the income of the many. Yet the same global forces that flatten wages also erode the surplus that could finance such schemes.

The Simulation Illusion

To make the transition look inevitable, theorists turn to models. Feed an economy into a Samuelson-Arrow machine [3] , adjust parameters for labor, growth, and redistribution, and you can simulate a smooth glide from welfare capitalism to post-capitalism. The results look scientific: curves converge, inequalities narrow, utopia arrives in the end.

But these models are mirrors, not windows. Change the assumptions and the future changes with them. Economists call this the Lucas critique [4]: once people know the rules, they change behavior, and the model collapses. Real economies are not parameter sets; they are political organisms, full of feedback loops, shocks, and asymmetric information.

A model that shows capitalism melting gently into communism is really showing the elasticity of its own equations. It’s an aesthetic of control — reassuring, rational, and irrelevant once confronted with history’s mess.

The Real Nature of Change

Economic systems do not evolve like software updates; they shift like tectonic plates. They hold steady for long periods, storing pressure, then rupture. The transition from feudalism to capitalism wasn’t a smoother wage curve. It was a centuries-long phase change driven by conflict, technology, and the reorganization of value itself.

If capitalism ever yields to something else, it will not be through subsidies or simulations but through a breakdown in its internal ratios: the balance between how wealth circulates, accumulates, and reproduces. Every system has a threshold where its feedback loops cease to stabilize and begin to amplify collapse. When investment outruns real productivity, when debt exceeds trust, when inequality erodes legitimacy, the structure becomes dynamically unstable.

One could think of it as a kind of critical ratio: when the engine that once spread growth starts concentrating entropy (via UBI) instead, equilibrium turns into fragility. Some societies cool this imbalance through reform; others overheat and fracture. But the passage from one phase to another is never smooth, it is turbulent by nature.

The Mirage

The appeal of a “capitalist road to communism” lies in its civility. It promises transformation without trauma, revolution without revolt. But capitalism has survived precisely because it digests reforms meant to overcome it. UBI would be no exception. It might soften inequality and reduce misery, which are definitely worthy goals in themselves, yet its deeper function would be to preserve the very system it claims to transcend.

Capitalism won’t melt into utopia through stipends and spreadsheets. It ends, if it ever, in crisis, not calibration.

References

[1] van der Veen, R., & Groot, L. (2025). Unconditional Basic Income and the Post-Labor World: On the Capitalist Road to Communism. Politics, Philosophy & Economics.

[2] Piketty, T. (2014). Capital in the Twenty-First Century. Harvard University Press.

[3] Samuelson, P. A. (1958). An exact consumption-loan model of interest with or without the social contrivance of money. Journal of political economy, 66(6), 467–482.

[4] Lucas, R. E. (1976). Econometric policy evaluation: A critique. In K. Brunner & A. Meltzer (Eds.), The Phillips Curve and Labor Markets (Carnegie-Rochester Conference Series).