Rather than savage cuts, Switzerland considers “Star Trek” economics

http://www.salon.com/2013/10/11/rather_than_savage_cuts_switzerland_considers_star_trek_economics/

by rbanffy • 13 years ago

225 303 13 years ago

archgrove2• 13 years ago

I still have no understanding on how this sort of thing would be paid for. Presumably, it's via some form of income, consumption, and corporation taxes. However, the marginal income tax rate would have to be huge (as you need to recover the entire amount paid to the earner in "basic income" before you get a cent to spend on someone else), the consumption taxes would negate the value of the basic income, and punitive corporation taxes would just ensure no-one actually sets up a company there.

Until we have Star Trek style technology for these free ham sandwiches, I don't see how Star Trek style economics will actually work.

eterps2• 13 years ago

Affordability of a basic income proposal is a function of the social/government services it replaces, any tax increases, and the less tangible positive effects on spending and tax receipts associated with wealth redistribution towards the poor, and any social savings as a result of less crime, or fewer incarcerable offenses.

Specific, though informal, measurements were made by Pascal J. for Canada.[123] A 2004 taxable basic income benefit of $7800 per adult could be afforded without any tax increases by replacing welfare, unemployment, and core Old age services. (Canada has supplemental poverty old age programs and pension system). The number excludes any intangible benefits of tax revenue increases due to higher spending and lower personal savings, and any expenditure savings on criminal enforcement.

http://en.wikipedia.org/wiki/Basic_income

archgrove2• 13 years ago

But unless the welfare bill has an astronomical amount of waste (which I don't deny may be the case), surely this redistributes welfare from those who need it to those who don't? At the moment, for example, I receive no welfare payments. Thus my "share" of welfare is actually going to people who require it. In the basic income universe, suddenly I get a share of this money, which must come from those who currently get it, thus reducing their share. Moreover, this is ignoring all the inflationary pressures that a basic income would induce.

Camillo3• 13 years ago

If it replaces focused benefits for people in need, doesn't that make it regressive?

herge• 13 years ago

I wonder how much money is wasted in the US in government bureaucracy between making sure people who claim social security benefits are due social security, that medicaid claimants are not medicare claimants, that food stamps physically go out to those in need, and that the foods stamps themselves are just spent on food, etc. Probably much more than checking how many people over 18 live in each address.

Also, the whole economy benefits by simply giving out money that people can choose to spend as they wish, instead of in limited categories (like food stamps).

Finally, people who work (legally) already pay taxes and are managed by the IRS, so taking this basic income back from them in taxes wouldn't be that much overhead.

jbattle• 13 years ago

Medicare in particular is famous/notorious for low administrative overhead. Not sure how other social services perform

rayiner3• 13 years ago

The SSA's budget is like $12 billion to oversee over $750 billion in social security payments (1.6%). Medicaid's administrative overhead is about $16.5 billion to oversee $288 billion in payments (5.7%). See page 69 of this PDF: http://www.hhs.gov/budget/fy2014/fy-2014-budget-in-brief.pdf.

astrodust5• 13 years ago

Enforcement costs can easily outstrip the revenue collected.

One example might be public transit where the cost of printing tickets, tokens and passes, plus paying fare collectors and maintaining the equipment to prevent people from jumping gates is way more expensive than just letting people on for free.

msellout3• 13 years ago

One purpose of a lump sum distribution such as the monthly "basic income" is to counteract the regressive nature of consumption tax.

For example, suppose we want to provide free mass transit. We then get terrible rush hour traffic and the system is overburdened. So we must charge for transit access. Even better would be charging more for rush hour than off-hours, more for long-distance, etc. But this is regressive! Relatively cheap for the wealthy for rare events, expensive for the poor who need it for everyday commuting. The solution is to provide a lump sum grant to all citizens equal to the amount a person would pay for everyday transit commuting. Thus the poor get "free" transit and the wealthy get a few bucks and the positive externalities of transit.

pdonis3• 13 years ago

The solution is to provide a lump sum grant to all citizens equal to the amount a person would pay for everyday transit commuting.

How does this solve the rush hour problem?

wmeredith• 13 years ago

Regarding those free ham sandwiches... The US government currently pays farmers enormous sums to NOT grow food. (This is not a simple issue - global economics - I just think it's an interesting data point.)

axus2• 13 years ago

I was wondering, if the government shutdown continues, will they stop receiving those payments, and then overproduce food before going out of business?

coldcode• 13 years ago

The department of Agriculture's share of the discretionary spending in the budget is on par with Homeland Security and the NSA. Paying Farmers has a year long latency so not likely to change anything.

Zigurd4• 13 years ago

We are already buying tens of billions of dollars in "free ham sandwiches" in the form of Social Security Disability fraud every year. That's a LOT of ham sandwiches - similar in cost to running a war on the far side of the planet. Extreme poverty as a result of a post-labor economy also means very high public and private costs for police, prisons, and security.

levosmetalo• 13 years ago

Wait a minute, are you complaining that too much money is spend on ham sandwiches? Your counterexample suggests that this money should be better spent on another war on the far side on the planet?

thomaslangston• 13 years ago

I see basic income being implemented by giving tax refunds divided over two week payments instead of as a single annual lump sum. Then we set an amount where you may get a larger refund than you actually paid in taxes.

nkoren5• 13 years ago

Actually, one of the major effects of basic income is that it would decrease marginal income tax rates (although it would undoubtedly raise taxes overall). This is counter-intuitive, so let me explain.

Marginal tax rates are the taxes that you pay on additional income. Eg., if I make (rounding numbers recklessly) £9k per year, I am taxed nothing. However every pound I make over £9k is taxed at 15% -- that's my marginal tax rate at the £10k income level -- then there is another step at £20k-something, etc.

For the poor, however, effective marginal tax rate include not only escalations in progressive tax rates, but the withdrawal of social support. Eg., let's say I am unemployed and receiving £700/month worth of benefits. Then I get a job which pays me £800/month. The first £750 is tax free, and I'll have to pay £8 of income tax on the remaining £50, so my total take-home pay is £792. Fair enough, so far...

Except now that I'm earning an income, all my benefits are withdrawn. This means that although I'm now doing £800 per month worth of work that I wasn't doing previously, at the end of the day I'm only receiving (£792 - £700 = ) £92 pounds of additional income. Hence my effective marginal tax rate on the extra income is a whopping 88.5%.

I'd have to think very hard about whether I wanted to keep that job, or stay on benefits. In fact, this is a fairly generous example: many benefits programmes are structured in such a way that they impose an effective marginal tax rate of more than 100% upon people who increase their incomes -- in other words, you can end up with less money by getting a job than by staying on benefits.

This is the mechanism which turns benefits programmes into poverty traps -- by de-incentivising people to work via astronomical marginal tax rates. Unfortunately, people have a very difficult time understanding this mechanism, and their intuitive reaction is often to "fix" benefits programs by increasing conditionalities and means-testing. The problem is that the more conditionalities and means-testing you impose, the more you increase the marginal tax rates for people trying to get out of poverty -- so such programmes are inevitably counter-productive.

A Unconditional Basic Income, however, is never withdrawn. This means that it imposes no penalties for increasing your earnings -- meaning that it actually minimises the effective marginal tax rates.

In fact a very fair basic income could be funded via a flat tax: tax every income at 50%, and then redistribute the earnings as a flat Universal Basic Income. Mean income earners, in this scenario, would pay exactly as much taxes as they receive back from the UBI -- so their tax rate would be zero. Non-income earners would earn 50% of the mean (which is roughly the level that Switzerland is proposing). Billionaires would see their income reduced by nearly 50%. However the marginal tax rate would be identical at every level of income. No matter what your standing in the economy, you would always receive the same UBI, and you would always pay the same rate of tax. It would seem almost fair.

angersock3• 13 years ago

I would be happy to give up half my income if I knew it was being used to support students trying to learn engineering or new technology, or help a small family through a rough time, or pay for some fresh grad to get a broken bone set--especially if I knew that that safety net existed for me as well.

It's time to start embracing the fact that as a civilization we've come beyond the point where we're scrabbling like mad to shake loose the resources for existence, and instead we can now start actually trying to make people, everyone, safer and happier and more actualized.

ds9• 13 years ago

In addition to those effects, there is more spending, which indirectly boosts the economy.

At first glance one might think, the recipient now has more to spend, but that amount is taken from others, so it's a break-even. But in fact, the "others" are higher income people, and would spend the money differently.

The poor people relying on the assured income boost total demand for things like food and clothes, while the richer taxpayer would have more likely spent it on either luxuries or investments. A transfer of spending from luxuries to basic items corrects a social balance, and increase of aggregate demand has better outcomes than feeding the supply side.

jessaustin• 13 years ago

Thanks for this very clear explanation. I think maybe you just blew my mind.

Also, a question occurs to me. Would this scheme still function at a rate other than 50%? If the billionaires would only allow the scheme with the rate set at 45%, it would change the "zero" point, but maybe not much else?

incompatible2• 13 years ago

I'm not convinced that a 50% tax would actually be enough to afford a basic income for the entire population. It would also have to cover all other government expenses, and many countries already end up with taxes that approach or exceed 50%.

Consider also that the proportion of people who actually earn an income in many countries is falling already due to ageing of the population. Plus once this guaranteed income is available, it's only going to encourage more to give up working. Personally, I have already given up, even though my available income is substantially lower than the $2800 in the Swiss proposal, and really only covers my basic living expenses. Nevertheless, I value my free time highly enough that I prefer it this way.

informatimago3• 13 years ago

The existing taxes, in most countries, nowadays, are a very significant part of the GNP. Check: http://en.wikipedia.org/wiki/List_of_countries_by_tax_revenu... and this covers only the taxes from the central state, there are also local taxes, and social security. In France, that makes it over 67% from only 44% of national taxes.

The point of such a citizen basic income, is that it would eliminate the need for plethoric armies of "civil servants", at all levels. Instead of paying them to bother and harass the public, we pay they to do nothing, and the money that was wasted on their useless activity (beside their salaries converted into citizen basic income), is used to pay this citizen basic income to the other citizen. http://www.technologyreview.com/view/519241/report-suggests-...

In other words, YOU are already paying for it!

As for the free ham sandwiches, what is required for that to work is:

- material resources: the universe is big. Even the Earth is big! (but we need energy to dig deep down).

- energetic resources: the sun is big too! And there's uranium, thorium, and perhaps soon hydrogen fusion.

- to put this energy to work moving mater into a ham sandwich, what else is needed is information, the command and control systems, which any programmer will be delighted to implement, if you give him the chance to do it.

Robots and 3D printers are already doing a lot of work, we just need to automatize more. Why aren't google cars already driving on the roads everywhere? Why are we still making buildings with man power, when the can be made in automatic factories or by big 3D printers?

userulluipeste4• 13 years ago

About free ham sandwiches, in USA actually the underlying industry is already heavy subsidized, thus - paid by pretty much everyone. The sandwich to be free (as available for free, not necessarily produced on negligible cost) is not dependent on technology here.

rayiner3• 13 years ago

That chart you linked is total tax revenue, not just central state tax revenue.

bluecalm2• 13 years ago

Also once you stop forcing people to do useless jobs just because it's considered good these days to "protect jobs" and just give them money (preferably enough to survive/look around for a bit but not too much to kill all the incentive to work) maybe they will start doing something actually useful like trying to meet all the increased demand for basic services/items created by shifting more wealth to the poor.

LaGrange• 13 years ago

The cost wouldn't be that bad, the unemployment isn't that high, the taxes for upper incomes are high (as they should be), and the guaranteed income isn't really that high either. Unemployment is 3%, workforce is 4.9 million, the guaranteed wage was, afair, 2500CHF, that gives us 367 million francs, which is a bit over a promile of the state revenue (less than I expected, I'm suspicious of my calcylation). Which is, by the way, less than the surplus they have, and doesn't take into account already existing and complex social support schemes, of which at least some would be effectively obsoleted (social housing has an invaluable stabilizing effect, but food shouldn't really be a problem).

But, (from my point of view unfortunately), this proposal has no chance of passing. Like many articles about what Swiss do, this forgets about the (awesome) nature of Swiss direct democracy, which sometimes ends up in voting on completely off-the-wall ideas (which sometimes even pass, but this won't be the case).

iSnow• 13 years ago

I guess your numbers are wrong. Yes, unemployment is only 3% of 4.9m workforce, but Switzerland has 8.1m inhabitants. So a lot more than 150k (the number of unemployed) would receive more than now - housewives, slackers...

Effectively, 8.1m * 2500 * 12 = 240b CHF would have to be redistributed every year. With the CHF at $0.9 that's roughly $218b - the Swiss GNP is $636b.

Now I don't know how much of this is additional instead of replacing traditional unemployment benefits, disability welfare etc - but still it seems a lot.

kgo• 13 years ago

Switzerland has its own currency and its own central bank. It doesn't use the Euro. So the money doesn't need to 'paid for'. The government can just create the money and hand it out.

Of course this might devalue the currency as a whole, but the central bank had to institute an exchange rate floor because Francs were becoming too expensive relative to the Euro. So they probably wouldn't even consider a minor devaluation a bad thing.

wildwood• 13 years ago

This is becoming my biggest concern about these Basic Income plans, too.

Giving this amount of money to every person in Switzerland would total almost half of the country's GDP.

Even if you exclude children and get the total amount down around 30% of GDP, you're still right around the total amount of money that the Swiss government takes in in a year.

So to get this basic income with no new taxes, the Swiss government would have to abandon all its other obligations. Or, put another way, to fund this and still function at the same level, the Swiss government would have to double its tax income.

stretchwithme2• 13 years ago

I think the voters realize this and will likely reject this. The idea got 100,000 signatures on a petition and that's all that has happened so far.

randomknowledge• 13 years ago

Remember that everyone above median income is going to end up paying what they receive right back to the government in taxes. Only half the adult population will actually see this money as a check and not just a tax break.

digikata2• 13 years ago

Actually, I suspect we've had the capital and productive technology to build the "free ham sandwich" kind of existence for a while, a couple of decades, maybe longer? It's that our economic technology is derived from a system based in historic scarcity, and is run in a society of people with human frailties. Ultimately, it's currently too inefficient to put the right resources into the right hands such that the entire world is fed.

I can't imagine an entirely different economic system that would be more efficient, but just as a thought experiment, suppose you were the supreme world dictator and other than the command logistics, you could somehow redistribute all the capital in the world anywhere and direct the work of everyone. Would you have the technology to feed, shelter, and clothe everyone in the world? How many busy hours would it really take?

chii2• 13 years ago

if i were the supreme dictator of the world, i would replace currency as a form of exchange, and use Joules as a form of exchange, and then mandate that all energy production be distributed equally to every single living human. E.g., lets assume 30 petawatthours of energy per year(approx 108 000 peta joules), divided by 6 billion people, is approx 18000000000 joules per year, or approx 50 million joules per day for each person.

To pay for food, you "pay" the amount of joules it takes to fuel the robots that create your food. Ditto with any automatable production (clothing, houseing), and any land has a tax equivalent of the amount of solar energy extractable from the land.

You could attempt to save your joule allocation, but i suspect it will become too difficult. You cannot borrow joules the way you can borrow money (that is, the "bank" cannot be a fractional reserve system). But you would be encouraged to invest your joule allocation into useful endeavours, such as scientific research, which is always made available to all to use.

You can get richer by investing in improvements, and get richer by growing the size of the pie. There would be no way to get richer at the expense of making someone else's allocation lower.

SubZero• 13 years ago

Correct me if I'm wrong, but wasn't Star Trek style economics no economics? I seem to remember a distinguished bald captain talking about how society has moved past the need for money.

hebz0rl• 13 years ago

Economics is not money. Its about how to allocate the limited resources in the most efficient way. Money is just a tool used for example in capitalism.

dcc1• 13 years ago

When you have technologies like replication and warp drives and your federation is off colonising multiple planets in an area 8000 light years wide your civilisation is not worried about limited resources

interestingly enough in star trek they still have constraints on things like dilithium, and of course wars are waged over territories

dragonwriter16• 13 years ago

Economics is not money. Its about how to allocate the limited resources in the most efficient way.

At least some presentations of Star Trek (or, at least, Federation) "economics" were that it was not economics; not having money was a symptom of that, but the fundamental thing presented was that scarcity was solved because resources were not practically limited (which is why they didn't have money.)

(Of course, there was a whole lot presented at other times that seems to be at odds with that.)

dragonwriter16• 13 years ago

Correct me if I'm wrong, but wasn't Star Trek style economics no economics?

"Star Trek economics" was an incoherent mess where the explanations given didn't match what people were actually shown doing.

I suppose, in that respect, its pretty much like economics everywhere.

donquichotte• 13 years ago

"Social scientists have argued that American hatred for “welfare” is racially coded, and that historic support for stronger social programs in Europe has been tied in part to ethnic homogeneity and lower immigration."

Interestingly enough, this is not true for Switzerland. In some cantons, up to 60 percent of the inhabitants have a migration background. (i.e. they or their parents were born abroad) [1]

[1] http://en.wikipedia.org/wiki/Immigration_to_Switzerland#Popu...

drone2• 13 years ago

To be fair, if you speak about racism in America, it's not based on nationality, but on well, race... The data for Switzerland is not categorized by race in that document, and I can tell from the list of source countries, the vast majority of those immigrants would be considered "white" - it's pretty rare to see discrimination based on country of origin between white people these days.

I think therein lies the disparity I see a lot in talking about "diversity" between some Europeans and some Americans: here, we generally view diversity as a plurality of races, whereas it seems (to me) in Europe it is seen as a plurality of ethnic groups.

[EDIT: What deserves a down-vote here? Does racism not differ from ethno-centrism? Can we not have a reasonable discussion on the point of the person I am responding to? He points out that welfare has nothing do with racism in Switzerland, because they're so well integrated with other races, yet does not provide any evidence to that point. My statement was clear, not argumentative, and as far as I can tell completely non-combative. If you disagree with my statements, then please tell me why, so we can have a discussion.]

bowlofpetunias• 13 years ago

This is not true for most of Western Europe, the notion of an ethnically homogenous population it's an outdated idea of Europe that Americans still hold on to.

In fact, for major parts of Europe it was never true in the first place, the continent has seen centuries of migration of various ethnic groups and cultures before many of today's nation states were even formed.

Pointing to European countries "homogeneity" is just a cheap and borderline racist (they're all white people right, so how can they be ethnically and culturally different?) excuse used by Americans that don't want to examine their own motives.

userulluipeste4• 13 years ago

"In some cantons, up to 60 percent of the inhabitants have a migration background."

To have a migration background does not necessarily to have a different ethnicity.

Also, in Switzerland's case, it would be worth mentioning that the (cultural but also the ethnic) diversity was always a little higher than a lot of other European places and somehow they learned to handle it pretty well.

snowwrestler• 13 years ago

But most of those migrants come from other European nations of similar racial homogeneity.

mathattack2• 13 years ago

I get the "This removes marginal disincentives to work" argument, but who pays for this? 30K per family in payments requires 30K per family in taxes.

Lets say the US has 100mm families. 30K per family is $3 trillion.

What do we stop doing to find that kind of money?

rbanffy3• 13 years ago

How much money are you spending to make sure current programs are not misused? By making it universal, you get away with much less administrative overhead than you previously could.

mathattack2• 13 years ago

Conceptually I like it for that, and other reasons. But what programs do you toss out? Education? Health Care? Food stamps? Subsidized Housing? Each of these has vast constituencies.

d4nt• 13 years ago

You shutdown all the targeted benefit programs that try and give money to people based on certain criteria. Things like unemployment benefit, state pensions, food vouchers, tax breaks for people on low incomes, tax breaks on goods and services that are deemed "essential" like childrens clothes.

What you end up with is a much simpler system. Everyone gets enough to survive, if you decide to earn extra you pay standard rate tax on it all.

msellout3• 13 years ago

This could replace some very expensive programs, such as Social Security and Medicare/Medicaid.

millstone• 13 years ago

Some Googling shows that Medicare spending per enrollee is around $10k per year, and average Social Security benefits are around $15k. So a guaranteed basic income, paid to each adult and that maintains current benefits for seniors, would cost around $5.8 trillion.

scarmig9• 13 years ago

I did a rough calculation for the USA, and you get somewhere between $6k-$10k merely from ending the welfare programs it's replacing. And that ignores all the additional economic activity that'd come from the efficiencies realized by implementing a basic income.

At least for the USA, I would never support $30k/year (can't speak knowledgeably about Switzerland).

netfire• 13 years ago

It seems like a system like this would be designed to replace Social Security, Medicare, Disability, Food stamps, WIC and other benefits paid to those who are poor, disabled or not working (which would be well over a trillion dollars -- see http://www.usaspending.gov/explore). I'd imagine you'd also remove the standard deductible and other deductions and exemptions for taxes and possibly move to a flat tax bracket that wouldn't discourage people from earning more money or working in general. The question is, how much more money would that bring in, if any?

Also, if you just give people money, will they really spend it on basic necessities or spend it unwisely? Seems like it would work better if the money were given as housing, food, and healthcare insurance vouchers that could only be used for those purposes.

It will be interesting to see if/how this works out Switzerland.

twoodfin2• 13 years ago

I'd love it if we had a functioning individual market for health care, so that such a system could replace Medicaid/Medicare, but the jury's still out on that. Fingers crossed that ACA exchanges actually work out without requiring massive subsidies.

axus2• 13 years ago

vouchers aren't fungible and then you need to pay for the whole system of authenticating/converting them. I don't have a problem with people spending unwisely; they will starve to death and stop collecting payments, right?

userulluipeste4• 13 years ago

"Seems like it would work better if the money were given as housing, food, and healthcare insurance vouchers that could only be used for those purposes."

I was asking myself the same at first. The thing is, all those would limit choices, the effect of which would be an object of hate. In addition, in USSR people were directed (or at most offered a choice of a few options) to planned working places where they should live and work, which was in fact just the way they were given many of the other things. As expected, that only spawned an underground markets (for products, services, and even for perspectives) on which were traded choices that weren't freely available. I think therefore that it's better to let everything on the table for the benefit of all.

About the quantity of money, maybe it would be best if this "citizen allowance" to be not a fixed sum, but calculated from how much the state can afford to give. Say it is 50% of the entire budget split on the number of citizens. More money gathered in budget - more per allowance, and if the allowance is getting smaller - the more people are encouraged to get involved as taxpayers. It would be a fair circle and a strong argument for everyone to either shut up or get involved.

gtCameron• 13 years ago

To put some actual numbers to it from a quick Google search

Number of US Households from 2010 census - 114,800,000

Times $30k per household - $3.4 trillion

Total US Federal Government Revenue 2010 - $2.163 trillion

Total US Federal Government Spending 2010 - $3.456 trillion

DavidAdams5• 13 years ago

Keep in mind that it would be taxable, so most people would pay a portion of it back in taxes.

twoodfin2• 13 years ago

(Just for the sake of argument, and of course, in the odd event the U.S. went for a plan like this, you'd assume a long transition period so as not to screw people's ability to plan.)

The first trillion is "easy", insofar as it's revenue/spending that you could eventually redirect:

~$600B in existing Social Security taxes/spending. ~$400B in non-healthcare-related welfare spending, like food stamps and unemployment benefits.

You could maybe squeeze out another couple hundred billion from reducing aid to states and other programs made redundant by the new payments.

But the next nearly two trillion is really hard. Eliminating the entire defense budget wouldn't get you even a trillion. Doing the equivalent of lifting the Social Security tax cap and adding a marginal 12% to high-earner income would only net you another $125B.

If you were serious, you'd need to either double income taxes, most of which would come from the middle class, or impose a VAT or sales tax around 20% that would raise the equivalent (which would hit the middle class and the poor). Taxing the rich alone won't do, unless you really believe that ~70% marginal rates would actually raise twice the revenue of ~35% marginal rates.

And all of this assumes you can do this without tanking the economy and thus tax revenue.

Anyway, I'm actually hoping Switzerland goes through with it, since it will be interesting to see what happens. I'm all for unconditional cash payments as the main form of welfare, though I think something like the EITC on steroids would work better to ensure people who can work productively do.

scarmig9• 13 years ago

The USA is significantly cheaper than Switzerland, though, so you don't need nearly the same amount here as Switzerland.

I have a hard time figuring out what the ideal grant amount is, but I'd want $15k as an absolute maximum, and more likely something like $10k-$12k. And like you mention, getting to there from here is pretty trivial if you think redirecting SS and Medicare funding is an option.

rayiner3• 13 years ago

$3 trillion is 20% of GDP. Medicare/medicaid alone is $1.6 trillion. Housing, unemployment assistance, and food stamps is probably a few hundred billion more. At the state level you have subsidized housing, etc, for hundreds of billions more.

seanc• 13 years ago

If no one will do a job that pays less than $2800 per month, then how will those jobs get done?

Historically, wealthy societies that guaranteed incomes for citizens had slaves. I'll bet if you go digging around in these proposals you'll find a class of people who aren't eligible (new immigrants or something), who are going to wind up doing all of the low paying jobs.

eterps2• 13 years ago

For one thing the wages for those jobs will increase significantly.

jskonhovd2• 13 years ago

Significantly?? That is pretty bullish. Are you saying the supply of labor will drop dramatically for undesirable jobs? Or there won't be a underclass willing to work for less pay?

rbehrends2• 13 years ago

Your job income adds directly to those $2800; it does not replace the basic income. E.g., if your employer pays you $500 a month, your total monthly income will be $3300.

Note that life in Switzerland is expensive enough that $2800 is not a whole lot more than minimum wage level in the US.

chiph2• 13 years ago

But the employer will say: "Now that they're getting the $2800, I can cut wages and keep more for myself."

yardie• 13 years ago

The job doesn't have to pay 2800/month. It doesn't even have to be a 40-hour job. You could get 1000/mo and the government would make up the difference. What they want is a baseline where everyone gets something no matter what. And that isn't attached to a minimum wage.

who are going to wind up doing all of the low paying jobs.

This proposal removes the concept of a low paying job.

scarmig9• 13 years ago

You're describing a significantly different proposal there: with a basic income, the government doesn't make up the difference of pay up to some threshold, which amounts to a massive marginal tax rate on low income labor and a massive subsidy to employers of low income labor. That's a guaranteed minimum income.

With a basic income, the government gives you the same size check, regardless of if you work and how much. I believe what Switzerland is proposing is a basic income.

amishforkfight• 13 years ago

The idea of a basic level of income isn't that it goes away once I find a job that pays the same or more, it's that I'm always guaranteed that base pay. If I take a job that pays an additional 2800 per month, then I'm grossing 5600/mo.

I don't think there's any reason to believe that low paying jobs will just go away, and more reason to think that the people who want nothing more than those low paying jobs will take them.

treerock• 13 years ago

If no one will do a job that pays less than $2800 per month, then how will those jobs get done?

Then we will have to pay more than $2800 per month (or the job simply won't get done, which isn't necessarily a bad thing).

astrodust5• 13 years ago

That's not how this works.

You can work a job that pays $1200 a month, and the program will chip in the rest to top it up.

This is not so people will do crappy jobs that pay very little, but instead so they can pursue things that otherwise don't pay very well, like working at a charity or other non-profit with a very slim budget.

jskonhovd2• 13 years ago

That is an issue the Swiss need to prevent with the implementation of this law. Also, They will need to maintain productivity.

I would be happy if this works, but correct implementation of this law is the hard part.

astrodust5• 13 years ago

The Mincome experiment (http://en.wikipedia.org/wiki/Mincome) did research into this and found out that, surprise, people don't like sitting around doing nothing. On the whole they want to work.

puller• 13 years ago

If no one will pay for those jobs to be done, then how do we know they need to be done?

jcromartie• 13 years ago

What's truly remarkable about this is the simplicity of it compared to virtually every other welfare program in existence.

ck2• 13 years ago

Aren't prices going to rise to what maximum people can afford?

If they do not control prices, rent will go up because profit can be made, food, clothes, etc.

agentultra2• 13 years ago

It was interesting reading this after having finished reading Bertrand Russell's, "In Praise of Idleness." [1]

It always struck me as odd that the ghost of the Protestant Ethic is still haunting us to this day. There are plenty of reasons why we can and should work less and still enjoy the benefits of a decent, modern life. And in spite of our advances there is a pervasive belief that we should work more.

I think this will be a very good thing and I'm interested to see how it turns out for Switzerland.

[1] http://www.zpub.com/notes/idle.html

thrownaway2424• 13 years ago

Switzerland is ground zero for "Protestant Ethic" so I'm not sure that's really the problem.

rbanffy3• 13 years ago

There are plenty of reasons why we can and should work less and still enjoy the benefits of a decent, modern life.

Or work more, but do so because you love your work, not to cover for some basic need. If I could retire next week, I'd probably work a little less, but wouldn't stop.

agentultra2• 13 years ago

> There are plenty of reasons why we can and should work less and still enjoy the benefits of a decent, modern life.
Or work more, but do so because you love your work, not to cover for some basic need. If I could retire next week, I'd probably work a little less, but wouldn't stop.

If you read the essay I linked to, Bertrand Russell makes this very point. It's not that we should work less and be completely unproductive, but rather that we should work less so that we may better utilize our time to pursue those interests and lines of research that satisfy our curiosity.

I used some downtime I had a while ago during a job search to pursue such avenues. I don't think I've ever had a more productive period. As I was unconstrained by profit motivations I was free to think ideas I would have otherwise dismissed due to a lack of time and energy.

swalsh• 13 years ago

If I could retire next week, i'd still work on projects (heck maybe even the kind of project i'm doing at work now) but i'd also spend more time with my table saw.

sliverstorm• 13 years ago

It always struck me as odd that the ghost of the Protestant Ethic is still haunting us to this day

Why is that odd? A strong work ethic has historically led to if not happiness, at least success & progress on a national scale. It is only natural that it would then be selected for.

Keyframe• 13 years ago

if everyone has base income added to their income (or as a sole income), wouldn't that raise the prices all around since people will have more money to spend?

protomyth• 13 years ago

That's the part I don't get. I can see doing a scaled, minimum income (payed nightly perhaps), but I'm not really sure about the whole basic income.

I get the feeling the cost savings of removing other programs would add up.

drone2• 13 years ago

Indeed, I can't tell how inflation doesn't happen either - some people said above it wouldn't happen unless the government prints money, but that seems to be a very limited view of how inflation happens.

Obviously, if some people have more money than they had before - they have more buying power, and with more competition amongst buyers to purchase limited products, the prices of those products must rise. Added to this, the concept being thrown about that almost no one would work a low-paying job in such a system, you could consider a lot of your less expensive products/services to simply disappear. Meaning you get a double-edged sword on inflation: cheap production diminishes, and increased competition for more expensive products.

I'm sure there are a thousand economists and theorists who would like to say that's completely wrong, but I'd like to see it play out, and see where this goes. (Not that I agree that it would solve the problems people refer to: what happens when a mother spends her money poorly? We'll still say we have to bail the kids out, because they didn't have a choice. Other social welfare programs may shrink, but they won't go away for so long as we assume a duty to others, and accept that others won't always behave dutifully.)

dragonwriter16• 13 years ago

Everyone doesn't have basic income added to their income, unless the government is printing money to pay the basic income. Basic income redistributes funds from one or both of two other sources: 1. Existing social benefit programs benefits + administrative costs, and/or 2. Taxes, (in most proposals where additional tax revenue is seen as part of the funding stream, this is a progressive tax on total income).

That being said, the redistribution should result in more money chasing certain goods and services, which should increase the price for those. With realistic elasticity levels, the increase in price will be less, proportionally, than the increase in the quantity of money available for the goods/services, and the market clearing quantity of those goods/services produced and sold will increase.

It will also result in less money chasing other goods and services (public sector administration for the "replace conditional benefits program" part, and goods that are disportionately attractive to wealthier purchasers for the "funds from progressive income tax" part.)

3pt14159• 13 years ago

To understand how this works for a relatively normal country (like Canada): Imagine having an expense that is HUGE for your government. Like easily the biggest expense that they have. Larger than healthcare or the military.

Then cut the government around that. School lunch programs, cut. Welfare, cut. Old age benefits, cut. Even some parts of healthcare get cut, like having someone care for you for free when you are bed ridden (since presumably you would be able to spend a portion of your money on hiring a personal assistant). Imagine laying off 30 to 60% of people that work for the government in a "knowledge worker" role (ie, administrators, not trash disposers). Completely scrap science grants and arts subsidies. Increase taxes slightly. Etc.

But for all that sacrifice, we insulate our economy from political turmoil of the continued mechanization of the economy. One day most people won't be working. I'm not 100% convinced that BI is something we should be doing right NOW, but I'm pretty sure we'll have it in 50 years or less.

devx• 13 years ago

I'm all for a "Star Trek economy", but I think that implies having very low costs on stuff, too, such as replicated food that barely costs anything more than the atoms needed to create it (energy to make it would be free/renewable).

But from what I hear prices in Switzerland are very high, and while I'm interested to see how this experiment will play out, I fear they will get even higher because of it, which could make the whole minimum wage raise pointless.

userulluipeste4• 13 years ago

Oh, they can always print more money, and considering how much international money is held in their currency...

walshemj• 13 years ago

dont forget that Switzerland has a high cost of living and presumably its making the system "fairer" in that its not as discriminatory to childless single people.

refurb4• 13 years ago

What do you do about local differences in cost of living? $1K/mo will get you pretty far in a lot of the US, but it won't even cover rent in SF.

So now you have to come up with a system to calculate the COL differential between regions. You also have to come up with an enforcement mechanism to prevent people from saying they live in SF when they really live in a small-town.

Sounds like you'd only reduce overhead by a little.

wodow• 13 years ago

Do you? Or do you just hope people move away to where it's cheaper? Isn't that what's happened in America in previous eras?

dragonwriter16• 13 years ago

$1K/yr will get you pretty far in a lot of the US

I don't think $83.33/mo will get you pretty far anywhere in the US.

So now you have to come up with a system to calculate the COL differential between regions. You also have to come up with an enforcement mechanism to prevent people from saying they live in SF when they really live in a small-town.

No, you don't have to do either of these things. You could do them, but the benefits of the first need to be weighed against costs that come with the need to do the second if you do the first.

refurb4• 13 years ago

Correction, meant $1K/month.

thecoffman• 13 years ago

I don't think you would do that at all.

Places like SF and NY are more expensive because there is more demand to live there and a limited supply of places to live. Presumably if you're on a basic income, you won't be able to afford to live in the "most desirable" areas in the entire country.

This would be akin to guaranteeing everyone a basic transportation and then having someone say "Well, actually, I wanted a BMW."

danielweber4• 13 years ago

As some economists have pointed out recently, the future will look back on us as nucking futs that we subsidize the poor to live in downtown Manhattan.

DavidAdams5• 13 years ago

This problem solves itself. Poor people move to cities because of limited economic opportunity where they live. You can make more money, but the cost of living rises in proportion. If you make 28K no matter where you live, then it makes sense for a lot of people to optimize by staying in or moving to places with a low cost of living. Maybe a lot of them will watch TV all day, but at least they'll be fixing up an old house so they have a decent place to live, and contributing to their community.

You absolutely don't give people more money who live in more expensive areas. Actually, by allowing people who don't really want to live in the Bay Area to move someplace cheaper and simultaneously increase their standard of living, you'd actually end up reducing price pressure in overheated real estate markets like SF, and propping it up in super-cheap areas like Detroit.

refurb4• 13 years ago

Then you have the issue of paying for it! What would you have to pay in order to give someone a basic standard of living in SF? $24K might fly for a young single person, but what about the single mom with four kids? That would be more like $50K.

So you just pay every person in the US more than the average income?

Shivetya• 13 years ago

The idea is interesting, why not use it to replace the myriad of benefits programs that exist? I would bet that most large governments have so many aid programs they truly cannot be sure of whom is getting what let alone if the who is supposed to.

A basic income strategy can roll up most if not all of these programs into ONE government program. The reduction in programs, persons, and the places for them to work, would all be applied to the program increasing the savings.

The trick is to not let politicians play with it.

nugget• 13 years ago

It's not widely known but the United States was the first developed country to promote a basic income, in the form of the Alaska Permanent Fund. Each year, every US citizen resident in Alaska receives a dividend payment from this fund. The amount varies based on market returns but it has hovered around $120/month ($1400/yr) over the last decade. Children are eligible, so a family of 4, for example, would receive $480/month.

Economists who want to study the effect of a basic income can travel to Alaska and see the impact for themselves.

It always struck me as ironic because Alaska is one of the most conservative states, and conservatives are not usually in favor of handouts. In this case, however, the inflows to the fund come not from personal income taxes but from taxes and lease-revenue on the state's natural resources, notably oil and gas. Because of this, people view it as a birthright, similar to an inheritance, rather than a handout, like welfare.

In 1976 Alaska's citizens just banded together and determined that (1) all of these natural resources are shared, and the benefits from them should be shared also; and (2) none of us trust the Government to spend this money for us, better than we could spend it ourselves. Today, it is the most popular Government program in the state with near absolute bi-partisan support.

So there seems to be precedent that this can work, if you have a massive sovereign wealth fund that is fed by revenues from shared resources. There are other countries, like Saudi Arabia or Norway, who will probably be the first to try this on a nation-wide scale before Switzerland.

rflrob• 13 years ago

Economists who want to study the effect of a basic income can travel to Alaska and see the impact for themselves.

The problem with the states as laboratories of democracy is that, from a scientific perspective, they're pretty crappy experiments in terms of having any control groups. While an economist can travel to Alaska, it's hard to tell whether any given quality in the current state is due to the experiment or not. For instance, the price of food is quite high in Alaska; is this due to some basic commodity inflation, or is it because there are no road and rail links to most major population centers? Probably the latter, and you can look at Alaska both before and after the Permanent Fund was implemented, but even then, it's not a perfect control.

the_watcher3• 13 years ago

I think the idea of states as labs is generally a good thing, but people often misunderstand it. States as labs shouldn't be seen as pilot programs for the whole country, they should be seen as pilots for other states. The US is huge, and a state like Alaska has a very different economy than Rhode Island. However, somewhere like Montana may be able to use some of what worked in Alaska. The advantage of state power is that allows things that are unique to the state to have more influence on policy.

mebassett• 13 years ago

I think economist have problems with perfect control regardless of what they look at. It's hardly specific to Alaska or to "states as laboratories".

nucleardog2• 13 years ago

Alaska isn't up there alone, you know. It would come with its own set of drawbacks, but Canada has three territories up there in similar conditions...

gaadd33• 13 years ago

Could also compare it to the Yukon since I bet it has more in common there than with most other states.

dkl• 13 years ago

Economists who want to study the effect of a basic income can travel to Alaska and see the impact for themselves.

Can you say more about this? What is the perceived impact?

pilom• 13 years ago

The biggest impact that many people see is that over time, a minimum income gives people a disincentive to work. So if Switzerland starts giving every citizen $2800 a month, will tons of people stop working because they realize they can live off of 33k/year? In Alaska, it is probably rather difficult to live off of $1400/year but some people do it by living off the land and hard work at home. If the Alaska fund did not exist, would some of those people go back to work? That is the question economists would look for.

JackFr• 13 years ago

"Alaska is one of the most conservative states" + "none of us trust the Government to spend this money for us, better than we could spend it ourselves" = not ironic at all.

pessimizer5• 13 years ago

I don't get a check for the usage of the natural resources of Illinois. If I did, it would be a handout, because I didn't put them there, and I don't own the land. One would assume that conservatives would be against people getting money just for living somewhere, without having to work for it.

kelvin0• 13 years ago

It is usually admitted that there are huge overlaps between conservative and libertarian philosophies. Thus if one equates conservatives with libertarians, one can (falsely?) conclude that there is an incoherence with the idea of libertarians receiving handouts (see Atlas Shrugged, and Ayn Rand's 'propaganda' for more details)

gcb0• 13 years ago

if we multiply the population of alaska for that sum, we get 731,449 * $120 = $87,773,880/mo

then we get Alaska oil production of 2mi barrel per day (it is much lower now than a decade ago). Assuming a very conservative $100/barrel = 200,000,000/day = 2,400,000,000/mo

That's 3% if you tax on top of gross profit (no idea how oil is taxed. it is probably much less than my income tax if i know how the world works...)

And I am not counting fish, gas, lumber, minerals, etc.

That sound like the citizens are doing a much worse job than the gov in setting the rent for the oil companies.

jotm3• 13 years ago

I think Norway does the same with their oil resources...

anbu32• 13 years ago

No, we don't :(

vidarh3• 13 years ago

Norway's tax revenues from oil (which is taxed at a special, extra high rate) goes into a sovereign wealth fund. Proceeds are reinvested, but the government may choose to use from the fund to fund the budget. So far the general consensus has been to stick to spending no more than 4% of the value of the fund every year.

Currently the fund apparently holds about 1% of the total share capital of all listed companies worldwide (though it is by no means evenly distributed) - about 2% of the share capital of European listed companies - and a few months ago it was worth $670 billion, or more than $130,000 per Norwegian citizen.

k-mcgrady• 13 years ago

> "all of these natural resources are shared, and the benefits from them should be shared also"

Is it not unfair that they are only shared with people who live in Alaska? Shouldn't they be shared with all Americans? If I was an an American I would be in favour of one of two things:

1. The money from the resources is shared with all Americans either via a handout or government spending on something that benefits all Americans. 2. Use the money to subsidise current unemployment benefits (or some other nationally available benefit) in Alaska.

umanwizard• 13 years ago

Why all Americans as opposed to all people in the world?

bsullivan01• 13 years ago

Economists who want to study the effect of a basic income can travel to Alaska and see the impact for themselves.

The thing is that Alaska is not taxing Alaskan to share the wealth. Alaska is giving everyone a s share of what it gets from what they have underground. Arab countries have generous welfare systems but I doubt they'd have them if the richer ones were taxed to provide for everyone.

adaml_623• 13 years ago

Are they taxing companies. Or charging a fee for extracting resources?

notdrunkatall2• 13 years ago

So there seems to be precedent that this can work, if you have a massive sovereign wealth fund that is fed by revenues from shared resources.

Sure, if you have a virtually limitless supply of free money, you can give away free money. Alaskans like the fund so much because a) that money goes into their pockets rather than the pockets of politicians or the wealthy and well-connected, and b) it's not welfare. Unless you have a large resource/population ratio, basic income generally isn't feasible.

mjcohen• 13 years ago

Of course it's welfare. That doesn't mean it's bad, it just means that they are not doing any work to get it.

kooshball• 13 years ago

How is it not welfare? It's free money from the government.

ianb• 13 years ago

One way a country could get to this would also be revenue-neutral taxes. A revenue-neutral carbon tax, for instance – a lot of taxes would be collected, on the theory of limiting output, or maybe you could use the theory that you were charging for access to the environmental load, which is a public resource held equally by all people. To make it revenue neutral then you have to return that tax money to people. You could cut taxes or put it some bullshit "lock box" but that's nonsense thinking. IMHO the only reasonable way to keep it truly revenue neutral is to directly funnel the money back to individuals. A basic income would be the result.

People freak out that a carbon tax would be regressive, and it would, but the return would be so progressive that it would more than undo that.

In general I think this kind of theory should be applied to more use taxes – places where ostensibly a tax supports something like roads, making a system self-supporting. But the use taxes only address a small part of the cost of roads, they don't consider the opportunity cost of using land for roads and they don't address the negative externalities. A use tax that included all of that, and returned some portion to people, would be a fairer tax. In that context something like congestion pricing would be fair in a way that it isn't currently.

the_watcher3• 13 years ago

I am generally pretty opposed to things like this, but in this case, I'm fascinated by this. If this actually happens, we'll actually get to see what happens when you guarantee people enough money to not need to work. How many people will just take the money? We'll actually have a data point on whether the incentive to survive is more important to a productive labor force than the incentive to get more.

vfclists• 13 years ago

How has the minds of otherwise intelligent Americans been hijacked by the main stream media and their 'conserative/christian' social conditioning?

Money is simply an abstraction used to further the production and exchange of material resources. Yet Americans seem hostile to any form of Social Security - which simply means printing money and distributing to be used to share production and resources equitably, rather than channeling it into expensive military procurement and genocidal foreign adventures. Do they know that the money is printed by private institutions who charge interest on the money they print, virtually out of thin air, or computer storage (whichever you prefer?), pauperizing future generations even more?

tryggvib• 13 years ago

Not adding anything to this discussion but by the looks of it, the Icelandic government was trying to imitate this stunt but misunderstood the "Start Trek" in "Star Trek" economics.

Here's a picture of the Icelandic prime minister and the Icelandic minister of finance as Kirk and Spock (this is a real thing they did as part of an auction for cancer awareness):

http://www.icelandreview.com/icelandreview/upload/images/new...

ffrryuu• 13 years ago

Print money to fund startups. It's the future.

Futurebot2• 13 years ago

I'm a big supporter of the GBI (see my comment history), and I think developed countries are going to all need to adopt it at some point for a variety of reasons. Reading this and a few other related articles on the Swiss experiment, I couldn't find information about the following, which I consider pre-requisites for a GBI system to be effective:

- Union strikes for non-safety related issues have to be made illegal. You don't get to strike for higher wages when there's a GBI.

- Hire/fire policies need to be made completely at-will, with pretty much no exceptions.

- The minimum wage has to be eliminated (generally won't matter, since the GBI will bring the wage of "bad jobs" up, rather than down.)

- The rest of the welfare system will likely need to be largely dismantled. The person answering the questions in the article seemed to conflate "public schooling" with welfare, which should be decoupled; things like schooling, health care, etc. should not be touched (and should not be considered welfare - they are regular public goods.) If the Swiss have things like TANF, Social Security, SNAP, WIC, etc. - those will probably need to go.

- Opt out. Any person who doesn't want to take the money (because they already have plenty) should be able to refuse it.

I'm glad to see a country starting to experiment with this, though. It's the only way forward in a world where the need for human labor is going down every day.

chli• 13 years ago

Swiss citizen here...

A few answers :

  - Strikes are mostly illegal in Switzerland and are very rare
  - Apart from a standard 3 months notice it's easy to lay off people in Switzerland (unless they are pregnant or sick)
  - There are no standard minimal wage but there have been discussion recently of introducing one 
  - We do have quite a few "program" in our welfare system a GBI would simplify a lot of things
  - There have been no mention of a possibility to opt-out

Futurebot2• 13 years ago

Thanks chli. It sounds like Switzerland is in great shape for this, then. I'm really rooting for their success here; it's hard to overstate how important successful examples of these policies are going to be for the future of our societies.

mikeash7• 13 years ago

- Union strikes for non-safety related issues have to be made illegal. You don't get to strike for higher wages when there's a GBI.
- Hire/fire policies need to be made completely at-will, with pretty much no exceptions.

So employers should have all power, and employees should have none? Why should employers have the right to fire at will, but employees should not have the right to stop working at will?

mason240• 13 years ago

GBI would give employees would have a huge amount of leverage in that they can just quit work whenever they without financial consequences.

dragonwriter16• 13 years ago

Opt out. Any person who doesn't want to take the money (because they already have plenty) should be able to refuse it.

Why is this necessary or useful? It adds administrative complexity to the system and doesn't serve any apparent useful purpose.

schtev• 13 years ago

Okay. So I think we can all agree that public bathrooms need to be cleaned regularly. Its a shitty job (pun intended), but it needs to be done.

In a GBI system, where's the incentive for anyone to do this?

bencoder• 13 years ago

I'm a bit late, but I think a GBI provides MORE incentive for these kinds of jobs

At the moment, there's no way you could afford to live just from cleaning for 1 or 2 hours a day like many places require. But with a GBI, many more people would be available for occasional work like this, and the costs could be lower (no minimum wage).

tokenadult2• 13 years ago

It will be interesting to see what happens if Switzerland tries out this policy. Thus far there hasn't been much mention in this thread of an author who has written a whole book about how a basic guaranteed income policy might work in the United States. Charles Murray's book In Our Hands: A Plan to Replace the Welfare State,

http://www.amazon.com/books/dp/0844742236

goes into detail about how much a program of guaranteed income for everyone would cost in the United States, and suggests some probable effects that would have on everyone's everyday behavior. I read the book a year or two after it was published.

Murray's own summary of his argument

http://www.irp.wisc.edu/publications/focus/pdfs/foc242a.pdf

and reviews of his book

http://www.aei.org/article/society-and-culture/poverty/in-ou...

http://www.conallboyle.com/BasicIncomeNewEcon/MurrayReview.p...

http://www.richmondfed.org/publications/research/region_focu...

http://mises.org/misesreview_detail.aspx?control=296

may inform the discussion here. The policy proposal of a basic income guarantee is interesting because

a) no country has ever tried it, really, so there isn't a real-world experience case to look at yet,

and

b) a remarkable variety of people from otherwise differing points of view have proposed it over the years.

I'm still trying to make up my mind how the trade-offs of a policy like a basic guaranteed income nationwide would compare to the trade-offs of "targeted" social welfare programs for elderly, disabled, and poor.

pekk2• 13 years ago

Why are your links focusing on the right-wing perspective on these ideas (Charles Murray of Bell Curve fame, von Mises institute)?

tokenadult2• 13 years ago

What authors would you recommend who have studied the issue in depth?

tpurves• 13 years ago

This would be an interesting substitute for both basic personal income tax deductions, welfare, EI and disability programs. Think of how much government complexity could be streamlined.

stretchwithme2• 13 years ago

We'll find out soon enough for sure, but I doubt this thing will pass.

plink• 13 years ago

I don't reckon we here in the U.S. would ever cotton to such a pro-shiftless social policy. Smacks of intellectualism to me. Even of Communism, and you know down what slippery path that "ism" can lead: It was Joe Stalin's money what gave us the Cato Institute.

otikik2• 13 years ago

Sadly, I think this will just raise inflation a lot.

If this passes, I would not be surprised that 1 kg of rice in the supermarket suddenly starts costing $100. The reasoning being: "hey, all my customers now have much more money than before, I can charge more for the same wares".

phaemon• 13 years ago

What a superb opportunity! You can just set up a rice importing business and sell rice at $50 per kilo. You'll make a fortune undercutting all the supermarkets!

atmosx• 13 years ago

Reading this comments, one can see the huge political and social perspective between Americans (USA) and Europeans, which is very intriguing - especially reading the arguments.

aluhut• 13 years ago

Life cost in Switzerland is pretty high. Food prices are so high that people tend to drive to Germany for their weekly shopping for excample.

I'm not sure how much the 2800$ would really be in the end.

wr1472• 13 years ago

I'm not an economist, but in simplistic terms if everyone was guaranteed X amount of income, wouldn't the price of everything go up by X amount - inflation?

How about making things like, food, clothing, healthcare, education, housing - basic human rights - universal for all instead?

fthssht• 13 years ago

It's funny because I think what the author fears in this proposal would be ideal. Guaranteed income replaces the welfare system with all its inequities, inefficiencies and bad incentives. Next you just need to replace the income tax with a natural resource /land tax. Then you have an ideal geolibertarian government.

Rather than savage cuts, Switzerland considers “Star Trek” economics

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