Tuesday, October 22, 2013

A Look At The Swiss Basic Income Initiative

The Swiss initiative to provide an unconditional income to all citizens is an interesting proposal for a number of reasons. It is a policy initiative that lands itself right in the field of battle between liberal and conservative ideologies. I will write a post later that examines the potential economic impacts of such a program but, for now, the ideological arguments is what interests me.

Conservatives are likely to view it as a disaster that will cause perverse incentives for an even larger portion of a nation's society instead of those benefiting from welfare programs. For conservatives, the basic income is a diabolical way to buy the approval of middle income citizens. The number that has been floated for the Swiss initiative is that every citizen will be given $2,800 per month. Theoretically, this monthly value could be strategically placed as the buy the favor of the median voter. For example, if the median voter pays $2,750 in taxes every month, then the transfer will make them better off and they will approve of the program. Anyone paying more than $2,800 per month in taxes will be worse off and the program will be a redistribution of their income to the rest of society.

Liberals are likely to view the policy as the endgame toward which most social welfare programs have been striving toward. It is finally a program that can effectively fight income inequality within a society without legal loopholes and arduous application requirements. A guaranteed state income would finally free important social groups from the need for financial survival. Struggling families will now have more time to spend raising their children properly and artists will break free of financial incentives to create an explosion of creative expression.

The interesting development in these discussion will be to determine how many conservative thinkers will be persuaded to support the initiative. A basic income program might actually reduce the bureaucratic mess of government because the program eliminates the need for many others. A basic income is unemployment insurance, food assistance, and social security all rolled into one. The complex process of applying/qualifying for government programs would be eliminated by simply sending the same check to every citizen. Conservative social values might be strengthened by such a program as divorce rates drop due to more stable marital relationship, absent the pressure of financial circumstances.

The basic income program is unlikely to pass in the short-term because it is too radical. It would be very surprising to see such a dramatic paradigm shift in the government of a developed nation in such a short period of time. However, the initiative will create some very important questions about the ideal future of human society.


I neglected to mention another aspect of the basic income initiative that will appeal to conservatives in my rush to type this up during my lunch at work. A basic income could actually improve the incentive structure of the economy by eliminating the cliff effects inherent in qualifying for many welfare programs. A person will no longer need to avoid getting a raise because it would actually make there circumstances worse by reducing the welfare they receive from the state.

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