Rather than savage cuts, Switzerland considers “Star Trek” economics(salon.com)
salon.com
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/
303 comments
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.
- 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.
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.
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.
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?
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?
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...
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...
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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?
In a GBI system, where's the incentive for anyone to do this?
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.
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.
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.
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?
How about making things like, food, clothing, healthcare, education, housing - basic human rights - universal for all instead?
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".
If this passes, I would not be surprised that 1 kg of rice in the supermarket suddenly starts costing $100. The reasoning being: "hey, all my customers now have much more money than before, I can charge more for the same wares".
Life cost in Switzerland is pretty high. Food prices are so high that people tend to drive to Germany for their weekly shopping for excample.
I'm not sure how much the 2800$ would really be in the end.
I'm not sure how much the 2800$ would really be in the end.
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.
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.
We'll find out soon enough for sure, but I doubt this thing will pass.
Print money to fund startups. It's the future.
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.
Until we have Star Trek style technology for these free ham sandwiches, I don't see how Star Trek style economics will actually work.
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.
"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...
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...
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?
Lets say the US has 100mm families. 30K per family is $3 trillion.
What do we stop doing to find that kind of money?
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.
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.
What's truly remarkable about this is the simplicity of it compared to virtually every other welfare program in existence.
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.
If they do not control prices, rent will go up because profit can be made, food, clothes, etc.
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
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
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?
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.
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.
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.
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.
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.
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.
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.
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.