There’s been much excitement among some of my more politically-minded friends recently over the upcoming vote in Switzerland on a universal basic income. The poll concerns a guaranteed income for all legal residents – whether rich, poor, or in the middle.
Famed for its direct democracy and regular referendums, the Swiss have voted on issues such as bonuses, ‘golden handshakes’ and can call nationwide votes on issues that concern them. Now they’re ready to put the idea of a universal basic income (or negative income tax) to the popular vote (date to be announced).
The idea has garnered support from both the Left and the Right alike in Switzerland. While it has a distinctly socialist overtone from the point of view that such a policy would indeed redistribute wealth; it also gives individuals power over their own welfare and therefore their lives. Freedom-loving Libertarians may well ask “Who distributes it; who decides how much?” as it’s clear that inevitably someone is going to have to make these decisions, so some kind of government would be required (in terms of the amount, an eye-watering £1700 a month is being proposed).
Libertarians may well be sceptical as to whether the UBI (as I shall call it from now on) could ever become a reality in the UK. However, let’s view it from a practical point of view. Right now, the UK government’s spending accounts for practically 50 percent of GDP, with much of it wasted on bureaucratic, self-serving and bloated welfare services. A UBI would mean the abolition of the welfare state, state education system and minimise the government’s role to administration and defence – a ‘minarchist’ system of government.
Interestingly, the UBI is by no means a new idea. Originally proposed by Thomas More in his famous work Utopia in the 16th century, it has continued to gain approval from all sides of the political spectrum. Even Liberty-loving political theorist Thomas Paine wrote in the 18th century that “The earth in its natural, uncultivated state is the common property of the human race”. The moral and ethical argument for the UBI according to Paine, was that as private land ownership deprives others of their ‘natural inheritance’ they must be compensated in the form of a permanent grant (similar to that old MoneyWeek favourite, a land value tax).
I’ve been speaking to people who feel it’s economically viable too – they’ve done the figures and have worked out that it actually would work if there was a flat rate of tax paid on everything earned over that to pay for the UBI of future generations. The tax rate (apparently) could be as low as a 15 percent flat rate to be able to provide for this. I don’t want to quote the figures as I haven’t checked them myself, but if they are accurate it shows that the idea could really work. Common questions that may be posed by sceptics include “What if someone needs surgery that costs way over the yearly amount?”, or “What if someone spends it all on crystal meth and loose women/men and ends up dying in a ditch?” (ha ha). One way to combat the former question would be to offer people who have large costs a loan on their future UBI to cover them – but this would have to be carefully assessed obviously so the latter scenario wouldn’t become commonplace!
The other question is whether people would be motivated to work. I believe they would, as no one can really live off 15 grand a year (or whatever the income level may be). I also believe all of the menial jobs would be provided by voluntary groups, communities getting together to provide their own solutions for their areas. This is because contrary to statists believing a Hobbesian hell would ensue if we were left to our own devices; the truth is that no one wants to live in squalor.
However, I’m a realist. I know that in the current political climate a UBI is wishful thinking. With all the interest groups; people relying on the government for jobs; rent seekers and other victim groups; it would be catastrophic to those who make a cushy living ordering everyone else around. It would also change democracy as we know it, as no one could bribe anyone in exchange for votes. It would surely take a real disaster or radical change of government to introduce such a policy, but for now all we can do is sit and hope that Switzerland introduces it. Oh, and book a one way ticket to Geneva if they do…