While most of us are all waiting patiently for tomorrow morning, thought I'd kick off some political discussion
Read an interesting article about a proposed system in which all adults within the economy receive a guaranteed basic income irrespective of whether they have a job or not. It is a very interesting idea supported by many government ideologies, especially amongst socialists and libertarians.
In October 2013 a referendum was triggered in Switzerland (by a petition with 126,000 signatures) on whether to introduce a guaranteed £1,750 per month unconditional income for all adult citizens.
It has been trialed in North America and Namibia
- Loss of jobs/reduction in workforce due to technological advances is all well and good for the companies profit margins, but if people don't have the income to afford their products due to not having jobs, at what point does workforce automation become counter productive?
- Wealth redistribution. People on lower incomes spend a greater percentage of their wealth on consumer items.
- The only checks would be whether the recipient is a citizen of the state, and whether they are classified as an adult, which would massively reduce the bureaucratic cost overheads of the welfare system. It would eliminate almost all means tested benefits and associated bureaucracies.
- It would effectively eliminate absolute poverty, therefore reducing criminal behavior such as theft (see the Namibia link above)
- Workers would no longer be compelled to work in order to meet their basic human needs, so employers would have to offer high wages and good terms and conditions in order to attract workers. Exploitative employment practices would be curtailed and the worker would have greater freedom to pursue the employment that they choose, rather than doing awful jobs for crap wages in order to stave off absolute destitution.
- The establishment of new businesses would be significantly more attractive and carry significantly less risk.
- The resulting boom in small businesses would improve capitalism by increasing diversity and competition, leading to a more robust economy.
- If the basic human needs of all citizens are met automatically, then the requirement on charity and state administered welfare is dramatically reduced.
- Opponents argue that the incentive to work would be destroyed, and that capitalism would grind to a halt without the fear of destitution driving workers to continue working.
- If a guarantee that the individual's basic human needs are met is given, then the individual will be inclined towards idleness (staying at home all day to play MMOs!!!).
- Why should people get something for nothing? Some argue this kind of attitude lies behind the irrational British obsession with welfare spending. It is estimated that the UK economy loses £120 billion a year to tax-dodging, yet the cost of welfare fraud is only £1.2 billion. Us Brits are easily riled with the sense of injustice that they must work hard, whilst others have a roof over their head and food in their belly despite not having a job.
- The guaranteed income is basically unconditional, and that means that there is no conditionality that the recipient must put anything back into the economy. Saying that the recipient would either spend it or save it and the only real issue would be if it was sent offshore.
- The Universal Basic Income would result in payments to citizens that are already wealthy, and have no trouble meeting their basic human needs.
- The threat of inflation. After the introduction of Child Tax Credits the childcare providers knew that working families were getting a payment from the government to cover the cost of childcare, so they raised the cost of childcare so much that the UK now has the most expensive childcare in the developed world.
Hope the Swiss give it a try, be interesting to see how it goes!
Edited by Chuey, 30 May 2014 - 12:14 pm.