Basic Income Guarantee: Have the Swiss Lost Their Minds? - Vivek Kaul's Diary
Free Reports

Basic Income Guarantee: Have the Swiss Lost Their Minds?

Jun 3, 2016


BALTIMORE - No whining and kvetching about the Deep State today.

Instead, we sit at its feet, admire the cut of its jaw, and sing its praises.

We are grateful to it...and not just as a source of amusement. In short, we delight in its incompetence.

Preposterous Initiative

What brings this to mind is a small item in the news, which, like a pool ball careening across a felted table, knocked two or three others in their pockets before coming to rest.

We had to go pluck each one out of its hole and examine it. And what a marvellous fraud each one is! Democracy! Central banking! Welfare statism!

We think of the Swiss as prudent, careful people. They have their feet on the ground and their heads screwed on straight.

But they have undertaken a pathetic and preposterous initiative, one so hopelessly ill-conceived, it is worthy of American economists...or French intellectuals.

Specifically, next week the Swiss will vote on a proposal to give a 'basic income' to all Swiss residents, whether they work or not: a guaranteed annual income of $30,000.

You may have the same reaction we did: This is crazy!

If you can earn $30,000 a year without working, it will be hard for anyone earning less than $60,000 (about the same as $30,000 after taxes in many places) to get up in the morning and put on his overalls.

Why bother?

The waiters will abandon us at our tables, our glasses unfilled and our dirty dishes still in front of us. The valet parkers will drive off in their own new cars. The burger flippers will leave their hot patties in midair as they head home. All the low-paying jobs, and more than a few middle-income posts, too, will be vacated.

New War on Poverty

But this proposal taps into several faddish worries and is finding many supporters...

First, there are the zombies.

Ever eager to get something for nothing, they see more something here to get. 'Nuff said.

Second, the 'good government conservatives' imagine that government can function more rationally and more efficiently.

They see the feds flailing around with their welfare programs. They figure this will be a simpler, more effective way to deliver something for nothing to the undeserving multitudes.

If you're going to spend trillions fighting a war on poverty, they believe, you might as well win it.

Third, the elites of all faiths and persuasions are eager for any pretext to give money to the zombies in exchange for their votes. It's a way for them to manipulate the masses, gain control of the police power of the state, and use it for their own aims.

Fourth, those whose hearts bleed over 'inequality' imagine that they can get the feds to staunch the wound.

But they've missed the point. The insiders who control the Deep State don't want to eliminate inequality; they want to add to it. They use government to get more money, power, and status. And they can only get these things by taking them away from their rightful owners.

(This is a key reason why the welfare state is doomed to failure...about which, more tomorrow.)

Fifth, there are those who are concerned about robots!


Yes, there is growing concern that robots will take over the world's work.

For example, there are 3.5 million truck drivers in the US Many or most of those jobs may soon be history, thanks to self-driving trucks (which are already operational).

So, too, will millions of other jobs now held by human beings. Lawyers, accountants, actuaries, architects, physical trainers - any career that involves routine procedures is vulnerable to disruption by the new generation of smart 'bots'.

Robots are getting better and cheaper; by comparison, humans are becoming dumber and more expensive. Some people believe robots will gradually replace all but the most creative, most entrepreneurial, and best educated workers.

  Our iOS App is Here... Get it Now!  
  We take immense pleasure in announcing that our iOS mobile App is now LIVE.

Yes, the complete Equitymaster experience is now available on your Smartphone...iOS and Android!

Right from the free e-Newsletters to the chart-of-the-day; from the intelligent portfolio tracker to our premium services; from our latest recommendation reports to all the daily market commentary... and a lot more.

If you're reading this on your mobile, just click on the icon below to download the app right away!

  Android Mobile App   Android Mobile App 

Here Come the Robots!

We've reported that the wages of nine out of ten US workers are no higher today than they were 40 years ago after you adjust for inflation.

It could get a lot worse: Nine out of ten workers could be permanently out of work. Here's journalist James Neilson writing in the Buenos Aires Herald:

  • The idle poor. There are already many millions of them. Soon, they could be numbered in the billions.

    With alarming speed, technological progress is leaving them behind. 'Artificial intelligence' - robots, computerized systems, and whatever else the folk in Silicon Valley come up with - will take over large swathes of the economy.

    By doing so, it will deprive all but a tiny minority of their jobs.

What then? How will most people support themselves when most people have no jobs?

That's what Swiss politicians think they have figured out.

The idea of a guaranteed income is hardly new. And hardly far out. The Romans had their panem et circenses (bread and circuses).

The working classes of Rome were put out of work by 'robots', too - slaves captured in Rome's many successful conquests.

The slaves gradually took over all the menial work - especially on the large latifundia (landed estates) - leaving a large, idle, and restless population in Rome. In order to keep them docile, the Romans handed out wheat and staged gladiator combats in the Colosseum. (Today, we have welfare payments and presidential debates.)

More recently, American economist Milton Friedman proposed a negative income tax (NIT). He was trying to make the welfare system more efficient.

The Nixon and Carter administrations proposed a guaranteed income program in the 1960s and 1970s, with the aim of making the system fairer, as well as more effective.

And the Green Party included a NIT proposal in its 2010 platform, for God knows what reason.

What's wrong with these proposals? What's wrong with the state the Welfare State is in?

Stay tuned...


BILL BONNER Founder, Agora Inc


Bill Bonner is the President & Founder of Agora Inc, an international publisher of financial and special interest books and newsletters.

Disclaimer: The views mentioned above are of the author only. Data and charts, if used, in the article have been sourced from available information and have not been authenticated by any statutory authority. The author and Equitymaster do not claim it to be accurate nor accept any responsibility for the same. The views constitute only the opinions and do not constitute any guidelines or recommendation on any course of action to be followed by the reader. Please read the detailed Terms of Use of the web site.

Recent Articles

A Darkness Is Spreading Across the US August 22, 2017
Today, we are attacked by one preposterous thing after another, each of them even more absurd than the last.
Dear PM Modi, India is Already Land of Self-Employed, and It Ain't Working August 21, 2017
Most Indians who cannot find jobs, look at becoming self-employed.
Trump Takes a Beating August 18, 2017
Donald J Trump, a wrasslin' fan, took a 'Holy Sh*t!' blow on Tuesday.
Which Gods Will Bring Down the US Empire? August 17, 2017
Mr Trump is in the White House and the gods are in their heavens; what's not to like?

Equitymaster requests your view! Post a comment on "Basic Income Guarantee: Have the Swiss Lost Their Minds?". Click here!

4 Responses to "Basic Income Guarantee: Have the Swiss Lost Their Minds?"


Jun 6, 2016

I havent followed the Swiss economy closely to understand the real intentions and motives of this.
Any initiative ultimately leads to failure or success depending on the attitude and motive of the public and the enterprise.
If only families were allowed to pursue things of interest and passion and leave the mundane yet necessary task of earning for a livelihood behind, wouldn't the country prosper well? Today, most of the people for e.g., behind the toll free nos. setup to provide assistance to grieved customers are manned by people who have no interest in customer care or knowledge about the issues being discussed. Most of them are there because they need to earn for their living and couldnt find any other job.

Imagine your food,clothing and shelter taken care of, and you are free to explore the world. I would imagine many would pursue things closer to their heart - music, art, research, social service etc., than do what they are actually doing.

None of what I say can actually happen in a world bereft of values, integrity and attitude. However, the leaders can ensure even a scheme such as this can be made effective by choosing how it is implemented. For e.g. the 30,000$ can be credited to a separate wallet which can only be transacted through some unique methods and can be traded for specific purpose only - such as buying food, clothing etc., and can be restricted for use such as drugs, alcohol etc., Without giving some thoughts on the good side of this thinking, I feel it is too hasty to dismiss it as foul or stupid


parimal shah

Jun 3, 2016



Shashank Tilak

Jun 3, 2016

I had written this piece for a contest about next 50 years and amazing changes that one can expect in the period. I copying same here.
For most people, efforts on job or for education, skill building, or enhancing their capabilities are meant to make them 'richer' in monetary terms. Money is expected to satisfy this gluttony. There are rare individuals - may be less than 5% of the total population who are really driven by a wish to excel.
As a start let us consider the 'common person' who does NOT fall among this rare class of individuals.
The common individual is really happy if her / his daily needs are met and are assured to be met in future - almost by any means. Let us look at what will happen if it becomes possible to give such assurance - specifically through usage of such electrical signals.
• All satisfaction - of basic needs and beyond will be assured through feeding these signals - as a basic (and free?) necessity to all humans in this world.
• People will not have to "work" to earn money or for gaining any of these resources.
• Hence people will have no need for an occupation and skill to 'earn a living'.
• The person will not have to commute - for work at least. So there will be no need for any vehicles or transport as one sees today.
• Any learning or knowledge or skills can also be imparted through these electrical signals. Hence there will not be any need for special schools or other learning infrastructure. The signals can be fed to infinite number of individuals at any time and no additional costs.

In this world of people - living an "easy life", all people will be receiving such electric signals - right to their brains. These signals will satisfy all their needs - from basic to most sophisticated or gluttonous ones. It will be possible to deliver these signals as a matter of basic service.
Some of the prominent examples of such signals and end results can be -
• People will virtually derive their satisfaction of having food and drink related requirements including taste, aroma and feel of the food. This will include handling, chewing, taste, digestion and feeling of contentment.
• Another major need is for procreation. In this case one will be able to get all feelings - view, fondle, caress and see the offspring 'grow' in front of the 'family'. The family and offspring also can be any combination that an individual can imagine
• One can get feel of wearing best possible / haute couture creations along with admiring looks from other people.
• Same will also hold for feeling of occupation and usage of best accommodations.
• All feelings about travel - excitement of catching train, flight or bus, speed, rush of air, vision, or feelings of temperature, air, people and their culture can be experienced in same manner
• It will be easier to satisfy senses of feeling of rush of air while skiing, or doing a dive or swimming underwater. All of this will also be lot safer and with no contingent risks of health or environmental damage.

Along with having satisfaction of getting all wishes satisfied, people will also be able to satisfy their fancies on creative lines - engineering, authoring, fashion, food / culinary expertise. This creativity can be expressed as electrical signals and then sent back to central computers for storage and distribution. All of this can also be published and made available to anyone. If other people see such published creations, they will also be able enjoy fruits of such creation. If general public likes this creativity, original creator will get recognition, adoration, and possibly other benefits as well. If not - no harm done. This is really taking forward overall democratization of current liberty brought in by internet and technology.
It will also be possible to monitor and ensure that people do not let loose variety of malware in terms of harming people and their feeling of satisfaction.
What this environment will mean? Some of the major ideas and points can be -
• Technology wise, there is a major research required to identify and validate all the variety of mechanisms assumed here. It will mainly consist of -
o Signals that will bring in responses conveying contentment from individuals. It will consist of range of human experiences, their combinations and overall integration in the environment.
o The research will also involve means to deliver these signals to each individuals
o Lastly, there will be a major computer and networking infrastructure that should be managed effectively and efficiently.

Benefits of this mode of operation -
• Demand for most natural resources will be cut down drastically. Even a figure of 80% reduction in usage of natural resources may be an under estimate.
• This should reduce most major current issues related to environment, global warming and fast depletion of irreplaceable resources.
• Most important factor will be in terms of improving quality of human life. This mode of operation will possibly result in most of human population being satisfied.
• It will also reduce root cause of most major political, military and economic conflicts that threaten the world today.

If most people will be satisfied with such an arrangement, one can rest assured that there will also be a small proportion - may be 5% to 15% but certainly not more than 20% of people who will still like to exert and really excel. These are the people who will like to physically climb the Mount Everest - "because it is there" in all senses of the term and context.
It is these people who will be physically running such utopian universe. They will lead 'working life'. These people will provide necessary support to computers and other facilities. These people will be chosen for their real will to work, excel and think through different situations and requirements of rest of the population. Apart from these basic needs they will also carry responsibility for identifying future leaders and groom them for carrying these needs.
Apart from the physical aspects, major issues are in terms of morals values and privacy. Some of these can be -
• Who will make the selection of people for the easy life and the working life? How this selection be done?
• In spite of removing major risks and physical infections etc, there would still be a major need for medical and healthcare support. What should be the mechanism for such support?
• There will be decisions required about what is malware? What will be good for the people? What will be considered bad? What would be the means to control and regulate such good and bad outputs?
Some of these issues are present even today. But their severity and overall impact will be much more in this futuristic scenario.



Jun 3, 2016

please unsubscribe me.

Equitymaster requests your view! Post a comment on "Basic Income Guarantee: Have the Swiss Lost Their Minds?". Click here!