Switzerland considers the citizen’s income

The citizen’s income is a political idea that I think deserves serious consideration. It something that crops up every few years, like the Land Value Tax, gets a little bit of attention and then vanishes again – only to be rediscovered by the next generation, who wonder why nobody has done it before.

So it’s interesting to see it being pursued a bit more deliberately at the moment in a few places, and the place taking it furthest at the moment is Switzerland. Thanks to its unique democratic model, citizens can propose legislation if they can garner enough support for it. Recently a campaign submitted a plan for a basic guaranteed income, and it’s been gathering support throughout the summer – here they are unloading a lorry full of coins in Federal Square in Bern, one for each Swiss citizen. The proposal will now go to a referendum. If it succeeds, every Swiss citizen would receive a guaranteed minimum income every month, sweeping away a raft of benefits and giving everyone a financial safety net.

Where this has been reported, the comments in response are predictable – expect the collapse of the Swiss economy, waves of lazy immigrants, Switzerland has gone socialist, etc. This is ignorance. Switzerland is broadly to the right politically, it has tight immigration laws already, and it’s one of the richest countries in the world. If anyone can afford the experiment, the Swiss can. And no, the citizen’s income is not a ‘leftist’ policy. Most Swiss trade unions are suspicious of the idea and fear it will depress wages.

It should go without saying that like any political idea, it can be implemented badly. It’s been broadly reported that the basic income will be $2,800 a month, which struck me as being pretty high. There’s more logic to that figure than might first appear, but it’s also negotiable. The referendum system allows counter-proposals so that voters are given a choice, and campaigners expect that the government will table its own more moderate version.

Speaking of more moderate versions, it’s also worth saying that the citizen’s income route being explored here is one form of the idea, and quite a purist one. There are many other ways of formulating a universal financial safety net, including some of the direct payment schemes being trialled in the developing world, or the Negative Income Tax advocated by Milton Friedman. Cyprus announced something close to the latter this year, though the details aren’t clear yet. These are simpler and fairer than welfare schemes that tell people how to run their lives, so it offers a way to provide welfare that is small-government friendly – hence the support of Chicago school economists and free-market thinkers.

Whether or not Switzerland votes in favour of the Citizen’s Income, the idea is enjoying another moment in the sun. We may yet see a guaranteed minimum income revolution. If we do, we might go some way to replying to JK Galbraith’s question of “why, in a troubled world, we make such poor use of our affluence.”