Monday, 06 June 2016

Swiss Voters Reject Giant Tax-funded Handouts for All

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Voters in ultra-wealthy Switzerland delivered a crushing blow to the “Universal Basic Income” plan, with more than three fourths voting against the proposal to hand out huge amounts of “free” taxpayer money to every adult and child in the country. According to results cited in Swiss media reports, just 23 percent of Swiss voters supported the controversial plan. A landslide 77 percent rejected the proposal. In other words, it was a brutal defeat for those supporting the guaranteed “free money” initiative — a group that includes establishment insiders affiliated with Big Labor and the internationalist Council on Foreign Relations.

But it is not the end of the story for those pushing the agenda. Despite going down in flames in the weekend's referendum, the global effort to encourage and promote widespread dependence on government by handing out “free” money to everyone continues to gain adherents. More than a few countries have growing movements to try out measures similar to what was proposed in Switzerland. And supporters of the effort worldwide celebrated the Swiss campaigners for getting the “basic income” issue on the ballot to begin with, and for raising the profile of a scheme that until recently was either not on the radar or dismissed as fringe absurdity.   

The Swiss proposal, if approved, would have seen the government hand some 2,500 Swiss francs ($2,560) to every adult resident of Switzerland. That amount would be the same whether somebody was a CEO or an unemployed artist. Every child under 18, meanwhile, would have received 625 Swiss francs from the government, making government, rather than parents, the providers of allowance and more. Of course, taxpayers would be expected to pick up the massive tab for the plan, making it extremely unpopular in low-tax Switzerland.  

But supporters of the scheme were adamant, saying a guaranteed basic income for everyone was necessary to fight “inequality.” They also claimed that it was urgent to avoid a dystopian future in which robots steal everybody's job, making everyone unemployed and broke. Supporters of the scheme marched through the street dressed as robots. Bizarrely, the measure was portrayed by supporters as an anti-poverty tool, despite the fact that market-oriented Switzerland has essentially no real poverty. Some especially silly and economically naive proponents of the measure even characterized it as “free money” — and who could be against free money?

Well, the Swiss, who have a long and distinguished history of moderation and making common sense decisions at the ballot box, were not buying the whole “free money for everyone” ruse. In part, perhaps, because the truth was so obvious. The Swiss government estimated that the “free” money scheme would have in fact cost taxpayers more than $200 billion every year. With the nation's Gross Domestic Product (GDP) coming in at under $700 billion, the plan would have consumed more than a quarter of Swiss economic output. Almost all the major political parties urged voters to reject the costly scheme.

The plan could have also sparked other problems. Economists and authorities warned voters that, among other concerns, the proposal, if approved, could have severely damaged the Swiss economy, making the plan potentially even more costly as a percentage of GDP. It could have also resulted in fewer people working, experts said. It may have also resulted in an exodus of international businesses, which have flocked to Switzerland in droves to enjoy its economic liberty, stability, and comparatively lower levels of taxation.     

Experts quoted in media reports said the defeat of the measure was reassuring to markets and investors. The referendum outcome “reinforces Switzerland as a favorable place to do business and be fiscally prudent,” Jon Cox, head of Swiss equities at Kepler Cheuvreux in Zurich, was quoted as saying in Bloomberg. “It’s a relief for business and for Switzerland’s reputation.” The vote is also likely to have a positive effect on the stock market, Cox added.

By contrast, the man who helped spark the referendum on the issue — it takes 100,000 signatures to trigger one in Switzerland, which has a population of eight million — sounded optimistic and determined to keep trying. “As a businessman I am a realist and had reckoned with 15 percent support; now it looks like more than 20 percent or maybe even 25 percent. I find that fabulous and sensational,” Basel cafe owner Daniel Haeni, one of the men behind the scheme, told Swiss media service SRF. “It would have been naive to expect the basic income to be accepted in the first try. In Switzerland, all big changes need several attempts to pass.”

Ominously, Haeni also pointed to the effects of the referendum outside of Switzerland as another example of his success. “When I see the media interest, from abroad as well, then I say we are setting a trend,” he told the Swiss broadcaster, claiming there was “enormous interest” in the scheme worldwide as a result of the attention shone on it by the Swiss “basic income” referendum. He said the campaign to hand out money to everyone (after taking it from taxpayers) had won a “moral victory,” if not success at the ballot.

Even before the Swiss vote, though, the scheme has been making waves — and it appears to have support from elements of the establishment. Later this month, a book will be published pushing the scheme written by former Service Employees International Union (SEIU) Big Labor boss Andy Stern, who served on the globalist Council on Foreign Relations' Trade Task Force. Entitled Raising the Floor: How a Universal Basic Income Can Renew Our Economy and Rebuild the American Dream, the book calls for handing out money to everyone.

Ironically, perhaps, the SEIU labor union Stern used to lead has been a top pusher of the economically devastating $15 minimum-wage agenda. As every credible economist understands, outlawing jobs that pay less than $15 per hour will cause massive unemployment among lower-skilled laborers — a perfect pool of disenfranchised voters without much economic understanding to serve as a support base for radical schemes such as universal basic income to get everyone dependent on government.   

Despite its calls for massive taxation and wealth redistribution, the idea of “basic income” has had some supporters among proponents of relatively free markets. Among its most prominent non-Marxist proponents was legendary economist Milton Friedman, who believed such a scheme would be better than the oppressive and lawless bureaucracies that had developed in the United States under the guise of “helping” the poor.  

Around the world, the basic-income scheme has also been gaining traction. In Finland, for example, politicians launched a study last year on the issue. Among other schemes, the Finnish government is reportedly set to find a random sample of 10,000 adults to give more than $600 to each month, with campaigners hoping to turn it into a national program eventually. Activists in other countries, from Canada to Holland to the United States, are pushing similar schemes.  

One of its most prominent supporters is pseudo-populist establishment cheerleader Yanis Varoufakis, a radical leftist former Greek finance minister who wants to further empower the super-state ruling over the European Union. “Now, either we are going to have a basic income that regulates this new society of ours, or we are going to have very substantial social conflicts that get far worse with xenophobia and refugees and migration and so forth,” he claimed, saying everyone had a duty to feed “surfers in California” even if they are “bums.” He claimed money for all would “stabilize society,” too.

But the last thing the Swiss or humanity need is more government and more wealth redistribution. On virtually every objective measure, Switzerland already ranks among the top performing nations in the world. Its GDP per capita (annual economic output divided by the number of people), for example, is among the highest in the world at close to $85,000. That is about twice as much as the United Kingdom or Germany, and over $30,000 more than the United States.

Switzerland also has among the longest lifespans in the world. Its unemployment rate of about 3.5 percent is half of the European Union's average. Switzerland also consistently ranks among the most competitive countries in the world. It is an industrial exporting powerhouse and home to more major international businesses per capita than perhaps any other nation in the world. It also consistently ranks at or close to the top worldwide in terms of economic freedom, which undoubtedly has much to do with its phenomenal prosperity.   

The idea of imposing even more draconian tax burdens on working people to hand that money back out to those same people, and to those who do not work, flies in the face of common sense, justice, and economic sanity. It also runs counter to what Paul says in the Bible: “This we commanded you, that if any would not work, neither should he eat.” Swiss voters were wise to reject the basic income scheme for many reasons. But if trends continue, the idea is far from dead — either in Switzerland or in the rest of the world.  

 

Alex Newman, a foreign correspondent for The New American, is normally based in Europe. Follow him on Twitter @ALEXNEWMAN_JOU. He can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it.

 

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