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South African businessman Johann Rupert calls for basic income

Billionaire businessman Johann Rupert, chairman of Swiss luxury goods company Richemont and South African investment holding company Remgro Limited, has recently been speaking in favor of basic income.

In March, Rupert spoke to the Swiss economic newspaper Finanz und Wirtschaft about the state of the Swiss watch industry. While the interview mainly focused on this specific industry and Rupert’s company Richemont, it eventually turned to some more general questions.

Asked about his biggest worries for the future of the economy, Rupert mentioned growing inequality and threat of job losses due to automation; in his view, such social and economic changes would intensify political extremism and hatred in society.  

When then questioned about potential solutions, Rupert brought up basic income, stating, “In order to mitigate the job losses through automation, we will have to talk about forms of unconditional basic income [German: Formen eines bedingungs­losen Grundeinkommens].”

In May, Financial Times reported that Rupert had told journalists, “I’m a proponent of universal basic income. We have to give time to people to re-skill themselves for a new economy.”

According to Forbes, Rupert is Africa’s fourth richest person.

 

References

Mark Dittli and Pascal Meisser, “Die Lage in China hat sich normalisiert,” Finanz und Wirtschaft, March 24, 2017. (In German)

Ralph Atkins, “Richemont founder backs universal basic income,” Financial Times, May 12, 2017.


Reviewed by Asha Pond

Photo: Montblanc Watches (a subsidiary of Richemont), CC BY-NC-ND 2.0 antefixus21

Kate McFarland

About Kate McFarland

Kate McFarland has written 437 articles.

Kate has previously worked as a professional student, but is currently taking a mid-career retirement.

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4 comments

  • Mike van Wyk

    I am heartened that one of South Africa’s foremost businessman has publicly stated his support for UBI.
    South Africa currently has an unemployment level of between 25 and 27%. Many of those unemployed are amongst our youth. What impact further on this disastrous situation is that many of our unemployed youth are under educated and therefore unemployable, leaving South Africa with a dangerous vacuum of skilled labour.
    This will impact South Africa’s future economic growth. The end result will be that South Africa will continue to languish behind as developed economies globally and many of our BRICS partners engage the 4th Industrial Revolution, which will require a workforce to have high levels of numeric and ‘digi-logic’ skill.
    South Africa’s current social support takes form around SASSA, which requires means testing and falls hopelessly short of providing anyone unfortunate enough to rely on such support any level of dignified living standard. A large percentage of South Africans, live desperate lives, battling to earn enough to feed their families, let alone afford adequate shelter and clothing. South Africa’s gini coefficient remains one of the worse measured globally. Mr Rupert falls into the very upper end of South Africa’s wealth percentile – the rarified 1%.
    Ordinary South Africans, most living in abject poverty, including those in the low and mid middle class have little or no chance of bettering their living conditions in an economy currently growing sub 1%, live lives far removed from that of Mr Rupert’s experience. South Africa’s economy must grow consistently between 5 and 6% in order to even begin creating enough jobs to employ the vaste sea of unemployed labour. So Mr Rupert is very correct in his assessment that such a huge social polarisation could produce civil strife and the signs are already very clear that the lack of economic mobility is fast fanning the flames of civil discontent.
    For this reason I agree 100% that urgent implementation of a UBI without means testing set at a level of support which guarantees a dignified basic living standard, as promoted under United Nations Article 25. A distributed sum to all citizens which meet the very basic necessities of life, adequate food, clothing and shelter.
    UBI is not a nice to have, or a philosophical game – it is a moral imperative that all governments must engage unilaterally, not as is currently the case, a sequence of separate national experiments. The experiments that have been conducted in many parts of the globe indicate that some form of UBI is desirable and certainly beneficial. To the contrary UBI should be engaged and implemented globally, by engaging and implementing global agreements common to all nations that so doing, create and follow an agreed economic construct which provides for a standard sub-economic foundation or support which uplifts all citizens to a basic level at which guarantees a acceptable minimum standard of dignified life, without the requirement of labour. Such an outcome will require implementation of new economic rules that are applied globally and are agreed as a minimum standard of statehood. Importantly UBI must be accepted globally as a human right. Such an outcome will promote a new dispensation for global peace, health and prosperity for all – not just some. UBI will further provide citizens of all nations the power to choose their own destiny from a position of strength and not weakness. MMT has shown that all sovereign governments have the power and means to fund the public good – if all nations come to an agreement globally that a certain percentage of funds will allocated to met the implementation of UBI it can be done immediately with a few keystrokes at central banks. If this funding is spread between higher taxation on wealth (capital gains tax) at the highest levels, central bank creating a support fund by issuing a predetermined, globally agreed sum, each according to its own need and further, implementation and utilisation of a collective global sovereign fund into which audit-able rare valuables are registered. The global sovereign fund could consist of a pool of hard assets such; i.e valuable rare metals such as gold, or jewels such a diamonds, or rare collectable art. For example there are a number of know depositories of minted gold in coin or ingot which form part of some nations sovereign reserves. Such reserves and other valuables should be collectively registered and then by central agreement by all nations be revalued to a level that guarantees support for a global UBI. All private ownership of such valuable could register such stocks of value into the global pool. For example if gold had to be revalued by agreement from its present market value to that of 1 million dollars an ounce, it would immediately create a massive wealth effect which can be harnessed to support UBI globally. Because these assets are hard tangible assets which can be audited, it will create certainty and trust, similar to that experienced under the gold standard. To make things more interesting, the central sovereign wealth (trust) could issue bonds which can be floated on the market for purchase. From time to time, by global agreement, the registered assets within the central sovereign wealth (trust) could be escalated in value by a predetermined percentage, so bond holders who have invested in this trust receive a guaranteed return on their investment. This will provide a safe haven for open market funds, such as pension funds and other classes of investment which require non-speculative certainty of return. Such a fund could serve two purposes; 1) create a stable source of global wealth that esculates and serves as a guarantee underpinning a global system of UBI; 2) as a safe haven in time of stock market downturns and or volatility, thus providing citizens that prefer investing in non-speculative assets a guaranteed safe haven for their wealth. Note that this system is an economic construct that requires willing global participation and that only assets that are registered into the global sovereign wealth (trust) enjoy the escalation of value. Keep in mind that historically governments have past laws that require citizens to hand over their ownership of values such as gold – this should be avoided.
    Recent economic history has shown that governments are very capable of inventing new monetary constructs, one of which is QE. QE did the job of moving bad assets out of the system and helped stabilise banks, but did very little or zero to support ordinary people. Our very use of a fiat monetary system is nothing more than a social construct, so as to convey value from one person to another. The Brentwood agreement was a monetary construct, which for a short period worked very well and kept global economy very stable. So I see no obstacle preventing the formation of a central wealth fund or trust, out of which support for UBI can be administrated by means of a decree being issued on the value of certain historically well loved rare assets. Therefore for example the value of gold reserves can be re-evaluated by decree to any level required to cover central funding of a global UBI. I see such a system working in concert with increased tax on wealth and possible some level of QE to pump-prime the economic base – rather than the top (banks). I propose such a economic system would work towards creating a much more stable global environment, with additional benefits that are far reaching – such as global peace, stability and improved health. Certainly worth contemplating as an option under the current turbulent global conditions – which frankly does not make for a good picture going forward.
    Currently most proponents of UBI forward funding solutions that almost totally rely on taxation – that would be a grave error. The art of implementing UBI, is to do so without destabilising or stressing the existing economic reality, but rather to support and underpin the existing economic reality and in fact build a more stable economic environment globally. The above proposal does not envision a return to the gold standard in any away or form – what is proposed is a economic structure that bolts onto the existing structure as a support or stabiliser.
    So yes, Mr Rupert, I agree that UBI can work well and solve many of our current woes globally, but its going to take some hard bargaining and a willingness for the wealthy to share their bounty in a way that does not take from one to give to another but rather in a way that invests wealth for the common good. That way we all prosper and we all have a future that could look a lot more positive than we ever imagined.
    Imagine a world without abject poverty, hunger and strife. That would provide positive strides to a more equitable social reality. It just takes the will to make it a reality and such a reality is within our grasp.
    So lets put those lumps of useless gold vegetating away in vaults and private collections, which most economists feels are not worth talking about and governments horde for no real purpose, to good use – for the good public purpose which the universe created it – not just the toy of governments and super rich. Rather make it work for the good of all of humanity and for a peaceful world. That is my pray – hopefully yours.
    I challenge the G20, IMF and World Bank to work on this very rough idea for the benefit of humanity and peace. I know many South African would support my idea, hopefully that would include Mr Rupert.

  • For myPhd field research on disability and poverty I’m running 30 Basic income projects supporting disabled people and children four across South Africa, as well as in Uganda Kenya Ethiopia and Angola. In the few months we have been running we have received amazing support from the established communities we have been working with. Now reaching 2,000 families.

    • Andre Coelho

      Hi,

      Please send us more information on that BI project you’re developing. It is certainly news worthy. You can use our site to do that.

      Thanks

  • Mike van Wyk

    Hi Andre
    I must apologise for taking so long to reply to your invitation.
    This rough summary starts to outline my thoughts broadly. Forgive the errors that may be present at this point.
    I’ve summarised the idea further in a reply to the BIEN opinion article:
    “Towards a Basic Income: A Targeted Universal Framework for Shared Prosperity and Enduring Progress”
    I am in the final stages of shaping the proposed economic “fix” – I call it a “bolt-on” solution.
    For me the main problems to solve are; 1) economic certainty which equals stability; and; 2) restart the flow of money and wealth through the global economy – if monetary and wealth stops flowing due to many factors then we end up in the current economic stagnation we current experience. I also separate money flow from wealth distribution because wealth is often expressed in non-monetary asset classes. The economic solution I propose creates an supra economic construct that enables for those with excess wealthy to share that wealth in a way that all of humanity can benefit. Through this principal, I maintain that a global UBI can be supported.
    To realise such an outcome will require an adjustment of think amongst the power brokers of the global economic system.
    I will propose the article via the BIEN opinion registry and send you a rough draft for further editing if necessary.
    Mike van Wyk – Western Cape – South Africa

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