by Philippe van Parijs | Jun 6, 2016 | Opinion
Despite being factually defeated in the ballots, the Swiss initiative for basic income should be regarded as a giant step in the now unstoppable march towards basic income, says BIEN Founder Philippe Van Parijs.
Philippe Van Parijs is Professor at UCLouvain, Hoover Chair of Economic and Social Ethics. Chair of BIEN’s International Board
June 5th, 2016 will be remembered as an important landmark in the worldwide march towards the implementation of unconditional basic income schemes. On that day, all Swiss citizens were asked to express their approval of or opposition to the following proposal:
- The Confederation introduces an unconditional basic income.
2. The basic income must enable the whole population to live a dignified life and to participate in public life.
3. The law will determine the funding and level of the basic income.
The proposal was rejected, with 76.9% of the voters against, 23.1% in favor. Why was this rejection predictable? And why is it such an important step forward?[1]
From 0 to 23%
To answer these questions, a brief historical overview is in order. In 2008, the German film maker Enno Schmidt and the Swiss entrepreneur Daniel Häni, both based in Basel, produced Grundeinkommen: ein Kulturimpuls, a “film essay” that gave a simple and attractive picture of basic income. The dissemination of this film through the internet helped prepare the ground for a popular initiative in favor of the proposal quoted above, which was launched in April 2012. Another popular initiative, which proposed an unconditional basic income funded specifically by a tax on non-renewable energy, had been launched in May 2010, but it failed to gather the required number of signatures. The initiators of the 2012 initiative first thought of specifying that the basic income should be funded by the Value Added Tax, as was suggested in the film, but they dropped the idea for fear of reducing support for the proposal. They also chose not to stipulate a precise amount of the basic income in the text itself. But their website did mention a monthly amount of 2500 Swiss Francs per adult and 625 Swiss Francs per child as the best interpretation of what was required, in Switzerland, “to live a dignified life and to participate in public life”. If an initiative gathers over 100.000 validated signatures in 18 months, the Federal Council, Switzerland’s national government, has the obligation to organize a country-wide referendum within three years either on the exact text of the initiative or on a counter-proposal to be negotiated with the initiators.
On the 4th of October 2013, the initiators handed in spectacularly 126.406 valid signatures to the federal chancellery. On the 27th of August 2014, after validation of the signatures and examination of the arguments, the Federal Council rejected the initiative without making a counter-proposal. In its view, “an unconditional basic income would have negative consequences on the economy, the social security system and the cohesion of Swiss society. In particular, the funding of such an income would imply a considerable increase of the fiscal burden”. The proposal was subsequently submitted to both Chambers of the Swiss Parliament. On the 29th of May 2015, the Commission of Social Affairs of the National Council (Switzerland’s federal house of representatives) recommended by 19 votes against 1, with 5 abstentions, that the proposal for an unconditional basic income should be rejected. After a thorough discussion at a plenary session on the 23rd of September 2015, the National Council proceeded to a preliminary vote and endorsed this negative recommendation by 146 votes against 14 and 12 abstentions.
On the 18th of December 2015, the Council of States (the Swiss Senate, made up of representatives of the cantons) considered the initiative in turn and rejected it by 40 votes against, 1 in favor and 3 abstentions. On the same day, the proposal was the object of a second and final vote in the National Council: 157 voted against, 19 in favor and 16 abstained. In all cases, all the representatives from the far right, center right and center parties voted against the proposal. All pro votes and abstentions came from the socialist party and the green party, both of which were sharply divided. At the final vote in the National Council, 15 socialists voted in favor, 13 against and 13 abstained, while 4 greens voted in favor, 5 against and 3 abstained. The degree of support thus oscillated between 0% in the Federal Council, 2% in the Council of States and 4, 8 and 10% in the National Council (commission, preliminary and final vote).
For the popular vote on the 5th of June 2016, the national leaderships of nearly all parties, including the socialist party, recommended a “no” vote. The only exceptions were the green party and the (politically insignificant) pirate party, which recommended the “yes”, joined by a number of cantonal sections of the socialist party from all three linguistic areas. Against this background, it was entirely predictable that the no vote would win. The actual results of nearly one vote out of four for “yes” — with peaks at 35% in the canton of Geneva, 36% in the canton of Basel-Stadt, 40% in the city of Bern and 54% in the central districts of Zürich — is far above what the voting record in the Swiss parliament would have led one to expect. We must, moreover, bear in mind that Switzerland is perhaps the country in Europe in which support for an unconditional income should be considered least likely, not only because of the deeper penetration, in Calvin’s homeland, of a Calvinist work ethic, but above all because of the comparatively low levels of unemployment and poverty it currently experiences.
In Switzerland and beyond: broader and more mature
Everyone now realizes, however, that even if the initiative had not managed to gather the votes of more than the 2.5% of the Swiss citizens who had given their signatures at the initial stage, it would have been, thanks to the initiators’ stamina and their impressive communication skills, a stunning success. There is now no population in the world or in history that has given more thought to the advantages and disadvantages of the proposal than the Swiss have done over the last four years. And the effect was by no means confined to Switzerland. Just in the few days preceding the popular vote, the Economist, the Wall Street Journal, the Financial Times, the New York Times, the Guardian, and countless other newspapers around the world felt forced to publish substantive articles in order to explain at length — sometimes quite well, sometimes not so well — what a basic income is and what it is about. There is certainly no week in the history of the world in which the media have allocated so much time and space to a discussion of basic income.
Apart from giving a big boost to the spreading of the idea, the Swiss initiative has also greatly contributed to the maturing of the debate about it. For one lesson to be drawn from the experience is that a proposal that stipulates a high amount for a basic income, but no precise way of funding it, can easily gather the required number of signatures for a vote – while still being a long way from convincing a majority among the voters who bother to turn up on voting day (about 46% of the electorate in this case). A shining star that indicates the direction is enough for the former, but visible signposts on the ground marking a safe path in its direction are essential to achieve the latter. Whenever I was invited to join the Swiss debate, I argued that introducing in one go an individual basic income of CHF 2500 (38% of Switzerland’s GDP per capita) would be politically irresponsible. True, no one can prove that such a level of unconditional basic income is not economically sustainable. But nor can anyone prove that it is. Nor will any local experiment performed or planned in Switzerland or elsewhere prove that it is. Moreover, it is not unreasonable to suppose that the economic sustainability of an unconditional basic income at that level will require a number of preconditions currently unmet, including the introduction of new forms of taxation — for example the micro-tax on electronic payments that played an interesting role in the Swiss debate — and effective international cooperation against tax evasion — not exactly Switzerland’s strongest point.
In the immediate future, however, it should now be clear that more modest but significant steps forward can and must be worked out and debated. They must involve an individual unconditional basic income at a lower level (say, 15 or 20% of GDP per capita) that would still need to be topped up by means-tested social assistance benefits or housing grants, certainly for urban single-adult households. It is not because in many cases the unconditional basic income would not suffice, on its own, to “enable the whole population to live a dignified life”, that it would not make a big difference to the security, bargaining power ad freedom of choice of many of the most vulnerable among us. Even in the short run, introducing such an unconditional basic income is definitely sustainable economically. It is up to us to make it politically achievable.
The totally unprecedented Swiss initiative has not only made many people, in Switzerland and far beyond, far more aware of the nature and size of the challenges we face in the twenty first century and of how a basic income might help us address them; by triggering countless objections, some naive and some spot on, it has also helped the advocates of basic income to sharpen their arguments and to better see the need for realistic next steps. For both of these reasons, the Swiss citizens who devoted a tremendous amount of time, energy and imagination to the “yes” campaign deserve the warm gratitude not only of the basic income movement worldwide, but of all those fighting for a free society and a sane economy.
[1] Many thanks to Nenad Stojanovic (Zurich and Princeton) for reliable information and insightful comments.
by Philippe van Parijs | Oct 23, 2010 | Opinion
The Basic Income Earth Network (BIEN) held its thirteenth biennial congress in Sao Paulo, Brazil, June 30 through July 2, 2010. USBIG has been a national affiliate of BIEN since 2006. Philippe Van Parijs, director of the Hoover Chair of economic and social ethics at the Catholic University of Louvain and Chair of BIEN’s International Advisory Board, wrote the following account of the Congress for the BIEN NewsFlash (reprinted in its entirety):
There are at least three reasons why holding a BIEN congress in Brazil made a lot of sense. Firstly, Brazil’s cash transfer system is one of the most comprehensive in the so-called developing world and is sometimes presented as one of the closest real-life approximations to a genuine basic income. Secondly, Brazil adopted, in January 2004, a law that explicitly asserts as an objective the introduction of an unconditional and individual basic income for all its permanent residents. This is something no other country ever did. And thirdly, it is on the suggestion and insistence of Senator Eduardo Matarazzo Suplicy that BIEN was turned, in September 2004, from the Basic Income European Network into the Basic Income Earth Network. Eduardo Suplicy was the first senator for Lula’s PT and has been representing the state of São Paulo in the Brazilian Senate for nearly 20 years.
So, the choice of São Paulo for this 13th Congress was more than justified, and it proved excellent. Thanks to the hard and intelligent work of an energetic organizing team led by Lena Lavinas, Fabio Waltenberg and Celia Kerstenetsky, the congress was yet another fantastic occasion for sharing information, exchanging arguments, taking new initiatives and rekindling fraternal contacts. The organization was even so good that the congress was able to smoothly accommodate the plenary viewing of the Brazil-Holland World Cup football match and happily get back to full swing straight away despite Brazil’s painful defeat.
The congress took place in the Faculty of Economics of the University of São Paulo on 1 and 2 July 2010 and was preceded by a Brazilian pre-congress day on 30 June. Over the three days, the meeting attracted over 500 participants from over 30 countries and hosted close to 200 presentations that can still be downloaded from the congress site (www.bien2010brasil.com). This meant many parallel sessions that allowed for some in-depth discussion, combined with a number of plenary sessions. The closing one, chaired by Senator Suplicy, provided an opportunity to look back and think ahead with four of those who founded BIEN in Louvain-la-Neuve in 1986 (Clause Offe, Guy Standing, Robert van der Veen, Philippe Van Parijs). On afternoon preceding the congress, BIEN’s Executive Committee was received at length by President Lula, who explained how BIEN’s objectives were already partly met by the programmes that exist in Brazil.
Indeed, several sessions of the congress, including a plenary addressed by the director of the programme, Lucia Modesto, were devoted to the achievements of the Bolsa Familia and to how the challenges it faces may pave the way to a basic citizen’s income. Means-tested programmes such as the Bolsa Familia unavoidably generate a major problem of fair implementation in the context of a largely informal economy. As the programme matures, there will be more and more people who will rightly say: “this is unfair, my neighbour is earning more than me and is receiving a Bolsa Famila whereas I am not”.
Brazilian scholars who study the operation of the scheme do observe that there are comparatively very few households removed from the programme because their assessed income exceeds the (low) threshold, and they acknowledge that many more would need to be removed if the means test were rigorously implemented. But it would be very harsh, expensive, conflict-ridden and unpopular to monitor closely families that are still very poor and punish them with the withdrawal of the Bolsa Familia as soon as their monthly earnings are suspected of exceeding the threshold of 140 reals per person (less than 80 dollars). So far, the risk of clientelism and straight corruption intrinsic in such a system has not eroded its popularity. The public discussion about the Bolsa Familia has been focusing mostly on a different issue, namely whether one should strengthen or weaken the condition of school attendance currently imposed on households with children in the appropriate range: 85% of the classes for children between 6 and 15, 75% for adolescents. But in case the legitimacy of the whole scheme were to be threatened by the unsustainability of the means test, Senator Suplicy and other Brazilian basic income supporters are ready with a structural solution: just do what the 2004 law promises to do, i.e. get rid of hundreds of thousands cases of unfairness in one go by simply extending the benefit to all.
The congress was, as usual, an opportunity to hear about what is happening in very different places in the world. For example, it provided a nice opportunity to compare the local basic income experiments currently conducted in Namibia and in Brazil or soon to be started in India. After the end of the conference, two groups of participants even went to visit the two Brazilian experiments currently underway (in São Antonio do Piñal and Quatinga Velho). It is important to keep the order of magnitude of these experiments firmly in mind. In São Antonio do Piñal, for example, an attractive municipality located in a hilly part of São Paulo state and supporting itself largely from tourism, we visited the room in which the municipal council made an unprecedented decision. It decided to allocate 6% of all municipal revenues collected from local taxes (as opposed to state or federal grants) to the funding of a basic income for all inhabitants. However the total of these local taxes amount to 1.240.000 reals per year. 6% of this amount divided by the 7000 inhabitants gives each of them less than one real per month (about half a dollar). This is a neat symbolic gesture, that its initiators try to supplement in various ingenious ways, but so far it does not weigh much next to the colossal bolsa familia programme, which provides an average per-family monthly benefit of about 50 dollars (95 reals) to over 12.5 million Brazilian families.
This is to be compared with what many of us saw as the most surprising news of the whole congress. It came from Iran. In January 2010, the Iranian parliament approved by a narrow majority the so-called “targeted subsidy law”, which combines two measures. Firstly, it scraps a large implicit subsidy to oil consumption by both Iranian households and firms. It does so by bringing the comparatively very low domestic price of oil in line with the international price. Secondly, it compensates the impact of the general price increase on the standard of living of the population by introducing a monthly uniform cash subsidy for over 70 million Iranian citizens to be paid to the heads of households. The amount is expected to reach initially about 20 dollars per person per month and to gradually rise to 60 dollars. The rich, who consume directly and indirectly more oil than average will not be fully compensated for the price increase, but the poor will automatically be more than compensated. The law, which is due to come into effect on September 21, is therefore expected both to foster a more efficient use of scarce natural resources and to reduce the level of social inequality. For more information, see the section “national debates” below (or Hamid Tabatabai, hamtab@gmail.com, “The ‘Basic Income’ Road to Reforming Iran’s Subsidy System”, slides downloadable from the website of the congress, updated paper forthcoming in Basic Income Studies). If this scheme is actually introduced and expanded as planned in Iran, it promises to be a very interesting initiative to study, and it may inspire other countries. Wherever one is seeking a “sustainable new deal” that combines ecological and social concerns, making resource consumption far more expensive and distributing the large revenues from the price increase equally to all is an obvious option to consider.
In many places, this is a far more realistic option than an Alaska-type permanent fund programme (discussed at the congress by two of its best specialists, Scott Goldsmith and Karl Widerquist). This programme distributes dividends to all Alaskan residents — in 2009, somewhat above 100 dollars per person and per month. As income per capita is about 13 times higher in Alaska than it is in Iran, this dividend obviously makes far less of a difference to the local income distribution than the Iranian scheme will, despite the latter being lower (per capita) in dollar equivalents. But the main difference is that the Alaska scheme is funded out of the interest collected from investments made worldwide with revenues generated by the production of oil at some point in the past, whereas the Iranian scheme should be understood to be funded out of a tax on the current consumption of oil. The Alaska-type scheme is therefore restricted to resource-rich (sub-) countries that manage at some point to exercise sufficient political self-restraint to create and develop a substantial fund. The Iranian-type scheme, by contrast, is available to any country that wants to price the consumption of oil in an ecologically responsible way and to buffer the effect on people’s standard of living in a socially responsible way. For this road to basic income to be a real option there is no need to first accumulate a large fund, nor indeed to be an oil-producing or resource-rich country. Yet, there are also disadvantages. In the long run, one can expect the return on the Alaskan fund to keep fluctuating quite wildly but not to converge to zero. Our consumption of oil, by contrast, will not continue forever.
This surprising Iranian story is only one of the many that were discovered and discussed at the São Paulo congress. It neatly illustrates the role a network such as BIEN can play to spread useful information, to make it intelligible, to broaden our imagination, to boost our confidence and to empower our struggle for greater justice all over the world.
-Philippe Van Parijs, Chair of BIEN’s International Advisory Board
