Cooking the Books: No Basic Change
In June Swiss voters – they get the interesting things to vote on – rejected a proposal to introduce a basic income from the state for everyone as of right whether they are working or not. Perhaps surprisingly, only 23 percent voted for with an overwhelming 77 percent against.
According to the Times (6 June), critics denounced the proposal as a ‘Marxist dream’. We don’t think Marx did dream of a basic income. What he had in mind was the abolition of the wages system and its replacement by ‘from each according to ability, to each according to need’. This would mean that, after cooperating to produce things and provide services, people would have free access, without having to pay, to what they needed to live and enjoy life.
The voters were asked to decide only on the principle of introducing an unconditional universal basic income without any mention of its level. However, its promoters such as BIEN Suisse did publicise a figure of 2,500 Swiss francs a month, or 30,000 a year, an amount just slightly above the poverty line in Switzerland.
In previous articles analysing Basic Income schemes we have always pointed out that this would result in a strong downward pressure on wage levels resulting eventually in a fall in wages. As we wrote when the Green Party included this measure in their manifesto for the 1987 general election:
‘If wage or salary earners are paid £100 a week by the government, they can use this income to maintain themselves; which means that the employer will be relieved of having to include an amount to cover this expenditure in the wage packet or salary cheque. Economic forces will therefore tend to ensure that wages and salaries fall to a level which, when added to Basic Income, will allow the employee to maintain him or herself. In other words, wages or salaries would become sufficient only to top up Basic Income to the economically determined level’ (Socialist Standard, September 1988).
The Swiss proposers of the scheme didn’t even bother to argue against this. Not only did they accept it but they incorporated it into their scheme. In an article in French costing the scheme on the website of Génération RBI (Generation Unconditional Basic Income) they emphasised, with graphs and numerical examples, that everybody earning more than the poverty line would be no better off financially as, they said, their wages would be reduced by the amount of the Basic Income:
‘Wages are going to adapt themselves to become a complement to Basic Income. For example with an Unconditional Basic Income of 2,500 Swiss Francs, someone who at present gets 8000 Swiss francs from their employer will not get more than about 5,500 or so wages which will come to be added to their Basic Income’ (http://rbi-oui.ch/laboratoire-sur-le-financement-du-revenu-de-base-inconditionnel/ ).
So their total income would be the same, only under their scheme, instead of all of a worker’s total income coming from their employer, a part would come from the state and a part from their employer. This would not be a subsidy to employers (another danger of such schemes) as taxes on employers would be increased to pay for this. And of course a basic income equal to the poverty line is neither going to undermine the wages system nor break the link between work and consumption, as other supporters of such schemes have argued.
We commend them for their honesty and logic at the expense of the credibility and attractiveness of their scheme to reform capitalism.