On June 5, the Swiss will vote on the unconditional basic income, i.e. the granting of an income of 2,500 Swiss francs per person and 625 Swiss francs per child. This means a total income of 6,250 Swiss francs for a family of 4 children, without having to work. Jackpot. What could be better in terms of financial independence?
Receiving a fixed income every month without having to work is what every future rentier is looking for. The opportunity offered by this popular initiative is therefore a real gift for all those who seek to acquire financial independence. Imagine the enormous boost this represents. You could practically stop working immediately, without even having to save and grow your money on the stock market. If the proposed annuity is still not sufficient, you could simply go and live in other countries where the cost of living is cheaper, such as Portugal, Croatia, Costa Rica, etc.
This is all well and good... too well indeed. But then, where is it going wrong?
The problem is that all of this is obtained effortlessly, entirely offered on a platter by the State. Those who follow me regularly know that the quest for financial independence is a path paradoxical. It involves working to be at peace later. It also involves being both in favor of capitalism, while wanting to free themselves from it.
Unless you inherit or win the lottery, you can't become a rentier with money falling from the sky. That would be too easy. It would mean that anyone can become one without effort. And yet at some point some of us have to go to work to keep society running. By working to save and then investing that money in businesses that generate profits, we allow society to continue to prosper.
Giving money without any compensation means, on the contrary, the death of the system. At first, for a while, everything will be fine. But quickly there will be no one left to create wealth, no more money to pay taxes, no more people who will want to train, no more labor for companies, and ultimately no more money, whether for the State, companies or individuals.
So yes, purely selfishly and with a short-term vision, we could vote yes to this initiative. But the risk is enormous. Much riskier than investing one's money in dividend-paying companies. It is the surest way to go bankrupt, at the national level.
These financial considerations aside, one can also ask oneself from a strictly personal point of view what degree of satisfaction one can draw from such an approach. Indeed, the path to financial independence is an initiatory journey as such. It involves discipline, self-denial, courage and perseverance. It has traps, pitfalls, but also moments of joy and pride. Ultimately, the path is as much, if not more important than the goal. And when one has arrived there, one can be proud of one's success, which one owes essentially to the fruits of one's own work, not to that of others.
Receiving money from the State, without any compensation, is on the contrary not very rewarding. One can even wonder what the person will do with this money that falls from the sky. He has not been used to managing this situation, to saving and investing. The temptation is then great to squander the income received and to let oneself go. The budding rentier, on the other hand, knows the value of money and knows how to make it grow. It is his money, for which he has worked hard. He will know how to enjoy it, to have good times, but he will also know what to do so that these good times can last.
So let's be responsible and vote no to this false good idea.
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Hello Jerome, you are not wrong, the amount of this income is indeed too high ... In France, there is this same debate, the amounts proposed in the studies only cover basic needs. So work is not disqualified: We are talking between 450 and 750 € for an adult and 225 € per child.
These amounts would replace all current aid, unconditional it also eliminates fraud. It finally allows to establish this real "flexi-security" and to avoid this feeling that the middle classes are always forgotten by the system. Finally, for taxpayers, this income is transformed into a tax credit: We would all be taxpayers with this income.
In the end, we would have a real safety net for everyone (in France, people are worried...) in a largely liberalized economy... Where our Minister of the Economy is asking for a moderation of salaries and dividends...
The idea that too high an income discourages work is present in the debates in France. Roughly speaking, the current aid (quite significant) does not discourage people from taking a properly paid job... We would have better working conditions. Greater consumption, logically this income would be based more on VAT than on tax or social contributions... More margins for companies, in the long term, it is virtuous... It is also the development of new activities because there will be less fear of starting out with an already guaranteed income...
In the era of the digital revolution, of "uberization" and tomorrow's robotics, this little security is perhaps not so bad... Perhaps even essential...
Have a nice day friend!
Hi Lionel,
Thank you for this interesting point of view. Indeed, if the proposed amount had remained decent, perhaps it could have been a good idea. Let's imagine for example 1,500.- per adult and 250.- per child, which would make 3,500.- for a family of 4 people. In this case, the incentive to work is obvious and it would still provide a safety net. In addition, we could imagine eliminating social insurance such as old-age insurance, disability insurance and family allowances. This would allow a very clear simplification of the social system and large savings in terms of their operating costs (which would partly cover the costs of the RBI). Given that the amount offered by the unconditional basic income would be minimal, this would also encourage responsible people to put money aside for their days and/or in case of a hard time.
This would be a bit like the right-wing version of the RBI on the political spectrum.
Regarding the argument you raise about the digital and robotic revolution that we are going through, and which is also put forward by the initiators, I am more reserved. Maybe jobs will disappear, of course, but others will be created. At the beginning of the era of industrialization, we also believed that employment would decrease, while the exact opposite happened. New technologies create new wealth, new needs and therefore new jobs. The important thing is to properly ensure the transition to these new jobs. This is done above all by a good training system and by a liberal labor market (which allows the evolution of jobs, their modification, their elimination and their creation). But not by an unconditional basic income, especially of this amount. On the contrary, it could even encourage people not to question themselves.
Thanks for your article Jerome.
The problem with your arguments (and your comment confirms it) is that we are voting on an idea, on a concept, NOT on an amount! If I understand correctly, you would be for a RBI of 1500/250?
I always find it very difficult to decide on initiatives because both the initiators and the opponents play with vagueness (more or less artistic). I don't know yet what to vote for...
We are voting on an idea, but the initiative committee is putting forward figures of 2,500 francs per adult and 625 francs per minor. If the initiative passes (which is unlikely), I would be surprised if they would drop their pants for less than that. They will fight to get the amount closer to that.
In any case, apart from the question about the amount, I don't particularly like the idea as such. It's just that if the amount is reasonable, it wouldn't change much compared to the current social system, except perhaps that it would simplify it.