Smart Swiss: “Free-Money-For-All” Rejected.

I have said before that if I were to live in any one nation outside of the United States, it would probably be Switzerland. Generally speaking, the Swiss government is very friendly to liberty. It is heavily decentralized. Military spending is low, and focused entirely on defensive operations. The economy is highly capitalistic, rated as one of the most free economies in the world.

Of course, like every other Western nation, Switzerland has it’s fair share of socialist interlopers. Recently, Swiss leftists were able to push for a vote on a Universal Basic Income for all Swiss citizens. Under the UBI, all Swiss citizens would be entitled to an unconditional monthly income of 2,500 Swiss francs (roughly the same in dollars) regardless of employment status or any other qualifier.

So basically, “free money for everyone!” And it’s really no exaggeration this time.

Thankfully, the Swiss ain’t stupid. The measure was overwhelmingly rejected:

Swiss voters rejected by a wide margin on Sunday a proposal to introduce a guaranteed basic income for everyone living in the wealthy country after an uneasy debate about the future of work at a time of increasing automation.

Supporters had said introducing a monthly income of 2,500 Swiss francs ($2,563) per adult and 625 francs per child under 18 no matter how much they work would promote human dignity and public service.

Opponents, including the government, said it would cost too much and weaken the economy.

Provisional final results showed 76.9 percent of voters opposed the bold social experiment launched by Basel cafe owner Daniel Haeni and allies in a vote under the Swiss system of direct democracy.

What is being cited as the reason to need a UBI? It was mentioned above, but also here:

Conservative Switzerland is the first country to hold a national referendum on an unconditional basic income, but others including Finland are examining similar plans as societies ponder a world where robots replace humans in the workforce.

In an separate article unrelated to the Swiss referendum, AI expert Jeremy Howard claims that unconditional free money is the only way to deal with robots:

In the future, giving people unconditional free money might be the fairest way to deal with a robot-powered economy.

At least, that’s what data scientist and artificial intelligence expert Jeremy Howard believes.

According to Howard, the pool of displaced workers will just keep growing exponentially, and the solution is to level the playing field.

The people pushing for a Universal Basic Income in the face of an increasingly robotic workforce are making a major fatal assumption: that there is no naturally-imposed scarcity of resources. Jeremy Howard even goes on to call it a “post-scarcity world.”

This is part of the whole thrust of Leftism: “If only those greedy bastards weren’t ripping us off, we could all live like kings! Only the greedy bastards stand in our way!” In fact, far-left politician Huey Long was known for his political catchphrase – “Every man a king!” – implying that his policies of radical wealth redistribution (aptly called “Share Our Wealth”) would overcome the evil scarcity imposed by private property and allow everyone to live off the fat of the land, forever.

But how can wealth redistribution give anything to anyone without stealing it away first? And how is money going to work in an economy where there is supposedly no more scarcity? Scarcity and the Market are twin concepts. The market exists because scarce resources must be allocated.  If no scarcity exists, no market is needed. But government paper money is a purely market commodity with no further use. When no market is needed, what happens to the market commodities like Swiss francs?

These articles make zero mention of these issues. The “experts” seem to avoid talking about them.

But this has been the socialist reaction to valid criticism for nearly 200 years. When Von Mises prophetically stated that socialism could not work in his 1920 article “Economic Calculation in the Socialist Commonwealth”, the socialists of the time simply ignored him. They knew they had no satisfactory response to give him, so they pretended he didn’t exist. I guess the paradigm continues.

AUTOMATION AND ADJUSTMENT

This is hardly the first time that the world has dealt with automation. Human workers have been losing jobs to more efficient processes and machines for basically all of human history. But the socialists pushing for a universal basic income today are claiming that robots will result in a permanently unemployed underclass, which is why we need free money. If this is supposedly true today, why wasn’t it true 100 years ago? Or 200 years ago? However many years ago?

There is no permanently unemployed underclass in human society. There are bums, and those too mentally ill or physically handicapped to work; but this does not constitute a permanently unemployed underclass. These are not lots in life handed down from father to son.

Society adjusts to automation. It adjusted to the mechanical loom, it adjusted to computers, and it’ll adjust to robots. This much is true. But how painful does the adjustment have to be?

Where humans are allowed to compete with labor-saving machines and processes for jobs, they can lower prices; meaning that they can accept a lower wage. This delays the inevitable – the replacement by a machine. And believe me, where a job can be done satisfactorily by a machine, it is inevitable. So the workers competing against robots and efficient processes have time to adjust. They can attempt retraining, or sharpening their skills.Or perhaps they can ride it out to retirement. But they have time to figure it out.

Where workers can voluntarily barter with employers for jobs, they can come to mutually satisfactory agreements. But what if politicians get involved? They have only one response to everything: the gun. Either they put the gun to your head, or they take it away. This is the essence of law.

Will they take the gun away from our heads in the form of repealing minimum wage laws and other regulation? Or will the barrel be pushed even harder into our skulls with a worse minimum wage law and worse labor law?

If there’s one thing we know about politicians, it’s that they don’t like taking the gun away. They like trying to take guns away from regular citizens, but Lord forbid the guns be taken away from themselves. So count on the latter.

CONCLUSION

The central planners just never give up. Friedrich Hayek, the great libertarian economist, called this “the fatal conceit”: that the best and brightest among us think they can shape and control the world, when in reality they just screw everything up.

It isn’t a question of clever politics. It isn’t a question of computing power. Central planners lack the key knowledge that makes an economy work: individual preferences. Individuals express their preferences through buying and selling. There is no way that central planners can make up for this. The Soviet Union couldn’t do it; they fell apart. China couldn’t do it; they gave up on communism after Deng Xiaopeng privatized agriculture in the late 1970s. Cuba and North Korea still can’t do it, either. Socialism fails everywhere it is tried.

The Universal Basic Income isn’t a revival of communism or socialism. Commie godfather Karl Marx said this: “From each according to his abilities, to each according to his need”.  But basic income supporter Jeremy Howard says this: “To hell with your abilities. Have some money instead!” At least Marx expected you to work; he was Ebenezer Scrooge compared to Jeremy Howard and the supporters of the Universal Basic Income.

Where people are allowed to freely trade with each other for work, they will adjust to robots. To any extent that the government interjects itself into this process, it will make the adjustment that much more painful.

 

 

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