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Sunday, October 23, 2016

Money for all free

As you know, Switzerland is very widespread direct democracy. Several times a year all adult residents vote on various issues of domestic policy. In early June, in particular, decided the fate of the so-called unconditional basic income (basic income).

The idea, recall, is very simple: every adult Swiss citizen (and even some categories of resident foreigners) on a monthly basis to give unconditionally 2500, and the child — 650 Swiss francs. This, according to the exchange rate on June 19, respectively, 170 thousand and 44 thousand. If this eliminates all social benefits (except pensions).

How do the people vote? Almost 80% had stopped this innovation.

Of course, you can now write off the idea of basic income as a failed fad initiators — group “green”. But I’m sure this is only the beginning of a long, with setbacks, but inexorable changes in social policy in developed countries. Just below I’ll explain that statement of mine, but first you have to understand: and at what here Russia? In our country, never, throughout her long history this or a similar idea had not been considered seriously. Only seems to be close in meaning historical episode — the abolition of money to the Bolsheviks after the October revolution of 1917. In return tried to switch to direct normalized provision of food and all other goods and services. All this quickly ended in economic collapse, and after the Civil war, the Soviet government returned the money, and even some elements of private enterprise in the framework of the NEP. As a result, the economy not only recovered really quickly from the devastation, but also began to develop dynamically. However, in the late 1920s, Stalin put this period to an end, starting industrialization and collectivization, which led to mass starvation in the village and the resumption of rationing in the cities.

It is not much like social experiments with BAUD, which, incidentally, are or will take place not only in Switzerland, but in Finland, the Netherlands and several other countries, which in contrast to the poor Soviet Union was able to provide financially for a decent life for the vast majority of its citizens.

We, in modern Russia, yet never dreamed of incomes that the majority of people receives the same in Switzerland. Average salary there is about 6 thousand francs a month. Of course, from this sum are deducted the taxes and the prices in this country bite, but still enough for a decent life.

But if to be a historical optimist, i.e. to look at the long term (e.g. 15-20 years), then the European experiment with BAUD can be for us and practically interesting. Or are we behind forever and in a social sense?

Returning to Switzerland, we can assume, why the proposal for BOD now failed miserably, but as they say in the movies, “to be continued”.

First of all I would like to draw attention to the fact that Switzerland is a Confederate country, where its constituent cantons are in fact independent States. Therefore, any solution which is imposed all over the country, and especially associated with specific financial regulations, obviously backfired, considered as “interference in internal Affairs.” In addition, Switzerland is divided into three ethnically colored parts — the German, French and Italian, each of which has its own “national character” and its socio-cultural ideas about what is good and what is bad social policy.

Another important issue — the price of the proposed innovations. It is easy to calculate that it is about 200 billion Swiss francs a year — an amount excessive for the Federal budget this rich, but still small countries, the income of which is less than 100 billion francs. To make ends meet, we need very much to raise taxes — and who likes that? I wonder why the initiators of the introduction of the BOD did not realize that the proposed amounts exceed the economic possibilities of the country. Simple Swiss just this is quickly realized.

But the question is why is not closed?

The fact that BOD is making headway in other European countries. While there’s not repeat the errors of the Swiss. For example, in Finland are prepared to pay 800 euros per month, which is significantly less than the local minimum wage and live on it alone man, as acknowledged by the Finns in Helsinki is impossible. About the same amount already allocated in the experiment on introduction of the AML in the Dutch city of Utrecht.

But it’s not in search of “Golden mean” between excessive and symbolic payment. BOD is trying to find a new social system where people get comfortable conditions for its development.

Something similar was written in the XVI century the Grand utopian Thomas more. The experience of his distant followers of Soviet Russia, I have already described. It would seem, insist on the introduction of modern POD left, or, as in Switzerland, “green”. But, it turns out, a supporter of this approach (in the form of “negative income tax”) was a famous libertarian, Nobel laureate in Economics Milton Friedman.

It is therefore very important to understand the underlying motivations and behavior of people. For example, as a result of the unconditional distribution of money to ensure that these funds will be eaten, drunken and launched all sorts of inappropriate things because that is human nature? Remember the case when in 2001, one resident of Ufa won the lottery the equivalent of a million dollars. This story eventually ended tragically, these huge amount of money was quickly squandered, and their owner very soon died in poverty. But as you know, one, even the most egregious case may be atypical, if you take a large mass of people.

Take, for example, the work of Nobel peace prize laureate Muhammad Yunus in Bangladesh. It is through your Bank, Grameen became involved in microcredit for the poorest families — such as in this Asian country is more than enough. Yunus began to give them loans — small amounts for a tiny percentage and without collateral and guarantors, but subject to expand or open a business, usually family. Many people thought the act of Dr. Yunus noble eccentricity. But it soon became clear that the level of defaults on its small loans is less than 3 percent.

Another example: the world Bank has found that regular results small cash benefits in the poorest countries does not lead in most cases to inefficient use of families of these funds. People invest in the creation of their own business, send their children to school.

So we can cautiously assume that the average person receiving BAUD, unlikely to fall off the wagon. Moreover, having guaranteed a few hundred euros per month for each family member, people can afford, for example, be less outside the home and spend more time with children. But this strengthening of one of the most important “traditional values”?

Or you can afford something to learn useful on the labour market or for self-development.

Or to devote more time to selfless social activities, volunteering, deeply involved in the Affairs of local government, understand the political intricacies at the national level to vote is not only the heart but also the mind.

It turns out that with the right approach you can make the POD tool to improve the quality of human capital and the improvement of public morals. And this in the end what you need for the successful functioning of a modern economy based not on physical strength of the worker, and the intellectual resource.

Why the Swiss failure is just the beginning, we are living in Russia, will sooner or later have to get up. Or we believe your people “special” with the sign “minus”?

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