Switzerland's Base Income Vote Turns Finance Reform Into a Democratic Spectacle

Americans are so intensely and intimately familiar with the virtues and vices of representative democracy, it’s easy for us to forget that democracy has alternative forms. Switzerland is about to give us a valuable reminder. As U.S. presidential candidates regurgitate stump speeches in the lead up to Super Tuesday, the citizens of Europe’s famously neutral mountain kingdom will put the idea of basic income to a vote. The Swiss are having a referendum on whether they should be paid for being Swiss.

Unconditional base income is an idea that has gained some traction in more affluent countries. The essential notion is that a government supported by tax payers should be able to guarantee those taxpayers a specific annual allotment and that this will bolster or stabilize an economy. It’s a policy that would be nearly impossible to implement stateside because of the two-party system, but conceivable in Switzerland where politics can be, in a sense, circumvented in the name of democracy.

Only 27 states in the U.S. make allowances for direct democracy, but a number of federal referendums have taken place in Switzerland since it became a modern state in 1848. In 2014 alone, Switzerland held 14 different referendums on the topics of abortion, immigration, and the rail network. The income vote will come on June 5 and, rest assured, the whole world — well, all the economists anyway — will be watching.

The referendum on Unconditional Base Income (UBI) has been a long time coming. Back in 2013, the initiative gathered enough signatures (the minimum is 100,000) to claim a right to referendum. In August 2014, the Swiss Federal Council rejected the initiative, although this “rejection” doesn’t hold any weight since it had already been decided there would be a referendum. At this point in the process, the Swiss government rejecting the initiative should be interpreted as a suggestion to the Swiss people to vote against it, rather than a definitive federal action. The Federal Council cited several potential results of the measure passing, including the restructuring of payment for low-income jobs, tax hikes, and potential exits from the workforce. Politicians argued that the amount of proposed monthly basic income — 2,500 Francs for adults and 625 Francs for children — was too high and even that women could be forced out of jobs and back into housework. All political groups in Swiss Parliament opposed the initiative. The Liberal Party’s Daniel Stolz described the initiative as a “cocked hand grenade that threatens to tear the whole system to pieces.”

Enno Schmidt and Daniel Straub, the co-initiators of the UBI initiative and members of the broader Basic Income Earth Network, are helming the push for basic income in Switzerland as the referendum vote nears in June. Advocating his initiative in the face of the Swiss government’s rejection, Schimdt told the Irish Times: “In Europe and the US, democracy is being dismantled. People are deprived of their rights. There is a growing oligarchy. An unconditional basic income gives democracy a fresh breeze, refreshes human rights and empowers people.” He’s also been quick to point out that his country’s top 1% lay claim to over a third of the nation’s wealth.

The problem is familiar to Americans even if the proposed solution is novel. 

The principal dividing line for the base income initiative is whether the funds would revive a faltering democracy or breed laziness overall, where supporters of the initiative believe the former and the federal government the later. When it comes to measures that reflect socialist policy — and this base income initiative does — the argument about laziness is usually at the forefront of the conservative mentality, while liberals uphold the prospect of a strengthened, more unified nation. Either way, the Swiss federal government has been effectively excluded from the decision-making process for UBI, as is spelled out by the way initiatives and referendums work. At this point, it will be completely up to the voters to decide if every Swiss citizen is entitled to an unconditional base income.

Come June, Switzerland could be the first country to — based on the demands of its people — reimagine what capitalism can mean to a modern nation. The referendum is unlikely to pass, but it makes Swiss politics fascinating for the first time in, well, ever.