Society's Child

Finnish government scraps basic income guarantee program

Hank Berrien
The Daily Wire
Tue, 24 Apr 2018 00:00 UTC

For those who believe a guaranteed basic income is the answer to the world's economic woes: welcome to Finland.

Starting in January 2017, Finland experimented with giving a random sample of 2,000 unemployed people between the ages of 25 and 58 a monthly income of roughly $690; the recipients were not required to have a job; if they did take a job, they would receive the same amount.

The idea was to stimulate people to look for paid work by eradicating gaps in the welfare system; the Finnish government thought that with existing unemployment benefits so high, an unemployed person would eschew getting a job because they would risk losing money by doing so; the more money they made, the lower their social benefits would be. The basic income was meant as an incentive for people to start working.

But now Finland is canceling the program, though the government will not say why. Kela, the Finnish social security agency, asked the government to expand the two-year pilot to a group of employees this year, but the government nixed funding it, meaning the entire program will come to a crashing halt in January 2019.

The pilot's results will not be released until late 2019, according to the BBC.

In 2016, Swiss voters rejected a proposal that would have given a monthly income of 2,500 Swiss francs (£1,834; $2,558) for adults and also 625 Swiss francs for each child. 77% of voters voted against the plan.

Comment: The cancellation may be due to tax increases that would ensue. Investor's Business Daily comments:

It's comforting, we suppose, that Finnish social planners have no more common sense than those in the U.S. Neither group seems to understand the economic truism: What you subsidize you get more of, and what you tax you get less of.

In Finland's case, they were literally paying others not to work. Meanwhile, as working Finns figured out, such a system would lead to massive tax increases. Even the OECD, not known as a bastion of free-market thought, in a study of Finland found that a guaranteed income to replace welfare (the ultimate goal of all basic income programs) would have to be "financed by increasing income taxation by nearly 30% or around 4% of GDP."

So it should be no surprise why average Finns, some of the best educated people on the planet, would reject such an idea.

Reader Comments

BEVAN BEVAN · 2018-05-10T13:49:42Z

All Nations of the world must take back their Sovereign rights that enable them to create their own supply of domestic, Interest free, Debt free, Social Capital; domestic circulating currency will be that and nothing more; it's sole purpose would be to "oil and facilitate" the domestic economy. An additional "formula" would be created, to facilitate the acquisition of foreign exchange mediums, designed to protect the terms of trade, Government debt, and trade agreements under Government control. This is the only realistic way to provide to humanity their share of survival sustenance and protection, without confiscating it from those who already own most of it, or are not willing to vote for social programmes that will allow it. Whilst also restricting Corporate Power from manipulating Government objectives concerned with Trade and Finance. This first step eliminates untold quanta of inflation and Government debt. Every Sovereign independent Nation, or co-operating group of Nations, will then use this Social Capital to totally eliminate Poverty and deprivation in their communities by issuing to all that need it a Social support income, structured to provide a basic break even living standard, support that will continue until death. This community is now in possession of the means that will not only keep them out of poverty but it will also guarantee them the permanent provision of basic human entitlements that sustain life, unencumbered by the whims and ideological beliefs of those determined to deprive them of this dignity. A basic form of rationing life sustaining essentials. The Government will finance all necessary Public Supports and Infrastructures, Health, Housing, Education, and Transport, this would represent "Money Spent" into circulation and will not create inflation; many "modern" economists support this conclusion. The Capital so created will be the sole means of financing the Nations Domestic Money Supply. This will become a "trickle Up" economy, replacing the nonsense of trickle down. No Capital or subsidy will go to Private Enterprise directly as cash, for if it did it would cause serious inflation.Capital issued and "spent" into circulation, as described above, would not create inflation. There would be no interference with Private Enterprise. The Private Sector could employ those in receipt of the Social Support by offering wages and hours of employment capable of inducing people to do the work offered; the wage so earned would supplement the Social Wage, not replace it. Thus inducing mutually agreed employment conditions at much lower wage costs to employers.This will act to reverse the export of jobs to overseas destinations. Thus far no or very little taxpayer money has been expended. The burden of support for the poor and the provision of social and community infrastructure has been lifted from the backs of Corporate enterprise and the wealthy. Denial of this could only be based on the "narrow", selfish, greedy motives born of ideology. Control of Social provision will have passed out of the hands of those not willing to vote for higher taxation to facilitate it. Working people are no longer at the mercy of, sometimes unscrupulous, employers or Market forces, that all too often deprive them of secure livelihood and cause them to forfeit hard won assets such as homes and pension funds; regulations will be introduced to prevent such losses and seizures in the future. Working people will more easily change employment to escape unsatisfactory masters and conditions; they will become a proud, socially responsible, independent people. Price and cost inflation will be substantially reduced by ceasing tax collections from wage and salary earners. Instead individuals will pay tax only once, and that when they are deceased, when the taxman will be empowered to asses deceased estates for tax liability. Avoidance will place the whole estate in danger of confiscation. Is there a better time to pay tax other than when we are dead? Corporations and all other commercial enterprise will pay an annual flat rate tax levied against total net profits. Avoidance and imaginative minimisation schemes will not be allowed, all income generated from commercial, financial, trading and investment activity, will be taxed in Australia. Inter company transfers to overseas Partners or Branches, in any form, will not be permitted unless tax has been paid. Tax allowances will be strictly limited to running,overheads and development expenditures. All money transmitted to overseas destinations will be taxed at twenty percent. Government will not subsidise free enterprise, this great engine, by it's own rules, must stand or fall on it's own merits. The value of Sovereign currencies for international purposes will be decided by co-operating Governments, taking into account the requirements indicated by agreements and cost of trading differentials. Exchange rates will be fixed, stable, out of the influences and control of manipulators and traders. There is much more to be said in explanation, however your own knowledge and experience will enable you to foresee the many attributes such a system delivers. My title for it is "THE UNIVERSAL ECONOMY" for it will work anywhere and for every person, fairly and equitably. A very small "coterie" of Bankers and money power people is holding the world to ransom, they spend untold quanta of money spreading lies about the evils of Social Capital, for their own narrow ideological purposes, populations around the world are in mortal danger, the money power must be re-claimed, and utilised for "The General Good" of Society at large..This will come about when we elect independent politicians who will change our system from being representative to being participatory, and we return the Economy to one operating on sound money. This formula, importantly,takes care of the constantly increasing costs due to population growth and other demographics. Have you read this far? then you have my thanks, your commentary would also be most appreciated. Regards, Thomas W. Adams.

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Society's Child

Finnish government scraps basic income guarantee program

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