Can we live without working?

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Can we live without working?

Switzerland posed its people and the world a daring question: would people be happier if they were guaranteed a basic income without having to earn it?

The Swiss people gave their answer last Sunday, voting against a referendum offering anyone 18 years and older a monthly income of 2,500 Swiss francs ($2,600) unconditionally and untaxed.

The idea, first floated in 2013, was favored by a quarter of the Swiss. It attracted world attention as a novel welfare option in an age where joblessness is expected to become a universal problem, with more and more human jobs being replaced by machines.

The concept of a universal basic income actually has been around for a long time. Some trace it back to the fictional society envisioned in “Utopia” by 16th-century philosopher Thomas More. Others believe the concept sprouted from the social contract theory of 17th-century English philosopher Thomas Hobbes.

It was further explored by English-American political activist Thomas Paine in the 18th century and became part of utopian socialist ideas, along with minimum communal living and working space for people in the 19th century.

Free-market economist Milton Friedman championed the idea of a “negative income tax,” subsidized income for those earning below a certain threshold instead of levying taxes on them, after World War II. Angus Deaton, who was last year’s Nobel laureate in economics, supports the idea.

Experiments on social dividends have worked well in some places. The Alaska Permanent Fund was institutionalized by the state constitution in 1976. The state pooled in more than 25 percent of its oil money to a fund dedicated to future generations who would no longer have oil as a resource. Anyone who lived in the state for at least six months without a serious criminal record is eligible for a payout, which is decided by the average fund returns for the previous five years. In 2008, the dividend payout reached as much as $3,269, tantamount to 6 percent of Alaska’s GDP. As a result, Alaska has become one of the most equal places to live in the U.S.

From 1993 to 2002, the average income of the poorest Americans rose 12 percent while that of the wealthiest jumped 26 percent. Alaska remained an exception to the widening income gap happening across other parts of America. The average income of the richest in the state increased 7 percent while those of the poorest soared 28 percent over the decade. Switzerland, Brazil, the Netherlands and Finland studied the basic income model following the success of Alaska.

Many have come up with various ways to address the question of funds for universal income and the issue of people idling away their time and being less motivated to work if their basic means of living are guaranteed.

Nobel Prize-awarded economist James Meade believes such a system could be funded through capital taxation and public investment trusts. Others propose funding through pollution levies and a Tobin tax on currency transactions. Robert Skidelsky, a fellow of the British Academy in history and economics, argues that the claim that societies are too poor to afford universal basic income for citizens no longer stands for rich economies. Locally, the liberal Green Party in Korea proposes giving 400,000 won ($350) monthly per head through a tax code revision and merger of social welfare schemes.

Then there is the issue of work and what an incentive to work is as opposed to a disincentive. A basic income is effectively a last-resort form of social security in an age when labor is no longer required. About 90 years ago, John Maynard Keynes prophesied such a day would come. In his 1930 work “Economic Possibilities for our Grandchildren,” he envisioned his grandkids a century later working about three hours a day or 15 hours a week, and “even this reduced schedule would represent more labor than was actually necessary.”
Human beings would have to face an entirely new and fundamental question for the first time since the beginning of mankind — how should one spend one’s time if work is entirely unnecessary?

This debate has largely been ignored by our mainstream economists. Even the Swiss referendum became just another ideological arm wrestle when discussed in Korea. Conservatives and right-wingers cheered the Swiss vote as inevitable, while liberals and leftists dubbed the referendum as the first meaningful step toward a more equal society.

We cannot determine the outcome of reduced labor as we have never experienced a universal cutback. But we are getting closer. GDP growth is shriveling every year. If sloth is where current trends in growth and industry will take us, a basic income is a needed public policy. The end, however, could be catastrophic for mankind.

JoongAng Ilbo, June 9, Page 30

*The author is an editorial writer for the JoongAng Ilbo.

Yi Jung-jae
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