The decisive rejection by the Swiss of an unconditional basic income for all, provided by the state, served the useful purpose of focusing minds on a critical issue of the times. The redistribution of wealth for the common good has taxed thinkers for ages. It's a problem that not only resists neat solutions but has also been made sharper by a yawning income gap (famously highlighted by economist Thomas Piketty), the creative destruction of the economy and the transformation of work by technology (robotics, smart automation and artificial intelligence).
Managing the social impact of such changes is an issue Singapore, too, cannot afford to ignore, given its exposure to global trends. Should a job crisis arise in the future, there might be pressure to consider a guaranteed basic income, or negative income tax, or some other means to ease social pain, forestall a drying-up of consumer demand and avoid contractionary effects.
Risks of making a disastrous choice lurk in the complex jumble of symptoms, causes and effects associated with inequality. These have led to unyielding views on both the left and right. Whatever the ideological basis offered, it is easy for many to be seduced by the idea of money for nothing, never mind the plain truth that money itself cannot come out of nothing. Policymakers, however, would be only too aware that giving it away unconditionally poses limits, especially for poorer nations. And combining it with generous welfare will not be sustainable. Something has to give.
In principle, there is no question that redistribution is a necessity. Via taxation, for example, redistribution enables the state provision of public health and housing infrastructure, among other public goods that few would dispute are vital. Just as high taxation can have negative effects like reducing economic activity, large monetary handouts can suffer from inefficiencies like administrative costs and skiving from work - a case of shifting wealth around with a leaky bucket, as economist Arthur Okun put it.
The point to bear in mind is that there are no panaceas. The danger in being dazzled by the ersatz glitter of guaranteed income is that one might lose sight of the need for both targeted redistribution schemes as well as sound policies that promote sustainable prosperity for the nation and greater financial inclusion. There is simply no single quick fix for income inequality.
Just putting cash in people's hands will not necessarily help raise skills, improve health, educate children holistically and spur entrepreneurship. Rather than creating a culture of taking - a possible result of a generous free cash scheme - a comprehensive approach is needed to address the growing inequality evident in many nations. That should include a redistribution of opportunities to allow more to make good for themselves.
