Are such transfers as will occur inflationary for a country like (say) Slovenia?
Probably yes. But with free movement of goods and in not so distant future free movement of people, wouldn't the prices anyhow have a strong bias to the 'general EU price level'? Of course you have some issue with too much people unwilling to work, when you have a basic income, which is initially more than basic in the poorer parts of the EU, but I think with a moderate income taxation starting at the first cent (or whatever they have there) earned, it should have not too dramatic effects.

Whilst pushing a basic income out across the Schengen zone solves the "freedom of movement in the EU" problem, is there a danger it will greatly amplify problems at the borders of the Schengen zone?
So this would be Switzerland and Norway, right?
I think they are small enough and rich enough, to introduce only a managable immigration stream, if at all. Already now Switzerland is a tax haven, and even inside the EU there are vast differences with inheritance tax, income tax, corporate tax. The last in my view a bigger distortion than what the basic income introduces with respect to Switzerland and Norway.

Der Amerikaner ist die Orchidee unter den Menschen
Volker Pispers

Given the rising importance of the individual in society as consumer I naively thought such a plan, which I called a National Minimum, would soon be adopted back in the '60s.  Not one in one hundred could see any virtue in such a plan.  The biggest obstacle is the common belief that people have to be driven by the fear of starvation and privation to work.  This view sees the world as a giant concentration camp run for the benefit of those who have money.

There will be individuals who will be only too happy to live on a subsistence income and do no further formal work.  That may well be the best thing to do with such people.  Most, however, freed from wage slavery, will be eager to do what they can to better themselves and will be able to bring their innate creativity to bear in their behalf and in behalf of the entire society.

With a more egalitarian allocation of capital to worthwhile enterprises we could see a flowering of economic, artistic, social and personal growth.  I believe that such a program is the key to a sustainable and humane future, thereby enabling us to morhp our current distopia into a true utopia.

It will, of course, be violently opposed by the beneficiaries of the current hierarchical power system. But it is those beneficiaries of that system who have brought us the calamity that is now upon us.  Things are likely to get bad enough that people will seriously consider fundamentally different social organizations.  It is difficult to see how the most likely alternative, fascist distopia, is likely to better provide for the prosperity of the society as a whole than would this system.  And there appears to be an evolutionary path from here to there without massive disruption.

"It is not necessary to have hope in order to persevere."

However, the basic income doesn't pay people for not working, but regardless of work. There is the same problem in Germany, and it has nothing to do with income taxes. The problem is the sharp reduction of benefits, when people earn their own living. The following picture is out of a book from a job market economist. On the Y-axis gross income is plotted, on the X-axis corresponding net income for a family of two adults and 2 children, assuming there is no capital or capital income in this family and all income is generated by work or payment of the gov't.
The red line shows the situation in 2003. As you see for the net income it didn't play a significant role, if this family earned nothing, or up to 1500 Euro, for the net income.
The Hartz reforms have improved this situation, but introduced a 'cave', where it can happen, that you have even less net income, when you increase your gross income from work. The blue line is irrelevant so far, as this is the line, the author proposes with an own model.

So even currently the effective marginal tax/benefit reduction rate is close to 80% for quite a way on this graph. The basic income would work as kind of combi wage, where you can determine the marginal tax rate as you want, but 30-50% will be still largely better than the 80% we have currently. After all it matters how much is left, and with 40% tax rate 3 times as much is left as with 80% tax rate. In the end the basic income would not give the most none-working people in Germany one cent more, but those with very little incomes. It reduces the disincentive of unemployment benefits.

Not even the Greens support it around here anymore.
I'm not 100% sure if it is part of the green basic program in Germany, but they are rather open to it. High ranking greens have already promoted the idea with using it as a corresponding measure to even more increased energy and environment taxes. There is as well some support from the conservatives and some more from the commies. Combi wages, as proposed by the conservatives and liberals, would be as well lead into this direction.
The only party, which totally opposes the idea of a basic income are the social democrats. There are plenty of arguments, which essentially culminate in either in the idea, that it is very difficult to explain hard working low earners, that people who don't try to get a job should be rewarded without strings attached, or that - as they believe it is the meaning of live to work - a basic income would diminish the value of their work.

Der Amerikaner ist die Orchidee unter den Menschen
Volker Pispers

That's where you get the very high effective marginal penalty to working ... when benefits phase out as taxes phase in. And of course, in a piecemeal program, there is a strong incentive to means test, as it allows more to be "accomplished" for the individual goal ... while the negative impact on incentive to work is one more small incremental piece of what can add up to a quite hefty penalty.

But with a Social Dividend, just start the bottom bracket of the marginal income tax brackets a $1, because work income is in addition to the Social Dividend.


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

In the 80ies Sweden had next to no unemployment while featuring very high levels of benefits for unemployment or illness.

In the 90ies Sweden took the low-inflation, high-unemployment route and installed an independent central bank that believes so firmly in the theorem of keeping the unemployment above the non-acceleratng inflation rate of unemployment, that it increases the rent even if it is external factors driving the inflation. And of course this was followed by cutting back on benefits for unemployment or illness. And after that followed the classical moral underclass discourse to explain that the poor has no money beacuse they are lazy.

So in conclusion: Sweden had no unemployment but high benefits, got unemployment, cut back on benefits, blamed the unemployed. And also, do not trust economics professors.

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se

I can only hope that the adjustment in Bulgaria will be similar fast as in the balic republics, with high real growth + high inflation.

For excessive corruption, unfortunately I don't know a cure.

Der Amerikaner ist die Orchidee unter den Menschen
Volker Pispers

For corruption driven by the fact that civil servants have difficulty surviving on their salary alone ... a not uncommon situation in many Africa nations ... a social dividend would reduce that as a driving force.

Its not an anti-corruption force on its own, but an anti-corruption fight would be a shade easier to win.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

I note that I have brought up some other aspects, still, with the EU regional solidarity/transparency/no bureaucracy angle, and the environmental taxes, so no simple copy of your diary ;-)

Der Amerikaner ist die Orchidee unter den Menschen
Volker Pispers