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May 03, 2018

Finland's take on universal income

Introducing a universal basic income (UBI) has been one of the big promises of Five Star in Italy. Finland, which experimented with a trial version of a UBI, has now decided against it. Petteri Orpo, the finance minister, told the FT that he was not a fan of the universal income anyway, but was open to the results of the trial. Orpo is the leader of the centre-right National Coalition party, which is leading the polls for next year's parliamentary elections. If he were to win the next elections, UBI would probably not get another chance.

In the trial, selected unemployed people were given €560 per month without any conditions on what they needed to do to get the money. This version of UBI was widely criticised as poorly designed and costly to implement, though participants reported that it reduced the stress of dealing with the administration. Finland is also using activation policies, that is monetary incentives for the unemployed to work, similarly to Denmark though in a softer version. It seems that Orpo is much more a fan of the latter type of policies, though it is not clear whether they really lead people to pick up work since half of the unemployed took the hit on unemployment benefits instead.

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May 03, 2018

The lessons from Weimar

Harold James has a brilliant essay in which he explains the relevance of the rise of Nazism for today’s political situation. 

Here is a subset of his ten lessons:

  • Referendums are dangerous;
  • dissolving parliaments prematurely is a bad idea;
  • constitutions don’t necessarily protect the system;
  • populists don’t usually have overall majorities - the Nazis never got more than 37%;
  • incumbents can survive by buying off the voters for some time.

We note especially in the Italian context a propensity by centrists to place too much emphasis on the Italian constitution, and on the ability of the political centre to fix the system. This is where James' historical comparison becomes relevant. The last election produced a populist majority in the Italian parliament. The president can appoint the most orthodox technocrat as finance minister, but this does not change the fact that there is no majority in the Italian parliament in favour of an EU-compliant budget. It is possible that Five Star will moderate its position, but only if bound into a stable government with the PD. All other options will invariably lead to more radicalism. In a government with the Lega, Five Star cannot act as the centrist party because it would lose its core support. Under any grand coalition/technical government scenario, Five Star would necessarily radicalise in preparation for new elections. And remember what James writes about new elections.

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