Universal basic income (UBI) is again a topical issue in the context of the structural transformation of the economy. The Digital economy is characterized by accelerated automation and robotization. Quite a number of economists are concerned about a net loss of jobs. In short: a rise in unemployment. Can UBI be considered an adequate response to such a scenario?

The term "universal basic income" is by no means used uniformly. If you look closer, each proponent of UBI has his/her own idea about the objectives and funding of UBI. Let us take a look at the various goals its different proponents pursue with UBI. I have, of course, mentioned the avoidance of mass unemployment already.

  • Fight against poverty, the removal of the social stigma of receiving social benefits (because everyone gets these benefits).
  • Others consider it a step towards a more modern welfare state. Namely, a merging of the various welfare state benefits (unemployment benefit, disability benefit, etc.) into a single payment. This could be associated with a significant reduction in bureaucracy.
  • Other advocates of UBI emphasize that the aim is to lay the foundation for a completely new economic and social order. This would remove the necessity to do gainful employment for the mere purpose of securing one's livelihood.
  • UBI allows for vocational (re)orientation and further training, while enjoying financial security.

The following are some prominent advocates of the BGE: The investor Frank Thelen, the philosopher and publicist Richard David Precht, founder of dm-retail chain Götz Werner, the German Telekom boss Timotheus Höttges.

The critics include: Nobel Prize winner in economics Paul Romer rejects it; the two Nobel Prize winners in economics Esther Duflo and Abhijit Banerjee are critical of applying UBI in developed countries; the critics also include Kevin Scott (CTO of Microsoft, author of "Reprogramming the American Dream").

The economists Duflo, Banerjee and Romer instead of UBI suggest that labour should be subsidized. I agree with that. Furthermore, it should be critically noted that without massive investments in education and equal opportunities, the UBI runs the risk of creating a two-tier society (UBI becomes a consolation prize); and some of the discussed funding models disadvantage the socially weak (e.g the UBI scheme suggested by Goetz Werner: increase in value-added tax).

Author

Sebastian Zang has cultivated a distinguished career in the IT industry, leading a wide range of software initiatives with a strong emphasis on automation and corporate growth. In his current role as Vice President Partners & Alliances at Beta Systems Software AG, he draws on his extensive expertise to spearhead global technological innovation. A graduate of Universität Passau, Sebastian brings a wealth of international experience, having worked across diverse markets and industries. In addition to his technical acumen, he is widely recognized for his thought leadership in areas such as automation, artificial intelligence, and business strategy.