03 Apr 2017

Universal Basic Income: The Promise vs the Practicalities



The journal Intereconomics, published bi-monthly by CEPS and the Leibniz Information Centre for Economics (ZBW), features articles dealing with economic and social policy issues affecting Europe.  Each issue contains a Forum section offering an in-depth exploration of a selected topic. All contributions to the Forum section in each issue, as well as the Editorial, are available for free downloading from the CEPS website at the links below (for full content, see www.intereconomics.eu). The ?ve articles in this Forum deal with strengths and weaknesses of Universal Basic Income, which will surely be a major topic of debate over the next decade and beyond.

Abstract: The idea of a universal basic income (UBI) is nothing new: the concept of a guaranteed endowment paid by the government to each of its citizens dates back centuries. The UBI has gained momentum in recent years as the relative economic stability of the second half of the 20th century gave way to a more turbulent start to the new millennium. The limits of the free market and globalisation in providing a decent standard of living for every citizen were laid bare for all to see, and inequality widened in even the richest global economies. Added to this was the increasing complexity of social security systems in modern welfare states. Policymakers and civil servants had the unenviable task of deciding who was deserving of assistance, as well as policing those in the system to make sure advantage was not being taken. Proponents argue that a UBI, by simply trusting everyone with a basic income each month, could solve both of these issues. Moreover, it could also be the solution to the purportedly imminent destruction of traditional jobs due to the rise of robotics and arti? cial intelligence. While the idea of a UBI is intriguing, real-world implementation is anything but basic. No serious answers have been found to the question of how to ?nance such a system, and until a workable solution is found, a UBIis simply not feasible. Other issues that economists continue to research include the negative effects of a UBI on a person’s willingness to work and the proper size of a UBI in order to ful?l its intended purpose. 

Authors: George Pagoulatos, John Kay, Thomas Straubhaar, Heiner Flassbeck, Hilmar Schneider, Olli Kangas, Miska Simanainen and Pertti Honkanen

Editorial: Greece: Searching for Light at the End of the Tunnel

By George Pagoulatos

Forum: The Basics of Basic Income

By John Kay

Forum: On the Economics of a Universal Basic Income

By Thomas Straubhaar

Forum: Universal Basic Income Financing and Income Distribution – The Questions Left Unanswered by Proponents

By Heiner Flassbeck

Forum: Universal Basic Income – Empty Dreams of Paradise

By Hilmar Schneider

Forum: Basic Income in the Finnish Context

By Olli Kangas, Miska Simanainen and Pertti Honkanen