Version 3.2_September 2016

Individual Paper: Prospects of an unconditional basic income in a degrowth economy

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It is already evident that current present-day industrial nations can offer a basic income without risking the collapse of the economy. Even the supply with an unconditional basic income (UBI) is imaginable. However, it is not obvious whether an UBI sufficing for more than the subsistence consumption can be realized in a degrowth economy. A simple mathematical model is applied to estimate the feasibility of an UBI. It maximizes the household’s utility which depends upon supplied labor and the level on consumption. In this model a certain amount of labor (voluntary labor) has by itself some utility since it is believed that the monotony of complete unemployment lessens the utility. It is found that an UBI can be realized if the level of technology has a certain degree and the additional consumption (consumption minus guaranteed consumption) lies above a certain minimum level. This level decreases with the propensity to work voluntary. The UBI causes a decrease of total consumption and, therefore, fosters degrowth. However, a degrowth strategy including the implementation of an UBI has its limitation since a severe restriction of additional consumption could possibly make an UBI inaccessible, especially in countries having a low level of technology. Alternatives to the UBI could be a means-tested basic income or the combination of basic income with basic labor devoted exclusively to the production of subsistence goods. Altogether it can be concluded that the more radical degrowth should be, the more consequent must be the shift from the free market economy towards a socialist economy if the basic needs of all members of society have to be guaranteed.


Day: 2016-09-01
Start time: 11:30
Duration: 00:15
Room: 393
Track: Environmentally sound economies