The photo of Götz Werner was taken by Enno Schmidt.
The entrepreneur Götz Werner was the best-known and most influential proponent of the universal basic income in Germany since 2005. With him, the UBI became a topic in the media and in society.
His presentation of the idea was also an inspiration and substantial basis for the Swiss popular initiative and vote on UBI and for many other activities of others on the UBI. About two years ago, his state of health no longer permitted any public appearances.
On February 8th, 2022, he passed away in the age of 78.
His strong public appeal and talent to inspire was not only because he had a high social status as a successful and repeatedly awarded entrepreneur, credible with his statements about economy, money and work as someone who had made it in the existing society, but it was his authentic way of putting people first. His presence made others feel joyful, uplifted and assured of a future development despite all the hardships.
His involvement with the UBI was a logical consequence of his entrepreneurial career. For him, basic income was not a contradiction to business, to productivity, but its prerequisite. If you asked him something to which you expected a business answer, he answered with human, idealistic ones. If you asked him something for which you expected a human, ideal answer, he answered in business terms. There was no difference. And what he said lived with the people in the company right down to all the branches at all levels. Not as a parroting of a corporate philosophy, but as an attitude to life and a living space.
The dm pharmacy chain that he founded has today more than 66.000 employees, 43.000 in Germany alone, almost 4.000 branches and an annual turnover of more than 12 billion Euros.
“The company is a platform for biographies,” Götz Werner said. He considered the division between working time and free time to be wrong. Because both are life time. My lifetime is me. I cannot separate myself and my lifetime. Only I can determine my lifetime. No one else can dispose of my lifetime. It is only out of my freedom and determination that I can devote my lifetime to others. But it’s always me. Freedom is not nice talk, it is the very nature of human existence. “The goal of people is freedom-generation“, Götz Werner noted. In the company, people spend their life time, develop skills and unfold their lives. That is what the company is there for. “People are not means, but ends.” They are not a means to the end (purpose) of the company, but the company is a means to the end (purpose) of the people. “A company is a social-artistic cultural event.” In the development of the company, Götz Werner could seem like a sculptor, a social sculpturer, and who sometimes keeps taking a step back to see how it is right and coherent. Action and reflection. He himself changed with his insights and with the changes in the company.
Entrepreneurs create jobs? “Nonsense,” he answered. “No entrepreneur comes into the office in the morning and considers: how can I create a lot of jobs today? Instead, he thinks: how can I optimize processes, how can I do something better for the customers?” But he had created tens of thousands of jobs with the dm drugstore chain, he was further asked. “Where we have opened a new branch, other shops in the area have gone out of business because of it. Previous jobs have been lost where we have offered new ones. New jobs are primarily created today where work is being done to eliminate jobs elsewhere.”
After countless interviews with applicants, a light came on for him: “First people need an income, then they can get involved with our working community and see where they can and want to contribute best.” First an income, then you can engage in the work. Notice the order. That is the order of the free man.
At an event at the University of Karlsruhe, he called out to the thousand listeners: “Your work and the work we all do can never be paid for. But an income makes it possible.” Because my work is my lifetime and my contribution to others. This cannot be paid for because you cannot buy people. Income makes work possible. It does not pay it. “In our society based on the division of labor, we all live from what others do for us. The more productive others can be, the better for me. So it makes sense to create the best conditions for everyone to be productive.” This framework is the UBI. ” Work costs nothing. But everyone needs an income. And everyone works. Even the unemployed. They work too. They also do something. Everyone wants to work, wants to do something that makes sense, for which they experience appreciation.” “Only with the UBI we have a free labor market.” For a free market presupposes the freedom of market participants to be able to say no to a bad offer and yes to a good one. No to underpaid bad or pointless work. Yes to something that makes sense, that I want, even if the pay is not high or it is not paid at all. For Götz Werner, it was evidence from his professional life that made it clear to him that wage dependency stands in the way of real cooperation on an equal footing. Of course, earned income remains beyond the basic income. But the question of existence is not tied to a paid job or the requirements of social welfare. “Today, many people do not have a working place, but only an income place,” Götz Werner remarked. Needless jobs that only give an income and power to the employer to rule about staff. This fits with what David Graeber described in his book Bullshit Jobs.
But how can a UBI be financed, Götz Werner was asked again and again. And again and again he answered: “It’s already financed, isn’t it?” Incredulous amazement on the part of the questioner. “Yes, we live in paradisiacal conditions. We have enough goods and services for all, and we could produce even more. Everything that can be produced can also be financed. Provided one has the good will to do so.” Götz Werner saw: The fact that we are all alive proves that the basic income is already financed. If someone did not have even as much as a basic income, in whatever way, they could not live. This basic income is made unconditional. We look at economics under “a money veil”. We do not live on money. You can’t eat money and you can’t wear money. “We live from what others do for us.” And there is enough of that and could even be more. We no longer live in times of scarcity. That is why the basic income is already financed. Because the goods and commodities and services are there. Money is only a legal means of exchanging goods and services.
And how does the funding take place in practice? Götz Werner’s friend and advisor Benediktus Hardorp had explained VAT to him. Götz Werner understood the advantages. Not elevating taxes where people do something for others, income, but where we all claim the services of others for ourselves, consumption. Much more correct and fairer, much simpler in the calculations. Only value-added tax, all others no more. But he wondered: Where is the social component in VAT? And he came up with it himself: an unconditional basic income amount to all economic participants, that is, to all people, all consumers, paid out at the beginning of the month as a refund of the VAT to be paid in the prices in the extent of the necessities of life. For him, VAT and UBI belonged together. They complement each other and pull in the same direction. Releasing the initiative of the people.
Because Götz Werner’s portrayal of the UBI had grown out of entrepreneurial activity, out of insight and evidentiary experiences, because it did not mean or favor any class of society, but rather the human being in his freedom, of which work is a part, he had an effect on people.
Götz Werner has given his shares in the company to a foundation. When his health began to deteriorate, he decided to bundle his financial support for the debate on UBi into an institution and the science and, together with his wife Beatrice, to endow a professorship at the University of Freiburg. The Götz Werner Chair with Prof. Bernhard Neumärker as chair holder. The dm Werner Foundation also finances the Freiburg Institute for Basic Income Studies, FRIBIS, at the university of Freiburg, Germany.
His son Christoph continues to run the company. He has adopted one of his father’s mottos: “Who want, find ways, who don’t want, finds reasons.”
On 29th April 2021 the prestigious Oxford Union Society hosted a panel of students, activists, politicians and scholars to debate the motion ‘This House Would Introduce a Universal Basic Income’.
The debate began with the majority (68%) voting in favour of introducing a Universal Basic Income (UBI) and the remaining 32% voting against it. After hearing a total of 8 panelists’ arguments for and against the motion, the majority shifted in the closing poll to a marginal victory for the opposition, with 54% voting against introducing a UBI and 46% voting for it.
The full debate can be watched on the Oxford Union’s YouTube channel here, with a programme of the speakers and summary of their key arguments provided below.
00:33 – Opening up the case for the proposition, Classical Archaeological and Ancient History student Ambika Sehgal drew on anecdotal evidence from victims of flaws in the DWP’s (Department for Work and Pensions) systems, experiences from the Covid-19 pandemic, and accounts of early forms of UBI in Ancient Greek societies to make three arguments for the motion:
To lift people out of poverty and provide a basic standard of living to everybody “without fear or favour”.
To increase the wealth of the entire population by giving everybody the freedom to upskill, reeducate, take on more prosperous jobs, or start their own business.
To prevent the inevitable economic catastrophe that we are approaching as a result of the automation of skilled industries.
10:52 – Rebutting with the opening case for the opposition, Eliza Dean, first year Classics and French student and Member of the Union’s Secretaries Committee, denounced UBI as the solution to our current economic and political struggles, arguing instead for better funding of existing state welfare systems and a return to greater recognition of the value of labour in society.
20:58 – Professor Guy Standing, Professorial Research Associate at SOAS University of London and founding member of BIEN, outlined the fundamental ethical – as opposed to instrumental – rationale for introducing a UBI, arguing that we have an ethical justification to introduce UBI to resolve the unequal distribution of wealth created by rentier capitalism.
Rounding off his argument for the proposition, Professor Standing drew on his extensive experience working on over 50 pilots to outline some of the key findings of research on UBI:
It improves individual mental and physical health.
It reduces people’s stress.
It leads to better school attendance.
It increases work and its productivity, leading people to be more innovative and altruistic in their work because people feel more able to act in such a way.
It helps to reduce debt.
It leads to a greater sense of social solidarity.
36:34Marco Annunziata, former Chief Economist and Head of Business Innovation Strategy at General Electric, invoked suggestions for the necessary rise in taxes, the case to offer the same amount to the rich and poor, and the disincentives to work as evidence that a UBI is both unaffordable, unjust and riddled with unintended consequences.
48:53 Drawing on simulations run by the RSA (Royal Society for Arts, Manufactures and Commerce) Anthony Painter, Chief Research & Impact Officer, made the economic case for UBI, citing its ability to make up for inadequacies in existing social support systems by offering a hardwired economic platform for all in society.
59:50 Regarding UBI a ‘recurring revenant’ throughout his career, Professor Hilmar Schneider, Director of the Institute of Labour Economics in Bonn, cited the experience of the German pension system and his own research conducting funding and behavioral responses simulation models to argue against the motion. Pointing to the fact that most UBI pilots rely on external funding sources, Professor Schneider argued that the strongest argument against a UBI lies in its unaffordability, as it would ultimately result in more people losing money than gaining money.
01:10:34William Greve, first year Philosophy, Politics and Economics student and Sponsorship Officer at the Oxford Union,consolidated the arguments made by the panelists to round off the underlying economic and liberal arguments for a UBI:
That is the most effective way to counter the wealth inequality and unjust returns to capital observed in the modern economy that leave labour so unjustly rewarded.
That it is reasonable to demand that all individuals in a society be entitled to a share of the total wealth of society a basic level of economic security.
That it would fundamentally change our relationship with employment for the better.
Drawing on Professor Schneider’s earlier remarks on the case against higher income taxes (owing to the fact that the majority of wealth that exists in the modern economy is not received as an income in the traditional sense), William also argued that a wealth tax, not an income tax, is the most just and feasible way to fund UBI.
01:21:30 Rt Hon Jon Cruddas, Labour MP for Dagenham and Rainham and Former Coordinator for the Labour Party, rounded off the case for the opposition by arguing that those advocating for UBI should remain cautious when their political opponents also support the scheme for radically different outcomes. Noting the many cross-spectrum and cross-ideological arguments for and against the motion, he also pointed to the more ‘mundane and practical’ issues with introducing UBI, such as financial feasibility, its efficacy compared to its alternatives, and what accompanying policies are required to ensure desired outcomes.
Concluding the case against UBI, Rt Hon Cruddas hammered home his argument for the dignity of labour and questioned the role that UBI would play in creating decent work. All but entirely dismissing concerns around automation and the future availability of work, he argued that we should instead be organizing for collective rights, strong unions, income guarantees and above all, dignified labour. He argued that there is a strong case against UBI if you consider that the nature of work thesis is flawed, and that the debate around the future of work is an inherently political one. UBI, he suggested, could transform citizens into ‘passengers of capitalism’, robbing them of meaning and dignity, and leaving them more isolated, vulnerable, angry and humiliated, and society itself less fraternal and solidaristic.
Michael j. Sandel has written a book about the deep causes of the inequality that is a key driving force behind the populist backlash of recent years. His analysis serves as a basis for justification of the introduction of a universal basic income. For the complete review, see: https://basisinkomen.nl/wp-content/uploads/Book-Review-Michael-Sandel-Jan-Stroeken.pdf
Here you will find a short summary, being the last part of the review:
Public Debate and Basic Income Sandel’s analysis is razor sharp. What he brings to the fore more than anything is how present-day populism is only indirectly fuelled by the unequal distribution of income and essentially dominated by an ethical and cultural component. A growing section of the population feels underrated. This has everything to do with the tyranny of merit driven by the meritocratic ethos that, over the past decades, has led to meritocratic hubris. This hubris is reflected in the winners’ tendency to let their success go to their heads, forgetting about all the luck and good fortune that helped them along the way. Those who make it to the top believe with self-satisfied conviction that they deserve their fate and that those who end up at the bottom do too. This leaves little room for the kind of solidarity that could arise if we were to realise just how haphazardly talent is distributed and how randomly fate can either be kind or cruel. Merit-based pay is, according to Sandel, thus a form of tyranny – an oppressive regime.
And so, Sandel launches into a plea for a sweeping public debate on how to move from today’s individualisation to a greater sense of solidarity and more self-determination for all. What is essential in this respect is his conclusion that for many to be successful in life, all forms of education and work would have to be taken equally seriously. Without explicitly mentioning it, he points to the core of what the implementation of a universal basic income is all about: more equal recognition of current paid and unpaid work, as well as a stimulus to go to school. In an interview with Dutch newspaper De Volkskrant (20 September 2020), Sandel describes this when he speaks about ‘that which contributes to the community’ as a key alternative criterion to purely performance/merit-based recognition:
‘It is, in any case, a more democratic method that allows us to recognise contributions that are currently ignored or undervalued. I mean contributions such as the unpaid work that is done within households, for example, such as raising children and caring for relatives. Or all the work that, due to the COVID-19 crisis, has turned out to be much more important than society gave it credit for: nursing care, cleaning work, waste collection, and logistics. Setting aside the matter of usefulness, the fact that there is equal dignity in every human being should also reverberate in the dignity of everyone’s work.’
Regrettably, Sandel hardly gets around to formulating specific solutions in his book. Nevertheless, his most concrete suggestion with respect to the revaluation of work is to improve wages at the bottom of the labour market, such as through wage supplementation schemes and by shifting the tax burden away from labour and onto consumption, speculation, and capital. While the latter suggestion is an excellent one, it would be even better if it were substantiated further to ensure that those who do unpaid work also benefit.
This further substantiation also takes us to a second key argument for downgrading the role of merit-based pay, which is that the link between current wages on the one hand and individual work performance on the other is loosening. Pay is increasingly less personal. Our current level of prosperity, as initially reflected in people’s primary income, is the result of many years of productivity growth to which many generations have contributed. Our high income levels can, therefore, not be put down only to the labour performed and capital invested in companies at this point in time. In this context, distributing primary income only to those directly involved in the production process seems to be increasingly less of a given and implementing a universal basic income for all is an obvious alternative, i.e. regardless of someone’s position in the productivity-driven labour process. The state collecting taxes directly at the source, i.e. at the level of companies’ production, would then be the obvious choice. This would also automatically shift the tax burden to sources other than labour, which is merely one production factor.
The figures provided in the book demonstrate that there is growing support among the general public for the idea of universal basic income. Even so, there is a hard core of people who are against it and keep using counter-arguments that they cannot back up with facts, such as a universal basic income having adverse effects on the labour market and being too costly. Their rejection might very well have little to do with those counter-arguments and rather be driven by a strong meritocratic bias. There is a clear relation between implementation of universal basic income and the public debate that Sandel wants to initiate.
Finally, the results of the most recent parliamentary elections in the Netherlands can be explained based on Sandel’s The Tyranny of Merit. On the one hand, right-wing populist parties are on the rise. One in five Dutch people voted for populist right-wing parties that have become increasingly extreme since the days of Pim Fortuyn’s first populist revolt in the early 2000s: full of mistrust and bitterness directed at everything and everyone and not shy about avowing discrimination. Even in the knowledge that these parties will not be part of a coalition government and play no role in the actual governance of the country, people still vote for them. And people vote for these parties even though their election programmes are, at least in a socioeconomic sense, more likely to be prejudiced than to favour them. On the other hand, the two winners of the elections are supreme exponents of meritocracy, namely the People’s Party for Freedom and Democracy (VVD, the party for the successful) and Democrats 66 (D66, the party for the highly educated). What we need to do over the coming years, therefore, is to assemble a left-wing populist programme that addresses three pressing issues:
How to achieve a sustainable world as soon as possible;
How to reach a post-capitalist state by shifting the balance of power;
How to accomplish lasting labour market change in line with the foregoing through a national debate as proposed by Sandel.
Some possible solutions include a large-scale shift from taxation of labour to direct taxation of companies’ production as well as implementation of universal basic income.
‘The Tyranny of Merit: What’s Become of the Common Good?‘ is available from Penguin Random House, published September 2020
With the increase in research on the circular economy system, the basic income and circular economy relationship has also started to be considered. For example, this relationship was examined in the article ‘‘How could a Basic Income support a Circular Economy?’’ published on the Basic Income Network Scotland website on 23 July 2019. In fact, this article is based on the transcript of an interview between Timothea Armor, Basic Income Network Scotland Editor, and Teja Hudson, a zero waste consultant and founder of Zero.
The current system of capitalism, free markets, and endless growth, according to Hudson, disappoints us socially. She points out that there are many people who want to make the world a better place, but this disappointment forces them to struggle just to survive. Therefore, she claims that we have lost many bright and creative minds due to preventable social inequalities such as poverty, hunger, disease, gender inequality, persecution, violence and lack of education. Finally, she suggests we need social change, and these people represent a great untapped potential for that social change.
Adding to Hudson’s argument, it is very difficult to be creative when you are stressed, under pressure or not inspired, and especially when you are worried about money. As a result of this, there are a lot of artists and creative people struggling to practice their art and instead interrupted by the need to earn a living. Hudson summarizes the potential contribution of basic income to this problem with the following statement: “This is where Basic Income would be a revelation.” She claims that by implementing a Basic Income, highly experienced creative people, free thinkers and problem solvers will be ready to help solve the problems of 10 billion people on a small planet instead of getting stuck in a dead end.
According to Hudson, circular economy is a way of looking at resources on our planet and understanding that everything is part of a circular system rather than a line. She believes the aim is to keep resources circulating in this cycle for as long as possible, minimizing the use of unused raw material and maximising productivity in the production process.
As for the potential relationship between basic income and the circular economy, Hudson points out that environmental and social concerns are very closely linked and that the goals and values of both systems are the same; “for humanity and the planet to survive and flourish together, so what helps the environmental movement to accomplish that will also help the social movement to accomplish that, and vice versa.” She argues that these two systems acting together could be more effective and bring sources and audiences together.
Universal Basic Income (UBI) is meant to provide financial security and address job losses. Africa is one continent where UBI is critical. During the COVID-19 outbreak that has rendered many people jobless, it could have been used to prevent them from sliding into poverty.
Universal Basic Income is unconditional cash transfers to recipients guaranteed by the government. Recipients are entitled to the income regardless they are earning or not. The universal basic income is not taxable and recipients can use it for any of their needs. The government has no obligation to follow up on how the payment is used.
Currently, there is no country with a Universal Basic Income in Africa, but there are schemes that can help transition toward a UBI policy. There have been trials in some countries in Africa, such as Kenya, Uganda and Namibia. The trials that were conducted in the three African countries showed positive results. What benefits can we expect from a universal basic income in Africa?
Eliminate Poverty by Generating Income
By introducing Universal Basic Income in Africa, recipients can improve their financial status from low-income earners to medium-income earners. The recipients will have more disposable income to cater to their needs.
This would have been beneficial at the time when many Africans have lost their jobs due to the COVID-19 pandemic. Basic income will help to support families and prevent them from sliding into poverty.
Ease of Access to Education for Children
With the guarantee of basic income, children can access education without having to work to support their parents. The lack of income leads to increased school dropouts and consequently early marriages.
Children drop out of school to help their parents generate additional income through informal employment. When casual jobs are not available, children get married early to seek solace and financial support from their spouses.
Providing basic income would help children stay in school since they do not have to look for employment to support their families. While children are in school, early marriages can be eliminated and help them gain an education and live a dignified life.
Promote Entrepreneurship and Increase Job Opportunities
Through UBI, people will have access to more disposable income. When people have access to disposable income, they can take risks and start businesses.
Starting a business requires some capital and enough funding before it can start generating revenue. Basic income can be directed to startups since the government needs not to follow up on how it is used.
The impact of basic income is that people can take risks and start businesses that will consequently create job opportunities. Companies will also help the economy through corporate taxes and income taxes.
Improve Mental and Physical Health
Basic income helps people lead a better life, improving their physical and mental health. The lack of disposable income to cater for the basic needs leads to stress and depression, pushing people to live in deplorable living conditions. Moreover, the lack of income hinders people from accessing health insurance.
The same way the government provides free health and education, it is also best that African governments invest in UBI for the financial security of their citizens. With disposable incomes, recipients can secure health insurance and live a dignified life.
A study carried out by GiveDirectly Organization in 63 Kenyan villages, provided each adult 0.75 dollars per day. The results of the study showed that recipients had an improvement in consumption and well-being. The recipients increased their investments in livestock and home improvement.
Financial and Social Inclusion
The problem of social inclusion is rampant in Africa. The lack of basic income leads to social marginalization, preventing people from accessing modern services like insurance, bank services and technology, such as access to mobile phones.
UBI would help to alleviate social marginalization by assisting people in accessing modern services.
For instance, the government can remit basic income through banks or mobile transfers. As such, people will open bank accounts and buy mobile phones to receive the money. This way, marginalized people can enjoy modern services.
Reduce Financial Gaps between the Rich and the Poor
One of the ways to fund Universal Basic Income is through taxes. Income taxes can lead to a fair distribution of wealth by taxing high-income earners and reducing wealth gaps. Africa is the leading continent with huge income disparities between the high-income earners and low-income earners.
Low skilled workers barely get incremental increases in their wages, pushing them into adverse poverty with increasing inflation. Through UBI, the government can tax high-income earners and redistribute the proceeds to low-income earners.
Family Cohesiveness and Stability
In many African countries, there is domestic violence due to the inability to cater to family needs and depression. The survivors of domestic violence cannot leave their spouses because they lack a stable income. If the survivors can access basic income, they can leave their spouses and meet their basic needs.
Also, if there is a guaranteed income, depression and stress can be eliminated, reducing domestic violence.
In many African countries such as Kenya, parents give birth to many children for cheap labour and security during their old age. If there is a guarantee of regular income, parents would not need to raise many children to support them when they grow old.
How to Fund the Universal Basic Income in Africa
There are many ways through which African governments can fund Universal Basic Income through taxes and creativity. These are some of the ways to finance the Universal Basic Income in Africa.
Reducing Government Expenditures
Reducing government expenditures can set aside some monies that can be directed to fund basic incomes. African governments can reduce some funding to revenue-generating state corporations. Some of the revenues they generate can be directed to the basic income initiative. Most of the recurrent expenditures for government institutions can be halted.
Higher Taxes for High-Income Earners
Through higher taxes from higher-income earners, governments can generate funds to finance basic income initiatives. It would also help to reduce income disparities between the rich and the poor. For instance, governments can introduce a luxury tax and wealth tax above a fixed net worth.
Increase Corporate Taxes and Reduce Financial Benefits to Leaders
African governments can increase corporate taxes by three percent to generate additional revenue for UBI. Additionally, governments can reduce some benefits for politicians. The monies can be redirected to a basic income to promote recipient welfare.
Final Thoughts
African governments should invest in basic income for its citizens. Basic income is equally important in a nation like other social amenities such as health and education. It leads to general wellbeing, social cohesion, and productivity. In addition, by affording basic needs such as food, shelter and clothing, citizens live a dignified life. Finally, basic income will promote mental health. Poverty and social injustice can lead to poor mental health and related illnesses.
Author Bio:
Vincent Nyoike is a Kenyan research writer with vast writing experience. He is a graduate of the University of Eldoret with a degree in Applied Statistics with Computing. He has also pursued a course in Certified Public Accountant. From his experience in business, he enjoys writing on finance and business topics, with a particular focus on Africa. He also works on SEO projects for private international organisations.
