Automation, Desert, and the Case for Capital Grants

Abstract

In debates about solutions to growing wealth inequality, two prominent proposals include a basic income and a capital grant. In this chapter, I examine the choice between a basic income and a capital grant from the perspective of automation. Automation can lead to technological unemployment if machines carry out similar work at much lower costs than humans. Some economists, philosophers, and tech billionaires think that the implementation of a basic income would be the appropriate policy response to technological unemployment. I defend two main claims in this paper. First, I argue that a universal and a conditional basic income do not provide a good solution to the problem of technological unemployment. Second, I defend the claim that technological unemployment strengthens the case for a capital grant, supplemented with a generous system of contribution benefits, which is to replace the unemployment benefit scheme. My argument builds on the notion of desert, which is often invoked in critiquing the implementation of a universal basic income.