In her final IEA podcast before moving to Washington DC, Reem Ibrahim is joined by Director General Lord Frost and Editorial Director Kristian Niemietz to examine two pressing economic questions: should we be optimistic about Britain’s economic future, and do we need a universal basic income because of artificial intelligence?
The conversation begins with a critical analysis of recent claims that Britain stands on the verge of economic recovery, driven by stored-up capital and AI productivity gains. Lord Frost and Niemietz push back against this optimism, arguing that Britain’s structural problems, particularly around energy policy and net zero constraints, make such a recovery unlikely. They contrast Britain’s anaemic 0.1% growth with America’s 3.5%, pointing to affordable energy as a crucial differentiator that UK policy actively undermines.
The discussion then turns to universal basic income, prompted by fears that AI will destroy jobs. Whilst acknowledging the theoretical free-market case for UBI as a replacement for the current welfare system, all three conclude it is a political fantasy. They argue that once introduced, UBI would prove impossible to reverse, would fail to meet the needs of specific groups requiring additional support, and would sever the essential link between work and market demand, creating what Niemietz calls a ‘self-indulgence economy’.
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