Universal Basic Income is Doomed

The AI Revolution and Our Search for a Safety Net

The common narrative of our AI-driven future is both exciting and unsettling. As artificial intelligence advances, many predict it will displace a vast number of human jobs, creating an economic chasm. The solution most frequently proposed for this disruption is Universal Basic Income (UBI), a safety net funded by the immense productivity of our new machine age.
But what if that solution is built on a fatal flaw? According to AI pioneer Emad Mostaque, the conventional wisdom is wrong. He argues that UBI is not just difficult to implement but is mathematically impossible in the future AI will create. In its place, he offers a startlingly different path forward—one that completely redefines how money and value are created.

Why UBI is Mathematically Impossible

Mostaque's central argument against UBI isn't political; it's a matter of cold, hard math. He outlines a cascading economic failure that would be triggered by the very conditions UBI is meant to solve.
The chain of events is simple and brutal. First, as advanced AI agents get smarter and begin "out competing everyone," they will trigger a "great decoupling of society," leading to widespread job loss. As people lose their jobs, they stop spending, and aggregate demand "goes down massively." This sharp economic contraction has a devastating consequence: it decimates the tax base. Without a functioning tax base from employed citizens and active businesses, the government revenue needed to fund a massive social program like UBI simply evaporates. The system collapses under its own weight before it can even begin.
UBI will never work mathematically it cannot work

AI Companies Won't Pay for It

The other common proposal for funding UBI is to levy heavy taxes on the handful of hyper-profitable AI companies that will dominate the new economy. Mostaque dismisses this idea as equally unworkable for two key reasons.
First, these "holy AI firms" are unlikely to ever declare a significant taxable profit. He paints a picture of a future dominated by a single entity—"one person at the top with a thousand million GPUs"—who will never stop expanding. In his view, profit is merely an "indication that they can't find any more marginal value." Therefore, any surplus revenue will be immediately reinvested back into the company's core mission—buying "more GPUs" to find the next competitive edge. They will be locked in a perpetual state of growth, not profit-taking.
Second, even if these AI firms did generate enormous profits, they would leverage "all the tax loopholes in the world" to avoid paying taxes on them. The idea that these global, technologically sophisticated entities would willingly submit to being the financial engine for a global welfare system is, in his view, a fantasy.

The Radical Solution: A National Digital Currency Minted by You

If UBI is doomed, what is the alternative? Mostaque proposes a radical departure from our current economic models, arguing that the "money that comes into the system isn't from banks; it's from the people."
In this vision, every individual would constantly "mint money" through a national digital currency. This wouldn't be a passive handout. Instead, a "number goes up every single day" as you use your personal AI—which he predicts will cost "only a dollar a month"—to actively "make yourself happier and better and improve your community."
Value, in this system, is generated through self-improvement and positive community action, which in turn injects currency into the economy. The ultimate goal is to solve the problem of collapsing aggregate demand by creating a new, decentralized engine for economic activity—generating "constant demand forever."

A New Definition of Economic Value?

Mostaque’s argument presents a stark challenge to mainstream thinking. He contends that UBI is a non-starter, destined to fail from a collapsing tax base and the untaxable nature of future AI giants. His proposed alternative—a system where individuals mint their own currency through AI-assisted self and community improvement—is a fundamental rethinking of where economic value comes from.
It forces us to ask a profound question. If this vision came to pass, what would a world where economic value is tied not to labor, but to personal growth and community betterment, actually look like?

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