Introduction

At the 1998 Amsterdam Congress of BIEN, three alternatives of providing basic security consistently with raising employment were discussed:

• 1. a tax-financed, institutionally independent and unconditionally granted basic income,

• 2. a negative income tax and

• 3. a permanent wage subsidy.

As I shall argue, I am in favour of a negative income tax (henceforth NIT). However, my arguments are not meant to claim comprehensive validity independently of national or historical conditions. My position is more modest. It is based upon the contemporary institutions of the tax and transfer system in Germany, which is marked by a historic dualism of tax-financed social benefits and contribution-financed social insurance entitlements of wage-earners. My plea for NIT, in the form of the Citizens Income Plan ‘Bürgergeld’ addresses the experiences, debates and expectations surrounding policies of income taxation, social security and the labour market as they exist in Germany. My argument in favour of Bürgergeld thus rests on a specifically German evaluation of current social problems and worthwhile social goals.

In general, I take the view that each country has to find its own ways and means to achieve a social optimum, even though the different alternatives of providing basic security have general advantages and disadvantages not limited to either a specific location or time period. While my ranking of these alternatives in terms of their problemsolving capacities is addressed to the German case, it may offer insights that are useful in other countries, to the extent that similar problems and similar goals exist in those.

Diagnoses of the German Labour Market Policy and Social Policy

The necessity for a new social and employment policy framework

For decades now, the level of hard-core unemployment has risen whenever the economy has shown signs of recovery. And the (timid) economic upturn at the turn of 1999 is passing the labour market by as companies cut jobs and further automated their production during the previous recession. Also, companies hesitated in hiring new employees, with the experience of the recession fresh on their minds, and they hesitate even when more orders start coming in again.