alt Hacker NewsI'm UBI-curious, but surely inflation would be inevitable if everyone suddenly had $x more disposable income per year? Landlords and grocery stores and everyone else would raise prices because they know people can afford it. Obviously if you're living in poverty, anything is better than nothing, but would the average middle class person be better off? As far as I can tell no country has ever tested true UBI (unconditional and for all residents) so its all theoretical.
Musk's idea of a Universal High Income (where money is no longer necessary because robots and AI give us anything we want) sounds great too until you consider scarce resources like land. Who decides who gets to buy the best properties on Earth if money is no longer a factor? What if you want, say, a human hair stylist or therapist: who would do such a job if they don't have to? We would lose the human touch in our lives, and that sounds awful.
Replies
It depends. On its own, UBI puts a downward pressure on the value of money. Some other things (e.g. setting low interest rates) also put a downward pressure on the value of money. However, some things (e.g. taxes) put an upward pressure on the value of money. So it comes down to how all of those factors balance out.
In places that consist of many people with subsidized incomes, like elderly housing complexes, why aren't local grocery stores and gas stations higher than elsewhere?
Also, aside from that question, prices will only rise if there's no competition. In a working market, if more people can afford a higher rent more apartments will be built.
It would not be inflationary if it's paid for with a tax on real value or income. Maybe somewhat inefficient, and prone to political meddling, but it's not introducing new money into the economy.
If it's just printed money, it would be.
That’s one of the flawed arguments used against minimum wage. The answer is, no.
This is kind of like social security, medicare or the 5 day work week, if everyone suddenly had $x more disposable income per year? Landlords and grocery stores and everyone else would raise prices because they know people can afford it.
> What if you want, say, a human hair stylist or therapist: who would do such a job if they don't have to?
I have no faith in Musk's vision of an abundance utopia for many reasons, but I suspect a lot of people would still want to do the job of being a human therapist or hair stylist even if they technically didn't need to for money.
They may want to work less than 40 hours a week, but most people do have an inate need to feel like their life has some sort of productive value beyond just base level existing.
> I'm UBI-curious, but surely inflation would be inevitable if everyone suddenly had $x more disposable income per year?
This does not have to be the case if higher taxes decrease purchasing power for some.
So there are two basic versions of UBI:
1. The right-wing UBI is a tool to dismantle the social safety net. The idea of the likes of Milton Friedman is to replace all social safety programs with UBI. This doesn't make sense because, for example, being disabled in today's society makes everything more expensive; and
2. Left-wing UBI would seek to have everyone share in the wealth they create by supplementing social safety programs with UBI. UBI becomes a form of super-progressive taxation because it can be viewed as negative taxation.
As for your inflation comment, you have a point, to which I'll say: UBI alone isn't sufficient. You need economic reform and planning on top of that.
A good example is the US military. If you live off-base you get a housing allowance (ie BAH). Now around military bases, in the US and overseas, all the landlords know this so you'll find that weirdly all the houses to rent cost pretty much what BAH is.
So a more equitable economic system, including UBI, needs social housing. That is, the government needs to be a significant supplier of quality, affordable housing so landlords (private and insitutional) can't artificially drive up prices, as is the case now. A prime example is Vienna [1]. Housing simply can't be a speculative asset in a healthy economy.
If you wnat to see what an equitable planned economy looks like, look at China.
If UBI is so high that people can afford paying extra without working for it then maybe, but I don't think that is the idea behind UBI. There still needs to be an incentive for people to work, they should just be in a place where they actually have a choice instead of living in survival mode every day.