4 ms·

Like others have said, pilot programs are a poor trial for UBI. You're creating wealth for select individuals (even a village), so you aren't dealing with econo

Like others have said, pilot programs are a poor trial for UBI. You're creating wealth for select individuals (even a village), so you aren't dealing with economic issues such as inflation. For example, read about Mansa Musa, who gave away so much gold in his pilgrimage to Mecca in the 1300s that he caused devaluation of money (hyperinflation) for nearly 10 years [1]. The huge influx of "free" money caused lasting damage to the functioning of the economy. I don't doubt doubt the effectiveness of UBI. I just also believe in the efficiency of markets to absorb influxes of money while keeping the relative cost of tangible assets the same. 1. https://en.wikipedia.org/wiki/Musa_I_of_Mali#Islam_and_pilgrimage_to_Meccasinglehandedly-caused-economic-crises https://en.wikipedia.org/wiki/Musa_I_of_Mali#Islam_and_pilgr...

skybrian 9y ago
Better to model this as a change in spending patterns, not an increase in the money supply. It results in more broad-based spending on low-end goods and less on luxury goods. (In the US this would be good for Walmart and their suppliers.) Also, inflation happens when supply can't keep up with demand. It doesn't happen when businesses can adjust by making more stuff. An example of supply-limited inflation would be housing in some areas, but this would be countered by making it more affordable to live in lower cost areas since UBI makes people less dependent on jobs. (Consider how social security affects Florida.)
munk-a 9y ago
I haven't seen any proposals for UBI that rely on printing money to fund the benefits so I imagine that the Fed will still be able to control money production rates and keep the total currency within fixed limits. Would this run away inflation be possible in a system where we're drawing money out of the top of the economy?
shkkmo 9y ago
I'm not sure that an effect on inflation would even really be a problem. The Fed has been struggling to maintain inflation at it's target rates for many years and has had to come up with new and creative tools beyond just adjusting base interest rates. In my opinion, the only way to introduce UBI at scale is slowly. If UBI does have an impact on inflation, we can scale up UBI during times of economic downturns and hold UBI steady when the economy is growing and control inflation with standard interest rate manipulations.
wu-ikkyu 9y ago
>you aren't dealing with economic issues such as inflation. For example, read about Mansa Musa, who gave away so much gold in his pilgrimage to Mecca in the 1300s that he caused devaluation of money This is why a UBI should be resource based, rather than money based.

skybrian 9y ago

Better to model this as a change in spending patterns, not an increase in the money supply. It results in more broad-based spending on low-end goods and less on luxury goods. (In the US this would be good for Walmart and their suppliers.) Also, inflation happens when supply can't keep up with demand. It doesn't happen when businesses can adjust by making more stuff. An example of supply-limited inflation would be housing in some areas, but this would be countered by making it more affordable to live in lower cost areas since UBI makes people less dependent on jobs. (Consider how social security affects Florida.)

munk-a 9y ago

I haven't seen any proposals for UBI that rely on printing money to fund the benefits so I imagine that the Fed will still be able to control money production rates and keep the total currency within fixed limits. Would this run away inflation be possible in a system where we're drawing money out of the top of the economy?

shkkmo 9y ago

I'm not sure that an effect on inflation would even really be a problem. The Fed has been struggling to maintain inflation at it's target rates for many years and has had to come up with new and creative tools beyond just adjusting base interest rates. In my opinion, the only way to introduce UBI at scale is slowly. If UBI does have an impact on inflation, we can scale up UBI during times of economic downturns and hold UBI steady when the economy is growing and control inflation with standard interest rate manipulations.

wu-ikkyu 9y ago

>you aren't dealing with economic issues such as inflation. For example, read about Mansa Musa, who gave away so much gold in his pilgrimage to Mecca in the 1300s that he caused devaluation of money This is why a UBI should be resource based, rather than money based.