4 ms·

Is it actually going to be universal? Because if it's not, don't call it "universal". I see a lot of articles stating that "universal basic income was tested wi

by brink 5y ago

Is it actually going to be universal? Because if it's not, don't call it "universal". I see a lot of articles stating that "universal basic income was tested with massive success" when there was nothing universal about it. There's a big difference.

jokethrowaway 5y ago
This. If it were universal, companies could just start charging everyday products much more. Boom, all people getting ubi suddenly need to start working again and they need to pay more in taxes to support all the money going in ubi.
- growse 5y ago
  > This. If it were universal, companies could just start charging everyday products much more. Boom, all people getting ubi suddenly need to start working again and they need to pay more in taxes to support all the money going in ubi. This is pretty naive. By the same logic, an unemployment rate of 0 would also cause a lot of inflation and still lead to poverty. Everyone's now earning a wage, so prices will just rise, right? UBI creates no money. It just redistributes it a little. It doesn't devalue the currency, and isn't inflationary.
  - tgv 5y ago
    In (some of) the proposals here, UBI is paired to a much lower minimum wage (a form of compensation, as taxes for corporations will rise). But very few people are going to work for €1/hr or €2/hr, when you get €11/hr from UBI. Instead, they'll probably start a little hustle on the side, or work black. So, if a company wants to keep its employees (and shops etc. really need them), they'll need to raise the wage. This will have a effect on prices, and most likely, prices of food will rise, taking away much of advantage the poorest segment would have, while forcing those who didn't/can't work to take a job, until there's a new balance, where many people will be off worse (because the plans require abolishing all personal subsidies and welfare to pay for UBI). So that's paying a lot of money to make life worse.
  - rsj_hn 5y ago
    > UBI creates no money. It just redistributes it a little. It doesn't devalue the currency, and isn't inflationary. "Creating" money is not a well-defined thing and is not what causes inflation. In fact, inflation is complex and not well understood but what we know is that it is driven by people's incomes (a flow) not the size of monetary aggregates (which are a stock). In fact you can run the whole economy with only a single dollar or with trillions of dollars, and as long as incomes are unchanged there isn't going to be any inflation as you switch between these two regimes of many slow dollars or a single fast dollar. That said, there are some channels by which UBI can lead to inflation: * If you take money from someone with a lower propensity to spend and give it to someone with a higher propensity to spend, then this creates inflationary pressures. * If you give someone enough money so they drop out of the labor market or reduce their hours, then this can cause inflation * The heavy taxes may discourage employment as well -- why work if half your income is taken away if you can do nothing and have the necessities of life provided. Whether or not these factors actually cause inflation and how much is an unknown. It's certainly not obvious that it wont, and there is reason to believe that it will. Merely the statement that "no new dollars are created" has no bearing on whether it is inflationary or deflationary. Unfortunately small experiments in a city or two is not going to answer this question. An entire nationwide experiment for a few decades will answer it, but by then we could have a society in which a large chunk of the population simply refuses to work and as a result is unfit for any kind of productive employment. That's the risk with a real UBI - what happens two or three generations on down the road if the culture shifts so that people expect the necessities of life to be given to them without producing anything in return. The risk is to the productive capacity of society as a whole, and to large swaths of it that need to learn important life lessons in order to become productive members of society.
PeterisP 5y ago
Perhaps it would be appropriate too label the experiment as unconditional basic income / UBI.

by brink 5y ago

jokethrowaway 5y ago

This. If it were universal, companies could just start charging everyday products much more. Boom, all people getting ubi suddenly need to start working again and they need to pay more in taxes to support all the money going in ubi.

growse 5y ago
> This. If it were universal, companies could just start charging everyday products much more. Boom, all people getting ubi suddenly need to start working again and they need to pay more in taxes to support all the money going in ubi. This is pretty naive. By the same logic, an unemployment rate of 0 would also cause a lot of inflation and still lead to poverty. Everyone's now earning a wage, so prices will just rise, right? UBI creates no money. It just redistributes it a little. It doesn't devalue the currency, and isn't inflationary.
- tgv 5y ago
  In (some of) the proposals here, UBI is paired to a much lower minimum wage (a form of compensation, as taxes for corporations will rise). But very few people are going to work for €1/hr or €2/hr, when you get €11/hr from UBI. Instead, they'll probably start a little hustle on the side, or work black. So, if a company wants to keep its employees (and shops etc. really need them), they'll need to raise the wage. This will have a effect on prices, and most likely, prices of food will rise, taking away much of advantage the poorest segment would have, while forcing those who didn't/can't work to take a job, until there's a new balance, where many people will be off worse (because the plans require abolishing all personal subsidies and welfare to pay for UBI). So that's paying a lot of money to make life worse.
- rsj_hn 5y ago
  > UBI creates no money. It just redistributes it a little. It doesn't devalue the currency, and isn't inflationary. "Creating" money is not a well-defined thing and is not what causes inflation. In fact, inflation is complex and not well understood but what we know is that it is driven by people's incomes (a flow) not the size of monetary aggregates (which are a stock). In fact you can run the whole economy with only a single dollar or with trillions of dollars, and as long as incomes are unchanged there isn't going to be any inflation as you switch between these two regimes of many slow dollars or a single fast dollar. That said, there are some channels by which UBI can lead to inflation: * If you take money from someone with a lower propensity to spend and give it to someone with a higher propensity to spend, then this creates inflationary pressures. * If you give someone enough money so they drop out of the labor market or reduce their hours, then this can cause inflation * The heavy taxes may discourage employment as well -- why work if half your income is taken away if you can do nothing and have the necessities of life provided. Whether or not these factors actually cause inflation and how much is an unknown. It's certainly not obvious that it wont, and there is reason to believe that it will. Merely the statement that "no new dollars are created" has no bearing on whether it is inflationary or deflationary. Unfortunately small experiments in a city or two is not going to answer this question. An entire nationwide experiment for a few decades will answer it, but by then we could have a society in which a large chunk of the population simply refuses to work and as a result is unfit for any kind of productive employment. That's the risk with a real UBI - what happens two or three generations on down the road if the culture shifts so that people expect the necessities of life to be given to them without producing anything in return. The risk is to the productive capacity of society as a whole, and to large swaths of it that need to learn important life lessons in order to become productive members of society.

PeterisP 5y ago

Perhaps it would be appropriate too label the experiment as unconditional basic income / UBI.