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But the UBI works completely different at small and large scales. When you test it at small scale it seems to be working exactly as expected. But when you try t

But the UBI works completely different at small and large scales. When you test it at small scale it seems to be working exactly as expected. But when you try to introduce it globally (I mean, for the whole country), then it suddenly starts affecting economy as whole, and the only result you get is inflation, and no one is better of with UBI compared to their previous situation. When the news breaks that everyone will be getting free money the natural reaction of all the sellers and service providers is to raise prices. I mean, I know UBI haven't been tried at whole country scale, but the populist government in my country came pretty close, trying to bribe people with things like social security payments for parents (you get paid a pretty penny monthly for each child you have), or giving extra pension raises to retired people - basically giving away free money to everyone. And guess what? Inflation in my country peaked at 19% in February, luckily it fell down to like 8% in September.

M95D 3y ago
That inflation is temporary. Most countries in Europe give money to parents and also have decent retirement payments. Inflation is not a problem, except for other external factors (Ukraine war, COVID measures).
- Detrytus 3y ago
  That inflation is indeed temporary - it fulfills its role once the prices reach the level when UBI becomes irrelevant. Imagine a country where average income is 2000 USD per month. Now, you give everyone UBI of 1000 USD per month, so the prices keep rising until cumulative inflation reaches 50% - now 3000 USD buys you exactly the same standard of living as 2000 USD used to do before. So, inflation stops, but no one's life is better after UBI than it was before. And of course if the government decides to raise UBI from 1000 USD to 2000 USD then the next wave of inflation follows, cancelling any gains once again.
  - itishappy 3y ago
    > So, inflation stops, but no one's life is better after UBI than it was before. This does not follow. Many people may find they have the same quality of life as before. This isn't a failure. The relative significance of $2k is much greater to someone making <$2k (>2x increase) than someone making >$2k (<2x increase). It seems like in terms of influencing behavior, the greater effect would be felt by the poor, and there's more poor.
    - Detrytus 3y ago
      > The relative significance of $2k is much greater to someone making <$2k (>2x increase) than someone making >$2k (<2x increase). That only works on individual level, in a world without inflation. it does not work when when you give money to everyone. Yes, I agree, rich people won't even notice that extra $1k of UBI in their pockets. And they also won't notice a price of pizza going from $20 to $30. Poor people, however, will stay poor. As a general principle: money is not a real thing. It doesn't exist. It's only a symbol, means of accounting. You cannot eat it, you cannot wear it. You cannot fix the poverty by giving everyone money if you do not increase the amount of goods available for purchase in the market at the same time.
      - itishappy 3y ago
        > Poor people, however, will stay poor. Right, so it's always in people's best interest to work harder, but $2k buys a lot more pizza than $0, regardless of price. > You cannot fix the poverty by giving everyone money if you do not increase the amount of goods available for purchase in the market at the same time. Supply is elastic. Increasing demand should indeed increase supply.
        Detrytus 3y ago
        > Supply is elastic. Increasing demand should indeed increase supply. That's some Keynesian bullshit, supply is constrained by a lot of factors, demand alone can't increase it. And even when it does, the intermediate step is, guess what? Raising prices.
itishappy 3y ago
Inflation is not the only component of UBI, far from it, social effects are pretty important too. "Do humans still feel compelled to work when their income is guaranteed" is a critical question that does not require a nationwide test to investigate. I wouldn't be so quick to write off the results here.
- M95D 3y ago
  > "Do humans still feel compelled to work when their income is guaranteed" Yes! Exactly. They will not work shitty jobs. Isn't that a good thing?
  - Detrytus 3y ago
    The problem is: those humans still need to rent apartments, pay their bills, buy some clothes and food. A person who has UBI + salary will always be able to outbid a person who only has UBI when buying all those goods and services (which are limited in quantity, so you have to compete for them. That's how economy works, at its core: it is a way of managing scarcity). Which means that after short adjustment period, the prices will rise and you will still need the salary from that shitty job to survive.
    - itishappy 3y ago
      It encourages work. The current system which can punish you for trying to improve your situation, with UBI it's always in your best interest to work. Also, the average person will not have their income increase significantly with UBI. The money has to come from somewhere, and taxes will offset the gains for most. Wealthy folks may see their income reduced by a few percentage points. Poor people can easily see their income doubled. Another factor to consider is that apartments, clothes, and food are not flatly limited, they're elastic. Currently people with no money cannot participate in the market, so UBI has the potential to drive prices down through demand as well. We're seeing a negative example of this with the current housing market; prices are rising quickly because only wealthy people can afford a house, and less and less affordable housing is created as it's not as profitable.
    - 3y ago

M95D 3y ago

That inflation is temporary. Most countries in Europe give money to parents and also have decent retirement payments. Inflation is not a problem, except for other external factors (Ukraine war, COVID measures).

Detrytus 3y ago
That inflation is indeed temporary - it fulfills its role once the prices reach the level when UBI becomes irrelevant. Imagine a country where average income is 2000 USD per month. Now, you give everyone UBI of 1000 USD per month, so the prices keep rising until cumulative inflation reaches 50% - now 3000 USD buys you exactly the same standard of living as 2000 USD used to do before. So, inflation stops, but no one's life is better after UBI than it was before. And of course if the government decides to raise UBI from 1000 USD to 2000 USD then the next wave of inflation follows, cancelling any gains once again.
- itishappy 3y ago
  > So, inflation stops, but no one's life is better after UBI than it was before. This does not follow. Many people may find they have the same quality of life as before. This isn't a failure. The relative significance of $2k is much greater to someone making <$2k (>2x increase) than someone making >$2k (<2x increase). It seems like in terms of influencing behavior, the greater effect would be felt by the poor, and there's more poor.
  - Detrytus 3y ago
    > The relative significance of $2k is much greater to someone making <$2k (>2x increase) than someone making >$2k (<2x increase). That only works on individual level, in a world without inflation. it does not work when when you give money to everyone. Yes, I agree, rich people won't even notice that extra $1k of UBI in their pockets. And they also won't notice a price of pizza going from $20 to $30. Poor people, however, will stay poor. As a general principle: money is not a real thing. It doesn't exist. It's only a symbol, means of accounting. You cannot eat it, you cannot wear it. You cannot fix the poverty by giving everyone money if you do not increase the amount of goods available for purchase in the market at the same time.
    - itishappy 3y ago
      > Poor people, however, will stay poor. Right, so it's always in people's best interest to work harder, but $2k buys a lot more pizza than $0, regardless of price. > You cannot fix the poverty by giving everyone money if you do not increase the amount of goods available for purchase in the market at the same time. Supply is elastic. Increasing demand should indeed increase supply.
      - Detrytus 3y ago
        > Supply is elastic. Increasing demand should indeed increase supply. That's some Keynesian bullshit, supply is constrained by a lot of factors, demand alone can't increase it. And even when it does, the intermediate step is, guess what? Raising prices.

itishappy 3y ago

Inflation is not the only component of UBI, far from it, social effects are pretty important too. "Do humans still feel compelled to work when their income is guaranteed" is a critical question that does not require a nationwide test to investigate. I wouldn't be so quick to write off the results here.

M95D 3y ago
> "Do humans still feel compelled to work when their income is guaranteed" Yes! Exactly. They will not work shitty jobs. Isn't that a good thing?
- Detrytus 3y ago
  The problem is: those humans still need to rent apartments, pay their bills, buy some clothes and food. A person who has UBI + salary will always be able to outbid a person who only has UBI when buying all those goods and services (which are limited in quantity, so you have to compete for them. That's how economy works, at its core: it is a way of managing scarcity). Which means that after short adjustment period, the prices will rise and you will still need the salary from that shitty job to survive.
  - itishappy 3y ago
    It encourages work. The current system which can punish you for trying to improve your situation, with UBI it's always in your best interest to work. Also, the average person will not have their income increase significantly with UBI. The money has to come from somewhere, and taxes will offset the gains for most. Wealthy folks may see their income reduced by a few percentage points. Poor people can easily see their income doubled. Another factor to consider is that apartments, clothes, and food are not flatly limited, they're elastic. Currently people with no money cannot participate in the market, so UBI has the potential to drive prices down through demand as well. We're seeing a negative example of this with the current housing market; prices are rising quickly because only wealthy people can afford a house, and less and less affordable housing is created as it's not as profitable.
  - 3y ago