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But how do you handle inflation in a base income economy? It seems that any extra freely allocated capital would immediately be nullified by the increase to inf

But how do you handle inflation in a base income economy? It seems that any extra freely allocated capital would immediately be nullified by the increase to inflation it would cause?

legutierr 13y ago
Why do you think inflation would go up? I have never understood this argument. It seems to me as likely for the price of consumer goods to go down as for them to go up in such a scenario. Or you may see no movement at all.
ominous_prime 13y ago
Basic income does not increase the money supply, which would bring about inflation. There may be an increase in the general cost of living for many, but that's not inflation, and it wouldn't absorb the entirety of one's basic income.
- userulluipeste 13y ago
  It seems that "inflation" has an equivocal meaning here. I presume he meant that the purchasing power of the currency would diminish and it's not hard to imagine why. Look at housing - if the credit wouldn't be cheap (or if it wouldn't be available on a large scale), the houses have to have a price between the basic price (the combined cost of land plus house construction) and the price that the market can bear. Given the credit, the housing becomes able to bear a lot more. The housing credit affects just housing, but a basic income would affect pretty much everything an average Joe would require. A basic income would rise both the basic prices for every human-involved activity (the payed work becomes more expensive) and the bar of what a vast pool of potential clients could bear/afford.
  - meddlepal 13y ago
    Correct. This is what I meant.
auggierose 13y ago
There are probably a host of questions like that, and I am not an economist, so I cannot answer them (I am not sure economists can, though). What is important is to have the will to do something like that. Only then will it become apparent if we can actually do it. I think this is very similar to writing software. You know roughly what you want it to achieve, but you don't know yet exactly how.
vasilipupkin 13y ago
the idea is to replace current system of welfare transfers with basic income for an equivalent amount of money, not simply to print more money and give it away

But how do you handle inflation in a base income economy? It seems that any extra freely allocated capital would immediately be nullified by the increase to inflation it would cause?

legutierr 13y ago

Why do you think inflation would go up? I have never understood this argument. It seems to me as likely for the price of consumer goods to go down as for them to go up in such a scenario. Or you may see no movement at all.

ominous_prime 13y ago

Basic income does not increase the money supply, which would bring about inflation. There may be an increase in the general cost of living for many, but that's not inflation, and it wouldn't absorb the entirety of one's basic income.

userulluipeste 13y ago
It seems that "inflation" has an equivocal meaning here. I presume he meant that the purchasing power of the currency would diminish and it's not hard to imagine why. Look at housing - if the credit wouldn't be cheap (or if it wouldn't be available on a large scale), the houses have to have a price between the basic price (the combined cost of land plus house construction) and the price that the market can bear. Given the credit, the housing becomes able to bear a lot more. The housing credit affects just housing, but a basic income would affect pretty much everything an average Joe would require. A basic income would rise both the basic prices for every human-involved activity (the payed work becomes more expensive) and the bar of what a vast pool of potential clients could bear/afford.
- meddlepal 13y ago
  Correct. This is what I meant.

auggierose 13y ago

There are probably a host of questions like that, and I am not an economist, so I cannot answer them (I am not sure economists can, though). What is important is to have the will to do something like that. Only then will it become apparent if we can actually do it. I think this is very similar to writing software. You know roughly what you want it to achieve, but you don't know yet exactly how.

vasilipupkin 13y ago

the idea is to replace current system of welfare transfers with basic income for an equivalent amount of money, not simply to print more money and give it away