I was once talking with one of my classmates and he said that in the future, there will be universal basic income implemented by entire world. I was not convinced at that time and thought he is just being stupid but given the layoffs happening and massive amount of unemployment, I am thinking about this possibility. What do you say?
I in my heart of hearts see UBI as unworkable and inflationary, as universal basic income doesn’t set universal basic buying power which is very hard to do without a socialist system guaranteeing housing, food, etc. I also don’t believe people are ok with a disconnection between work and financial value. Money is one of the few ways to quantify the value of work and humans in general have a need to feel what they do is valued, particularly if it takes up so much of human identity and what they do on a day to day.
i disagree. food prices would not go up. prices are set by supply and demand. demand would not change. imagine a society with 1 million people. all of them need to eat, whether they earn their money through wages or get it through UBI. the demand for food does not change. i don’t see a reason why supply would change either. so prices stay the same.
do you have any rational argument against this?
Sure - I have 10 customers, their income is fixed. They all need food, and at current prices, all of them can afford rice and beans, but 5 of them can afford rice and beans and meat. UBI increases everyone’s income by $100/mo. They still all need food, but now all of them can afford meat, but the quantity of meat hasn’t changed and they can’t all get meat. Therefore, I as a producer, may increase the price of meat as demand has increased - there’s more money available to buy my goods, therefore there’s more profit extraction available to me. Now, it gets more complicated and with a free market, you’d expect more players to enter the market, but we don’t have a free market, we have limited suppliers. Take housing as an example. There is a shortage of housing causing prices to way outpace inflation. What happens when you give more money to everyone? They now add more players into an already supply constrained market, causing prices to go up even higher. You’d assume with the massive demand there’d be incentives to build, but in practice, we don’t see this. That’s my issue with things like UBI - it tackles a symptom of wealth inequality and while it works somewhat, its still inflationary. you’d have a better shot at taxation for the very wealthy to redistribute wealth in public goods and focusing spending on the poorest of society(i.e. welfare), not an equal distribution across the entirety of the population.
yeah ok that would make meat more expensive (which some people would argue is actually a good thing) but not plant-based food. (since plant-based food is less limited). which is an interesting observation …
yeah the housing crisis is something else. however i suspect that there are bigger factors at play here than just a limited supply … theoretically, the housing supply could be arbitrarily big. the land area is not the bottleneck here (around 1% of the settleable land area of the world are used for housing, 97% is used for farming) and neither are the materials available … it’s more about market expectation (declining birthrate) making new housing construction seem short-sighted and not worth it in the long run. but this is a bit of a different issue and does not directly have to do with the buying power of the people, i think.