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I definitely agree the experiments are flawed. But I'd like to raise that there also are positive effects that are not accounted for. You mentioned the impact on market prices, I think the impact on prices would be net positive, because the market would become more inclined to provide products and services for people with lower incomes, where every marginal spent dollar has a much higher impact on overall well being than in higher income brackets. Market economies are more efficient when purchasing power is close to evenly distributed in the population.

If you’re getting £1000 extra a month and I say your rent is now £1000 extra a month, you can’t and won’t say no. If you say no, I’ll just get someone else in who will give me their free money.

As you’re competing with them for the same goods, you’ll have no choice but to pay the same. Meaning it’s made no difference for you as the primary costs in your life are limited by supply.

For someone who owns their own house and makes £10,000 a month, it’s meaningless. Their inflexible goods are already covered. So they’re free to spend it in holidays and working less.

That's unrealistic. If it's purely supply and demand, the premium landlords will be able to command out of that 1000 bucks will be somewhat less than the total - and perhaps significantly less, if prospective tenants are savvy enough to hold out collectively. The only way you see the entire thing co-opted for rent is if landlords were to collude and refuse to break rank on pricing. But there's no way that would happen, since it'd be illegal.

> if prospective tenants are savvy enough to hold out collectively

and why would that be the case? Seems like a hard coordination problem to me.

But collective rent bargaining is common so it's clearly not impossible.

Because there are multiple concrete examples of class solidarity just in the past year which point to a shift in consciousness about such issues. Covid gains were stolen; good luck doing it twice in a generation (in the hypothetical case of UBI in the next few years).

If that was really the case then all surplus would already be eaten by landlords and that clearly isn't the case. In some parts rents are absolutely very high but that's not everywhere. If rents increase more apartments will be built, reducing the ability of landlords to extract rent.

But I agree that inflation is likely to increase if people get more money to spend. However, I think that would mainly be over a transitional period while the economy adapts to the new demand.

> If that was really the case then all surplus would already be eaten by landlords ...

That's what seems to be happening in at least Sydney, Australia. :(

Not all of it, but real estate does very strongly correlate with income, and for lower income quintiles it can eat the surplus.

Lower income quintiles have the surplus eaten because their consumption of raw materials and labor is break-even with their production of raw materials and labor. Even if by magic land were free and construction costs were negligible, a 1-bed 600 sq ft living space would still take a decade for the average bottom-quintile family to pay for the raw materials in the US, saving nearly everything other than rice and beans, healthcare, and other such niceties, and assuming no major calamities on the way. Landlords charging on par with that same rate in rent isn't evidence that were the bottom quintile of incomes to increase by $1k/mo their rents would as well.

> For someone who owns their own house and makes £10,000 a month, it’s meaningless. Their inflexible goods are already covered

I disagree. Competitive middle classers would often climb up the property ladder and spend the £1,000 more on their mortgage. Mortgage payments are often a large percentage of middle class costs that constrains disposable spending (certainly true for me).

I generally agree that say rent might rise to take up any extra income from renters. But a similar dynamic occurs for owners. Especially when you look at the group level where house prices are indirectly set by householder incomes. House buyers compete with each other for how much they can pay in mortgage repayments, similarly to how renters compete with each other.

> If you’re getting £1000 extra a month and I say your rent is now £1000 extra a month

Two people, each making an extra 1000 a month become roommates and collectively they have an extra 500 a month. If landlords try to exploit this, make it illegal for them to ask about extra roommates (within reason).

Another positive market wide force that isn't accounted for is the added safety net will enable more businesses to start and enter the market and ensure that companies are competing. When markets become small and filled with old companies, those companies can form a nefarious "trust" where they collude and stop competing. It's like the Christmas Truce of WW1; opposing forces gradually lessened hostilities for mutual benefit, trust was built, and eventually both sides went into no-mans-land, exchanged food and prisoners, and even played games. This doesn't happen if there's a fresh flow of new soldiers through the trenches, a trust can never form and actions for mutual benefit never happen. It's good when soldiers in WW1 achieve trust and use it for peace, it's bad when a few companies in a stagnant market achieve trust and use it to cease competition (aka, collusion).

> If landlords try to exploit this, make it illegal for them to ask about extra roommates (within reason).

What does that accomplish? The landlord will ultimately find out about the extra $1,000 available to spend even without knowing of a roommate through simple price discovery.

It won’t matter. They don’t need to know about the room mates. They know everybody now has $1000 which means they simply raise the rent.

I would wager that minimum rent becomes close to if not $1000.

and? minimum rent becomes the government stipend so you now live rent-free.

the cash you make at your otherwise crappy, barely-keep-the-lights-on minimum-wage job is now going to pay for other things.

You failed to think that land lords already make money. They can get what they have plus the government minimum.

This would essentially be a wealth transfer from tax payers to land owners.

Unless they can find someone willing to rent for 900? That's how markets work. Suddenly it's more profitable than it used to be to house the homeless.

> To put it more succinctly, they are measuring the impact of a stipend and not a basic income program.

Most importantly, they're connected. As you noted, of course people are happy to get "free" money. But what happens when the markets eats up that extra and they are back to normal, or perhaps worse off? Happiness isn't going to stay high.

In theory, I like the idea of UBI but I'm also confident the market (at least in the USA) - specifically housing - is going to quickly eat up anything extra.

Why would giving everyone basic income below a certain income level immediately cause inflation to match it?

Inflation doesnt track directly to minimum wage, which seems to be a very similar principal.

Consider that some resources are naturally or artificially constrained (housing, medical care, good schools).

If everyone has more money, those things have almost limitless capacity to absorb the extra money in the form of higher rent, higher health costs, higher college fees.

UBI can help somewhat to decrease inequality (same as welfare targeted only at the poor) but if the government prints and gives everyone a million dollars, that would obviously cause inflation to the point that a million isn't that much money.

Reducing inequality will generally mean that well off people (which most software engineers are) will ultimately have less spending power.

On the other hand removing artificial constraints could make those resources cheaper for everyone. Relax zoning to build more housing. Increase residency spots to train more doctors and allow foreign licensed doctors to practice in the US more easily. Etc.

> government prints and gives everyone a million dollars

I think you might be conflating unrelated economic boogeymen.

UBI is not at all about the government "printing" money. It's a redistribution of taxes, such that the net government taxation income remains the same.

The total money supply remains constant.

It's a redistribution of taxes

It's also a replacement for other forms of financial aid. Someone currently on unemployment or other benefits won't get UBI on top of his current benefits, but instead of. Most proponents of UBI also argue that this simplification of the benefits system will bring its own savings as you will have less administrative overhead that comes with means testing and dealing with multiple overlapping systems.

Because inflation doesn’t exist, it’s an invented idea.

If nobody told you that inflation was 8%, you’d only increase your prices if you had a reason to. That reason could be increased demand, increased costs. Those could come about from increased money supply but that would be slow and unlikely.

When the government announces inflation will be 8%, everyone puts their prices up by 8% + 3%. Inflation is therefore 11%. Even though none of them even had a reason to do it.

That 11% price increase then inflates their balance sheet. This surplus lets them give it to the wealthy or splurge on stupid things like buying twitter.

The wealthy then have an inflated bank balance. This surplus lets them buy investments or splurge on stupid things.

These purchases then cause prices to increase. Which signals the government to announce that prices should increase more…

> When the government announces inflation will be 8%

This isn’t how it works. Inflation numbers are announced based on what has already happened, not what will/should happen.

I do think there’s something to the idea that it gives companies a license to raise prices, though.

I see you went to the economics school of Venezuela and Zimbabwe

Because in the 1970s, Saudi Arabia shut off oil exports to America, triggering waves of supply side inflation. This manifests both as increasing prices as well as economic stagnation, which mainstream economists thought wasn't possible. The prevailing interpretation was that this was caused by a "wage price spiral", i.e. that any wage gains by workers will trigger the inflation necessary to claw those gains back.

This is a valid assumption... in a perfectly closed economy where no new energy, material, or labor is available[0]. However, this is not actually the case for most economies - just the one where resource-cursed petrostates are deliberately conspiring to starve out democracy and we decide to let them do that. Energy literally falls on us from the sky[1], we can use it to recover disposed of material, and, if we need more than that, we've got an entire planet full of material to dig up.

In fact, states with lots of mineral or energy wealth already use UBI. Saudi Arabia and Wyoming basically have no income tax because oil and coal extraction pay for everything. Alaska goes one step further and gives state residents a dividend out of the state's permanent oil wealth fund. And, as far as I'm aware, none of these states have outsized inflation compared with the rest of the country / world.

tl;dr economists have a superstition about workers having money

[0] Not to be confused with degrowth, at least I think so?

[1] And when it isn't we have this metal called uranium that literally spews out heat from radioactive decay when you enrich it enough.

> every basic income ‘experiment’ is flawed because they don’t account for the externalities of higher taxes

I think UBI should be combined with a flat tax to achieve the same as a progressive tax but without any loopholes (because it’s so simple).

The central bank wouldn't just sit there and allow the money supply to increase unbounded. They'd turn their knobs so the money supply would remain more per less constant.

And by "turn their knobs" you mean "pull the one and only lever they have and cripple the economy with high interest rates". Universal incomes would be disastrous for economies.

Great, so I guess it’s time to try UBI on a country scale then!

Sure, you go first

Wasn't COVID in the US a large scale basic income experiment, with the stimulus checks?

(Not an American). Did those checks go to everyone? Or just people who were laid off?

Everyone

There were many different checks, from both the central (federal) government and several states handed out their own too. Some of them went to everyone, others had various requirements.

I was working full time but I still got thousands of dollars for no reason. It actually kinda bugged me how wasteful and thoughtless my government was being (no surprise there). I wish they they sent my share of it to people who really needed it then, the folks who couldn't just take their work remote.

You neglect to mention who the higher taxes would be on. I presume that the UBI isn't taxed, so in the near term, at least, such a regime would merely be reversing the upward wealth flow that we've seen since 2008. I'm fine with that, are you?

What about Alaska's permanent freedom fund?