1. Does it cause inflation
2. What is the impact on employment/productivity
3. Can we afford to tax ourselves to pay ourselves in a way that makes sense?
These studies answer none of these.
You can probably come up with policies that penalize real estate investments, but (a) it will just cause the investors to chase some other asset class, instead of redistributing wealth; (b) unless scarcity is addressed, it's unlikely that housing prices are going to drop. Landlords extract profits from the assets they hold, but they don't cause there to be fewer homes or apartments available.
I've always marveled at how it's 100% accepted to talk about poor people employing six dimensional chess and dubious strategies to scrape undeserved pennies from the system, but it's somehow unthinkable to even so much as contemplate the possibility that rich people are pulling obvious levers to extract millions. The double standard is absolutely wild.
It's one of the few things that are real (ba-dum-tss). And given that demand for housing is inelastic, it'll absolutely absorb any extra money injected into the system as UBI.
Put differently: whatever you set UBI to, it'll always be just barely enough to cover rent on a shack today and not enough tomorrow.
One workable version of UBI was Communism (as implemented in the Soviet Union, not in modern-day China). There you explicitly take the fundamentals like housing out of the economic system and make it a crime to exchange them for money. Prices of staples are tightly controlled, and excess income is to be used for aspirational expenses. It turns out though that it's hard to implement in practice because without a way to regulate demand - the supply side tends to fall over.
what you describe doesn't sound workable to me...
what if UBI led people to think "i can go live wherever i want, regardless of job/market conditions"?
herds of young idealists and artist-types deciding to take over cheap realestate in rust-belt towns and rural areas because they no longer need to be next to a big urban center to 'make it'.
we started to see this during covid WFH, but true UBI would be even bigger
Of course, restricting supply is a problem. I also think this logic might break down in tightly restricted areas that are already vertically built out - Manhattan, for example, because costs per housing unit tend to follow a U curve with respect to height, where they decline with density but start increasing again at very high density, but that's not an issue in most places.
Currently, demand is the only access by which housing markets are dictated in heavily NIMBY areas like SF. Supply is an underused level due to cost and permitting issues.
Greed will take over and try to get the _most_ out of the UBI as if we/you/they owe it to those people.
The idea would be that holding land becomes less profitable, but buying land for development becomes cheaper.
More than 200 million Americans own their home. They are your real estate holders. So what if they absorb some of these increases?
If your concern is housing for those who don't own a home yet then say that, and the solution to that isn't not doing basic income, but to relax the obsolete local zoning laws that require e.g. 1 acre per home in rural area or "nothing higher than 30ft" in suburban areas, basically flat out banning any density increases.
It is super regressive and effectively replaces everything with a housing tax and food tax.
It would be a massive tax break for the rich. IP, stock, and service income would be tax free.
It is primarily popular with a narrow band of white collar technology workers because it would benefit them immensely as their 500k SWE salary become tax free to be picked up by some poor school teacher living next door.
If you use more of your fair share you pay more. If you use less you receive an income.
Instead the ultra wealthy owns the land and receives the income.
Far more ethical than either no tax or taxing productive work.
- Does it liberate people from meaningless employment?
- Does it give a sufficient platform to people to bootstrap their own trade?
- Does it give people the runway for meaningful creation / artistic self-actualization?Personally, I think the necessity and viability of UBI will become apparent sooner than most would expect. If AI and related fields continue to advance at their current pace, at some point we'll be able to observe a clear trend toward an eventual government budget surplus paired with a mass unemployment crisis. Implementing a UBI or similar measure during that transitional period will be the only way to avoid a lot of unnecessary pain and societal upheaval.
This won't cause excess inflation because the payments will be backed by real economic output; the payments will only serve to keep demand in line with supply. Eventually, we'll get to the point where a UBI with annual raises and a balanced budget can coexist. A pessimistic outlook would be that this heralds the end of human innovation and ingenuity; I personally predict that it kicks off a renaissance of entrepreneurship, invention, and scientific breakthroughs that at least matches the relative progress of the 20th century.
Our current system has inflation baked in, so im not sure how big an issue it is, so much as how much inflation?
> 1. Does it cause inflation
On its own, yes, it would create inflation if rolled out globally. However, this is why serious advocates of UBI also point out that we need policies that ensure it isn't turned into a wealth pump into the upper/ruling classes. This entails things like rent, margin, and price controls on necessities like food, shelter, healthcare, education, and transportation, which also requires substantial public investment in those areas to deter or discourage privatization of those necessities. In other words, it means pissing off every landlord, upscale grocer, private hospital, utility company, telecom, private university, rideshare company, rail company, and Taxi owner for the sake of the public good.
> 2. What is the impact on employment/productivity
Generally speaking, humans want to do something productive with their time - it's the definition of productivity that varies from person to person. Those who think solely in economic output will say that negative-profitability employment isn't of value, even if that output has knock-on positive effects in the economy (such as the disparaging compensation for teachers and first responders despite the immense value they create in the long run). It's also why people sneer at the homeless or panhandlers as being "problematic" and "undeserving" of assistance for failing to "pull themselves up [by their bootstraps]."
In reality, taking into account the whole picture, these sorts of individuals could (and studies show, often do) contribute to society better if they had support structures in place that prioritized long-term stability instead of quick KPIs for grant money. It could even be argued that UBI enabling humans to stay home and not work is itself a profitable exercise, since it removes friction from systems that those individuals might create by being forced to exist and interact with modern society and its lack of safeguards. Not only that, but the productivity gains could likely increase as we can finally eliminate "bullshit jobs" and give people the safety nets needed to start their own businesses instead - more restaurants, service experts, inventors, researchers, teachers, and other jobs that are high risk/low reward in the current system, wouldn't be in an economy with UBI and associated policies to provide for necessities and essentials.
> 3. Can we afford to tax ourselves to pay ourselves in a way that makes sense?
We can, but this is arguably the hardest opposition to surmount because it fundamentally means higher taxes on everyone, and that's a bitter medicine nobody wants to swallow. Countries with successful social safety nets have higher tax rates, but also higher quality of life as a result. Unfortunately, the current technocrats and their sycophants (not to mention their industrial predecessors and their decedents) have managed to convince a plurality of powerful people that the world would be perfect if everyone just worked harder and became billionaires themselves so we'd have no more poor people and thus no need for taxation in principle - a fantasy so high and lofty it makes the MCU look plausibly accurate.
It would mean building a society of high taxes, rigid policies, and a massive reduction in (or outright elimination of) loopholes for wealth preservation, especially across generations. It'd mean punishing hoarding of wealth, as that would (rightly) signal exploitation rather than success. These are things most people simply aren't ready for, because they still believe themselves to be one lottery ticket, one inheritance, one startup, one IPO, or one crypto boom away from being billionaires themselves, and don't want to accept that the outcome of the 99% is to work for the rest of their lives before dying in destitution of some form under the current system - a depressing reality to be sure, but all the more reason to change it.
So there you have it. If all you look at is the current system as-is and shoehorning UBI into it, then obviously you have a slam dunk case for why it's a bad thing. UBI advocates like myself, however, acknowledge that it's merely one component in a larger transformation of society itself towards more equitable outcomes, one where colorful pieces of paper are inherently devalued for necessities like food, shelter, healthcare, education, and transportation, while increased in value for actual luxuries. It's an inversion of our present society for the betterment of all, and that's why it's incompatible with the questions you raise above (which seek to preserve a broken status quo).
> substantial public investment in those areas...
> discourage privatization...
Ah, so we are just looking at communism with extra steps. Good to know. UBI, despite its size, was just the motte all along. Thanks for telling us the bailey.
and #3 at least as already been well modelled economically, UBI replaces many other welfare programs, so we can definitely afford it
As GGP said, this doesn't compare. There's even nothing magically non-linear about it: people stay employed, because they know the UBI study will only last a few years, after which they'll need to get back to normal. It makes no sense to interrupt your career for it, as the "hole in your CV" will just turn into a severe and compounding disadvantage in lost years and experience.
The only way I see this being sustainable is get as far as possible from the big cities, buy a tiny piece of land, by a durable tiny home, buy solar panels, get a tablet with all Gutenberg books, and find a soulmate that will follow you to that journey.
No kids, no private schools, no parties, no nothing. Everything will be swallowed by inflation.
I believe this to be a fundamental feature of free market economy in general. It's something I started realizing many years ago, and thought about a lot ever since; in the last year, I distilled that belief into a concise phrase I now use for this:
The market constantly adjusts to keep the average disposable income to zero.
Except now I realized that "average" is the wrong measure here, I should be saying "median", and also I've been mistakenly using the term "disposable income" (which actually means just after-tax income) to refer to "discretionary income" (what you're left with after covering taxes, bills, and essentials). Which leads me to the New and Better, Updated, Version 2.0 of my economic theory:
The market constantly adjusts to keep median discretionary income near zero.
I'd imagine this is an obvious thing that's already been named 100 years ago, but so far my research only pointed me to things like "neutrality of money", and some specific examples of my statement holding, yet nothing that covers it entirely.
(EDIT: in the unlikely case I'm not an idiot, and that this phrasing was not used/named before, I welcome credit; inquiries from the Nobel Foundation should be directed to my e-mail address, which is in my profile.)
Oh yes!! This very thing!! A quick DDG search didn't return anything, but yes, 300% yes. This is the rule/law. Once people get some money, forces tend to (try and) take it away.
EDIT: Ideally, your disposable income must be a little less than zero, so your needs/wants outpace your income, so you get a credit card with $2k limit, then you expand that to $5k limit, and that to $7k limit, until you cannot any more.
EDIT2: I once dated a lady (the most beautiful woman I've dated in my life) and she was in debt for €40k, ALL spent in clothes. She was SO gorgeous that when I feel for her she was wearing a €50 jeans and a €10 white tshirt. She walked in to the room and people stopped breathing. After 1.5 years of dating when I wanted to get very serious with her and she told me her 'dark secret', I suggested a Dave-Ramsey-baby-steps plan to pay off her €40k debt but to chop up her credit cards (and I would gladly generously contribute to pay off that debt - but with a different lifestyle). Long story short.. I haven't seen her in ~15 years :)
In general, as long as we're funding it with taxes instead of by printing money, it's not going to cause any extra inflation.
That's almost twice the aged pension here in Australia. (550 GBP)
I guess I would also need some iron clad guarantee that the cost of living would not skyrocket.