Comment by abannin
10 years ago
Paying people to not contribute to GDP will result in decreased GDP. Lower GDP means less income to be distributed.
UBI is not the first time someone has proposed that a central authority should determine the income of the general population. It doesn't take much research into Russia to recognize this as 'serfdom'.
Increasing the GDP is easy. First, pay me 50$ to dig a hole. Then I pay you 50$ to fill the very same hole. We created nothing but the GDP increased by 100$ (well, tax aside).
original source of this example: https://ploum.net/largent-doit-il-etre-notre-seul-objectif/ (in french, but interesting essay)
Yeah, try that in scale for a few years and watch the economy collapse under runaway inflation.
You're missing the point. The point is that GDP increases don't necessarily mean productive work is being done.
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Probably not, actually, but to recognize that you have to go into the details of how inflation works.
Briefly, the only possible reason why there would be inflation is that the people given money for digging and filling holes now have more income that they can spend, so they increase demand for products. If this raises the price of products (and yes, that's an if), it will also mean that companies will have more money and an incentive to hire new people so that they can meet the increased demand. Some of those people will come from the digging-and-filling-holes program. It's a self-stabilizing feedback loop.
Obviously there are more subtleties, e.g. when a lot of domestic consumption is from imports. But even then, you wouldn't get runaway inflation. In the extreme case, currency markets would adjust up to the point where it becomes profitable to increase domestic production, and you'd get self-stabilization in that way. And increased domestic production in itself would be seen as a good thing by many people.
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