Comment by Liftyee
1 day ago
Correct me if I'm wrong, but my understanding of the economy is that money is earned when someone creates value. Just "giving people money" without having the corresponding value be created increases demand for valuable things without increasing supply, leading to inflation and the costs of said things going up.
Money is earned either by extracting rents/profits/taxes, through borrowing or by selling something. None of these have to actually create value.
You can advertise something without value and “earn” money selling it. The perceived value was created by advertising, but didn’t actually exist.
You can raise funds, sell at a loss, buy out the competition and later drive up prices without creating any value. This is how Amazon got started.
You can go to the bank, borrow money(increasing the money supply, driving inflation, thanks to fractional reserve banking), buy up houses (driving housing inflation), and extract rent without doing anything useful for your community.
In fact, cloud computing is largely that: buying up all the compute and renting it out to those without the capital to buy themselves.
A person can create value without earning money (parenthood, volunteering), and one can earn money without creating value (rent extraction), although the word “earn” is under a lot of strain.
You're wrong. People have inherent value whether they "create value" or not. UBI is not about rewarding people for some economic contribution but rather provides everyone with a reasonable amount of money so they can survive (hopefully) and stay healthy and have a shot at the prerequisites for "freedom" to exist.
Money has been completely manufactured in financial markets already and doesn't seem to be screwing us over too badly. I hardly think UBI paid from taxing the largest economic surpluses and wealth in the history of the world will have a significant impact on inflation.
Any inflationary impact would happen if you print the money supply to pay UBI rather than using existing dollars in the supply.
You're also completely writing off the additional surpluses that people receiving UBI could provide if they're confident they can get by on a daily basis and also ensure they stayed healthy and working rather than spiraling any time one or two things go sideways.
In, say, the Netherlands we already have something that's very close to free money. I know many, many folks perusing said mechanism(s). Sure, it's not UBI and there is some stigma involved but I think it's the closest you'll get. I won't be snarky about this, but let's just say I need some.. convincing this reliably addresses the primary obstacles in economically disadvantaged folks. In my experience our economic situation is downstream from other more urgent issues that we find hard to talk about. Culture, ethics, behavioral and cognitive differences, etc. Thorny, nasty things, but .. real and more importantly they don't respond to dollar bills. In fact, it may make it worse.
But anyway, I'm not too worried about inflation mainly because of the points you raised, but I am worried about resource constrained markets like housing. If nothing is done to stop this, and I don't know how, I'm sure they'll just raise the prices to completely cancel out any UBI you'll pass around. It's not just housing either, but that's an obvious one.
So far in Croatia any kind of stimulus from the government just makes the market compensate. For example, an increase in public spending made the prices of goods and services more expensive and providing subsidies for first time home buyers caused prices of real estate to increase by that amount.
> our economic situation is downstream from other more urgent issues that we find hard to talk about. Culture, ethics, behavioral and cognitive differences
I see it as exactly the opposite - culture, ethics, behavior differences etc are downstream of financial inequality. When people are financially insecure it becomes much harder to tolerate disagreement, and much easier to blame [insert whatever populist notion of enemy]. I think it would be easier to engage with people with opposing ideas, not seeing them as an existential threat, if you are not worried about housing, income or health insurance.
Cultural polarization is a deflection mechanism (both in the subconscious psychological sense as well as a politcal/propaganda technique) meant to mask the real deeper structural inequalities. It's the lie we tell ourselves and the powers that be tell us to prevent to change the direction of the "wealth redistribution" we've been witnessing for 20+ years.
Value is subjective and some value takes unknown time to create. So money is also given to people in that grey area.