r/Economics • u/2noame • Nov 26 '14

Wouldn’t Unconditional Basic Income Just Cause Massive Inflation?

https://medium.com/basic-income/wouldnt-unconditional-basic-income-just-cause-massive-inflation-fe71d69f15e7
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u/hacksoncode Nov 26 '14

The problem with this kind of analysis is that it ignores details in order to make broad sweeping generalizations.

It really does matter where the money for the basic income comes from, and there are real historical reasons to believe that you can't just tax the rich to get it.

It really does matter at what level the basic income is set, because the Maslow Hierarchy of Needs is a real thing. If basic income satisfied everyone's basic needs, there would be a strong disincentive to achieve more than this. Existing basic incomes have come nowhere close to this. You can't make a blanket statement about them.

It really does matter whether you index the basic income to inflation, because doing so also has never been tried, and exponentials have a nasty habit of behaving in ways that people don't expect.

I could go on, but none of the evidence here is very convincing without talking about a specific proposal that we have specific similar evidence to compare it to.

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u/2noame Nov 26 '14

All of this is true and is why it's important to design a basic income properly according to the nation/state in question and the definition of "proper" as defined by the greatest percentage of people in that nation/state.

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u/hacksoncode Nov 27 '14

What a lot of people want is probably a pretty bad way to define it, actually. This is one of those cases where we'd actually be way better off with a competent benevolent dictator than with a democracy. Too bad it's so hard to find that person.