It's interesting to observe any UBI discussion and a total neglect of the most developed theory about UBI - the georgist economics - where UBI is refered to as a 'citizens dividend'.
They state that the only and sufficient financing scheme to make UBI work are the so called monopoly taxes. Simply because if you hand out free money to the people, the monopoly service providers could hike up prices by exactly that amount given out freely to people in aggregate. Other non-monopoly providers would still be trapped in a competition so it would be more difficult for them to increase the prices after UBI implementation. Monopolies would set the prices exactly to the point where they would optimize their income by eating away all the free money suddenly given to people.
This is well described by Ricardo's law of rent (1809) in the context of land rents (which are essentially land monopolies). In other words the landlords would increase the rents exactly to the aggregate amount of UBI money handed out.
Interestingly enough the present day proponents of UBI don't understand this basic law. Some od them are aware of the UBI inflation problem but are not aware of this monopoly inflation problem.
Andrew Yang proposes Value Added Tax to finance it, which proves he has no clue.
If you print money to pay UBI you get inflation, yes.
If you're paying it with VAT or Income Tax or something else you're not increasing the money supply, so broad inflation should stay unchanged.
Local prices will go up and down as you reduce demand for rich person goods and increase demand for poor person goods.
This would imply rent going up but one of the promises of UBI is to increase the ability of people to move to places with cheap rent, taking power from landowners.
>This is well described by Ricardo's law of rent (1809) in the context of land rents (which are essentially land monopolies). In other words the landlords would increase the rents exactly to the aggregate amount of UBI money handed out.
Thanks. I keep asking the same question without knowing there is actually a Law of Rent. And I have yet to see a convincing argument.
people arent as tied to a location anymore if they are receiving guaranteed income. They can go live somewhere with a lower cost of living and dont have to worry about income, rent, medical expenses while they are moving and getting settled.
Landlords partly have power because people want to be near jobs that pay well. If you dont have to have a job or can take a lower paying one elsewhere, there may be less local demand.
They state that the only and sufficient financing scheme to make UBI work are the so called monopoly taxes. Simply because if you hand out free money to the people, the monopoly service providers could hike up prices by exactly that amount given out freely to people in aggregate. Other non-monopoly providers would still be trapped in a competition so it would be more difficult for them to increase the prices after UBI implementation. Monopolies would set the prices exactly to the point where they would optimize their income by eating away all the free money suddenly given to people.
This is well described by Ricardo's law of rent (1809) in the context of land rents (which are essentially land monopolies). In other words the landlords would increase the rents exactly to the aggregate amount of UBI money handed out.
Interestingly enough the present day proponents of UBI don't understand this basic law. Some od them are aware of the UBI inflation problem but are not aware of this monopoly inflation problem.
Andrew Yang proposes Value Added Tax to finance it, which proves he has no clue.