I've been hearing a lot about the Universal Basic Income, and all these reasons why it is a good idea.
I'm here to share my viewpoint, as to why it is NOT a good idea.
At the end of this post I'll share some links from the Mises Institute (Austrian School of Economics vs the Keynesian School of Economics on which most governments of the world have been creating a wealth transfer from the lower and middle classes to the elite class).
The first question I ask is, "what is money?"
Well, money is an idea backed by confidence. Which means it is ANYTHING (including cryptos and fiat) that you and I agree can represent value, and we can use to exchange for goods and services. In other words, is the evolution of the barter system.
Barter meant that I could only trade my programming services with a fisherman who needed a website, perhaps. Money fixed all that.
Now, behind that, what does money stand for? It stands for value. The most basic value is a product. You plant some potatoes, give them manure and water, and later on you have something you can exchange for goods and services. A product.
Without that product, we can print as many units of paper or digital currency and it is meaningless as there is nothing to buy, right?
OK, so you need to have a product or a service that people value, and want to exchange with little bits of paper or digital numbers.
Now, let's suppose that we have 10 people and they all have 5 units of currency (USD, EUR, satoshis, etc.).
And one of those people picked an apple and brought it to market. There are 9 people who may be interested in that apple. How much will that apple be worth? (Fair Market Value)
Like a bidding war, it'll be worth the most that any 1 person is willing to pay for it. Let's say everyone is willing to buy it at 1 unit, but only 3 are willing to spend 2 units, and only 1 is willing to spend 3 units. So, the guy who bids 3 units gets the apple. If "bidding" had stopped lower, the price would be lower... or higher.
The Law of Supply and Demand says that the higher the demand, and the lower the supply, the higher the price will be, and the lower the demand and higher the supply, the lower the price will be.
So, if instead of 1 apple you had 20 apples, the price might drop to 0.5 units and everyone could have an apple. But if that were the only apple, and people really wanted that last apple, then the price would go to 5 units.
What's the problem with a Universal Basic Income, then?
Well, if money represents value, and you just give it to everybody, then suddenly, instead of 5 units, they have say, 20. And what happens to the price? It goes up.
In other words, since there is no more value entering the system, simply more paper notes or digital numbers, you are inflating the money supply and raising inflation (goods get more expensive).
But more important than that, you're saying that money really has no value. If anyone can get it simply for breathing, then the value of the currency drops. Not just because of inflation, but because you don't have to work so hard for it, so it is worth less.
Which do you value most? The things that came to you for free? Or the things you really had to work hard for?
Then, some people say, well, what if the government imposes price controls so the prices remain the same?
Well, many countries have tried that, and you have 2 problems I can see: 1) you end up creating a black market where people sell their goods for higher profit (perhaps to another country), and 2) you limit what any person can earn, like in Europe, which can limit productivity. You are not allowed to reward those who produce more, therefore you lose those people to places who do. Look at what happened with the labor costs in America -- companies found cheaper labor elsewhere, or re-homed in countries with less tax burden.
Universal Basic Income sounds great. Money for nothing. But who wants something for nothing? Isn't that the Criminal Think? Take something without giving anything in return? Don't we all feel better when we are productive and can contribute to each other? To our families?
Where does all the money come from in the end? Governments do not create value or wealth or a product. Governments make money by taxing you directly, or by inflating the currency which taxes you indirectly by raising costs, and then you still have to pay that money back. When the US government "increases" the money supply, they are essentially borrowing money from the Federal Reserve (US Treasury issues Bonds which the Fed buys with money created out of nothing).
You probably heard the saying "There ain't no such thing as a free lunch!" Well, money is not free. Someone had to sweat to create the product that then was bought for fiat or other currency unit.
Someone has got to pay the piper sooner or later.
If that weren't so, then why would anyone, private companies or government ever have to file for bankruptcy?
Then what about if machines create all the value?
Again, that sounds great, and certainly they can and already do create value. Robots make cars, computers, etc. And they do it very well. But even robots require maintenance, and require better and more efficient versions, and a human to monitor progress and make sure things are on track.
And who owns them? Who had to pay currency units for their creation, maintenance, etc.? Does he deserve the same compensation as a guy who produces nothing? Some people will think so. Then, what's the benefit of working hard? Or producing? Or studying mechanics and robotics enough to maintain and create those units? Altruism? Would you do it? Work for nothing?
And still, it doesn't change the fact that you won't really change anyone's standard of living, because by throwing money units into the system, you're going to inflate prices.
Maybe when everyone has a good replicator, and owns their own home, we won't need to worry about exchange. Maybe one day we'll all be spiritually evolved enough to where that might work. But look around you, do you really think that humanity is that evolved that a UBI will turn into anything else than a mess or loafers mooching off the producers? We already have that and there's no basic income.
And just how much is a "fair" basic income? Why not double or triple that? It's free money isn't it? Why be greedy with its dispersal?
Don't fall into that trap. Credit and borrowing has never created wealth... only slaves. And we're already indebted enough as a planet. It's time to produce. Let's do it.
REFERENCES
Here is The Dangers of a "Universal Basic Income".
And here is another article from [LewRockwell.com](Libertarianism and a Universal Basic Income).
And here is a post about the Cato institute's position.