Wouldn’t Unconditional Basic Income Just Cause Massive Inflation?
Scott Santens
36545

Scott Santens assumes that the “Free Money” would be a “basic” income and argues that wages would rise as people would not need to work so would need more incentive. It also assumes that the Basic Income would need to be inflation adjusted. In the model I promote I believe that wages would fall after the initial adjustment period as people would work because they value the products or services or because they value the social engagement and with a more generous basic income they would not need to demand high wages. There might be even more competition for the interesting jobs using expensive equipment. Wages would probably have to rise in the less attractive jobs like toilet cleaning and care-giving. In my model taxes on natural resources would pay for the Basic Income so the relationship between the Basic Income and wages would be set by the relative value of natural resources compared to the value of human labour. The Basic Income, or Natural Dividend as I call it in my model, would not be inflation adjusted. Inflation or deflation would be driven by the rate of increase of productivity of labour and the rate of global population increase. High labour productivity decreases the value of labour as we need less labour to produce the same goods. Increasing human population makes labour more available but also increases the need for products and hence the demand for labour. Increasing human population makes a heavier demand on natural resources so would increase the value of natural resources and should increase the value of the natural dividend compared to wages.