Will Basic Income Cause Massive Inflation? No
That’s just an internet fairy tale.
There are still quite a few people online who mistakenly believe that Basic Income will cause huge problems with inflation. Some of them even claim it will ‘obviously’ cause runaway hyperinflation and the collapse of the economy. But don’t worry. These claims are not true.
Basic Income is not likely to cause any sort of major inflationary problems.
The belief that Basic Income will ‘obviously’ cause inflation is essentially just an internet fairy tale. It’s a myth perpetuated by people who misunderstand how a Basic Income system would work and/or misunderstand one or more well-known theories about what causes inflation.
To be fair, you can see how these misunderstandings arise. Basic Income involves everyone being given money. All other things being equal, that means more money being around, doesn’t it? And having more money around will cause inflation, won’t it? But that’s really not what the situation is at all. Let me explain.
The main misunderstanding is the idea that Basic Income involves giving the population ‘new’ or ‘extra’ money that they wouldn’t otherwise receive. But this is not true.
For starters, Basic Income, as generally proposed, would replace a whole series of…
