Universal Basic Income is Communism 2.0
Throughout the months that I have been in Steemit, I have met several times with different posts of different authors, who have different ideologies, in which explains an approach that aims to make use of a Universal Basic Income with the goal of both eradicating poverty, and reducing the dependence of people to a job.
Although the reasons are very good, I am afraid that the staging of a concept such as the Universal Basic Income would not be beneficial at all, first because it would not achieve its objective (eliminate poverty and dependence on a job) and second, because the only thing that would be achieved with such a measure is to destroy the market, distort the price system and generate inflation, which will probably lead to an increase in poverty and dependence on jobs.
But since I know that the concept of Universal Basic Income is quite pleasant for many of the people I have met in Steemit, I will explain the main reasons why such a project would fail, however, I will also try to provide some possible alternatives.
Well, first we must understand that the Universal Basic Income is a subsidy that all people, without any kind of distinction, receive regularly, either from a public institution, or through the use of private mechanisms.
Under this concept there is no requirement to perceive the subsidy allocation, therefore, neither age, gender, race, origin, degree of study, distinction between civil and military, foreign and native or any other, they are not an impediment to receiving the income.
But then, this multicultural paradise in which poverty and dependence on work are eradicated, presents the first question:
Where would you get the money to pay everyone this assignment?
Well, there are two main forms and they are quite well known to all of you: Taxes and Monetary Issuance.
Taxes: Through this mechanism all those who perceive alternative earnings to the Universal Basic Income should contribute voluntarily, or in their absence of mandatory form, with the money necessary to maintain the system, that is, the Universal Basic Income would be accompanied by a tax that would be charged on the productive factors.
Monetary Issuance: Through this model, the body responsible for monetary policy would be responsible for issuing new money, with the objective that it be used to finance the basic income.
Both cases have the same problem, and that problem is basically inflation.
Let's see, what is inflation? Well, I will reuse the definition I used in a previous publication: Inflation is the excess of money supply, so simple, if there is more money in circulation than the one demanded by the suppliers of goods and services, inflation is generated.
In both cases, whether the funds are generated through new monetary issuance, or if they are collected through taxes, the amount of money in the hands of people increases, so that the demand for goods and services will increase, which will inevitably translate in an increase of the prices, so in the same measure that the Universal Basic Income increases, the level of the prices will increase, therefore, the positive effect that this income should have is totally annulled by the inflation, at the same time bringing with it the inflationary problem, and everything that entails.
Well, some of you will say: Hey @vieira, I understand that the issuance of new money generates inflation, but the government collects taxes frequently and also spends that money, does not that generate inflation? What would be the problem with the Universal Basic Income?
The difference between public spending and private spending is very simple, when spending money is about, the State does not act in the same way that acts as the set of people that make up the body of a society, the State has very particular needs, and spend their money on different things, so the increase in demand is only generated in very remote fields, however, when the increase in demand is forced by the people and not by the State, the money is usually spent in products and services of first necessity, which subsequently brings with it the increase of all prices.
Such is the story of Mansa Musa, who for those who don't know, it was a king of the Mali Empire known for being extremely wealthy, according to estimates, his wealth was superior to that of Jeff Bezos today, founder and CEO of Amazon. Mansa Musa was known to be very generous, he paid good amounts of gold to those who served, in addition to trying to help the poor by making donations in gold, however, things did not go as he had planned, because his generosity was such, that gold lost all its value in cities like Cairo, Medina and Mecca, and because this mineral was used as a means of exchange, since fiat money did not exist yet, inflation reached the clouds.
This case is very important, because it leaves the problem in perfect evidence. People often believe that fiduciary money is based on trust and that instead gold inherently has a value, therefore, they think that the problem of inflation is due solely to the issuance of new money, forgetting that distribution is also important. The problem that arose in the cities affected by the generosity of Mansa Musa, would be the same problem that would happen in the case of implementing something like the Universal Basic Income in modern society, why? Because when the means of exchange is abundant, it automatically loses its value with respect to the goods that are traded with it.
This happens because the real wealth is not what the millionaires have in a bank account, nor is the gold bars that are stored in a vault, wealth are goods and services that can be used by consumers, and this wealth is directly proportional to the production capacity of the company. Increase the amount of money but maintain the same level of production, the only thing you will get is that the money loses value, that is; inflation, moreover, it is more likely that the level of production will decrease, because by establishing a regime such as the Universal Basic Income many individuals would decide not to participate actively in the economy.
In spite of all the faults that this model presents, I have been able to find two ways in which under a purely theoretical and superficial logic it can work. These two forms are also known to you, they are mainly: Socialism and Communism.
I must be honest, I started writing this publication with the aim of describing the fundamental flaws that a model like the "Universal Basic Income" would have, however, as I went deeper into my analysis I noticed something that I had not noticed before, and that is that as all roads lead to Rome, all subsidies lead to communism, and universal basic income is no exception, if you want to see proof of this, just open the book written by Karl Marx and then you will see that the principles that are at the base of UBI are the same under which communism is sustained.
So what was a publication with which he pretended to kindly discard the concept of Universal Basic Income, has been reduced to the same as always, my personal struggle against communism and its innumerable mutations.
Why do I say this? let's see...
Universal Basic Income - Socialist version
As we have established that the problem of wealth is not due to the small amount of money in circulation, but is due to the shortage of goods and services, then we can determine that there are two possible solutions in which we could implement a Universal Basic Income.
The first one would be a model in which the State would give the Universal Basic Income, but in turn, it should have the capacity to anticipate the way in which consumers would spend their money, and to be able to produce the sufficient quantity of goods and services demanded, in the quality demanded, in the time and place demanded, with the objective that the increase of the demand generated by the consumers does not exceed the total supply of goods and services required.
So in these conditions the, suppose "People's Universal Basic Income Office", should have several qualities:
Have the ability to know previously what, where, in what quantity, in what quality, and when goods and services will be demanded.
Have the ability to produce and distribute goods and services to meet the greatest demand never seen before, because when dealing with a Universal Income we all become claimants.
All this supposing that the market continues in operation, that is to say, that the State does not take control of the means of production. So all that effort is practically impossible, dependent on the market, and probably very inefficient, it would simply be to compensate the wealth generated by the current market.
Universal Basic Income - Communist version
Under this mechanism the Universal Basic Income is not granted through a monetary allocation, but to eliminate the problem of inflation, as the paradoxical problem that represents anticipating the decisions of people, the "People's Universal Basic Income Office" would be responsible to assign goods and services directly, and not in money.
In such a way that the tax charged to the current productive factors, should be large enough to maintain the parallel industry created by the Universal Basic Income Office along with the entire distribution system.
So in practice, this would be a kind of parasitic industry, which will feed on the wealth generated in the market industry, and which would depend to a large extent on the continuous growth of the market it is destroying, because when implementing the Universal Basic Income the cost of labor increases and the incentives to work diminish, in addition, the most likely is that the market for basic goods and services eventually disappear, as they could not compete with the parasitic industry created by the new system, which would end up decreasing taxes, causing them to have to carry more weight on the shoulders of the rest of the industry.
In the end, it would be necessary to decide between eliminating the Universal Basic Income, or maintaining it at the cost of destroying the current market. The practical decision to this dilemma is easy to take, since it is easy to see that the parasite can't live on its own, so the correct option would be to eliminate the Universal Basic Income, however, the theoretical option raises another question, that practically is the same question posed by communism: Would people be willing to work exclusively to receive in return a Universal Basic Income that everyone should receive by right?
If the answer to that question is no, but you still want to implement this model, then that model will probably end up in the same way as the Soviet Union.
If the answer to that question is yes, then you simply have to put it into practice and see how it goes to the theoretical communism described by Marx, because that is what it is.
I think the standard https://mises.org definition of Growth of money supply would be much clearer.
It's because all mandated subsidies come from the same ideological roots and communism is merely the full extension of that ideology (at least out of the one that manage to have a civilized facade.) The true end of line would be glorified snuff (I'm dead serious). Every living person needs to breathe. The charity of breath would require asphyxiation of the individual. A softer version would be cutting off limbs because it's able-ist (remember those offensive Stephen Hawking tributes)
Sustainable Basic Income
This project is very erroneously named @steembasicincome
It's a great project which works more like a community investment pool that give you dividends based on your shares and you always have to sponsor another person if you want to buy shares. I've sponsored few shares for you and few other people and they actually have a working model.
Great post. Upvoted and Resteemed!
mmmm I had not heard about @steembasicincome, I'll see what I find about it. Thank you very much buddy!
Sure thing :-)
I did not read it all yet, but first, I wanted to respond to this:
All of this has already been done, so nothing to lose here.
It's true, but what I'm trying to say is that a measure like that would distort it even more.
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"Basic Income" (Universal is a globalist idea for this concept, stupid NWO) will be only for normal people, for the majority who will not be in power, for the government will be a paradise of absolute control ... ask the government of Cuba.
The loss of individuality that occurs in the long term when these kinds of things are institutionalized is incredible, people tend to look more like cows than thinking rational human beings ... this without counting the total dependence to which it supplements that "basic income".
Upped and re-steemed!
Pd: por cierto, tu que hablas español, no te interesa participar en unos podcasts? Bueno, ya iremos hablando, saludos :)
What good is a forest if the individual trees are dying. Basically communism = Death of civilization and we have a history to prove that (not that you need empirical evidence in this case)
Complete! Also there is not Humanity or Rational Thinking at all in Communism ... btw, I am from Cuba so I have experienced in first hand ;)
Where I live never turned fully capitalist or fully communist. So I could say that I've lived a lite/mediocre version of both worlds and those who think a combination of capitalism and communism is good, they are utterly mistaken. You can manage to sustain a mixed economy. The result would simply be an economy that is lagging behind capitalism. A perfect parallel example that is easy to research would be post colonial India Vs Singapore.
It's based on the Feelz. So that is to be expected. You might find the following posts interesting:
https://steemit.com/philosophy/@vimukthi/how-ayn-rand-became-the-greatest-prophet-of-our-time-how-her-philosophy-was-born-it-s-use-in-modern-times-and-criticisms-against
https://steemit.com/philosophy/@vimukthi/deconstructing-philosophies-osho-and-ayn-rand-s-common-roots-oppositet-words-similar-meanings-teachings-from-dhammapada
https://steemit.com/economy/@vimukthi/understanding-the-mechanisms-of-commie-madness-and-a-clever-list-of-incredible-facts-to-disarm-socialist-propaganda-while
As for some individual effort:
lol
Thanks @juanmiguelsalas!!
Of course friend, just tell me what you need about the postcasts and I'll see if I have the possibility to help you with that.
The most glaring flaw I see begins with the strange notion that those who control most of the wealth give a shit whether poor people live or not. They seek to extract wealth, not share it. I do not get this disconnect that a growing number of people have that the rich want to help out at the expense of their wealth. Does anyone believe that inviting impoverished immigrants has anything to do with them wanting to give these people a better life? They want them here for cheaper wages and votes. To extract more wealth from the same actions. They could care less if it puts citizens out of work trying to compete to put food on the table.
My mother always told me that when love flies out of the window, money becomes a problem. But I believe wherever there is money involved love flies out of the window.
This dynamic is most visible when someone dies and many of the "loved ones" begin fighting among themselves over the material wealth left behind. Often destroying whatever illusions were there that they had any genuine love for one another.
Alas, I know this is so true!
There are good and bad people regardless of wealth, wealth, in fact, does not modify, it only amplifies that which is within you. and universal income applied via rule or legislation is very very bad. if people volunteer to share, that is the truest and greatest way for such a system to work.
Perfectly stated.
Look, currently when technology and artificial intelligence is still not very well developed, and we cannot tap unlimited amount of metal resources with asteroid mining, implementing UBI would be indeed problematic. However, once we have those things, it could be pretty simple to implement since everything, Tech, Metals, Land (I showed in one of my post that if we allocate equal land to everyone, each of us would have more than 8000 m2 of land) and Food (Even if we give 25% of wasted food to malnourished, hunger problem is solved) would be abundant. Check the concept of Post-scarcity economy to know more. Experts are saying that we could have a Post-scarcity economy as early as 2050.
Right, I was going to talk about that topic too, but I would prefer to have that point for another publication, in which I will explain that this society in which UBI is possible, also have other problems.
Thanks @hmushtaq!!
Not everybody wants 8km2 of land. Thinking of all that weeding alone does my head in!
Hi @hmustaq
What is your take on the video "A Funny Thing Happened on The Way to the Moon"?
Agree with you. UBI is not good! It sounds more like a control than a advantage to people.
Your explanation of inflation is spot on. I cannot agree more and there are not a lot of people that see it this way. They can't look past what they're being told. I explain the same in one of my post
But I cannot agree with the isolated example of Mansa Musa where inflation on gold was an effect of over supply into a system. Yes, in isolation it will happen as one cannot eat gold. I can further explain it througn an example of 10 people in a system. They have basic needs and exchange money for what they need. If all you give them is gold (not even water) they'll die within 7days. Hence gold becomes worthless to them.
This is however a small sample. If the same was done today those people would be rich beyond words because they'll be able to trade with the world.
A good example of why I don't agree is the inflation rate when a fiat currency is on the gold standard. It is close to zero.
What is bad for us is not however bad for someone else. Government want you to spend money as quickly as possible and if money holds value for a long time people tend to not spend as much becuase their money would be worth in 20 years what it is worth today. This kills most government budgets and is the reason they moved away from a system like this (if they can link an expiry date on fiat they will be even happier).
In a larger system like the world. Gold will never have an excessive inflation rate because there is just not enough to go around and it cannot be printed from nothing.
That is my opinion if you don't agree, let me know.
Excellent post man. I have learnt something new.
Thank you very much @dpl!
Right, at present gold would have value, what I was trying to explain is that an increase in the money supply (in this case gold) does not lead to real wealth, since real wealth is goods and services, currently there is a global market and a lot of wealth, in addition to the fact that gold has ceased to be a medium of exchange and has become a means to save value, so that today gold would have a lot of value, however, if tomorrow they arrived some aliens and they made the gold very abundant, then it would lose its value automatically.
Agreed, I tend to disagree even in agreement to entice further conversation which leads to a better understanding. We are saying the same thing, and if you read my post on inflation it ties in nicely with your explanation.
Keep up the good work. I really enjoyed this post!
Amazing explanation of the effect of monetary distribution on inflation, and great example with Mansa Musa of the Mali Empire! 😱
I must admit that I like the basic ideas behind ideologies such as Communism and Socialism, but, unfortunately, I agree that they can't be effectively implemented in reality.
I don't know from which country you are. We in Germany could easily afford a UBI. It's not a matter of finances and also it is not a matter of people not working. People without having anything to do or to work get depressed and uninterested in their lives. Most people with uninteresting work already give half what they've got into their jobs. At all times humans were seeking for meaning through their activities.
Exceptions prove the rule.
It's all reckoned and it's all possible. To have a UBI is just a matter of will. If people don't want it, we won't get it. That's all.
All the arguments against it or towards it are mostly ideology based.
You should ask yourself what you would do yourself if you would get a UBI? That is the most important question.
As modern man is not supported by his clan or family, there are substitutes needed. The one and only insurance against poverty, sickness, and age is nowadays "money". Therefore it's logical from my point of view that money seems a solution. If you are interested in that topic there are a lot of good discussions and youtube videos out there. A very competent figure is Guy Standing, a British guy.
Switzerland had a referendum two years ago for UBI and they voted with 23% for it. Which is an incredibly high number for the first vote.
I would beg to differ that UBI is socialism or communism. It is what you see in it resp. what you prefer to call it or what anxieties one connects with it.
Indeed it's a very interesting mental experiment worth walking through.
In that you are right, but a UBI would not completely end the activities of people, they would simply do things by valuing money a little less. (Hypothetically, because the UBI would not work)
Germany, Switzerland, Sweden, and any other country in the world can afford to implement a UBI, the problem is that it will not work, as I said, wealth has to do with the goods and services available, not in the monetary accumulation that have a country, of course Germany has a lot of money, besides having a very strong industry, however, the UBI would fail anyway. Even supposing that the resources were unlimited, the UBI would fail, since, as you say, it is not a question of finances, but rather an economic approach.
Thank you very much @erh.germany !
Thanks for discussing with me.
Regarding your theory, Germany already would have a failing system. Just take away the "guaranteed" term out of UBI and you've got what we are running right now. Social money for those who cannot make a living.
Over 700 billion spent on social transfers alone, not counting the running costs for infrastructure and staff of social institutions. We maintain a huge complex of state institutions, all of which are responsible for people in social need. These are, among other things, the services you are talking about. In fact, I agree with you that with the abolition of the state as a carer, a large part of the institutions would no longer be necessary, people would be left to their own devices to find work and ways to earn a living. You must not forget that a UBI would only be a subsistence minimum. In order to continue to indulge in luxury goods and material pleasures, everyone would still have to have a well-paid job or become an entrepreneur, as they do now.
From the view of many UBI opponents, it is feared that nobody would want to do the slave jobs anymore, which nowadays ensure that the supermarket shelves remain full and that stupid work is done. Since I myself do a much more demanding job and cannot imagine clearing shelves or doing a cleaning job, it is difficult to imagine that other people do this work voluntarily. But that doesn't mean that I'm right or that my predictions will come true.
There would not be more money in circulation than today. All money today is used for consumption and the services you speak of. Demand for products and services is currently extremely high and is maintained because this is our only remaining measure of prosperity. However, in my view, consumer pressure and demand are also an expression of compensation and habit. A possible positive consequence of the basic income, for example, could be an opposite effect. Namely, that of lower or more environment-friendly consumption or production. When the psychological effect that my survival is not linked to my work income occurs, there are tendencies that I want to start my own business through this form of freedom.
What I mean to say is that we already have a basic income here in Germany. Everyone knows that he will receive these social benefits if he applies for them and does not have a job. We have over 120 different transfer services, many of which do not even depend on whether you work or not. Those who want to work do this and those who do not, do not work.
Ultimately, the internal decision whether pro or contra UBI is neither an economic nor a financial one. It's a question of the image of man. Neither you nor I can make any reliable statements or forecasts as to what effect the introduction of a UBI would have. We have preferences and wishes as well as fears and reservations. We form theses or theories based on this image.
I am dealing with UBI for more than ten years now. What it did to me was a slowly but surely taking shift towards my life concept. I myself pretend as if we already got a UBI. I am having my own business as a freelancer and I decided to be a very bad consumer. For me, it actually became unnecessary that my government decides on a UBI. It was and is a personal journey for me to have gained a concept of life which worships money but also people. They will be my insurance once I get sick and old. Money will do its thing but people will do the rest. If I wouldn't take care of my people I would have to earn three or for times more than I do currently.
My reply got really long. I hope you don't mind.
Where do you actually live? Are you interested in more details and pilot-projects of UBI?
Well, you can not compare a partial subsidy with a collective subsidy, the results are different, each economic action is different from each other and has different results.
Currently there is no such thing with the UBI that works positively in any place in the world, I could bet with my eyes closed. I am willing to listen to examples of this, as long as I am allowed my right to repicla, because it is possible that if there is currently something like a functional UBI, it is more likely that it is not a UBI really, but rather it is about a very strange mutation.
If I throw a rock into the air, can we assume that it will fall to the ground? I bet yes, right? why? because the laws of physics tell us that gravity will attract him down. Exactly the same thing I am doing when I say what would happen to the UBI, I am simply applying the natural laws.
Do not worry, I like to listen to people's opinions, for that reason I write publications.
Yes, I would be interested in hearing about these UBI projects, but I think it is necessary to make clear that a pilot test applied in a city is not the same as an economic practice applied to an entire economy.
I am from Venezuela. Regards!
Here we have a kind of UBI called "Bonds", it is a kind of UBI that has practically no effect.
Thank you very much @erh.germany !
You are welcome.
As it seems that you made up your mind I am not sure whether a deeper confrontation with that topic towards a more open result and unpredictability would make sense. I would have some work to look up the websites and what I would recommend reading I hope you understand that I only would do that if you signal a more urgent interest.
I guess that a couple of hundred years ago nobody in my country would have believed that a social welfare and security system for an entire population would be thinkable or even doable. People would have said to an idea like that that it's insane or not sustainable. This system was created by will.
For my part, I do not care so much about wrong or right predictions. I mostly care about my outlook on life and how I wish to lead it. I can imagine a UBI as much as I can imagine a world without money. The system matters when I have to enter the interfaces between it and me and have to watch my ethics and my ground.
Regards to Venezuela. That's far away.
Oh, I have not made a decision, I just do not see how the inflation problem can be solved, if you could give me an answer explaining how to implement a UBI without generating inflation, then my position towards the UBI would change, but not I have been able to find that answer on the internet. Thanks!
By the way, I believe that a couple of hundred years ago, it was precisely the Germans who proposed to create a plan for security and social assistance, during the Bismarck government.
In the comment above i explained how a basic income could be financed without inflation. I would be glad to hear your thoughts to that!
Thanks buddy!
I already answered it. The problem that I pose does not lie in the financing of the UBI, but in the available goods and services.
Regards!
UBI is only sustainable through unlimited resources. The reason it would still fail is psycho-social. Basically the wheel of civilization would stop turning. From early civilizations to middle ages, there wasn't much of a change. Bitcoin that revolutionized the world as we knew it is now merely a relic akin to dial-up internet. This progress would come to a halt.
People would still work under UBI. But since working doesn't matter, at least 99.99% of the people will end up doing work that doesn't matter (except for personal satisfaction).
Switzerland is one of the most free countries according to http://www.heritage.org/index/ranking and they will survive considering they have a history of capital friendly policies.. As for Sweden (Unless some drastic changes happen), 1 Generation and they'll be a part of the 3rd world. Germany would take 2 More Generations.
Not necessarily, I propose a hypothesis in which a society that implements the UBI could not coordinate the productive factors to exploit those "infinite resources", because the implementation of the UBI would bring about the total distortion of the economy. It would be like placing a communist software in a capitalist hardware.
Infinity is actually a much more abstract number. Think about the natural numbers (1,2,3.....) There is an infinite amount of them. Think about the square numbers (1,4,9,16....) there is also and infinite amount of them.
Infinity + Infinity = Infinity
Infinity - Infinity = Infinity
As long as the inefficiency isn't absolute (100%) UBI is sustainable through Infinite resources. But these are just theoretical stuff. You are not going to have infinite resources in your lifetime. So UBI is unsustainable. Period.
The UBI would be sustainable if that system could have the capacity to produce what is demanded, what happens is that I do not believe that a productive socialist / communist system can achieve production levels to exploit those resources and create the wealth demanded by the consumers, in such a way that the problem of inflation would continue to exist.
I do not see it possible for UBI to work, for me, there is no easy road, we have to work and create wealth, only abundance will allow prices to fall for consumers.
We went into the pure mathematic realm discussing about non-finite resources. Infinity is a tricky case. Can a person win 500 lottery jackpots in a row? If this person is given infinite chances, the answer is YES.
The capacity to produce what is demanded in a commie system is still not an absolute zero. Given enough time a person could figure out all the private-public keys in BTC using a 5 year old smartphone.
UBI is unsustainable in a realistic scenario. Period. But it can work under unrealistic fictional conditions.
a UBI is silly and would cause all the problems you say what I can get behind, for Utilitarian, in the Mill sense, reasons, which would be a prebate of consumption taxes after moving to a fair tax model. This ought not to cause inflation and keeps the consumption tax from being completely regressive