Ask Lemmy

Sure - I have 10 customers, their income is fixed. They all need food, and at current prices, all of them can afford rice and beans, but 5 of them can afford rice and beans and meat. UBI increases everyone's income by $100/mo. They still all need food, but now all of them can afford meat, but the quantity of meat hasn't changed and they can't all get meat. Therefore, I as a producer, may increase the price of meat as demand has increased - there's more money available to buy my goods, therefore there's more profit extraction available to me. Now, it gets more complicated and with a free market, you'd expect more players to enter the market, but we don't have a free market, we have limited suppliers. Take housing as an example. There is a shortage of housing causing prices to way outpace inflation. What happens when you give more money to everyone? They now add more players into an already supply constrained market, causing prices to go up even higher. You'd assume with the massive demand there'd be incentives to build, but in practice, we don't see this. That's my issue with things like UBI - it tackles a symptom of wealth inequality and while it works somewhat, its still inflationary. you'd have a better shot at taxation for the very wealthy to redistribute wealth in public goods and focusing spending on the poorest of society(i.e. welfare), not an equal distribution across the entirety of the population.