This. There is compelling evidence that UBI, over the short term, really is effective at distributing money to a lot of people in need without a cumbersome burden of proof placed on assessing that need. That's why the treasury department used it for stimulus checks in the US. But long term, we don't understand if UBI is an effective tool for dealing with poverty. In effect, UBI would be like arbitrarily adding $15,000 to every persons annual salary. Over the short term this would be great. You'd be able to cover the costs of your bills with that additional money and live a little more securely. But in time, the market would absorb this expansion of the money supply as inflation. More surplus money in some people's pockets would lead to increased demand for goods and services. Increased demand would lead producers and retailers to charge more for goods. Renters would get charged more for desirable property. Gas stations would charge more for gas. And over time, your UBI check would need to get bigger and bigger to carry the same purchasing power that it did when UBI first started. There are examples of what this runaway inflation looks like in countries that pump free money for extended periods of time into their economies. Venezuela comes to mind.
To be effective, UBI might work better if it's distribution were random. And the duration of payments were irregular. Something that a market couldn't set it's watch by and producers couldn't game. If this sounds a ridiculous long term solution to poverty, it's because it is.
If producers are able to totally game a commodity market and control prices so completely than you have bigger problems than just poverty.
And yea, we do. If we had UBI tomorrow and people wanted more apples because they could afford more fresh fruit the apple cartels of today would collude prices up and use regulatory capture to block competition from entering the market to supply the elevated demand for apples.
But thats basically saying "hey, you want a government in your interest, you should probably get to a democracy first". If businesses control the legislature you don't have a democracy to begin with and should probably get that first before talking about... pretty much anything else. Because any other conversation is eminently pointless if you aren't influential upon your government.
> If producers are able to totally game a commodity market and control prices so completely than you have bigger problems than just poverty.
Game is probably more strongly worded than what actually happens : a shift in the demand curve. It's not that a cabal of producers are colluding to raise prices. Its more that, in aggregate, producers will decide to independently raise prices when consumer demand increases [0].
Except if its just a price shock than the increased profitability of apples will attract investment in apple farming to produce more apples because of unmet demand and fair market conditions. The price would go up, the profitability margin would be exploited by increased competitive production up to near break even costs, and prices would fall back to where they are today just with way more apples being grown.
In practice in pretty much every industry in the US incumbents put up regulatory barriers behind themselves to prevent competition from emerging.
The market and production gaming UBI will inevitably happen. It's just people's money.
Actually, in Alaska's UBI program, alcohol and drug abuse go up by 15% after all check day (but crime also goes down significantly as well).
So yes, the payouts of it will create some sort of twisted marketing schedules. I think it would be really cool if the payout was daily (if they can make that happen). It would likely encourage the immediate spend of it into small items (like food)... but also probably drugs.
To be effective, UBI might work better if it's distribution were random. And the duration of payments were irregular. Something that a market couldn't set it's watch by and producers couldn't game. If this sounds a ridiculous long term solution to poverty, it's because it is.