Universal Basic Income and Bitcoin
Recently I received a deluge of criticism for the statement “If you understand Bitcoin then you support Universal Basic Income”. This statement was seemingly obvious but was derided as being moronic and non-sequitur. Even when prefaced with the statement that those that are against Universal Basic Income (UBI) generally don’t understand economics or money. The sequential logic here being Bitcoin relates to understanding money relates to understanding economics relates to economic policy = UBI.
The general concept of money has ben confused with wealth, currency, and even dollars. Fortunately our language distinguishes between these concepts, even if the meanings of the words has blurred into each other. Wikipedia does a pretty good job of defining it;
“Money is any item or verifiable record that is generally accepted as payment for goods and services and repayment of debts in a particular country or socio-economic context, or is easily converted to such a form. The main functions of money are distinguished as: a medium of exchange; a unit of account; a store of value; and, sometimes, a standard of deferred payment. Any item or verifiable record that fulfills these functions can be considered money.”
Money isn’t what people think it is, and fiat has a lot of ‘fairness’ problems. Money includes all money stock, M1, M0 Etc.
It boils down to an information system for efficient allocation of resources. If you get that and also understand that wealth is created primarily through trade then it is obvious you want as many participants as possible to act in the network for efficiently allocation resources.
With a fixed, but infinitely divisible money supply wealthy people actually benefit from increased trade from poor people and increased demand of the money supply.
In the context of a world running on Bitcoin as a global reserve currency, where taxation still exists either in the global reserve - redistributing it to raise the bare minimum income to be above poverty line makes sense. Its fair to question if it can be afforded with tight money - however, given the deflationary nature, the poverty line should be consistently decreasing.
I think it is a reasonable criticism to ask if perhaps UBI doesn’t make sense with a deflationary currency (as people should be able to extract themselves from poverty with increasing purchasing power of their money). However, in the absence of a tight money standard, UBI makes more sense and if a lot more defensible.