UBI might be a way to save Capitalism from worker exploitation, one of its major failings. Capitalism is based on using resources effectively to maximize return on investment of capital. One important resource is labor. There are few incentives in Capitalism to provide adequate compensation to laborers. For most jobs in a free labor market recruiting and training costs are minimal making employee turnover a non-issue compared to pay scales driving pay and working conditions to minimum legal standards. Even in higher skilled jobs where recruiting and training costs are significant immigrant labor can drive average compensation down if visas are easily acquired by the Capitalist.
With a UBI recruiting and training costs become significant even for entry level jobs, as enterprises must entice employees to accept time constraints and cooperative work in competition with unlimited free time and independence with subsistence living costs covered. Wages, working conditions and benefits would be an important part of the exchange.
Enterprises must also compete on quality of products especially in service industries, as entry level entrepreneurship is essentially risk free. Employed workers with a bit of extra disposable income might choose to become capitalists by backing an entrepreneur with capital rather than labor. E.g. Leasing a taco truck for a latino family with traditional food preparation skills. A risk free transactionon both sides. The capitalist still has his job and if the truck doesn't pay a competitive wage for the entrepreneurs plus a return on the lease, at the end of the lease everybody goes back to the status quo.
At higher skill (and pay) levels working conditions, hours and time off, benefits and other intangibles, will be a competitive necessity to retain high skilled employees that can easily save enough FYM to become a competitor. Employee spin-offs will be an important source of competition in most industries even ones with extremely high entry costs. See Lucid Motors as a recent new entry in the automotive industry.
An alternative economic system to Capitalism (never before tried) that might work is based on a UBI with a slight surplus over subsistence (UBI+) where people buy goods and services direct from the producers via apps like Amazon or Lyft with the producers funding their means of production via loans from the local thrift institutions that float the UBI, surplus and accumulated savings for speculative productivity aids. Neither the thrift institutions nor the government would invest in or subsidize productive facilities. Government spending on infrastructure would be treated as a consumer good. Government itself would be as usual a slush fund for politicians.
The money supply would be managed by the Government by regulating the amount of the surplus to balance supply and demand in the economy.
The government providing the UBI+ would collect taxes using a progressive income tax on producers, or a VAST progressive VAT on consumption. Links to both are below the fold.
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A thorough analysis of the tax effects of UBI based on income taxes.
Hat tip to @miniver
https://www.weforum.org/agenda/2017/01/why-we-should-all-have-a-basic-income/
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