There will always be misallocation of resources, because the environment we live in can't be perfectly predicted. People's tastes change, the climate changes, sometimes people die unexpectedly, etc. Unpredictability leads people to make investments based on uncertainty, and that will always lead to "mistakes".
Interestingly, the startup ecosystem is a little replica of this in which the best investors understand that capital in fact must be misallocated if we're going to find The Next Big Thing (tm) [1].
Anyway the point I want to make is that just because resources are misallocated doesn't mean we can't smooth the transitions to reallocation. In fact, I would argue that because some misallocation is healthy (otherwise we aren't taking enough risks), we should have in place a system which does smooth the transitions.
Basic income is a proposal for smoothing labor transitions, comparable to how bankruptcy smooths capital transitions.
There will always be misallocation of resources, because the environment we live in can't be perfectly predicted.
There will always be some misallocation due to this, yes. But the amount of misallocation due to, for example, the housing bubble was much more than can be explained just by our inability to perfectly predict the future.
Interestingly, the startup ecosystem is a little replica of this in which the best investors understand that capital in fact must be misallocated if we're going to find The Next Big Thing (tm) [1].
Anyway the point I want to make is that just because resources are misallocated doesn't mean we can't smooth the transitions to reallocation. In fact, I would argue that because some misallocation is healthy (otherwise we aren't taking enough risks), we should have in place a system which does smooth the transitions.
Basic income is a proposal for smoothing labor transitions, comparable to how bankruptcy smooths capital transitions.
[1] http://avc.com/2013/11/loss-ratios-in-early-stage-vc/