C3.2 Inflation Control Mechanisms
System Resilience. Can the system maintain function under stress and adapt to change?
Pass threshold
Long-term inflation ≤3%, stress test inflation ≤5% (when external 8%), automatic adjustment preventing runaway inflation
Clause by clause:
- Long-term inflation ≤3%
- stress test inflation ≤5% (when external 8%)
- automatic adjustment preventing runaway inflation
What it asks
Specific, tested mechanisms preventing monetary inflation. Not vague appeals to taxation or abstract productivity claims.
Why it matters
This addresses the primary objection to basic income proposals. Without concrete inflation control mechanisms (sectoral demand isolation, velocity controls, automatic parameter adjustments), material security promises become meaningless as purchasing power erodes.
How it is measured
Long-term inflation rates in system-controlled sectors (must be ≤3% annually). Price stability during stress tests (inflation contained to ≤5% during external 8% inflation scenarios). Parameter responsiveness (automatic adjustment effectiveness when inflation exceeds targets).
Mechanisms required
Sectoral demand isolation (basic income for essentials only). Velocity controls (expiration mechanisms preventing hoarding). Supply response (production capacity scaling with demand). Automatic parameter adjustment (rates adjust based on inflation data).
How scores are anchored
1.0, pass
Specific, named mechanism(s) preventing inflation, whether monetary-policy-based or structural (e.g., no money supply to inflate). Participatory Economics (1.0): "'Facilitation boards' adjusting indicative prices to balance supply/demand... prevents systemic price instability."
0.5, partial
Relies on conventional monetary policy without novel safeguards, or a proposed mechanism is theoretically plausible but unproven at scale, or the system specifies no inflation-control mechanism of its own and has no active inflationary mechanism (decision D26). MMT+Job Guarantee (0.5): "Buffer stock employment theoretically anchors wages and prices. However, the mechanism is unproven at scale."
0.0, structural failure
The system's design actively risks compounding inflation, with no counterbalancing design element. Reserve this band for an active inflationary mechanism: a system that specifies no inflation-control mechanism of its own, or has no monetary function, scores 0.5, not 0.0 (decision D26).
Normative roots
From N5 (Crisis Robustness) + N13 (Incentive Alignment).
How the systems score
0.5, partial
Participatory Economics, Integral, Degrowth Economics, Nordic Social Democracy, Market Socialism, Sovereign Wealth Fund Statism, Georgism / LVT, Ostrom Commons, Islamic Finance, Mutual Credit / LETS, Universal Basic Income, Universal Basic Services, MMT + Job Guarantee, Status Quo Market Capitalism, Fully Automated Luxury Communism, Stakeholder Capitalism, State Capitalism / Qatar, Doughnut Economics, Libertarian Minarchism, Centrally Planned Socialism
Sources
Definition: Paper Section 6. Anchors: Paper Appendix H.7 (0.0 and 0.5 bands corrected: decision D26 (revision R3); Correction 7's stale count removed from this anchor).