Then, oversimplifying in some obvious ways, we have the following:
A bit too much oversimplification for my taste. In particular, there is a rather important bit missing: what happens to the price of the products (or services) that these people produced. Let's say they made widgets. In a market-based economy the price of the widgets would go down considerably and this will lead to a lot of extra consumer surplus for all buyers of widgets. This could easily be the most important effect and the greatest source of utility.
And because of that your option 2 is actually very unlikely to happen, other than in a monopoly-like situation, even in the short run.
In the long run, all of these are probably better than leaving things as they are.
There we go :-)
we only get worlds designed by Moloch
I don't know about that. Moloch has to wrestle with the invisible hand of Adam Smith :-D and the world we are currently living in isn't half bad, is it?
In particular, there is a rather important bit missing: what happens to the price of the products (or services) that these people produced.
Yeah, in retrospect I should have said something like
(In this case, what probably happens next -- at least if there is competition -- is that the company lowers its prices somewhat. So now the business owners win and their customers win. In the long run these lower prices may lead to new jobs.)
... Oh, wait. I did.
I really like this argument for UBI, it looks at the real problems on the front lines of current problems with existing programs.
Something has to be done about this, none of those manufacturing, or managerial jobs are coming back, and the minimum wage increase movement is going to really hammer youth and the un-skilled. Those are the easiest to radicalize, and once they get really angry, things could get ugly very quickly.
"because they aren’t publicly acknowledging just how poorly our present means-tested programs are targeted by virtue of their applied conditions, and just how unequal one dollar can be to one dollar, however counterintuitive that may seem."
"The fact is that cash welfare, as it exists today, is not given to the overwhelming majority of those living in poverty who need it."
https://techcrunch.com/2016/09/09/the-progressive-case-for-replacing-the-welfare-state-with-basic-income/