4 ms·

I'm not convinced it will even provide the basics. There would be nothing to stop rents / real-estate prices from going up to compensate. Or food, or utilities.

I'm not convinced it will even provide the basics. There would be nothing to stop rents / real-estate prices from going up to compensate. Or food, or utilities. It's simple supply and demand.

chongli 11y ago
Basic income would not significantly increase the demand for food or accommodation. How does "simple supply and demand" work in this case?
- empressplay 11y ago
  People will be able to pay more for it. Remember, part of demand is the amount people are willing and able to pay.
  - rubinelli 11y ago
    One thing to consider is that basic income increases mobility. Without the pressure to stay in large centers, where most jobs are concentrated, people can migrate to lower-cost areas.
  - chongli 11y ago
    People's willingness to pay is not strictly positively correlated to their ability to pay. In many cases, such as rubinelli's example of increased mobility, an increase in ability to pay is marked by a decrease in willingness. Overall, I'd argue that by increasing a person's ability to pay for anything you increase their ability to walk away from all kinds of bad deals. One of the best examples of this is given by Terry Pratchett: The reason that the rich were so rich, Vimes reasoned, was because they managed to spend less money. Take boots, for example. He earned thirty-eight dollars a month plus allowances. A really good pair of leather boots cost fifty dollars. But an affordable pair of boots, which were sort of OK for a season or two and then leaked like hell when the cardboard gave out, cost about ten dollars. Those were the kind of boots Vimes always bought, and wore until the soles were so thin that he could tell where he was in Ankh-Morpork on a foggy night by the feel of the cobbles. But the thing was that good boots lasted for years and years. A man who could afford fifty dollars had a pair of boots that'd still be keeping his feet dry in ten years' time, while the poor man who could only afford cheap boots would have spent a hundred dollars on boots in the same time and would still have wet feet. This was the Captain Samuel Vimes 'Boots' theory of socioeconomic unfairness.
    - msandford 11y ago
      Remember also that people's wants are effectively unlimited in aggregate. If we could all have 100 foot yachts and spaceships and Ferraris we collectively in large majority would choose to have those things. You know, in the absence of any negative consequences for those actions. A beef carcass might have 500 pounds of meat on it, but only 5-10lbs of that is tenderloin. If we all have enough money to buy tenderloin it doesn't immediately follow that cows are then made up of nothing but tenderloin. So the price of tenderloin will go up until the demand balances the supply again. You can take this and apply it nearly anywhere in the economy and find it'll be approximately correct for a great many situations.
      - chongli 11y ago
        You know, in the absence of any negative consequences for those actions And there's the rub. Even if we could make 500lb all-tenderloin cattle you wouldn't see people buying hundreds of pounds of beef tenderloin for themselves every day. Billionaries like Bill Gates can already afford millions of pounds of tenderloin yet you don't see him eating that. Basic income might cause the price of tenderloin to go up a little bit but so what? It's not going to do anything to the price of corn or rice or wheat. Maybe the price of an apartment in Manhattan will go up a little bit (I doubt it) but not a house in rural Wisconsin.
        msandford 11y ago
        > And there's the rub. Even if we could make 500lb all-tenderloin cattle you wouldn't see people buying hundreds of pounds of beef tenderloin for themselves every day. First off, we can't make an all tenderloin cow. And second, that's the problem! If filet cost 1/4 of what it did now consumption might go up 100x. And obviously, it can't. But people would try. Until the price went up enough that the market for tenderloin started to clear again. But people have this extra money, right? So they can afford to spend more on hamburger. Congrats, we've raised prices!
        chongli 11y ago
- gambiting 11y ago
  If a baker can make the same amount of money not working thanks to basic income, it follows logically that you have to pay him/her more to stay and work, which increases the cost of bread for everyone. So now you have more money to spend but everything went up in price.
  - alexvoda 11y ago
    Not necessarily. In scenario 1 with no basic income the baker only receives what he is paid. If there were no other providers, and the baker would not desire to do this work he could charge more to stay and work. This would apply until he has competition in one way or another. In the second scenario, he receives BI, but the same market forces would apply and he would only be able to charge more as long as there are no competitors. Additionally, since everyone will receive BI this will grant people more potential free time. Time they could use to make their own bread in case the baker raises prices. In this scenario the baker would have less incentive to work but would also have more potential competition in case he raises the prices.
  - cdash 11y ago
    The baker CANT make the same amount of money not working though. The baker makes additional money on top of the basic income.
dsq 11y ago
And so the next, inevitable step after benefacting loyal citizens with their stipend would be price controls so that greedy kulaks - sorry, property owners, can't profiteer like that. Cast your vote for the next General Secretary!
dllthomas 11y ago
There would be competition to stop rents and real estate from going up to compensate. It may or may not be sufficient. Note that it is not merely a question of competition of perfect substites. An apartment competes with a house, but also with a shared apartment, with living with family, with leaving the area. And note that a Basic Income quite directly increases the supply of "housing near some source of income".
akgerber 11y ago
Given a sane zoning regime, the supply of housing will increase in response to increased demand.

I'm not convinced it will even provide the basics. There would be nothing to stop rents / real-estate prices from going up to compensate. Or food, or utilities. It's simple supply and demand.

chongli 11y ago

Basic income would not significantly increase the demand for food or accommodation. How does "simple supply and demand" work in this case?

empressplay 11y ago
People will be able to pay more for it. Remember, part of demand is the amount people are willing and able to pay.
- rubinelli 11y ago
  One thing to consider is that basic income increases mobility. Without the pressure to stay in large centers, where most jobs are concentrated, people can migrate to lower-cost areas.
- chongli 11y ago
  People's willingness to pay is not strictly positively correlated to their ability to pay. In many cases, such as rubinelli's example of increased mobility, an increase in ability to pay is marked by a decrease in willingness. Overall, I'd argue that by increasing a person's ability to pay for anything you increase their ability to walk away from all kinds of bad deals. One of the best examples of this is given by Terry Pratchett: The reason that the rich were so rich, Vimes reasoned, was because they managed to spend less money. Take boots, for example. He earned thirty-eight dollars a month plus allowances. A really good pair of leather boots cost fifty dollars. But an affordable pair of boots, which were sort of OK for a season or two and then leaked like hell when the cardboard gave out, cost about ten dollars. Those were the kind of boots Vimes always bought, and wore until the soles were so thin that he could tell where he was in Ankh-Morpork on a foggy night by the feel of the cobbles. But the thing was that good boots lasted for years and years. A man who could afford fifty dollars had a pair of boots that'd still be keeping his feet dry in ten years' time, while the poor man who could only afford cheap boots would have spent a hundred dollars on boots in the same time and would still have wet feet. This was the Captain Samuel Vimes 'Boots' theory of socioeconomic unfairness.
  - msandford 11y ago
    Remember also that people's wants are effectively unlimited in aggregate. If we could all have 100 foot yachts and spaceships and Ferraris we collectively in large majority would choose to have those things. You know, in the absence of any negative consequences for those actions. A beef carcass might have 500 pounds of meat on it, but only 5-10lbs of that is tenderloin. If we all have enough money to buy tenderloin it doesn't immediately follow that cows are then made up of nothing but tenderloin. So the price of tenderloin will go up until the demand balances the supply again. You can take this and apply it nearly anywhere in the economy and find it'll be approximately correct for a great many situations.
    - chongli 11y ago
      You know, in the absence of any negative consequences for those actions And there's the rub. Even if we could make 500lb all-tenderloin cattle you wouldn't see people buying hundreds of pounds of beef tenderloin for themselves every day. Billionaries like Bill Gates can already afford millions of pounds of tenderloin yet you don't see him eating that. Basic income might cause the price of tenderloin to go up a little bit but so what? It's not going to do anything to the price of corn or rice or wheat. Maybe the price of an apartment in Manhattan will go up a little bit (I doubt it) but not a house in rural Wisconsin.
      - msandford 11y ago
        > And there's the rub. Even if we could make 500lb all-tenderloin cattle you wouldn't see people buying hundreds of pounds of beef tenderloin for themselves every day. First off, we can't make an all tenderloin cow. And second, that's the problem! If filet cost 1/4 of what it did now consumption might go up 100x. And obviously, it can't. But people would try. Until the price went up enough that the market for tenderloin started to clear again. But people have this extra money, right? So they can afford to spend more on hamburger. Congrats, we've raised prices!
        chongli 11y ago
gambiting 11y ago
If a baker can make the same amount of money not working thanks to basic income, it follows logically that you have to pay him/her more to stay and work, which increases the cost of bread for everyone. So now you have more money to spend but everything went up in price.
- alexvoda 11y ago
  Not necessarily. In scenario 1 with no basic income the baker only receives what he is paid. If there were no other providers, and the baker would not desire to do this work he could charge more to stay and work. This would apply until he has competition in one way or another. In the second scenario, he receives BI, but the same market forces would apply and he would only be able to charge more as long as there are no competitors. Additionally, since everyone will receive BI this will grant people more potential free time. Time they could use to make their own bread in case the baker raises prices. In this scenario the baker would have less incentive to work but would also have more potential competition in case he raises the prices.
- cdash 11y ago
  The baker CANT make the same amount of money not working though. The baker makes additional money on top of the basic income.

dsq 11y ago

And so the next, inevitable step after benefacting loyal citizens with their stipend would be price controls so that greedy kulaks - sorry, property owners, can't profiteer like that. Cast your vote for the next General Secretary!

dllthomas 11y ago

There would be competition to stop rents and real estate from going up to compensate. It may or may not be sufficient. Note that it is not merely a question of competition of perfect substites. An apartment competes with a house, but also with a shared apartment, with living with family, with leaving the area. And note that a Basic Income quite directly increases the supply of "housing near some source of income".

akgerber 11y ago

Given a sane zoning regime, the supply of housing will increase in response to increased demand.