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This only true if there is no competition and demand for the good is completely inelastic. What stops grocery stores from doubling the price of food? The other

This only true if there is no competition and demand for the good is completely inelastic. What stops grocery stores from doubling the price of food? The other stores will make a killing by undercutting them. I think food is pretty safe here. I am concerned about housing though. In some places, the supply is extremely inelastic, limiting competition, and the demand is also inelastic due to the difficulty of moving. Although UBI could make moving to a cheaper area easier.

bufordsharkley 10y ago
This is why a Land Value Tax is the clearly logical way to fund a UBI-- by collecting land rents in this fashion, you remove the ability for landlords to effectively confiscate the UBI.
- Zenst 10y ago
  Alas same effect, the TAX by owners will be passed onto renters with rents going up. Now if excess of housing that will eventually catch up and if a shortage then this will only exacerbate the divide. So much that can go wrong and equally right, hence they are testing this. Though a small test will be isolated from all global country impact and bias towards a false positive due to small impact. If that is projected to the entire country then and only then will the impact be truly seen. But be interesting how this works out, I'm sure the initial trial/test will work out but once you scale that across a country then you start to see the true impact and outcome. One question to ask yourself, when mortgages and taxes increase the costs of owning a property - have rents ever gone down! I'll say no upon that.
  - xvedejas 10y ago
    That's not how Land Value Tax (LVT) works, at least under the economic theories I'm familiar with. And there's this quote[1]: "Because the supply of land is essentially fixed, land rents depend on what tenants are prepared to pay, rather than on landlord expenses, preventing landlords from passing LVT to tenants." Unlike property tax, LVT only taxes based on the land itself, and so doesn't disincentivize more productive (i.e. costlier) use of the land. [1] https://en.wikipedia.org/wiki/Land_value_tax#Economic_effects https://en.wikipedia.org/wiki/Land_value_tax#Economic_effect...
  - jerkstate 10y ago
    Rents go down when demand goes down. I've lived in the bay area through two booms and busts now and rent was higher in 2000 than it was in 2003, and higher in 2007 than it was in 2009. When you project a local experiment to an entire country, don't forget that a concept similar to UBI known as "communism" has been tried before in the USSR, China, Cuba, and a few other countries, with limited success and many downsides.
    - Zenst 10y ago
      Yes rents can go down if demand drops, but if you scale over a period longer the trend is always upwards. So short term drops and spikes will happen due to population shifts. When demand low, building new places stops until it catches up again. But excellent comparison with communism and indeed that is comparable upon many levels. Though more niche in this aspect it still falls within that stable of thought. As an aside the only example most people aware of in which communism style approach works would be the Star trek universe. Which only add's fuel to the old saying "money is the root of all evil". Certainly be interesting how this pans out and I'm mindful that if this was a whole country taking part that the true effect would take a few decades to get a true picture of the impact. With many aspects coming into play and let us not forget economic migration and with Finland part of the EU Schengen project then that aspect might be more impacting than envisioned. After all look at Spain and the UK free access to health care and how that is impacted by free movement, certainly not inconsequential.
    - loulouxiv 10y ago
      Well in fact there is no clear ressemblance with communism. Communism primary principle is that all the means of production are state owned, and everyone is therefore salaried by the state, earning as much as everyone else with no oncentive to work more and or better. Basic income aims to the contrary, by helping businesses to offer more flexible work contracts (part-time, temporary work, ...) and potentially lower wages (if the UBI is 1000€/month someone who currently earns 1500€ each month could take a 500€/month position and keep the same life level). It is in fact a completely capitalist idea
      - 10y ago
qudat 10y ago
Won't the cost of hiring staff increase if no one is willing to work for low wages, thereby increasing the cost of any good or service that relies on those UBI adjusted wages?
- ajmurmann 10y ago
  I believe that to be true. However, I think the reason why we are trying this form of gateway communism now is because labor is becoming less valuable and owning the means of production is becoming more valuable due to automation. At least that's the theory. Because of this the resulting increase in minimum salary for any service to be provided by humans should be less impactful as it would have been in the past. If this wasn't the case we wouldn't need UBI. I think UBI is becoming important because there is an increasing number of people whose participation in the workforce is not needed anymore.

bufordsharkley 10y ago

This is why a Land Value Tax is the clearly logical way to fund a UBI-- by collecting land rents in this fashion, you remove the ability for landlords to effectively confiscate the UBI.

Zenst 10y ago
Alas same effect, the TAX by owners will be passed onto renters with rents going up. Now if excess of housing that will eventually catch up and if a shortage then this will only exacerbate the divide. So much that can go wrong and equally right, hence they are testing this. Though a small test will be isolated from all global country impact and bias towards a false positive due to small impact. If that is projected to the entire country then and only then will the impact be truly seen. But be interesting how this works out, I'm sure the initial trial/test will work out but once you scale that across a country then you start to see the true impact and outcome. One question to ask yourself, when mortgages and taxes increase the costs of owning a property - have rents ever gone down! I'll say no upon that.
- xvedejas 10y ago
  That's not how Land Value Tax (LVT) works, at least under the economic theories I'm familiar with. And there's this quote[1]: "Because the supply of land is essentially fixed, land rents depend on what tenants are prepared to pay, rather than on landlord expenses, preventing landlords from passing LVT to tenants." Unlike property tax, LVT only taxes based on the land itself, and so doesn't disincentivize more productive (i.e. costlier) use of the land. [1] https://en.wikipedia.org/wiki/Land_value_tax#Economic_effects https://en.wikipedia.org/wiki/Land_value_tax#Economic_effect...
- jerkstate 10y ago
  Rents go down when demand goes down. I've lived in the bay area through two booms and busts now and rent was higher in 2000 than it was in 2003, and higher in 2007 than it was in 2009. When you project a local experiment to an entire country, don't forget that a concept similar to UBI known as "communism" has been tried before in the USSR, China, Cuba, and a few other countries, with limited success and many downsides.
  - Zenst 10y ago
    Yes rents can go down if demand drops, but if you scale over a period longer the trend is always upwards. So short term drops and spikes will happen due to population shifts. When demand low, building new places stops until it catches up again. But excellent comparison with communism and indeed that is comparable upon many levels. Though more niche in this aspect it still falls within that stable of thought. As an aside the only example most people aware of in which communism style approach works would be the Star trek universe. Which only add's fuel to the old saying "money is the root of all evil". Certainly be interesting how this pans out and I'm mindful that if this was a whole country taking part that the true effect would take a few decades to get a true picture of the impact. With many aspects coming into play and let us not forget economic migration and with Finland part of the EU Schengen project then that aspect might be more impacting than envisioned. After all look at Spain and the UK free access to health care and how that is impacted by free movement, certainly not inconsequential.
  - loulouxiv 10y ago
    Well in fact there is no clear ressemblance with communism. Communism primary principle is that all the means of production are state owned, and everyone is therefore salaried by the state, earning as much as everyone else with no oncentive to work more and or better. Basic income aims to the contrary, by helping businesses to offer more flexible work contracts (part-time, temporary work, ...) and potentially lower wages (if the UBI is 1000€/month someone who currently earns 1500€ each month could take a 500€/month position and keep the same life level). It is in fact a completely capitalist idea
    - 10y ago

qudat 10y ago

Won't the cost of hiring staff increase if no one is willing to work for low wages, thereby increasing the cost of any good or service that relies on those UBI adjusted wages?

ajmurmann 10y ago
I believe that to be true. However, I think the reason why we are trying this form of gateway communism now is because labor is becoming less valuable and owning the means of production is becoming more valuable due to automation. At least that's the theory. Because of this the resulting increase in minimum salary for any service to be provided by humans should be less impactful as it would have been in the past. If this wasn't the case we wouldn't need UBI. I think UBI is becoming important because there is an increasing number of people whose participation in the workforce is not needed anymore.