5 ms·

I'm the author of this piece for the WEF, and have written an entire separate piece specifically about inflation and rising cost concerns. Link: https://medium

by 2noame 10y ago

I'm the author of this piece for the WEF, and have written an entire separate piece specifically about inflation and rising cost concerns. Link: https://medium.com/basic-income/wouldnt-unconditional-basic-income-just-cause-massive-inflation-fe71d69f15e7 https://medium.com/basic-income/wouldnt-unconditional-basic-... Basically, more and more money only chases the same amount of goods if the UBI does not exist as a transfer of existing money from top to bottom and middle as described in this piece, and instead exists as continual expansion of the monetary supply through newly created money. Additionally, UBI does not eliminate forces of market competition. In fact, I argue it will even increase competition through increased entrepreneurship. It would be really stupid to raise your prices in a competitive market where your competitor does not raise prices, or even lowers them. As a quick example, every year when Alaskans get their dividend checks, there are a lot of sales as businesses compete for that money. It would be a really stupid business in Alaska that increases its prices every time the dividend is distributed, in the knowledge people have more money to spend. You may also find this argument interesting as well in regards to concerns of technological deflation: https://medium.com/emergent-culture/an-exciting-new-idea-in-basic-income-b1b7bf622845 https://medium.com/emergent-culture/an-exciting-new-idea-in-...

_rpd 10y ago
Your argument that rent won't rise to absorb most of any additional income relies on low-income people moving out of high demand areas to super-affordable "Google Homes" in remote ex-burbs and formerly rural towns. I think you're fighting history, culture and even human nature on this one. If the Great Basic Income Migration doesn't occur, and if basic income is indexed to inflation, or worse, to a local 'cost of living', then you are deliberately engineering a hyper-inflationary spiral that will make Venezuela's seem tame by comparison.
- malloryerik 10y ago
  As has been said before on HN, a land value tax could solve this problem with a basic income.
  - _rpd 10y ago
    Landlords will just raise the rent to compensate for the tax. It guarantees the post-UBI rent increase, because landlords will feel justified. If the tax is somehow indexed to rent, once again you are engineering an inflationary spiral. What's the reasoning that a land value tax could be helpful? Edit: after some reading, the apparent intent of the land value tax is to encourage landlords to build denser housing to share the burden of the new tax among more renters. But this is like proposing a Slow Driver Tax while ignoring that the speed limit has been set at 15 mph everywhere in the city. Landlords already want to build multiple housing units, but they are prevented by zoning laws. Attempts to change zoning laws are some of the most vicious political battles in existence. Everyone knows that more density/supply is needed to make housing more affordable, but it just hasn't happened (at least in the US).
    - malloryerik 10y ago
      Well, first, there are a few different versions of land value taxes, and a few different rationales for them. I'm not an expert on this but do find it interesting and important. In the version that I was thinking of, a land value tax would pay for the basic income. If the land value tax provided all of the funds for the basic income, then there would presumably be no excess for landlords to siphon off, except maybe as one region gained in popularity at the expense of another, etc. The eventual goal would be to have all or almost all income from rents within a country be distributed to the citizenry. Land owners would also receive the income.
      - benjiwengy 10y ago
        The reason why a Basic Income paid out from a LVT is a good idea, is because it reduces costs by leveling the field for all participants in the immovable property market. So that market can then allocate resources at optimal efficiency. A UBI paid out of taxes on produced factors (income,capital) distorts resource allocation, so we all end up poorer. Rents would go up, but then so would the LVT and then the UBI until an equilibrium point is reached. In the US, without any other changes to your tax/welfare system the LVT/UBI would result in every man,woman and child getting around $4000 each. That would rise as rents went up. That would go up even further if other taxes and benefits were reduced.
seoguru 10y ago
have you read the debate on federal Job Guarantee vs UBI? https://modernmoneyaesthetics.wordpress.com/2017/01/20/re-fck-work-arcade/ https://modernmoneyaesthetics.wordpress.com/2017/01/20/re-fc... also Pavlina Tcherneva on the debate: https://www.youtube.com/watch?v=S_-CRquE_bU&feature=youtu.be&t=786 https://www.youtube.com/watch?v=S_-CRquE_bU&feature=youtu.be...

by 2noame 10y ago

_rpd 10y ago

Your argument that rent won't rise to absorb most of any additional income relies on low-income people moving out of high demand areas to super-affordable "Google Homes" in remote ex-burbs and formerly rural towns. I think you're fighting history, culture and even human nature on this one. If the Great Basic Income Migration doesn't occur, and if basic income is indexed to inflation, or worse, to a local 'cost of living', then you are deliberately engineering a hyper-inflationary spiral that will make Venezuela's seem tame by comparison.

malloryerik 10y ago
As has been said before on HN, a land value tax could solve this problem with a basic income.
- _rpd 10y ago
  Landlords will just raise the rent to compensate for the tax. It guarantees the post-UBI rent increase, because landlords will feel justified. If the tax is somehow indexed to rent, once again you are engineering an inflationary spiral. What's the reasoning that a land value tax could be helpful? Edit: after some reading, the apparent intent of the land value tax is to encourage landlords to build denser housing to share the burden of the new tax among more renters. But this is like proposing a Slow Driver Tax while ignoring that the speed limit has been set at 15 mph everywhere in the city. Landlords already want to build multiple housing units, but they are prevented by zoning laws. Attempts to change zoning laws are some of the most vicious political battles in existence. Everyone knows that more density/supply is needed to make housing more affordable, but it just hasn't happened (at least in the US).
  - malloryerik 10y ago
    Well, first, there are a few different versions of land value taxes, and a few different rationales for them. I'm not an expert on this but do find it interesting and important. In the version that I was thinking of, a land value tax would pay for the basic income. If the land value tax provided all of the funds for the basic income, then there would presumably be no excess for landlords to siphon off, except maybe as one region gained in popularity at the expense of another, etc. The eventual goal would be to have all or almost all income from rents within a country be distributed to the citizenry. Land owners would also receive the income.
    - benjiwengy 10y ago
      The reason why a Basic Income paid out from a LVT is a good idea, is because it reduces costs by leveling the field for all participants in the immovable property market. So that market can then allocate resources at optimal efficiency. A UBI paid out of taxes on produced factors (income,capital) distorts resource allocation, so we all end up poorer. Rents would go up, but then so would the LVT and then the UBI until an equilibrium point is reached. In the US, without any other changes to your tax/welfare system the LVT/UBI would result in every man,woman and child getting around $4000 each. That would rise as rents went up. That would go up even further if other taxes and benefits were reduced.

seoguru 10y ago

have you read the debate on federal Job Guarantee vs UBI? https://modernmoneyaesthetics.wordpress.com/2017/01/20/re-fck-work-arcade/ https://modernmoneyaesthetics.wordpress.com/2017/01/20/re-fc... also Pavlina Tcherneva on the debate: https://www.youtube.com/watch?v=S_-CRquE_bU&feature=youtu.be&t=786 https://www.youtube.com/watch?v=S_-CRquE_bU&feature=youtu.be...