4 ms·

I see a lot of similarities between this and YC's attempt at UBI[0], one thing that was pointed out a few times in the YC launch thread was that if you give a s

I see a lot of similarities between this and YC's attempt at UBI[0], one thing that was pointed out a few times in the YC launch thread was that if you give a small subset of people $500/mo, then yeah of course they'll experience immediate relief, because nobody else they're competing with also got $500/mo. But if everyone gets $500/mo at the same time, we can't be sure the same will happen. The market might respond differently and suddenly rice will cost $50/lb (or it might not, I don't know, but this study doesn't prove it won't) Overall this is a cool idea, I'm glad that 125 people got the help they desperately (according to the article, anyway) needed, but I don't think this really indicates anything broader. [0]: https://basicincome.ycr.org/ https://basicincome.ycr.org/

thrill 7y ago
Do you think prices will increase if the overall money supply does not increase - i.e. the UBI is taken from the tax revenues?
- ebg13 7y ago
  Yes, because people with more money than they need will easily absorb the higher prices even if they have slightly less more money than they need.
  - nicoburns 7y ago
    Surely that's only true in the short term while supply of the good stays constant. Long term you'd expect supply of the now in-demand good to increase, bringing prices back down.
    - ebg13 7y ago
      In the context of rice...We already produce more rice than people can eat, so there's no driving force for supply to increase. Increasing supply would only make more rice go unsold. It's not like just because you have more money now you biologically need to eat more volume too.
      - nicoburns 7y ago
        Well if people already have enough rice, then presumably they would spend the extra money on other goods that they don't have enough of.
        ebg13 7y ago
        Unless the price of rice goes up. If they're buying rice now instead of something else with limited funds, that suggests that they need the rice more. Goods aren't all perfectly exchangeable. If you need shoes, a shirt won't protect your feet.
nicoburns 7y ago
You'd probably expect a short-term price shock if it was introduced all-at-once (probably a bad idea, it would be better to phase it in). But long-term, surely the expected outcome would be for the change in wealth distribution to affect supply, such that our economy actually moves to produce fewer luxury goods and more basic goods and services.
zik 7y ago
The idea that UBI would cause inflation seems intuitive but it's shown to be a small effect at most: https://www.vox.com/policy-and-politics/2017/9/20/16256240/mexico-cash-transfer-inflation-basic-income https://www.vox.com/policy-and-politics/2017/9/20/16256240/m...
- prepend 7y ago
  That study does not show much at all. They gave a small amount, $20, and prices went up 0.2%. Even if prices went up or down, a small amount of a specific item, food, doesn’t really equate to what UBI is trying to accomplish. Giving a more significant amount of cash to large groups would drive up prices and increase inflation.
  - gremlinsinc 7y ago
    There's an easy solution to this. Integrate some sort of tax on rent increase. Have a threshold to allow competition but if someone is gouging then their entire tax bracket moves up a notch and they spend a lot more than the money they make via upping their prices. E.g. Say they sell rice at $3/lb, because of UBI they think they can sell it at $5/lb, gov't says 10% markup seems normal, but you've marked it up 200%, so you'll now pay 20% more taxes across the board --say the markup divided by 10. Of course that takes a large amount effort behind the scenes...maybe an easier method would be say to Walmart: If you forbid sales of products where they raise prices in relation to GBI we'll give you a 10% discount in taxes. Most small retailers and distributors do NOT want to lose good grace w/ walmart so they keep prices stable. Since walmart and other big retailers cover a lot of territory government only needs to make the deal with a few partners : Amazon, Walmart, Target, etc...
    - niij 7y ago
      Your solution to government overreach of UBI is.. government mandated price controls? Fixing one problem with a bigger one. I'm going to go out on a limb here and say that's never worked anywhere.
- baddox 7y ago
ohazi 7y ago
The difference would all go to landlords. Competitive commodities like rice have downward price pressure, because all it takes is one supplier selling for a penny less than all the other $50/lb price gougers, and the market will be theirs until the next penny defector, until you reach the commodity price. With housing it's the opposite. Low teaser price to get you to sign a lease, and then you're guaranteed large rent increases until you move out because the landlord knows how much moving sucks.
- zizee 7y ago
  UBI would increase people's mobility, allowing them to move to cheaper areas where employment opportunities are not quite as strong.
  - c0nducktr 7y ago
    People often are already able to do that but don't, because surprisingly to some, most people find the idea of leaving everything and everyone you know just to find a better job absolutely dreadful. We need to remember that we're talking about humans, and not some particle which can simply find a shorter path to wealth. Edit: To be clear I'm not necessarily opposed to UBI, but I find this 'people are but cogs in the machine' view of economics especially appalling.
    - zizee 7y ago
      > I find this 'people are but cogs in the machine' view of economics especially appalling I resent your implication that I think people are just cogs in a economic machine. People move location all the time for a variety of reasons. Sometimes economic, sometimes for lifestyle, sometimes for the weather. I suggested UBI would give people more options, more choice, more power in their lives and you suggest I hold an appalling view and think people are nothing more than wealth seeking particles? Thanks very much.
      - c0nducktr 7y ago
        I wasn't trying to say you specifically feel that way, but when we're talking about predatory behavior of landlords, giving those who are being taken advantage of the ability to leave town seems like a second rate solution.
dannypgh 7y ago
The market should converge at the point where the supply and demand curves intersect. The only goods that we'd expect to see a change in price are those where suddenly there was more demand. It's hard to imagine this for products like rice. Trade is a thing, too. The local price of rice can't go up to $50/lb if you can import it for far less. There's a lot of scary speculation going around about UBI right now. It does not seem likely that the sky will fall.

thrill 7y ago

Do you think prices will increase if the overall money supply does not increase - i.e. the UBI is taken from the tax revenues?

ebg13 7y ago
Yes, because people with more money than they need will easily absorb the higher prices even if they have slightly less more money than they need.
- nicoburns 7y ago
  Surely that's only true in the short term while supply of the good stays constant. Long term you'd expect supply of the now in-demand good to increase, bringing prices back down.
  - ebg13 7y ago
    In the context of rice...We already produce more rice than people can eat, so there's no driving force for supply to increase. Increasing supply would only make more rice go unsold. It's not like just because you have more money now you biologically need to eat more volume too.
    - nicoburns 7y ago
      Well if people already have enough rice, then presumably they would spend the extra money on other goods that they don't have enough of.
      - ebg13 7y ago
        Unless the price of rice goes up. If they're buying rice now instead of something else with limited funds, that suggests that they need the rice more. Goods aren't all perfectly exchangeable. If you need shoes, a shirt won't protect your feet.

nicoburns 7y ago

You'd probably expect a short-term price shock if it was introduced all-at-once (probably a bad idea, it would be better to phase it in). But long-term, surely the expected outcome would be for the change in wealth distribution to affect supply, such that our economy actually moves to produce fewer luxury goods and more basic goods and services.

zik 7y ago

The idea that UBI would cause inflation seems intuitive but it's shown to be a small effect at most: https://www.vox.com/policy-and-politics/2017/9/20/16256240/mexico-cash-transfer-inflation-basic-income https://www.vox.com/policy-and-politics/2017/9/20/16256240/m...

prepend 7y ago
That study does not show much at all. They gave a small amount, $20, and prices went up 0.2%. Even if prices went up or down, a small amount of a specific item, food, doesn’t really equate to what UBI is trying to accomplish. Giving a more significant amount of cash to large groups would drive up prices and increase inflation.
- gremlinsinc 7y ago
  There's an easy solution to this. Integrate some sort of tax on rent increase. Have a threshold to allow competition but if someone is gouging then their entire tax bracket moves up a notch and they spend a lot more than the money they make via upping their prices. E.g. Say they sell rice at $3/lb, because of UBI they think they can sell it at $5/lb, gov't says 10% markup seems normal, but you've marked it up 200%, so you'll now pay 20% more taxes across the board --say the markup divided by 10. Of course that takes a large amount effort behind the scenes...maybe an easier method would be say to Walmart: If you forbid sales of products where they raise prices in relation to GBI we'll give you a 10% discount in taxes. Most small retailers and distributors do NOT want to lose good grace w/ walmart so they keep prices stable. Since walmart and other big retailers cover a lot of territory government only needs to make the deal with a few partners : Amazon, Walmart, Target, etc...
  - niij 7y ago
    Your solution to government overreach of UBI is.. government mandated price controls? Fixing one problem with a bigger one. I'm going to go out on a limb here and say that's never worked anywhere.
baddox 7y ago

ohazi 7y ago

The difference would all go to landlords. Competitive commodities like rice have downward price pressure, because all it takes is one supplier selling for a penny less than all the other $50/lb price gougers, and the market will be theirs until the next penny defector, until you reach the commodity price. With housing it's the opposite. Low teaser price to get you to sign a lease, and then you're guaranteed large rent increases until you move out because the landlord knows how much moving sucks.

zizee 7y ago
UBI would increase people's mobility, allowing them to move to cheaper areas where employment opportunities are not quite as strong.
- c0nducktr 7y ago
  People often are already able to do that but don't, because surprisingly to some, most people find the idea of leaving everything and everyone you know just to find a better job absolutely dreadful. We need to remember that we're talking about humans, and not some particle which can simply find a shorter path to wealth. Edit: To be clear I'm not necessarily opposed to UBI, but I find this 'people are but cogs in the machine' view of economics especially appalling.
  - zizee 7y ago
    > I find this 'people are but cogs in the machine' view of economics especially appalling I resent your implication that I think people are just cogs in a economic machine. People move location all the time for a variety of reasons. Sometimes economic, sometimes for lifestyle, sometimes for the weather. I suggested UBI would give people more options, more choice, more power in their lives and you suggest I hold an appalling view and think people are nothing more than wealth seeking particles? Thanks very much.
    - c0nducktr 7y ago
      I wasn't trying to say you specifically feel that way, but when we're talking about predatory behavior of landlords, giving those who are being taken advantage of the ability to leave town seems like a second rate solution.

dannypgh 7y ago

The market should converge at the point where the supply and demand curves intersect. The only goods that we'd expect to see a change in price are those where suddenly there was more demand. It's hard to imagine this for products like rice. Trade is a thing, too. The local price of rice can't go up to $50/lb if you can import it for far less. There's a lot of scary speculation going around about UBI right now. It does not seem likely that the sky will fall.