6 ms·

I am against UBI because the soon as you give people $1000 dollars, their rent, transport, and other associated costs will go up by exactly $1000 over a relativ

I am against UBI because the soon as you give people $1000 dollars, their rent, transport, and other associated costs will go up by exactly $1000 over a relatively quick time frame. It will initially look good, but it will be extremely transient. You'll then have all the same problems you had before and a huge financial engine sucking in and spitting out tremendous amounts of money that needs to be managed to no practical effect. These effects might not be visible with a "mincome" type RCT experiment because they rely on there being enough extra income lying around for it to be worth it to industry to design programs and policies around it. Instead, we should nationalize certain industries and make them free of charge to end users (e.g. healthcare, public transit, housing, education, etc).

aeternum 7y ago
The whole point of a market based economy is allocation of resources. Yes, rent, transport, and other costs may go up in the short-term with a UBI. However that creates strong opportunities for companies to come in and compete to drive those costs down. In contrast, when you nationalize those industries, there is no incentive to drive costs down. In fact, costs will likely go up because the more a nationalized industry spends, the more it gets from next year's budget.
- tehjoker 7y ago
  A market economy distributes scarce resources to those with the most money. It is fundamentally irrational. To reuse an example from Richard Wolfe, if there are ten people that need milk, and there are 5 units of milk, we should distribute them according to need (e.g. medical, children, vs someone baking a cake). Instead, under a market, the rich get to buy it for their cat while the poor are priced out of the market.
  - aeternum 7y ago
    It may not seem moral, but allowing the rich to buy the milk for the cat often makes everyone better off. The high price for milk and inflow of dollars from the high demand lead to more dairy farms, or research into milk alternatives. That does not happen if you seize the milk and distribute it according to need.
    - c0nducktr 7y ago
      Why wouldn't the wealthy not having milk for their cat not also result in more dairy farms or research into milk alternatives? Both ways there's less milk available than needed, so the problem (lack of milk) still exists.
      - yellowapple 7y ago
        Because in one case the one selling the milk gets money to invest into providing more milk, and in the other case said seller does not (or gets less of it). If those five gallons are to be distributed by need, then that difference in return needs accounted for as well (i.e. the government doing the redistribution should also be putting resources into improving milk production to avoid that situation in the future).
        c0nducktr 7y ago
        Well what prevents the government putting resources into improving milk production? That just seems to be the logical next step. It seems the same activity (more milk production) would happen regardless, but instead of placing the rate of milk production in the hands of the current milk suppliers, it would be democratically controlled by the people buying the milk.
        aeternum 7y ago
        In theory it could work, but the government would need experts in milk production to determine what to invest in. Expand this to every possible good, and it becomes un-manageable quickly, while also being ripe for corruption. The producers of the good are typically much better positioned to determine how to efficiently spend resources to increase production. It is their own profits, future, and livelihood on the line so they are much more likely to choose carefully.
        c0nducktr 7y ago
        I'm still not really following. Can people with knowledge of milk production not be selected for government? Why would people choose to have those with less knowledge of milk production to run the milk production department?
  - ygggdrasil 7y ago
    Most resources are not scarce, and most industries have healthy competition. If a business tries to raise prices after UBI is implemented, other companies will enter the market for the increased margins and in turn, drive prices down again.
  - campfireveteran 7y ago
    Do you mean Richard Wolff?
theptip 7y ago
> soon as you give people 1000 dollars, their rent, transport, and other associated costs will go up by exactly $1000 I don't think this is actually true, though I'd love to see an economic model that would convince me otherwise. Sure, if the only income anyone had was UBI income, then increasing UBI by $1000 would (to a first order approximation) increase everyone's purchasing power equally, and the price of goods would increase by the same amount. (Though note that even in this simplified situation, due to effects like price/wage inelasticities, you wouldn't expect every price to move at the same time). In the current UBI proposal, however, many people would still earn most of their dollars from other sources, and so the changes of purchasing power wouldn't be evenly distributed. My intuitive model for this is that if the average person gets 1% of their income from UBI, and then UBI doubles to 2% of income, then prices should inflate by 1%, because everyone has 1% more to bid on the goods they want. But for those who are getting 100% of their income from UBI, then that 1% inflation on goods doesn't affect them the same way; it just means their purchasing power decreased by 1%, after doubling, so they still got a 99% increase. 1% is a placeholder, you'd need to model this with real data of course, true median salary and the proposed UBI. Obviously the reality is way more complex since you have different mixes of goods and services purchased by the different segments of the population (e.g. perhaps more people in the bottom quartile of income rent than the top quartile), but we don't need to go into that much detail to disprove the argument above (at least with the level of detail that was afforded in the parent post).
- pochamago 7y ago
  I'm struggling to find the paper now, but I recently read an analysis that asserted one of the primary reason wage growth feels so stagnant is that rent rises almost as much as wages, and that landlords are fully capable of absorbing all the new money that enters into an economy because their resource is so scarce. I do think that before introducing UBI you would need to deal with any industry that has shown it is not being driven down to the competitive prices we would expect to see in a market.
jhanschoo 7y ago
> their rent, transport, and other associated costs will go up by exactly $1000 over a relatively quick time frame But wouldn't this be more efficient than subsidy programs? There is the idea that the needy will have the flexibility be able to obtain what they need most, rather than rely on programs that do not necessarily provide what they need most or in a way that they can't properly take advantage of.
- tehjoker 7y ago
  This article doesn't quite address what I was talking about, but it has a rather detailed case against UBI: https://jacobinmag.com/2017/12/universal-basic-income-inequality-work https://jacobinmag.com/2017/12/universal-basic-income-inequa... In particular, it discusses what happens at different levels of UBI, with lower affordable levels creating more precarious workers with higher levels being completely unaffordable. Yang's $1000 a mo. for all 18+ adults would cost about about: (~200M 18+ adults) * (12k $/yr) / (19T GDP) = ~12% GDP I would take serious issue with Yang's 18+ requirement as families with children need more money, not less! It also doesn't help you at all if your landlord raises the rent by $1000. They would argue this is fair, because they know you can pay it.
  - jhanschoo 7y ago
    Thanks!

aeternum 7y ago

The whole point of a market based economy is allocation of resources. Yes, rent, transport, and other costs may go up in the short-term with a UBI. However that creates strong opportunities for companies to come in and compete to drive those costs down. In contrast, when you nationalize those industries, there is no incentive to drive costs down. In fact, costs will likely go up because the more a nationalized industry spends, the more it gets from next year's budget.

tehjoker 7y ago
A market economy distributes scarce resources to those with the most money. It is fundamentally irrational. To reuse an example from Richard Wolfe, if there are ten people that need milk, and there are 5 units of milk, we should distribute them according to need (e.g. medical, children, vs someone baking a cake). Instead, under a market, the rich get to buy it for their cat while the poor are priced out of the market.
- aeternum 7y ago
  It may not seem moral, but allowing the rich to buy the milk for the cat often makes everyone better off. The high price for milk and inflow of dollars from the high demand lead to more dairy farms, or research into milk alternatives. That does not happen if you seize the milk and distribute it according to need.
  - c0nducktr 7y ago
    Why wouldn't the wealthy not having milk for their cat not also result in more dairy farms or research into milk alternatives? Both ways there's less milk available than needed, so the problem (lack of milk) still exists.
    - yellowapple 7y ago
      Because in one case the one selling the milk gets money to invest into providing more milk, and in the other case said seller does not (or gets less of it). If those five gallons are to be distributed by need, then that difference in return needs accounted for as well (i.e. the government doing the redistribution should also be putting resources into improving milk production to avoid that situation in the future).
      - c0nducktr 7y ago
        Well what prevents the government putting resources into improving milk production? That just seems to be the logical next step. It seems the same activity (more milk production) would happen regardless, but instead of placing the rate of milk production in the hands of the current milk suppliers, it would be democratically controlled by the people buying the milk.
        aeternum 7y ago
        In theory it could work, but the government would need experts in milk production to determine what to invest in. Expand this to every possible good, and it becomes un-manageable quickly, while also being ripe for corruption. The producers of the good are typically much better positioned to determine how to efficiently spend resources to increase production. It is their own profits, future, and livelihood on the line so they are much more likely to choose carefully.
        c0nducktr 7y ago
        I'm still not really following. Can people with knowledge of milk production not be selected for government? Why would people choose to have those with less knowledge of milk production to run the milk production department?
- ygggdrasil 7y ago
  Most resources are not scarce, and most industries have healthy competition. If a business tries to raise prices after UBI is implemented, other companies will enter the market for the increased margins and in turn, drive prices down again.
- campfireveteran 7y ago
  Do you mean Richard Wolff?

theptip 7y ago

> soon as you give people 1000 dollars, their rent, transport, and other associated costs will go up by exactly $1000 I don't think this is actually true, though I'd love to see an economic model that would convince me otherwise. Sure, if the only income anyone had was UBI income, then increasing UBI by $1000 would (to a first order approximation) increase everyone's purchasing power equally, and the price of goods would increase by the same amount. (Though note that even in this simplified situation, due to effects like price/wage inelasticities, you wouldn't expect every price to move at the same time). In the current UBI proposal, however, many people would still earn most of their dollars from other sources, and so the changes of purchasing power wouldn't be evenly distributed. My intuitive model for this is that if the average person gets 1% of their income from UBI, and then UBI doubles to 2% of income, then prices should inflate by 1%, because everyone has 1% more to bid on the goods they want. But for those who are getting 100% of their income from UBI, then that 1% inflation on goods doesn't affect them the same way; it just means their purchasing power decreased by 1%, after doubling, so they still got a 99% increase. 1% is a placeholder, you'd need to model this with real data of course, true median salary and the proposed UBI. Obviously the reality is way more complex since you have different mixes of goods and services purchased by the different segments of the population (e.g. perhaps more people in the bottom quartile of income rent than the top quartile), but we don't need to go into that much detail to disprove the argument above (at least with the level of detail that was afforded in the parent post).

pochamago 7y ago
I'm struggling to find the paper now, but I recently read an analysis that asserted one of the primary reason wage growth feels so stagnant is that rent rises almost as much as wages, and that landlords are fully capable of absorbing all the new money that enters into an economy because their resource is so scarce. I do think that before introducing UBI you would need to deal with any industry that has shown it is not being driven down to the competitive prices we would expect to see in a market.

jhanschoo 7y ago

> their rent, transport, and other associated costs will go up by exactly $1000 over a relatively quick time frame But wouldn't this be more efficient than subsidy programs? There is the idea that the needy will have the flexibility be able to obtain what they need most, rather than rely on programs that do not necessarily provide what they need most or in a way that they can't properly take advantage of.

tehjoker 7y ago
This article doesn't quite address what I was talking about, but it has a rather detailed case against UBI: https://jacobinmag.com/2017/12/universal-basic-income-inequality-work https://jacobinmag.com/2017/12/universal-basic-income-inequa... In particular, it discusses what happens at different levels of UBI, with lower affordable levels creating more precarious workers with higher levels being completely unaffordable. Yang's $1000 a mo. for all 18+ adults would cost about about: (~200M 18+ adults) * (12k $/yr) / (19T GDP) = ~12% GDP I would take serious issue with Yang's 18+ requirement as families with children need more money, not less! It also doesn't help you at all if your landlord raises the rent by $1000. They would argue this is fair, because they know you can pay it.
- jhanschoo 7y ago
  Thanks!