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A market's throughput is limited by the number of participating actors. If a large percentage of the population can't participate, the market's capability to pr

A market's throughput is limited by the number of participating actors. If a large percentage of the population can't participate, the market's capability to price, evaluate and represent value is hindered. UBI makes sense for a purpose of bringing more buyer's/actors to the game. It's especially useful considering our dependence on jobs as the primary activating mechanism shows strain under the troubles of scaling human coordination and hiring. In a sort of backwards way we get more jobs when more people can contribute to the flow of money. However UBI doesn't solve the problem of debt still piping the cash back into the hands of banks and other financial institutions. What are these UBI checks going to be spent on? Rent that's too high? Student loans for indulgent tuition prices? Without blocking the pipes from the poor to the the actors with pipes of their own, these throughput problems aren't solved more than delayed. An actor is still a single actor, so if one actor has an over aggregation of wealth and has trouble spending it effectively the potential of that wealth is wasted when at least some actors don't have enough. So surely trillions of dollars of UBI injected directly into the hands of the poor will stimulate the economy. But for how long until the cash starts to aggregate again into slower pools of cash where throughput is limited? In a sense we almost want inflation if these "overaggregators" are so abundant, but only if the population is maintained at a base level of wealth relative to the inflation. Otherwise the rich, who probably got rich by being more effective with their money respond to the market changes faster and the UBI stimulation is only temporary. But if UBI causes significant inflation, and the pipes going directly to every individual have enough back pressure, it could be a great situation where the overaggregators lose value to inflation as they struggle to spend or invest.

AnthonyMouse 6y ago
> However UBI doesn't solve the problem of debt still piping the cash back into the hands of banks and other financial institutions. That isn't a problem it's expected to solve. It's a completely independent problem that already happens whether you have a UBI or not. The solutions there are likewise independent. Build more housing so it isn't supply constrained and doesn't increase in price to consume any gains made by the working class. Stop issuing student loans (students now have a UBI and don't need them), because student loans inflate the cost of college relative to other things which loans aren't available for. A UBI doesn't do that because the money isn't only available when spend on college. > An actor is still a single actor, so if one actor has an over aggregation of wealth and has trouble spending it effectively the potential of that wealth is wasted when at least some actors don't have enough. That's not how money works. Money in a bank account isn't being "wasted" because it isn't consuming resources, and if hoarding is causing currency scarcity (i.e. deflation) then additional money can easily be printed. > So surely trillions of dollars of UBI injected directly into the hands of the poor will stimulate the economy. But for how long until the cash starts to aggregate again into slower pools of cash where throughput is limited? For as long as they keep getting the UBI. Where do you think the money to fund it would come from?
- jacobush 6y ago
  Land tax is better than more housing. A lot of housing is not used very well.
  - AnthonyMouse 6y ago
    What do you think the point of a land tax is? It's to get people to build more housing, because it's more profitable to build taller buildings when they have the same tax burden as single story buildings or empty lots instead of having most of the returns from new construction eaten by property taxes. But that doesn't work if building more housing is still prohibited by zoning.
    - jacobush 6y ago
      It is also for making under-utilised property already built up, being used in more productive ways.
- emeerson 6y ago
  Re. Money in a bank account not contributing to scarcity: I think that logic checks out when you observe money as a resource in isolation. If you think of Money as a proxy for "captured value," then one way to look at it is how much "captured value" is "captured opportunity for wealth creation," which has a certain distribution % chance across the entire population. In that sense, total aggregate money at any point in time can be viewed as zero-sum.
  - AnthonyMouse 6y ago
    Suppose the government prints a hundred trillion dollars, buries it in the ground for 50 years and then digs it up and burns it in a furnace. Notice how printing a hundred trillion dollars would normally be expected to cause a lot of inflation, but doing the above doesn't do that. It wouldn't have been any different if they had printed monopoly money instead of real money, because it doesn't get spent. The opportunity for wealth creation is in raw materials and labor force. We measure those things in dollars because dollars are fungible and we want to be able to compare them to each other but the green paper isn't the prize, it's only a token that represents the prize. If some of the money is removed from circulation then the rest of it is worth more. It costs fewer dollars to buy an hour of labor, but there are still the same number of hours of labor available to buy. This is deflation, which is bad for various reasons, but deflation can be countered by printing money. Not buying stuff with your money doesn't destroy the stuff, it only causes somebody other than you to have the stuff. This is only worse if what you'd have done with it is better than what they do with it.
nicoburns 6y ago
> Rent that's too high? Student loans for indulgent tuition prices? I think these two example are to the point. They're really the only outsized debts that most people have that aren't just "generally need more money". They should be tackled separately in addition to general wealth distribution policies. > If a large percentage of the population can't participate, the market's capability to price, evaluate and represent value is hindered. Note, that the actors having roughly proportional buying power is also important. Having actors that control disproportionate amounts of wealth also hinders the market's capability to price. We need explicit measures against wealth accumulation if we wish to have functioning markets.
- toomuchtodo 6y ago
  > I think these two example are to the point. They're really the only outsized debts that most people have that aren't just "generally need more money". They should be tackled separately in addition to general wealth distribution policies. Universal Basic Needs. I don't care how much UBI payments are, I still argue single payer healthcare is mandatory, because there is no way such a system can effectively function as a free market (besides perhaps elective procedures). Also, humans are irrational, unlucky, and do an overall poor job planning for the future. Almost half of the US population over 55 has no retirement savings. They will be living on their Social Security alone (effectively an age tested UBI), but we still provide Medicare for them for their health needs when they arrive at age 65. This is a sound model. EDIT: Tangentially, there is a thesis [1] which breaks apart the concept of fiat into distinct components: "machine money" and "human money". We can print "machine money" without a care, because what you buy with it is produced or delivered by automation; this might be renewable energy or automated electric transportation. We can deflate it away with technology. "Human money" is money where you must have a human do the work, and therefore there are supply and demand constraints. This currency must be carefully managed to prevent inflation or devaluation. [1] https://wtfeconomy.com/machine-money-and-people-money-29b497eeb9d0?gi=2c9634c0958 https://wtfeconomy.com/machine-money-and-people-money-29b497...
  - nicoburns 6y ago
    > I still argue single payer healthcare is mandatory, because there is no way such a system can effectively function as a free market (besides perhaps elective procedures). Ah, I agree. But I'm in the UK, and universal healthcare is a given here so I didn't think to put it on the list.
thomasfl 6y ago
Good points! That is way Thomas Piketty says ubi is only an interesting start, but that we should go way longer to achieve more fair distribution of wealth.
zhoujianfu 6y ago
Exactly... inflation with a UBI I think is not really a problem. Imagine 10% inflation and a $20K UBI. If you’re worth less than $200K, you come out ahead. It’s a very efficient (perhaps the most efficient?) means of flattening unequal wealth distribution (without distorting incentives). The risk is perhaps a flight to an alternative currency without 10% inflation... but maybe the USD is in a fortunate position to withstand that.
mountainboot 6y ago
That is not correct that in general the rich got rich by being more effective with their money. In the US social mobility is limited compared to other countries. How rich your parents are/were is more important than your intelligence.
- JamalW 6y ago
  Source? Or is this just something you tell yourself to sleep at night.

AnthonyMouse 6y ago

> However UBI doesn't solve the problem of debt still piping the cash back into the hands of banks and other financial institutions. That isn't a problem it's expected to solve. It's a completely independent problem that already happens whether you have a UBI or not. The solutions there are likewise independent. Build more housing so it isn't supply constrained and doesn't increase in price to consume any gains made by the working class. Stop issuing student loans (students now have a UBI and don't need them), because student loans inflate the cost of college relative to other things which loans aren't available for. A UBI doesn't do that because the money isn't only available when spend on college. > An actor is still a single actor, so if one actor has an over aggregation of wealth and has trouble spending it effectively the potential of that wealth is wasted when at least some actors don't have enough. That's not how money works. Money in a bank account isn't being "wasted" because it isn't consuming resources, and if hoarding is causing currency scarcity (i.e. deflation) then additional money can easily be printed. > So surely trillions of dollars of UBI injected directly into the hands of the poor will stimulate the economy. But for how long until the cash starts to aggregate again into slower pools of cash where throughput is limited? For as long as they keep getting the UBI. Where do you think the money to fund it would come from?

jacobush 6y ago
Land tax is better than more housing. A lot of housing is not used very well.
- AnthonyMouse 6y ago
  What do you think the point of a land tax is? It's to get people to build more housing, because it's more profitable to build taller buildings when they have the same tax burden as single story buildings or empty lots instead of having most of the returns from new construction eaten by property taxes. But that doesn't work if building more housing is still prohibited by zoning.
  - jacobush 6y ago
    It is also for making under-utilised property already built up, being used in more productive ways.
emeerson 6y ago
Re. Money in a bank account not contributing to scarcity: I think that logic checks out when you observe money as a resource in isolation. If you think of Money as a proxy for "captured value," then one way to look at it is how much "captured value" is "captured opportunity for wealth creation," which has a certain distribution % chance across the entire population. In that sense, total aggregate money at any point in time can be viewed as zero-sum.
- AnthonyMouse 6y ago
  Suppose the government prints a hundred trillion dollars, buries it in the ground for 50 years and then digs it up and burns it in a furnace. Notice how printing a hundred trillion dollars would normally be expected to cause a lot of inflation, but doing the above doesn't do that. It wouldn't have been any different if they had printed monopoly money instead of real money, because it doesn't get spent. The opportunity for wealth creation is in raw materials and labor force. We measure those things in dollars because dollars are fungible and we want to be able to compare them to each other but the green paper isn't the prize, it's only a token that represents the prize. If some of the money is removed from circulation then the rest of it is worth more. It costs fewer dollars to buy an hour of labor, but there are still the same number of hours of labor available to buy. This is deflation, which is bad for various reasons, but deflation can be countered by printing money. Not buying stuff with your money doesn't destroy the stuff, it only causes somebody other than you to have the stuff. This is only worse if what you'd have done with it is better than what they do with it.

nicoburns 6y ago

> Rent that's too high? Student loans for indulgent tuition prices? I think these two example are to the point. They're really the only outsized debts that most people have that aren't just "generally need more money". They should be tackled separately in addition to general wealth distribution policies. > If a large percentage of the population can't participate, the market's capability to price, evaluate and represent value is hindered. Note, that the actors having roughly proportional buying power is also important. Having actors that control disproportionate amounts of wealth also hinders the market's capability to price. We need explicit measures against wealth accumulation if we wish to have functioning markets.

toomuchtodo 6y ago
> I think these two example are to the point. They're really the only outsized debts that most people have that aren't just "generally need more money". They should be tackled separately in addition to general wealth distribution policies. Universal Basic Needs. I don't care how much UBI payments are, I still argue single payer healthcare is mandatory, because there is no way such a system can effectively function as a free market (besides perhaps elective procedures). Also, humans are irrational, unlucky, and do an overall poor job planning for the future. Almost half of the US population over 55 has no retirement savings. They will be living on their Social Security alone (effectively an age tested UBI), but we still provide Medicare for them for their health needs when they arrive at age 65. This is a sound model. EDIT: Tangentially, there is a thesis [1] which breaks apart the concept of fiat into distinct components: "machine money" and "human money". We can print "machine money" without a care, because what you buy with it is produced or delivered by automation; this might be renewable energy or automated electric transportation. We can deflate it away with technology. "Human money" is money where you must have a human do the work, and therefore there are supply and demand constraints. This currency must be carefully managed to prevent inflation or devaluation. [1] https://wtfeconomy.com/machine-money-and-people-money-29b497eeb9d0?gi=2c9634c0958 https://wtfeconomy.com/machine-money-and-people-money-29b497...
- nicoburns 6y ago
  > I still argue single payer healthcare is mandatory, because there is no way such a system can effectively function as a free market (besides perhaps elective procedures). Ah, I agree. But I'm in the UK, and universal healthcare is a given here so I didn't think to put it on the list.

thomasfl 6y ago

Good points! That is way Thomas Piketty says ubi is only an interesting start, but that we should go way longer to achieve more fair distribution of wealth.

zhoujianfu 6y ago

Exactly... inflation with a UBI I think is not really a problem. Imagine 10% inflation and a $20K UBI. If you’re worth less than $200K, you come out ahead. It’s a very efficient (perhaps the most efficient?) means of flattening unequal wealth distribution (without distorting incentives). The risk is perhaps a flight to an alternative currency without 10% inflation... but maybe the USD is in a fortunate position to withstand that.

mountainboot 6y ago

That is not correct that in general the rich got rich by being more effective with their money. In the US social mobility is limited compared to other countries. How rich your parents are/were is more important than your intelligence.

JamalW 6y ago
Source? Or is this just something you tell yourself to sleep at night.