3 ms·

the other thing is, without proper price controls (rent, basic food stuffs, transportation etc) business will look at it as a chance to jack up prices because "

the other thing is, without proper price controls (rent, basic food stuffs, transportation etc) business will look at it as a chance to jack up prices because "free money" the other aspect is, no amount of ubi is going to cover huge medical costs that the current u.s system incurs, as well as higher education for those thst really do want to improve themselves and contribute so (i think) ubi isnt a bad idea, but it needs to be coupled with other structural reforms and price controls to prevent being a huge potential diaster

bhupy 6y ago
> the other thing is, without proper price controls (rent, basic food stuffs, transportation etc) business will look at it as a chance to jack up prices because "free money" I don't buy this argument. Businesses that do this would be leaving money on the table: namely the poor people that were outside of their total addressable market. Whereas before those folks would never have been able to provide revenue, with more cash in their pockets, they are now potential consumers. Increasing prices just maintains the same TAM for no real reason — you can make more revenue by serving the newly minted consumers. The only good/service for which this breaks down is housing, for which there is a true supply scarcity — but even that ceases to be true in a regime with proper zoning reform (like Japan).
jacobr1 6y ago
You can only keep the prices high with cartelization or true scarcity. Though removing subsidies (for things like public transport) can also raise prices. But our food supply is highly distributed. If one vendor charges higher-prices, others will take the opportunity to offer lower prices as long as they still can get the margin. We often debate various forms of market failure on this forum, but in the cases of functioning markets, supply and demand does indeed work.
- 1propionyl 6y ago
  This is only if you assume that a market saturated by advertisement is (properly) "functioning". While advertisers like to claim that they are merely improving distribution of information (bringing us closer to that mythical "perfect information" assumption about competitive markets), in practice they mostly do the opposite. That is, taking advantage of cognitive biases to sell people things they don't need, increasing net market participant irrationality.
  - solveit 6y ago
    Which is why Coca-Cola, which has decisively won the advertising war as much as a corporation can, can jack up prices willy-nilly and people plagued by cognitive biases don't switch to Pepsi.
- RockIslandLine 6y ago
  "But our food supply is highly distributed." Not nearly as much as it needs to be. Indiana imports 90% of its calories. What does it take to get vegetables grown near Indianapolis?
  - jacobr1 6y ago
    If non-Indiana-carrots started to cost $40/lb, you bet some local farmers would switch to carrots. Right now they have existing investments and benefits of scale, but the right incentives switches that. > our food supply is highly distributed. I meant this in the sense of diversity if firms, not geographically. We've certainly seen consolidation with some of the bigger agri-conglomerates, and the trends are worrying, but we are nowhere near monopolization of the industry as a whole. From Wikipedia: > The 2012 US Census of Agriculture indicates that 5.06 percent of US farms are corporate farms. These include family corporations (4.51 percent) and non-family corporations (0.55 percent). Of the family farm corporations, 98 percent are small corporations, with 10 or fewer stockholders. Of the non-family farm corporations, 90 percent are small corporations, with 10 or fewer stockholders. Non-family corporate farms account for 1.36 percent of US farmland area. Family farms (including family corporate farms) account for 96.7 percent of US farms and 89 percent of US farmland area;[17] a USDA study estimated that family farms accounted for 85 percent of US gross farm income in 2011. There are plenty of issues with our food supply system. But I don't think we need to worry about monopolies raising prices unilaterally. The OP thought we needed price controls to keep food costs low. I don't think this in the case. The problems are instead on the poverty side of the equation. Who has the money to pay for our (generally pretty cheap) food? The are too many that are food insecure, not because groceries are expensive, but because they are in poverty.
nyhc99 6y ago
What's wrong with competition as a price control? Isn't that the basis of capitalism? If someone else wants to raise their prices because "free money" then I'll just keep my prices the same and steal all their business.
Aperocky 6y ago
> without proper price controls US government injected about 3 trillion worth of liquidity into the country since the start of the coronavirus, similar to how UBI of $1000/month to every single adult would cost. And did you see any price rise?
- twblalock 6y ago
  Right now consumer spending is way down because people can't or won't leave the house, and millions of people are unemployed. Injecting 3 trillion into the economy in normal circumstances would of course have a different effect.
- mars4rp 6y ago
  Corporations already got most of the 3 trillion!

bhupy 6y ago

> the other thing is, without proper price controls (rent, basic food stuffs, transportation etc) business will look at it as a chance to jack up prices because "free money" I don't buy this argument. Businesses that do this would be leaving money on the table: namely the poor people that were outside of their total addressable market. Whereas before those folks would never have been able to provide revenue, with more cash in their pockets, they are now potential consumers. Increasing prices just maintains the same TAM for no real reason — you can make more revenue by serving the newly minted consumers. The only good/service for which this breaks down is housing, for which there is a true supply scarcity — but even that ceases to be true in a regime with proper zoning reform (like Japan).

jacobr1 6y ago

You can only keep the prices high with cartelization or true scarcity. Though removing subsidies (for things like public transport) can also raise prices. But our food supply is highly distributed. If one vendor charges higher-prices, others will take the opportunity to offer lower prices as long as they still can get the margin. We often debate various forms of market failure on this forum, but in the cases of functioning markets, supply and demand does indeed work.

1propionyl 6y ago
This is only if you assume that a market saturated by advertisement is (properly) "functioning". While advertisers like to claim that they are merely improving distribution of information (bringing us closer to that mythical "perfect information" assumption about competitive markets), in practice they mostly do the opposite. That is, taking advantage of cognitive biases to sell people things they don't need, increasing net market participant irrationality.
- solveit 6y ago
  Which is why Coca-Cola, which has decisively won the advertising war as much as a corporation can, can jack up prices willy-nilly and people plagued by cognitive biases don't switch to Pepsi.
RockIslandLine 6y ago
"But our food supply is highly distributed." Not nearly as much as it needs to be. Indiana imports 90% of its calories. What does it take to get vegetables grown near Indianapolis?
- jacobr1 6y ago
  If non-Indiana-carrots started to cost $40/lb, you bet some local farmers would switch to carrots. Right now they have existing investments and benefits of scale, but the right incentives switches that. > our food supply is highly distributed. I meant this in the sense of diversity if firms, not geographically. We've certainly seen consolidation with some of the bigger agri-conglomerates, and the trends are worrying, but we are nowhere near monopolization of the industry as a whole. From Wikipedia: > The 2012 US Census of Agriculture indicates that 5.06 percent of US farms are corporate farms. These include family corporations (4.51 percent) and non-family corporations (0.55 percent). Of the family farm corporations, 98 percent are small corporations, with 10 or fewer stockholders. Of the non-family farm corporations, 90 percent are small corporations, with 10 or fewer stockholders. Non-family corporate farms account for 1.36 percent of US farmland area. Family farms (including family corporate farms) account for 96.7 percent of US farms and 89 percent of US farmland area;[17] a USDA study estimated that family farms accounted for 85 percent of US gross farm income in 2011. There are plenty of issues with our food supply system. But I don't think we need to worry about monopolies raising prices unilaterally. The OP thought we needed price controls to keep food costs low. I don't think this in the case. The problems are instead on the poverty side of the equation. Who has the money to pay for our (generally pretty cheap) food? The are too many that are food insecure, not because groceries are expensive, but because they are in poverty.

nyhc99 6y ago

What's wrong with competition as a price control? Isn't that the basis of capitalism? If someone else wants to raise their prices because "free money" then I'll just keep my prices the same and steal all their business.

Aperocky 6y ago

> without proper price controls US government injected about 3 trillion worth of liquidity into the country since the start of the coronavirus, similar to how UBI of $1000/month to every single adult would cost. And did you see any price rise?

twblalock 6y ago
Right now consumer spending is way down because people can't or won't leave the house, and millions of people are unemployed. Injecting 3 trillion into the economy in normal circumstances would of course have a different effect.
mars4rp 6y ago
Corporations already got most of the 3 trillion!