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That incorrectly assumes completely inelastic labor and consumer product markets in response to UBI, which is false. With UBI, laborers - especially lower skil
by danans 6y ago
That incorrectly assumes completely inelastic labor and consumer product markets in response to UBI, which is false.
With UBI, laborers - especially lower skilled laborers - are less incentivized to take any job just to survive, which can increase the cost of labor for the employers, and also increase the production of most consumer goods purchased with UBI - basics like diapers and cereal - which are not supply constrained, but demand constrained.
Even rents might not be increased if UBI allows people to support themselves better in less expensive, typically rural areas, thereby reducing demand somewhat on housing in more expensive areas. It could, coupled with targeted investment, even enable an economic rebirth of smaller towns by bringing purchasing power back to them.
- Simulacra 6y agoBut UBI is not isolated to anyone part of the country. If you want to have a UBI in one city, it makes perfect sense that a person is going to want to move there. Free money, is free. The point I think you missed is that despite the cheerleading for a UBI, capitalism is going to negate that rapidly. If prices rise by the amount of the UBI, then you’re just spending that money but your overall financial stability is still negated. If you know that everyone is receiving thousand dollars a month from the government for free, why not raise the car price $1000? Why not raise the rent $1000? The Fantasy of a UBI requires that you completely ignore economics, and put blind faith in the rest of the system to go along.
- danans 6y ago> If you know that everyone is receiving thousand dollars a month from the government for free, why not race car price is $1000? Competition from other car-makers, which is precisely capitalism. Otherwise it would be illegal price collusion. > Why not raise the rent $1000? You can only do that if supply/demand in your area supports that, and that's often because of local restrictions on increasing housing (i.e. as seen in a variety of exclusive Bay Area hamlets). With UBI, more people would be able to choose not to inhabit these supply-constrained housing markets, which might actually temper rents in those areas. If every place implements excessive supply constraints on housing, that would again be collusion - which is another issue that should be addressed simultaneously.
- Simulacra 6y agoIt would not be illegal price collusion if every auto maker came to the same conclusion: raise prices. UBI seems to completely ignore economics both in theory and practice. It’s almost like a political fantasy in order to get votes, but has never shown actual promise anywhere in the world.
- matz1 6y ago>It would not be illegal price collusion if every auto maker came to the same conclusion: raise prices They could, until one of them try to out compete other by lowering price.
- ClumsyPilot 6y agoThis is a total absurdity, cars are not a daily good people need to survive. If all car companies suffer a derangement simultaneously and decides they are entitled to a larger share of my money, I, along with other consumers, will put off our purcase untill they've come to their sences. A few months of reduced sales willl get the message across. With rents the situation is a bit more plausible, but car manufacturers have excess capacity, and there is no ' limited nunber of cars' in the world. If we needed to double their production, we would.
- Simulacra 6y agoWhich example can you understand? How about laundry soap. That’s a necessity. Store brands go up by 50% because people can afford it. If anything a UBI shifts money from the taxpayer to corporations.
- ClumsyPilot 6y agoCan actually demonstrate thay this effect of " raising prices because people can afgord it" has ever happened? Because to me it looks like a serious misinterpretation of economics
- 6y ago