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> Lower-class workers will see their incomes increase much more on a proportional basis and end up with a net benefit. Except their goods are going to cost mor

> Lower-class workers will see their incomes increase much more on a proportional basis and end up with a net benefit. Except their goods are going to cost more too now. Unless you're going to start proposing price controls. I can't really see UBI doing anything except inflating itself away.

lordlic 5y ago
Their goods will cost more, but they'll also have more income, both from employers paying more for labor and from the direct payments from UBI. And even if the benefits are entirely "inflated away" in aggregate (which is extremely dubious given that UBI produces real economic value in terms of stability), that's just the aggregate effect. To take an extreme example, if the Fed prints 1,000,000 exadollars and distributes them equally, then yeah it's pure inflation, but it also massively redistributes wealth to the point where everyone is practically identical. Hopefully that example demonstrates that the effect isn't zero even if it's just "inflating itself away." Finally, I object to treating this question in pure economic terms. We shouldn't be overly concerned with optimizing aggregate economic outcomes for society. Those at the top end can more than afford to give up some wealth, and those at the bottom are struggling to a heartbreaking degree. The utility function of holding wealth is not linear and if you're interested in increasing everyone's well-being then that's a fact you have to address.
- jhncls 5y ago
  How will printing money lead to redistributing wealth? The wealthy will still have their properties, their stocks, their personal connections, their education, ... . When the water level rises, all boats will rise together.
  - Boxxed 5y ago
    Because the proportions change. OP used exadollars in his/her example to show that giving money equally to everyone evens things out.
    - babesh 5y ago
      Governments don’t generally do it that way. Usually they just seize assets. That is because if you print exadollars then either the assets rise in value in proportion or beyond a certain point, implode, making the country as a whole poorer. That is because companies can no longer make money. Suppliers demand more anticipating further inflation. You then need to pass it on but may not be able to pass it on fast enough. Cycle builds upon itself. Pretty soon, your currency is completely devalued and there is a robust underground economy. You run into shortages for essentials and have to introduce price controls. The poor get poorer. The rich get poorer. Good job. Lebanon. Venezuela. https://www.linkedin.com/pulse/money-credit-debt-ray-dalio https://www.linkedin.com/pulse/money-credit-debt-ray-dalio
randomname93857 5y ago
I remember seeing interview on TV with a McDonalds worker in Switzerland. She said, They are paid about 35 Euro/hour. and they are happy to work at McDonalds ! One of comments from the reporter was that higher salaries increase the price of BigMac by some cents( I remember that it was about 50cents) due to higher salary comparing to cost of BigMac in US. I wonder, Could this be a way to fix the lack of employees? /s
- gruez 5y ago
  1. Switzerland is a lot more wealthy than the US 2. The wage of the burger flipper at mcdonalds might not contribute much to the overall price of a big mac, but the wage of the burger flipper plus the wage that was factored into the cost of the ingredients might.
  - CydeWeys 5y ago
    Fwiw, when I was there four years ago the meal prices were in the $13-15 range, so quite a bit more than I was used to. But if that makes for a more equitable society, good.
    - dilyevsky 5y ago
      Where? I still remember that $60 that google gave me for food was barely enough for one meal in zurich ~10 years ago
      - Jensson 5y ago
        Then swiss mcdonalds massively lowered their prices since, you ate at a special mcdonalds or you eat huge meals consisting of many burgers. Or you remember wrong. Last time I ate there a big mac didn't cost more than $7. It is expensive, but not that expensive.
      - CydeWeys 5y ago
        That would've been in Geneva, with prices similar to Zurich. There's no way you couldn't feed one person on $60.
breadbreadbread 5y ago
If the cost of labor goes up, increasing the consumer cost of goods (inflation) is only one way of offsetting that labor cost. That cost can also be offset by A) Reducing shareholder profits B) reducing management profits C) government subsidies D) reducing capacity. Companies in America are incredibly top-heavy, and a more stable economy could emerge if those resources at the top are distributed down to the worker. If implemented properly, UBI could push companies to share more of those profits with their workers without affecting the buyer. Additionally capital generates more social value when it circulates (when its being spent) vs when it is stagnant (when it sits in a bank). Even if things are more expensive, more people having access to things allows local economies to grow

lordlic 5y ago

Their goods will cost more, but they'll also have more income, both from employers paying more for labor and from the direct payments from UBI. And even if the benefits are entirely "inflated away" in aggregate (which is extremely dubious given that UBI produces real economic value in terms of stability), that's just the aggregate effect. To take an extreme example, if the Fed prints 1,000,000 exadollars and distributes them equally, then yeah it's pure inflation, but it also massively redistributes wealth to the point where everyone is practically identical. Hopefully that example demonstrates that the effect isn't zero even if it's just "inflating itself away." Finally, I object to treating this question in pure economic terms. We shouldn't be overly concerned with optimizing aggregate economic outcomes for society. Those at the top end can more than afford to give up some wealth, and those at the bottom are struggling to a heartbreaking degree. The utility function of holding wealth is not linear and if you're interested in increasing everyone's well-being then that's a fact you have to address.

jhncls 5y ago
How will printing money lead to redistributing wealth? The wealthy will still have their properties, their stocks, their personal connections, their education, ... . When the water level rises, all boats will rise together.
- Boxxed 5y ago
  Because the proportions change. OP used exadollars in his/her example to show that giving money equally to everyone evens things out.
  - babesh 5y ago
    Governments don’t generally do it that way. Usually they just seize assets. That is because if you print exadollars then either the assets rise in value in proportion or beyond a certain point, implode, making the country as a whole poorer. That is because companies can no longer make money. Suppliers demand more anticipating further inflation. You then need to pass it on but may not be able to pass it on fast enough. Cycle builds upon itself. Pretty soon, your currency is completely devalued and there is a robust underground economy. You run into shortages for essentials and have to introduce price controls. The poor get poorer. The rich get poorer. Good job. Lebanon. Venezuela. https://www.linkedin.com/pulse/money-credit-debt-ray-dalio https://www.linkedin.com/pulse/money-credit-debt-ray-dalio

randomname93857 5y ago

I remember seeing interview on TV with a McDonalds worker in Switzerland. She said, They are paid about 35 Euro/hour. and they are happy to work at McDonalds ! One of comments from the reporter was that higher salaries increase the price of BigMac by some cents( I remember that it was about 50cents) due to higher salary comparing to cost of BigMac in US. I wonder, Could this be a way to fix the lack of employees? /s

gruez 5y ago
1. Switzerland is a lot more wealthy than the US 2. The wage of the burger flipper at mcdonalds might not contribute much to the overall price of a big mac, but the wage of the burger flipper plus the wage that was factored into the cost of the ingredients might.
- CydeWeys 5y ago
  Fwiw, when I was there four years ago the meal prices were in the $13-15 range, so quite a bit more than I was used to. But if that makes for a more equitable society, good.
  - dilyevsky 5y ago
    Where? I still remember that $60 that google gave me for food was barely enough for one meal in zurich ~10 years ago
    - Jensson 5y ago
      Then swiss mcdonalds massively lowered their prices since, you ate at a special mcdonalds or you eat huge meals consisting of many burgers. Or you remember wrong. Last time I ate there a big mac didn't cost more than $7. It is expensive, but not that expensive.
    - CydeWeys 5y ago
      That would've been in Geneva, with prices similar to Zurich. There's no way you couldn't feed one person on $60.

breadbreadbread 5y ago

If the cost of labor goes up, increasing the consumer cost of goods (inflation) is only one way of offsetting that labor cost. That cost can also be offset by A) Reducing shareholder profits B) reducing management profits C) government subsidies D) reducing capacity. Companies in America are incredibly top-heavy, and a more stable economy could emerge if those resources at the top are distributed down to the worker. If implemented properly, UBI could push companies to share more of those profits with their workers without affecting the buyer. Additionally capital generates more social value when it circulates (when its being spent) vs when it is stagnant (when it sits in a bank). Even if things are more expensive, more people having access to things allows local economies to grow