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How does that solve the problem of capital-owners simply raising prices to match new general level of income? For example, if renting housing previously cost $X

How does that solve the problem of capital-owners simply raising prices to match new general level of income? For example, if renting housing previously cost $X, and UBI was implemented giving everyone an additional $Y dollars, I would expect leasing costs for housing to immediately jump by, say, 0.75*Y, and the costs of other goods to rise similarly. UBI would then just be a general transfer of money from the poor and middle classes (through taxation) to the capital-owning classes. Obviously, this can't be captured in the limited "scale model" research economists do because a temporary UBI given to a small segment of the population is not comparable to a permanent and general UBI that landowners can fully exploit. In all the arguments I've seen for UBI, I've never seen someone address the issue of the response of the landowners without relying on full-blown communist control of prices by the government.

derac 5y ago
You're assumption is untested as well. I'd rather guess that with greater mobility and the ability to move between jobs without fear of losing everything, people would move elsewhere and invest in housing outside of expensive cities. I can see an argument for some sort of regulation around housing which disincentivizes financialization of that market and increases supply. A Land Value Tax seems like a possibly good approach.
- endominus 5y ago
  Why do you assume that the UBI will lead to greater mobility or financial safety? My point was that it simply moves the first rung of the ladder up, such that housing that cost $X before will now cost $X+0.75*Y. Nothing changes on the ground except that numbers go higher - until existing social services are removed as "unnecessary" now that UBI is in place, which is how I often see UBI pitched. Otherwise, how is it paid for? This is beside the point, of course, but even a modest UBI of $2,000 a month will cost over 7 trillion dollars annually, which is 50% greater than total federal government spending last year. Even now, people can move out of expensive cities and into the hinterlands. A few weeks ago, we had a story here about a guy who worked himself up from blue-collar work to carpetbagging (his words) in a rural town. It's possible to do that for anyone on a reasonable salary, but most people choose not to. On a known stipend, the prices in those tiny towns will rise just the same; the incentives to do so are the same as those that keep them at their current level, after all. The recent move to remote working is probably going to do a lot more for equalization and social/physical mobility than UBI ever would, simply because it gives people the option to opt out of life in major cities. That's something that UBI by itself could never do. People will still have the fear of losing everything, of spiralling into unrecoverable debt, of never actually owning the house that they live in and the car that they drive. Look at Social Security as an example. A monthly stipend does not stop the elderly from going homeless.

derac 5y ago

You're assumption is untested as well. I'd rather guess that with greater mobility and the ability to move between jobs without fear of losing everything, people would move elsewhere and invest in housing outside of expensive cities. I can see an argument for some sort of regulation around housing which disincentivizes financialization of that market and increases supply. A Land Value Tax seems like a possibly good approach.

endominus 5y ago
Why do you assume that the UBI will lead to greater mobility or financial safety? My point was that it simply moves the first rung of the ladder up, such that housing that cost $X before will now cost $X+0.75*Y. Nothing changes on the ground except that numbers go higher - until existing social services are removed as "unnecessary" now that UBI is in place, which is how I often see UBI pitched. Otherwise, how is it paid for? This is beside the point, of course, but even a modest UBI of $2,000 a month will cost over 7 trillion dollars annually, which is 50% greater than total federal government spending last year. Even now, people can move out of expensive cities and into the hinterlands. A few weeks ago, we had a story here about a guy who worked himself up from blue-collar work to carpetbagging (his words) in a rural town. It's possible to do that for anyone on a reasonable salary, but most people choose not to. On a known stipend, the prices in those tiny towns will rise just the same; the incentives to do so are the same as those that keep them at their current level, after all. The recent move to remote working is probably going to do a lot more for equalization and social/physical mobility than UBI ever would, simply because it gives people the option to opt out of life in major cities. That's something that UBI by itself could never do. People will still have the fear of losing everything, of spiralling into unrecoverable debt, of never actually owning the house that they live in and the car that they drive. Look at Social Security as an example. A monthly stipend does not stop the elderly from going homeless.