4 ms·

UBI will almost certainly fail to cover the necessities unless we have Marx-style price controls. When everyone in the economy has a minimum of say $3,000 per

UBI will almost certainly fail to cover the necessities unless we have Marx-style price controls. When everyone in the economy has a minimum of say $3,000 per month the cost of necessities, and everything else, will go up roughly in line with that.

paulddraper 2y ago
Case study: COVID
- winkeltripel 2y ago
  That isn't a test of anything, since we've not isolated a single policy change; many things changed everywhere all over the world all at once.
  - almosthere 2y ago
    Yes, I think there was a few things going on with covid, most of all the fact that shipping got halted for a year and we're still unwinding the damage from that (although, mostly smooth now).
dataflow 2y ago
I wasn't here to take a stance on UBI or argue over its practicalities, I was just explaining the intended outcome was not what the parent believed it to be. But fine, I'll bite. > will go up roughly in line with that Could you at least explain the logic that you believe implies this would occur with such certainty? I've thought about this before and I couldn't see this as a necessary outcome, though (depending on various factors) I do see it as a possible one.
- rank0 2y ago
  > Could you at least explain the logic that you believe implies this would occur with such certainty? Because we haven’t actually created anything. Supply is the same, demand is WAY up.
  - dataflow 2y ago
    That doesn't follow. It's a reason to believe prices will increase, not that prices will increase roughly in line with the income increase. This distinction is not a minor detail, it's pretty crucial. If you give people $3k and the prices go up by $2k... that's a very different scenario from one where the prices go up by $3k.
    - rank0 2y ago
      It should all even out in the long run. As long as we’re in a deficit, spending for this program would directly increase the money supply. Of course there are other factors like velocity of money and elasticity of good/services but at the end of the day we’re increasing the amount of money (aka cash + credit) with no change to supply AND we’re going into debt to do it.
- _heimdall 2y ago
  Capitalism is based on, among other things, an expectation that free markets are pretty good at balancing out in the long run. If demand goes up only because access to money goes up, prices will rise. Any increase in supply over time will eat up some of that price fluctuation, but for most products prices are more flexible than supply and a majority share of any capital increase will go towards prices rather than supply.
  - dataflow 2y ago
    > a majority share of any capital increase will go towards prices rather than supply You actually made my point, I think: that the price increase need not necessarily be "roughly in line with that", but could be less. This distinction is absolutely critical. Like I said in [1], if you put $3k in my pocket, and my expenses increase by $2k, that's a very different situation from if my expenses grow by $3k. It would mean there is a reachable equilibrium. [1] https://news.ycombinator.com/item?id=43430867 https://news.ycombinator.com/item?id=43430867
    - _heimdall 2y ago
      When I said "in line" I didn't mean 1:1 or 100%. I may have picked a bad phrase there, I was intending to say that there would be a strong correlation between the two and that a majority of the extra Monet would go towards price increases. I forget the general rule when it comes to companies, but there's a general percentage that is often how much a price increase on a company is passed on to consumers. If a company's tax rate goes up by 10% something like 8% of that is passed on to the consumer through price increases. I'd expect something similar with a UBI.
      - dataflow 2y ago
        > When I said "in line" I didn't mean 1:1 or 100%. I may have picked a bad phrase there, I was intending to say that there would be a strong correlation between the two and that a majority of the extra Monet would go towards price increases. If so, then explain how you're making the jump from "prices increase some" to "you would need Marx style price controls" or "otherwise UBI will fail to cover the necessities"? If you give me $X and I spend $X * r of it due to price increases, and r < 1, then don't I have (1 - r) * $X left in my pocket, meaning it could be made large enough to cover the basic necessities? This isn't complicated math. I don't get why "prices increase" is seen as such a mic-drop phrase that shows the system would fall apart. Prices already increase for all sorts of reasons, it's not like the economy falls apart every time or we somehow add Marx style price controls every time. Sure, prices increase some here too. And then what? The sky falls?
nmz 2y ago
And yet we have christmas, with its very own christmas bonus.
LinXitoW 2y ago
We already have "Marx-style" price control and regulations in many sectors, specifically food production. It's just that the advantages are arbitraged away by corporations using cheap corn to create highly addictive foods, and lobbying and marketing with the resultant profits. But I also disagree with your assertion. Minimum wage increases are a great example. Opponents will constantly claim they will lead to massively increasing prices, but they never do. Moreover, a higher standard of employment rights and payment in first world countries like Norway doesn't seem to correlate well with higher Big Mac prices.
- _heimdall 2y ago
  > We already have "Marx-style" price control and regulations in many sectors, specifically food production. And our food quality in the US is garbage. We can't say if there is causation there since we can't compare against a baseline US food system without subsidies, but there is a correlation in timing between the increase in food subsidies and the decrease in quality. > Opponents will constantly claim they will lead to massively increasing prices, but they never do. The only times that really comes up is when an increase is proposed and the whole debate is over politicized. Claims on both sides at those times are going to be exaggerated. Prices absolutely go up with minimum wage increases. How could they not? It'd be totally reasonable to argue the timeline that matters, prices aren't going to go up immediately. You could also argue the ratio, maybe wage is increased by 30% and prices are only expected to go up by 20%. People earning a minimum wage almost certainly have pent up demand, they would buy more if they could afford it. Increasing their wages opens that door a bit, they will spend more which means demand, and prices, will go up in response.
  - orangecat 2y ago
    You could also argue the ratio, maybe wage is increased by 30% and prices are only expected to go up by 20%. And the point is that the income percentage increase is higher for those with lower incomes. Even if prices go up by 20%, somebody making $20k/year who gets an additional $10k from UBI is going to be much better off.

paulddraper 2y ago

Case study: COVID

winkeltripel 2y ago
That isn't a test of anything, since we've not isolated a single policy change; many things changed everywhere all over the world all at once.
- almosthere 2y ago
  Yes, I think there was a few things going on with covid, most of all the fact that shipping got halted for a year and we're still unwinding the damage from that (although, mostly smooth now).

dataflow 2y ago

I wasn't here to take a stance on UBI or argue over its practicalities, I was just explaining the intended outcome was not what the parent believed it to be. But fine, I'll bite. > will go up roughly in line with that Could you at least explain the logic that you believe implies this would occur with such certainty? I've thought about this before and I couldn't see this as a necessary outcome, though (depending on various factors) I do see it as a possible one.

rank0 2y ago
> Could you at least explain the logic that you believe implies this would occur with such certainty? Because we haven’t actually created anything. Supply is the same, demand is WAY up.
- dataflow 2y ago
  That doesn't follow. It's a reason to believe prices will increase, not that prices will increase roughly in line with the income increase. This distinction is not a minor detail, it's pretty crucial. If you give people $3k and the prices go up by $2k... that's a very different scenario from one where the prices go up by $3k.
  - rank0 2y ago
    It should all even out in the long run. As long as we’re in a deficit, spending for this program would directly increase the money supply. Of course there are other factors like velocity of money and elasticity of good/services but at the end of the day we’re increasing the amount of money (aka cash + credit) with no change to supply AND we’re going into debt to do it.
_heimdall 2y ago
Capitalism is based on, among other things, an expectation that free markets are pretty good at balancing out in the long run. If demand goes up only because access to money goes up, prices will rise. Any increase in supply over time will eat up some of that price fluctuation, but for most products prices are more flexible than supply and a majority share of any capital increase will go towards prices rather than supply.
- dataflow 2y ago
  > a majority share of any capital increase will go towards prices rather than supply You actually made my point, I think: that the price increase need not necessarily be "roughly in line with that", but could be less. This distinction is absolutely critical. Like I said in [1], if you put $3k in my pocket, and my expenses increase by $2k, that's a very different situation from if my expenses grow by $3k. It would mean there is a reachable equilibrium. [1] https://news.ycombinator.com/item?id=43430867 https://news.ycombinator.com/item?id=43430867
  - _heimdall 2y ago
    When I said "in line" I didn't mean 1:1 or 100%. I may have picked a bad phrase there, I was intending to say that there would be a strong correlation between the two and that a majority of the extra Monet would go towards price increases. I forget the general rule when it comes to companies, but there's a general percentage that is often how much a price increase on a company is passed on to consumers. If a company's tax rate goes up by 10% something like 8% of that is passed on to the consumer through price increases. I'd expect something similar with a UBI.
    - dataflow 2y ago
      > When I said "in line" I didn't mean 1:1 or 100%. I may have picked a bad phrase there, I was intending to say that there would be a strong correlation between the two and that a majority of the extra Monet would go towards price increases. If so, then explain how you're making the jump from "prices increase some" to "you would need Marx style price controls" or "otherwise UBI will fail to cover the necessities"? If you give me $X and I spend $X * r of it due to price increases, and r < 1, then don't I have (1 - r) * $X left in my pocket, meaning it could be made large enough to cover the basic necessities? This isn't complicated math. I don't get why "prices increase" is seen as such a mic-drop phrase that shows the system would fall apart. Prices already increase for all sorts of reasons, it's not like the economy falls apart every time or we somehow add Marx style price controls every time. Sure, prices increase some here too. And then what? The sky falls?

nmz 2y ago

And yet we have christmas, with its very own christmas bonus.

LinXitoW 2y ago

We already have "Marx-style" price control and regulations in many sectors, specifically food production. It's just that the advantages are arbitraged away by corporations using cheap corn to create highly addictive foods, and lobbying and marketing with the resultant profits. But I also disagree with your assertion. Minimum wage increases are a great example. Opponents will constantly claim they will lead to massively increasing prices, but they never do. Moreover, a higher standard of employment rights and payment in first world countries like Norway doesn't seem to correlate well with higher Big Mac prices.

_heimdall 2y ago
> We already have "Marx-style" price control and regulations in many sectors, specifically food production. And our food quality in the US is garbage. We can't say if there is causation there since we can't compare against a baseline US food system without subsidies, but there is a correlation in timing between the increase in food subsidies and the decrease in quality. > Opponents will constantly claim they will lead to massively increasing prices, but they never do. The only times that really comes up is when an increase is proposed and the whole debate is over politicized. Claims on both sides at those times are going to be exaggerated. Prices absolutely go up with minimum wage increases. How could they not? It'd be totally reasonable to argue the timeline that matters, prices aren't going to go up immediately. You could also argue the ratio, maybe wage is increased by 30% and prices are only expected to go up by 20%. People earning a minimum wage almost certainly have pent up demand, they would buy more if they could afford it. Increasing their wages opens that door a bit, they will spend more which means demand, and prices, will go up in response.
- orangecat 2y ago
  You could also argue the ratio, maybe wage is increased by 30% and prices are only expected to go up by 20%. And the point is that the income percentage increase is higher for those with lower incomes. Even if prices go up by 20%, somebody making $20k/year who gets an additional $10k from UBI is going to be much better off.