5 ms·

We've discussed this here before. I like to think I am progressive but I think this is the wrong approach. Costs will rise to the minimum that everyone is kno

by ck2 13y ago

We've discussed this here before. I like to think I am progressive but I think this is the wrong approach. Costs will rise to the minimum that everyone is known to afford (or higher to deny the minimum income). So rent will go up, food costs will go up, clothing etc. You are just transfering wealth from the state to a few individuals who own property and own chain stores. Better to have rent control and other cost-of-living regulation.

rjtavares 13y ago
I feel the complete opposite. Rent/price controls never worked well (too many unintended consequences), it's time to try something new.
- tomp 13y ago
  You might be right, but your reasoning is not good. Only in a (local) minimum you can improve by choosing any direction; otherwise, you might go down as well as up. If rent/price controls are not working, it doesn't follow that basic income will improve the social inequality and reduce poverty.
  - anExcitedBeast 13y ago
    It's stunning how much rhetoric is founded in the politician's syllogism.
  - rjtavares 13y ago
    Think of it this way: we're near a local optimal point using the current policies, and we're not going to dramatically improve if we just keep using a gradient descent type algorithm. It's time to start fresh and aim for a global optimum instead of just the local one we've been living with for so long. Is it guaranteed that we'll find it? No. Is it worth it? In my opinion, yes.
- bolder88 13y ago
  There's trying something new, and there's complete idiocy. This is the latter. It's dangerous and very worrying that people are trying to repeat mistakes.
pliny 13y ago
>Costs will rise to the minimum that everyone is known to afford Isn't the point to have a minimum that everyone can afford? There's also an unstated (and wrong) assumption that however much food / apartments / transportation / etc is fixed and unchanging, rather than a variable that tracks the demand for these products - so presumably if you add a lot of money you will have to produce/spend however much energy it costs to extract rocks and wheat from the ground, but everything after that is mostly free since the infrastructure for turning rocks and wheat into iphones and pizza already exists.
- return0 13y ago
  > Isn't the point to have a minimum that everyone can afford? The right way to do that is to expand cities and build community housing. The correct assumption is that costs will rise above the minimum everyone can afford, keeping inequalities at bay.
  - ck2 13y ago
    At least in the USA, "community housing" is a hellscape for most of its residents. I have no problem with giving people money so they can find a place to rent of their own from a landlord that will make profit. I just have a problem with landlords who then all raise their rents to the maximum amount they know people are going to get.
    - chii 13y ago
      but that is exactly what they will do, because when each landlord raises the rent slightly every month, via pure experimentation/intuition, they will reach a point where someone will still rent their house/apartment at the highest price they can ask for. The only way to drive rent/cost of housing down is to produce more houses/apartments.
vdaniuk 13y ago
Not really. Basic income will force companies that hire unskilled workers to automate their business processes aggressively that in turn may lower prices for basic products. Rent control is much more prone to inefficient bureaucracy as the amount of regulation and border cases is higher.
chongli 13y ago
Costs will rise to the minimum that everyone is known to afford (or higher to deny the minimum income). How do you support such a claim? If I was a business and all my competitors did this, I would undercut them and make a killing! Basic income (or something similar) is an inevitable outcome of our development as a civilization. As technology continues to drive up productivity, the demand for labour falls. As the demand for labour falls, so does employment and consequently the demand for goods and services fall as well. It may be a very rough transition to get there but eventually we will have a society where robots make everything we need and we are forced to devise a system for allocating these products to the people.
- return0 13y ago
  Anecdotally, we have witnessed prices of products soaring in southern europe after the introduction of the euro and real estate bubbles due to cheap loans. Prices are adjusting back due to cuts now, only the profit margins are reduced. Similarly to how cartels work, free money just creates inflation.
- Aloisius 13y ago
  If everyone around you tripled their prices, you would make a killing, but then you'd quickly run out of product, have massive lines and frustrated customers. At some point you might even realize that if you raise your prices 2.5x, you'd probably make more money while still undercutting the competition. But you'd still have raised your prices.
- ck2 13y ago
  Really? Is that how things like healthcare costs in the USA work out? Competition solves all? Because we have unlimited hospitals and doctors and yet a Tylenol in the hospital is hundreds of dollars (Obamacare won't fix that either because now more people can pay hundreds). Internet, Cable, Cellphone service, all seem to rise to the most people can afford. Rent on apartment complexes near each other owned by different management companies magically stay within a several percent of each other. If you gave everyone $1000 a month, rent will magically rise to at least half that for even the smallest efficiency.
xutopia 13y ago
You're assuming there is no competition in the market. If you have a single grocer you'd be right but if there are more than one they will compete for their share of the market.
tocomment 13y ago
It sounds like you're assuming inflation. But this money won't be printed out of thin air, it will come from taxes and thus aggregate demand won't change. (Not sure if you were clear on that.)
- return0 13y ago
  Government is supposed to collect taxes and spend them to benefit the community as a whole. Free subsidies seem to reinforce individual consumerism, which in the end does not benefit the people.
  - lmm 13y ago
    It improves the economy (because the velocity of money is higher in the hands of consumers) and thereby benefits the people. The system as a whole is a form of progressive taxation, and so benefits people on average (because the marginal value of money is higher for the poor).
loceng 13y ago
You're right that this isn't the full approach needed.
lostInTheWoods3 13y ago
> Better to have rent control and other cost-of-living regulation. Rent control is another government program that messes with the natural order of things (aka the free market). It kills the incentive of developers to build affordable housing. Why build a building if you can't turn a profit? It keeps people from moving. Why move if your rent is 50% below market? Which in turn causes a shortage of new housing stock, which drives rental prices up.

by ck2 13y ago

rjtavares 13y ago

I feel the complete opposite. Rent/price controls never worked well (too many unintended consequences), it's time to try something new.

tomp 13y ago
You might be right, but your reasoning is not good. Only in a (local) minimum you can improve by choosing any direction; otherwise, you might go down as well as up. If rent/price controls are not working, it doesn't follow that basic income will improve the social inequality and reduce poverty.
- anExcitedBeast 13y ago
  It's stunning how much rhetoric is founded in the politician's syllogism.
- rjtavares 13y ago
  Think of it this way: we're near a local optimal point using the current policies, and we're not going to dramatically improve if we just keep using a gradient descent type algorithm. It's time to start fresh and aim for a global optimum instead of just the local one we've been living with for so long. Is it guaranteed that we'll find it? No. Is it worth it? In my opinion, yes.
bolder88 13y ago
There's trying something new, and there's complete idiocy. This is the latter. It's dangerous and very worrying that people are trying to repeat mistakes.

pliny 13y ago

>Costs will rise to the minimum that everyone is known to afford Isn't the point to have a minimum that everyone can afford? There's also an unstated (and wrong) assumption that however much food / apartments / transportation / etc is fixed and unchanging, rather than a variable that tracks the demand for these products - so presumably if you add a lot of money you will have to produce/spend however much energy it costs to extract rocks and wheat from the ground, but everything after that is mostly free since the infrastructure for turning rocks and wheat into iphones and pizza already exists.

return0 13y ago
> Isn't the point to have a minimum that everyone can afford? The right way to do that is to expand cities and build community housing. The correct assumption is that costs will rise above the minimum everyone can afford, keeping inequalities at bay.
- ck2 13y ago
  At least in the USA, "community housing" is a hellscape for most of its residents. I have no problem with giving people money so they can find a place to rent of their own from a landlord that will make profit. I just have a problem with landlords who then all raise their rents to the maximum amount they know people are going to get.
  - chii 13y ago
    but that is exactly what they will do, because when each landlord raises the rent slightly every month, via pure experimentation/intuition, they will reach a point where someone will still rent their house/apartment at the highest price they can ask for. The only way to drive rent/cost of housing down is to produce more houses/apartments.

vdaniuk 13y ago

Not really. Basic income will force companies that hire unskilled workers to automate their business processes aggressively that in turn may lower prices for basic products. Rent control is much more prone to inefficient bureaucracy as the amount of regulation and border cases is higher.

chongli 13y ago

Costs will rise to the minimum that everyone is known to afford (or higher to deny the minimum income). How do you support such a claim? If I was a business and all my competitors did this, I would undercut them and make a killing! Basic income (or something similar) is an inevitable outcome of our development as a civilization. As technology continues to drive up productivity, the demand for labour falls. As the demand for labour falls, so does employment and consequently the demand for goods and services fall as well. It may be a very rough transition to get there but eventually we will have a society where robots make everything we need and we are forced to devise a system for allocating these products to the people.

return0 13y ago
Anecdotally, we have witnessed prices of products soaring in southern europe after the introduction of the euro and real estate bubbles due to cheap loans. Prices are adjusting back due to cuts now, only the profit margins are reduced. Similarly to how cartels work, free money just creates inflation.
Aloisius 13y ago
If everyone around you tripled their prices, you would make a killing, but then you'd quickly run out of product, have massive lines and frustrated customers. At some point you might even realize that if you raise your prices 2.5x, you'd probably make more money while still undercutting the competition. But you'd still have raised your prices.
ck2 13y ago
Really? Is that how things like healthcare costs in the USA work out? Competition solves all? Because we have unlimited hospitals and doctors and yet a Tylenol in the hospital is hundreds of dollars (Obamacare won't fix that either because now more people can pay hundreds). Internet, Cable, Cellphone service, all seem to rise to the most people can afford. Rent on apartment complexes near each other owned by different management companies magically stay within a several percent of each other. If you gave everyone $1000 a month, rent will magically rise to at least half that for even the smallest efficiency.

xutopia 13y ago

You're assuming there is no competition in the market. If you have a single grocer you'd be right but if there are more than one they will compete for their share of the market.

tocomment 13y ago

It sounds like you're assuming inflation. But this money won't be printed out of thin air, it will come from taxes and thus aggregate demand won't change. (Not sure if you were clear on that.)

return0 13y ago
Government is supposed to collect taxes and spend them to benefit the community as a whole. Free subsidies seem to reinforce individual consumerism, which in the end does not benefit the people.
- lmm 13y ago
  It improves the economy (because the velocity of money is higher in the hands of consumers) and thereby benefits the people. The system as a whole is a form of progressive taxation, and so benefits people on average (because the marginal value of money is higher for the poor).

loceng 13y ago

You're right that this isn't the full approach needed.

lostInTheWoods3 13y ago

> Better to have rent control and other cost-of-living regulation. Rent control is another government program that messes with the natural order of things (aka the free market). It kills the incentive of developers to build affordable housing. Why build a building if you can't turn a profit? It keeps people from moving. Why move if your rent is 50% below market? Which in turn causes a shortage of new housing stock, which drives rental prices up.