3 ms·

> That is, if say, $500/week was the basic income level, wouldn't the price of everything rise quickly to subsume that $500 almost immediately, as it moves the

> That is, if say, $500/week was the basic income level, wouldn't the price of everything rise quickly to subsume that $500 almost immediately, as it moves the lower-bound from $0 to $500? How would that happen? Alice's and Bob's grocery stores still have to compete for customers.

sliverstorm 12y ago
Sure, but Alice's and Bob's grocery stores expenses have risen, right? Because taxes have risen to support BI.
- vidarh 12y ago
  But their demand has risen, which may help them secure better deals with suppliers. It is not automatically a given that their overall costs would increase. Also, even if they do raise prices, the price rise will be averaged over all their customers, most of whom will be spending far more than whatever the added spend from basic income would be, so will alter the degree of redistribution and the cost, not in any way eviscerate the benefit to those it is meant to help.
- mikepurvis 12y ago
  It's far from clear exactly how much of a tax rise would be necessary. Present social assistance programs are astoundingly wasteful and could be by and large replaced with a simple BI scheme. Of course, there might be a bunch of social workers, bureaucrats, administrators, and other folks living on BI as their primary income for a while, but part of the point of the system is to take away the stigma of that.
vidarh 12y ago
The assumption for that kind of scenario is that supply is static, which is clearly not the case for a lot of things. If supply is entirely static, then injecting $500 extra demand might drive the combined price of the supply up $500.. Of course it misses the elasticity of the supply, but also that the supply is not exclusively paid by people for whom $500 makes up all that large part of their demand, so even if there is a price rise, the primary effect of that price rise will "just" be to alter the degree of redistribution (making the $500 worth a bit less to the recipient, and make providing it cost a bit more to the people eventually footing the bill).

sliverstorm 12y ago

Sure, but Alice's and Bob's grocery stores expenses have risen, right? Because taxes have risen to support BI.

vidarh 12y ago
But their demand has risen, which may help them secure better deals with suppliers. It is not automatically a given that their overall costs would increase. Also, even if they do raise prices, the price rise will be averaged over all their customers, most of whom will be spending far more than whatever the added spend from basic income would be, so will alter the degree of redistribution and the cost, not in any way eviscerate the benefit to those it is meant to help.
mikepurvis 12y ago
It's far from clear exactly how much of a tax rise would be necessary. Present social assistance programs are astoundingly wasteful and could be by and large replaced with a simple BI scheme. Of course, there might be a bunch of social workers, bureaucrats, administrators, and other folks living on BI as their primary income for a while, but part of the point of the system is to take away the stigma of that.

vidarh 12y ago

The assumption for that kind of scenario is that supply is static, which is clearly not the case for a lot of things. If supply is entirely static, then injecting $500 extra demand might drive the combined price of the supply up $500.. Of course it misses the elasticity of the supply, but also that the supply is not exclusively paid by people for whom $500 makes up all that large part of their demand, so even if there is a price rise, the primary effect of that price rise will "just" be to alter the degree of redistribution (making the $500 worth a bit less to the recipient, and make providing it cost a bit more to the people eventually footing the bill).