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Comment by tomp | Hacker News Reader

> inflation is always a monetary phenomenon

I don't understand this reasoning. Look, only one of the following can be true: (1) everyone can buy basic necessities of life, in which case nobody is poor and we don't need UBI, or (2) not everyone can buy the basic necessities of life. If (2) is true and we introduce UBI, then there will be more demand for the basic necessities of life (coming from all the people who were unable to afford them before), which will in itself result in inflation (which, btw, doesn't measure the total supply of money, but overweights the basic necessities of life and underweights e.g. the stock market). If you combine that with the decreased motivation of people to work (resulting in lower supply), the resulting inflation will be massive.

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> Look, only one of the following can be true: (1) everyone can buy basic necessities of life, in which case nobody is poor and we don't need UBI, or (2) not everyone can buy the basic necessities of life.

We have discovered the source of the misunderstanding.

(2) was true, which means we need a UBI or welfare and we already have welfare, so (1) is now also true.

What we are discussing is replacing welfare with a UBI, which increases the incentive to find work over welfare because unlike welfare you don't lose the UBI when you get a job.

So you're saying that everyone who's promoting UBI is actually just doing it to incentivise poor people to work?

> So you're saying that everyone who's promoting UBI is actually just doing it to incentivise poor people to work?

What I'm saying is that is a primary difference between a UBI and the status quo. Giving money (or less efficient money-equivalent things) to poor people is not, because we already do that.

Prove that it will be "massive". How much? The numbers are important here. I am willing to accept that some prices will go up. But I don't think it's "massive" and some are claiming that there's runaway inflation in this scenario. There isn't.

We've also had a deflationary enviroment for quite some time. We need inflation.

Except when they're caught short during a natural disaster, Walmart is not supply-constrained. If they sell more they'll order more and factories will make more. The problem is (3) people don't always have the money to buy, which limits the size of that market.

Inflation happens when the market can't adjust fast enough or they hit real supply constraints (such as real estate in big cities).

This is not the way supply and demand work. If there is a short-term spike in demand, there is a temporary increase in price, which creates profits for suppliers. Increased profits draw more supply. In the medium to long run, price is driven to marginal cost (plus a market return on assets employed), and excess profit is eliminated (again, "excess" meaning that beyond market rates of risk adjusted asset returns).

The idea that food prices would dramatically increase is kind of strange, because it requires that we have no way to increase supply of food production, despite our demonstrable history of doing exactly that through productivity increases. We had less farmland in 2012 than ten years prior, but the value of output doubled during the same time, so supply is in no way constrained.

>> If you combine that with the decreased motivation of people to work (resulting in lower supply)

You won't get lower supply because of the automation, because that's the reason you are giving basic income in the first place.

John no longer needs to drive it's truck, the truck is gonna drive itself.

Then (presumably) costs will fall, stuff will get cheaper (free-ish?), UBI won't be needed.

Unless the owner of the truck keeps whatever he paid the driver..

Competition?

Giving people money is redistribution.

We are spending less money on yachts and more money on food.

The Yacht factories get torn down, and replaced with food factories.

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