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Comment by JoshTriplett | Hacker News Reader

1) The "U" in "UBI" means that working another job does not stop you from receiving UBI, which means it may still make sense to do so if you want more income. UBI is supposed to be enough to live on, not enough to have everything you might want; there are at least preliminary results that show UBI doesn't stop people from working.

2) UBI will tend to mean less people willing to work low-paying unpleasant jobs, which means employers will have to pay more for those jobs. People who would only take such jobs because they have to, but don't actually want those jobs, will no longer need to take them.

3) Because of (2), more research effort and investment will go into automating and otherwise reducing the number of humans required for unpleasant jobs. And with UBI, that becomes an unmitigated good, with no worry about putting people out of work.

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You can already see this in countries with less extreme difference in the society's economy, e.g. Scandinavian countries.

They do not have UBI (yet) but have generous benefits for unemployment, sick pay, disabilities and pseudo minimum pay so that most people earn a decent income.

I am not an economist or sociologist but the economy still works, most people still work and it has lead to 2) and 3). There is less interest in the less desirable jobs so their salary has subsequently increased. And there is heavy investment in automation, in farms, in manufacturing, in shops, etc.

It is not perfect though. Maybe UBI will be even better.

It's a gamble - either 2 will lead to 3, or 2 will lead to input and output prices of goods being raised. Probably some of both.

Hopefully more of 3 than the alternative, because the alternative scenario of prices rising has negative consequences in the form of economic deadweight loss even if UBI pays for the price increases.

2) and 3) are very simplistic predictions and we don’t have any idea if it has a higher chance to go that way.

For instance an effect of UBI would be disappearance of bullshit jobs. A lot of job won’t see wages increase and will just be automated/optimized away instead.

OTOH it could mean getting rid of minimum salary, which would lower the cost for high demand/vocational low paying work for instance (dog walking, cafe staff, event staff etc.)

All in all I’m not sure it’s as simple as saying “people have money without working = prices go up”

> which means employers will have to pay more for those jobs

Yeah no kidding so there will be hyperinflation. Making the net effect of UBI almost zilch. What use is $1000 bucks when toilet paper is $100 a roll.

> 3) Because of (2), more research effort and investment will go into automating and otherwise reducing the number of humans required for unpleasant jobs. And with UBI, that becomes an unmitigated good, with no worry about putting people out of work.

So there will be a giant underclass of people who live on nothing but UBI (UBIers) while a small minority of elite researchers in corporate labs come up with more ways to keep the UBIers from earning their own living. Great. And who buys all the stuff? Is the "stuff" just for the gilded class smart enough to work? Or do we just give the UBIers a raise every now and then to "stimulate" the economy? How is this not communism?

There would still be markets and competition. There would be some baseline price increase when people stop being exploited. At a certain point equilibrium will be met and someone will come along with cheaper toilet paper.

The difference will be there are more consumers in a safe position to make purchasing decisions.

You don't get it. The cost of labor would rise. You would have to pay paper factory workers more when they could just not work at all. The truck driver also needs to get paid more. The shelf stocker also needs to get paid more. The security guard needs to get paid more. Eventually you get $100 toilet rolls.

> At a certain point equilibrium will be met and someone will come along with cheaper toilet paper.

Yes, from overseas, where they have no UBI. That's one of most insidious parts of all of this.

What amount of UBI gets us to $100 toilet rolls?

Consider wages 10xing and taxes becoming over 50% and it's not hard to see how firms would have to charge more money for their products just to remain in business.

UBI is central planning of the economy, where the government decides the market value of you simply existing is worth $1000 a month or whatever. Whenever the government thinks they are smart enough to set prices for things, historically people end up dying of hunger. The value of the dollar will collapse unless other countries also adopt UBI, but of course that wouldn't be possible since UBI in America would hinge on cheap overseas labor. Only WE are allowed to be lazy bums! At some point the dollar would disconnect from intrinsic value and no longer represent money, because people are being given it simply for existing. One day we we would show up to the Chinese or Mexican port asking for a ship full of All The Things We Need To Survive and they throw us away because they don't want our monopoly money. That's when the music stops and the real panic begins.

Competitive markets will probably be fine. There seems to be enough automation in manufacturing businesses driving the prices down.

How do you deal with monopoly businesses? What prevents them from rising prices to pocket sudden excess of UBI money?

Abuse of a dominant position in a market is already forbidden in many countries.

I guess that those monopolies would be split to ensure that the market is competitive.

First, some monopolies are monopolies forever - network and utility monopolies.

Second, you still have to deal with aggregate monopolies - ie when one societal class has monopoly pricing power over another. You cannot break up these as they are already broken up.

The prime example is real estate and land market. Landlords have monopolistic pricing power over tenants. Price for rent is not governed by landlord's costs but by what the tenant can bear.

If you inject UBI to the economy then tenants can suddenly bear more and landlords can and will rise rent prices convincing others that their cost increased so it's justified.

It's not the inflation of produced goods which would kill VAT or similarly funded UBI but rent and monopoly good inflation which by definition can't be competed away.

Therefore before you can implement UBI you have to deal with monopolies first.

Hint1: Fix it by implementing monopoly based taxes such as Land Value Tax and natural resource auctions. You will raise more than you need and will also abolish labor taxes stiffling productivity.

Hint2: Georgists (economical movement after guy named Henry George in 19th century - who coined the term "Progressive") were discussing UBI ideas already pretty extensively and understood these implications. They realized the monopoly problem and made it central to their teaching. Only instead of UBI they called it a Citizen's Dividend.

> First, some monopolies are monopolies forever - network and utility monopolies.

Could you expand on this a bit more? Network and utility companies can clearly be broken up. The actual infra can be owned by municipalities.

> Price for rent is not governed by landlord's costs but by what the tenant can bear.

Citation needed. There is competition amongst landlords as long as housing supply is not severely limited. If supply is limited, that is a failing of zoning policy. The flat I just started renting a few months ago was priced on supply-and-demand, not on how much I earn (otherwise the landlord did a pretty terrible job of gouging me because relative to my income I got a good deal). You can look to Japan as a country where zoning policy isn't totally nuts like it is in parts of the US.

We are dealing with monopolies, the current administration notwithstanding. Andrew Yang in particular has a number of thoughts on these issue:

https://www.yang2020.com/blog/regulating-technology-firms-in... https://www.yang2020.com/policies/net-neutrality/ https://www.yang2020.com/policies/zoning/ https://www.yang2020.com/policies/financial-transaction-tax/

You can have competition among landlords but you can't provide the key ingredient of which there is fixed supply - land. No more land + people moving in = price only goes up.

> The flat I just started renting a few months ago was priced on supply-and-demand, not on how much I earn (otherwise the landlord did a pretty terrible job of gouging me because relative to my income I got a good deal).

A single example doesn't prove or disprove anything. You haven't mentioned cases for example of many others who are living on level of bare sustainability in the same city. You cannot apply micro analysis to understand this problem by citing individual cases. You need macro analysis for this.

Zoning is not enough of a solution because it doesn't deal with the underlying problem - city land supply.

Maybe tech workers will no longer need to live in the cities after covid crisis. That still doesn't make it a casr for the rest of the society and cannot serve as a basis for ignoring the issue.

Cherry-picking only some monopolies which are currently under scrutiny doesn't fix the problem either. Land monopoly is the biggest one out there and is not mentioned. Fixing the others without considering this one is merely applying a bandaid on a blister while the patient's artery is bleeding.

The nice thing about land is that modern technology allows you to stick more than one person on a piece of it.

The land supply is finite. Housing supply is not.

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