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Comment by whitemary | Hacker News Reader

Close, but the most efficient way to help people is to provide the services they need without depending on the private sector to deliver them. For example, if cash benefits are universally increased by $500, low-end rents will also increase by approximately that same amount, like clock work. UBI would be a catastrophe for many reasons, but this is the most straightforward of them.

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That argument about UBI may be true ceteris paribus (all else being equal), though even then it may not. The assumption seems to be that all other money flows and incomes remain the same and demand grows while supply remains the same. UBI (there are many proposals/variants) would likely require taxes that will make it basically zero beyond a certain level of income and negative further up (increase in tax on upper brackets). UBI will also incentivize some people to stop working and rely on UBI, so net effects won’t be a uniform increase in buying power. Rents are not uniform geographically and area usually related to how desirable a place is and how much work there is in the areas. With UBI consumers can choose to move away from jobs centers.

Sounds like a recipe for increase in demand for goods/services, coupled with a simultaneous reduction in productivity. Won't this just make the country as a whole poorer?

This redistribution already happens with progressive income tax brackets and tax refunds that don’t depend on amounts paid in. This is US tax code today. Might as well have a better safety net in case things go south.

> simultaneous reduction in productivity

Hasn't productivity been on the rise the past X years? Shouldn't we have a little slack by this point?

And maybe some profit sharing too.

First-order, yes: Redistributive policies don't have the sum of the country's wealth as their primary optimization objective. Arguably, their goal is closer (but not quite) to the sum of national utility, which follows from diminishing marginal utility.

That being said, there are also claimed and real second-order effects of policies whose first-order economic effect is deadweight-loss. The entirety of government fits this description! To use the most trite and least controversial example, confiscating resources to build roads is redistribution from heavier taxpayers to heavier road users (incl downstream beneficiaries), but the second-order effects of a functional transportation are enough that we don't consider it to "make the country as a whole poorer"

Like I said, this is only the most straightforward problem with UBI. The most damning problem with UBI is that it's still capitalism, i.e. the capitalists will remain in control. As a result, UBI recipients, like the poor in developed countries today, will remain what Karl Marx called a "reserve army of labor." The UBI will always fall short of what is necessary for a healthy or dignified existence. This instrumentalized suffering, just like the permanent unemployed class in the US today, is a crucial component of industrial capitalism. Effectively, under UBI, nothing will fundamentally change.

I do support UBI because it will probably prevent some number of deaths of despair, but capitalists will never let UBI happen for this reason. The reserve army of labor must be trimmed and maintained to prevent a worker uprising, which is the primary function of the opioid crisis.

Sadly, communism worked out even worse. When communists realized that NEP worked too well and peasants started to get out of poverty, they instituted terror to “prune” the population and “remind them why they need” those said communists (a reference to V for Vendetta movie line). Just the best known example, there were also 1920s razkulachivanie and such, https://en.m.wikipedia.org/wiki/Great_Purge

Communism != Socialism

Greed, seemingly fundamental human nature, causes corruption and suffering. I don't think we've yet developed a society or tool that is immune from such issues, though competition among providers does seem to help.

Your narration is so nonsensical and unserious that even the link you yourself shared undermines it, and of course it does. Wikipedia is a well-known liberal anti-communist institution, but at least they do some diligence.

For your housing example, we just need to produce more housing - but so many people are opposed to it. It's not that the private sector doesn't want to, obviously, they just aren't allowed to. You're making a good argument that we should allow for more housing to be built, but I don't see from your argument why it's better for that to be the government.

I can't think of many examples where the government does a better job producing things than the private sector. Even in countries with, for example, socialized medicine, and assuming you think that works well, the services (I think) are still provided by private companies. Maybe the VA Hospitals in the US - though I'm not sure that's an example of the government doing better or not.

> For your housing example, we just need to produce more housing

Existing property capital owners have a vested interest in not building more housing. Building more housing will negatively impact their profits. Existing property capital owners also have far more power than the petty bourgeoise investors seeking to "build more." This conflict of "NIMBYs vs YIMBYs" exemplifies a core contradiction of capitalism that Karl Marx articulated 150 years ago, except "NIMBYs" are not individual homeowners; they are rather the idols of the petty bourgeoise "YIMBYs." See: contradiction.

Objectively, the working class has no place in this conflict and will not profit from building more housing. Of course we should build more and better housing for working people, but that is not what the petty bourgeoise investors actually want; they want to build more housing for profit. Big difference.

No they have incentive for others not to build, but for them to build.

I’ve always thought this same thing about UBI. Like that episode of Futurama where every citizen gets a $300 bill from the government and in the background of the scene right after they announce it, you see the 99 cent store sign being changed to the $299.99 store.

https://youtu.be/X_HyY-8dQJA

This ignores the effects of increasing marginal income or marginal sales taxes, which can be adjusted to the desired level of wealth redistribution.

Income tax and sales tax are both regressive taxes. In other words, they both promote inequality by favoring the capitalist class.

Marginal income and marginal sales taxes are not regressive, they are progressive.

If low-end rents double, building housing looks a lot more attractive.

Except current landlords have local governments in a stranglehold and you can't build any new housing at all.

That’s not the entire picture -Builder’s Remedy apperently is working: “ For example, after Santa Monica failed to pass a compliant housing development plan, developers employed the builder's remedy to move forward with the construction of approximately 4,000 new housing units spread across 12 new development sites.” https://en.m.wikipedia.org/wiki/Builder%27s_remedy

That’s nearly an 8.8% increase from the current 45,487 units total (including all houses) https://scag.ca.gov/sites/main/files/file-attachments/santa-...

It’s “working” insofar as it represents a giveaway to value-extracting development interests, nearly all of which seek to grow the permanent renter class.

It remains to be seen whether that will reduce housing costs.

Santa Monica is one of the most desirable areas in greater Los Angeles. I doubt the demand for it is that shallow. However, this helps more people (who are likely well off) to afford it and reduce pressures elsewhere.

If your goal is a paid off place to live, SM isn’t the best choice unless you are either high income already or are set to receive a windfall somehow.

Low end rents are already really high and subsidies set a price floor.

A two bedroom hovel in my city nets about $1200 section 8 voucher. A two bedroom in a nice development in the burbs is about $1300, and includes parking, pool and gym.

Landlords are like oil people, it’s all about extractive value. You want to pump the most cash possible with the minimum overhead possible. Building housing gets attractive only when the government subsidizes construction through low rates and rapid tax depreciation. A relative was the lead on development of a $18M hotel. He probably has $750k in. Most of the money is made with accelerated depreciation. The hotel itself is an afterthought, you couldn’t build it without the backend tax subsidy.

From what I've read, low income housing is actually more profitable for landlords.

I don't think you understand what the word efficient means because what you said about it is certainly untrue. The private sector will almost always deliver a better result as long as you mitigate market power abuse. You are basically saying it is more efficient to deliver services through a public system because said public system failed at mitigating market power. In the rent example a lot of that market power is even self inflicted by said public sector via onerous zoning and permitting regulations that make development only plausible via large, oligopolistic systems.

You assume a free market economy that does not exist. Rent is a good example because regulation is driving it small land lords in favor of a few large corporate land lords that collude on rent using common algorithmic models.

Similarly, you assume a public sector ability to identify, create, operate, and obsolete services that does not exist.

Mostly the issue with being a small landlord lies in how the landlord-tenant laws are written to treat you like a large corporate landlord. You have the same legal obligation to go through very lengthy eviction processes and to be very verbose about criteria but you can’t amortize the risk of a bad tenant over even tens of units like a corporation can. If you get one bad tenant they can cost you more than you get from them in rent, and they can destroy the rental house before you get to the eviction hearing.

I’ve had more than one conversation with my wife about just keeping the house empty instead while we’re gone, but I still think I have a moral obligation to rent to someone if I can.

I think short term rental lowers that risk by having more renters but none under contract. Air b&b is a terrible thing but also the local maximum for individuals

No, I assume the free market that does exist, i.e. the one where the outcome of competition is monopoly/oligopoly. On the way to oligopoly you get all these sweet, sweet benefits from competition, so one of the major goals of government has to be breaking up the ologipolists/monopolists or at least regulating them in such a way that they can't exercise market power (i.e. mitigating market power) so we can keep competition fierce and keep benefiting from said fierce competition. Doing the above has mostly been an utter failure in America and Canada since roughly the 1970's.

It's interesting that I said government self inflicted a lot of this in the rent space by over-regulating and you seem to think this is an example of the free market not working rather than the government breaking the market.

In my country there used to be a government-owned airline with a monopoly. Tickets were so expensive that only the wealthy could afford them (yet somehow the airline still lost money). Then the market was thankfully deregulated. Competition substantially lowered the prices, and gave people the freedom to choose which airline to fly on.

The bigger problem seems to be private homeowners colluding to increase their house prices by voting to prevent development in their neighborhoods.

> The private sector will almost always deliver a better result as you mitigate market power abuse.

Yeah, and feathers fall at the same speed as baseballs if you mitigate friction.

"too much material wealth is captured by rent-seeking middlemen controlling access to location" is a problem with your property regime.

yeah, by extension, it is a problem with any action you take under that property regime. but don't let that prevent you from talking about what the solutions to problems must be.

this is only true if everybody needs the same services, thus everyone uses UBI for the same thing. In the case of rent this would point to a systemic issue for which cash payments is not going to correct it, but there are a lot of varied needs for which UBI far more efficient than a government program addressing it directly.

It's not so much UBI as a supply issue with housing at play regardless of UBI.

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