Comment by giantg2 | Hacker News Reader

Comment by giantg2 | Hacker News Reader

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That's something that most programs don't even try to explain, and something ive wondered about - how does the money affect competition, both for goods/services and labor?

If you're affecting very small percentages of the population, the impacts seem minor. We've seen this with analysis on raising minimum wage to about $10/hr. Most people make over that amount (or work in excluded roles), so the impact is small. Raise it too much too quickly, and some industries experience issues due to costs passed on in their products/services, and inflation can become detrimental to the people at the bottom.

I wonder how this sort of thing will work out with something on a nearly universal scale - Social Security. To keep up with inflation, we need higher payouts. To keep the program solved, we need more revenue. This can be achieved with more workers, but relies on ever expanding population to cover the prior generation. Or it can be achieved with higher earning workers, which generally requires higher prices which potentially drives inflation, or though higher consumption (not very competitive on the global market due to cost of living, so not likely). Or we can raise the payroll taxes to cover the payouts.

Anything besides the higher output/consumption is likely to result in higher costs to consumers and drive inflation. More money being in more people's pockets also means more competition for constrained resources, also driving inflation.

UBI creates inflation. I think anyone trying to deny that amounts to denying it because they really want UBI, and so they need it to not have that bad effect, but it does. You can't pour money into an economy without a productivity offset without inflating it.

The theory is that productivity increases will in fact offset it. One way to prevent an increase in money causing inflation is to correspondingly increase the value generated by the economy. Some economic theories, including the current dominant mainstream one, would suggest that if you have that sort of productivity increase you need to increase the money supply to avoid negative impacts brought on by deflation.

One of my several major problems with the idea is I see almost no one trying to figure out how to actually bind the productivity increases together with UBI. Even if I stipulate for the sake of argument a perfectly functioning UBI system working exactly as the advocates propose, as gracious as I can possibly be, it is still a fragile system. Droughts, wars, asteroid strikes, volcanos, bad crop years, supply chain disruptions, normal economic variations including recessions, these things all happen. The productivity excess will shrink at times, but, no politician under any political governing scheme could reduce the payouts, and after long enough on UBI, the hypothetical paradise it produces full of wonderful artists and musicians and programmers creating text editors rather than CRUD apps and people just enjoying life also produces an economy full of people who can't help get the economy back on its feet when there is a disruption... but they're still there with their hands out.

> an economy full of people who can't help get the economy back on its feet

Because they're infantile, used to picnicking and playing their guitars, and devoid of industrial skills like lathe operating or CRUD app development?

> You can't pour money into an economy without a productivity offset without inflating it.

Isn't this even more egregious in the case of bank bailouts? Shouldn't that money have evaporated?

>no one trying to figure out how to actually bind the productivity increases together with UBI

Because we not only figured that out, but already implemented this several times in practice. Productivity decreasing until there is nothing to eat, and then people dies from starvation (for some reasons they can't live without food)

I'll be honest. You had me in the first half, but then: "... the hypothetical paradise it produces full of wonderful artists and musicians and programmers creating text editors rather than CRUD apps ..."

Who willingly endeavors to write text editors in 2024 when acme(4) exists?

I jest. More seriously though, if the measure of one's value to society is in their ability to crank out CRUD apps, I'm appalled. I want more dishwashers, more plumbers, more framers, more joiners, more cooks, more babysitters, more stonemasons, and the only way any of that kind of hard labor is sustainable is if there's a cushion to fall back on to recuperate. Bodies break. They break more catastrophically when the damage is continued and sustained over time.

I want my girlfriend to feel free to take on domestic work full-time with the knowledge that, no matter what, she'll be paid for it and that her domestic labor contributions, as informal as they are, are valued monetarily without my having to make up the balance. Likewise, I want that there in case I myself want to take up those domestic responsibilities for a while.

These are two cohorts that literally cement the foundation of society, let alone our trade system, not a cavalcade of keyboard cowboys wrangling Ruby on Rails. I want UBI for them because, without them, the entire project literally crumbles.

The UBI problem, and the problem in your post, is you're engineering starting from what you want, and then assuming that there must be a solution to get there.

You have to start with what you have and build from there.

This is a subtle point and it may take some meditation and thought, possibly ever over some months or years, to understand what I mean. But if you are an engineer, life will hand you opportunities to see what I mean. You can't write down a list of requirements, then assume that exact solution exists, and then burn for it full speed. You must always start with what you actually have and the options you actually have.

The thing that makes perfect sense to me, but you would consider ironic, is that while you may accuse me of this and that, lack of imagination, lack of dreaming, lack of belief, whatever, my way builds better worlds and your way builds failures. I don't follow this path because I don't also see the temptation to build dreamscapes and live in them, I follow this path because it's the one that works.

I am, in fact, not an engineer; I trained to be an actuary. (Though, I guess if one squints enough, the operations research electives look like industrial and systems engineering.)

I consider UBI less an engineering exercise with requirements that feed into the engineering method and more one of ratemaking and claim severity against an entire trade system. My only goal is to put a dollar amount on a loss event (and get some quantification of how many loss events occur over time while we're not looking). What anyone does with that is up to them.

Use of the second person was certainly a choice.

>how does the money affect competition, both for goods/services and labor?

We have the entire 20th century, when many countries tried exactly that. Production is decreasing, labor participation decreasing, good availability decreasing. Mass famine, millions of deaths from starvation. Governments have to decree force labor to overcome famine and totalitarian oppression to avoid revolutions and protect the progressive achievements of general welfare. Last part centralizes authority even more and gives the government tools to remain in power no matter what.

>Or we can raise the payroll taxes to cover the payouts.

This is exactly where the spiral of death begins. Hieger taxation (when there is welfare) - less work incentives - fewer workers - less goods availability - you need bigger welfare share, so even hieger taxes. And so on until people have literally nothing to eat. Not once or twice, always.

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