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Comment by ryandrake | Hacker News Reader

Most participants in mature markets know approximately what percentage of the public's wallet they can grab. Obviously it's not 100% for any of them, but they all know what they can get away with.

My guess is that if UBI added $1,000/mo to everyone's income, landlords would respond by raising rent by about $400-$500 or so, grocery stores would raise their prices by a percentage of that new income, and so on for all businesses, until all $1,000 was soaked up and the public is no better off than they were before.

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> My guess is that if UBI added $1,000/mo to everyone's income

Aside from whether the prediction is realistic under this assumption, UBI under any realistic financing scheme doesn't do that. It replaces (and potentially increases the net benefit of) means-tested welfare at the bottom end of the income distribution and spreads the clawback from a set of relatively sharp cliffs that occur between working poor and middle income levels to a much more gradual effective trail-off over nearly the whole income distribution as part of progressive income taxation.

Has anyone considered something like UBI but instead of income make it UBG--Universal Basic Goods.

The idea would be that when automation advances to the point that something can be made with very little labor the government would build automated factories to produce that thing and make the output available for free.

There would still be room for private companies to make those things too. They could make fancier or higher end models for those people who want something more than the free models from the government.

And who would purchase those, and with what?

The only scenario where UBI/UGI would make sense is one where AI can replace most/all humans at any job they could have. At that point it makes no sense for there to be a economic hierarchy at all.

No, UBI makes sense right now (the exact level that makes sense changes over time), it is a lower-bureaucracy, lower perverse-incentives alternative to means-tested welfare (and, possibly, also minimum wages) as a means of providing a support floor (its not really a flat addition because any means of financing it will provide some form of clawback, and if done through the progressive income tax, it becomes redistributiion that compresses the pre-benefit-and-supporting-tax income distribution.

UBG is a completely different story, though.

The way it does all these things is by adding $1,000/mo to everyone's income. That is what UBI is. Whether you choose to cut means-tested welfare or increase progressive taxation alongside it is up to you.

- Are you assuming that all these people also have employment income on top of their UBI? Or only UBI? The premise upthread seemed to be UBI in response to mass unemployment caused by automation. Are you sure renters will still have more money in their pockets, even with UBI?

- If they don't have employment, and incomes are $0, then in the absence of UBI, would rent also drop to $0? If not, then I think we're better off with UBI.

- These higher prices for rent and groceries seem like strong incentives for competition. Maybe we can't expect that in NIMBY San Francisco, but without a jobs market, the only attraction to live there is the weather. Why not move somewhere cheaper?

> Are you assuming that all these people also have employment income on top of their UBI

Any system with UBI requires other sources of income to exist (thr absence of such sources means that nothing of value is being produced for exchange, in which case any money printed is basically monopoly money and how you distribute it doesn't matter because it isn't doing anything), and a major premise of UBI has always been that it enables those transitionally deprived of income more freedom to reconfigure their lives and ramp up these sources of income (and does so with less redundant—with the progressive tax system—bureaucratic overhead) than do means- and behavior-tested welfare programs.

The particular mix of available other forms of income between wage labor, independent business, or capital don’t really change the basic arguments.

Well, my question implies that being a landlord would be a remaining source of income, for starters. But if that landlord also owns the automated farms and factories producing consumer goods without labor, then the people they're renting to really might not have any other income. At any rate, where a UBI is substituting for employment income that someone used to earn, but is no longer able to, then I don't think the renter gains purchasing power to pay more for rent. (They do gain free time though).

Yes, if you have a single capital owner that owns all productive assets, that's a serious problem that UBI won't solve.

The idea of adopting a downward-redistributive policy like UBI is to do it before that occurs.

One market where we see this effect, I think, is university education.

Access to cheap loans has lead to an explosion in costs.

I'm not so sure about that. A few years ago I looked for historical university cost data. I didn't find much, but when I graphed what I did find I did not see any noticeable change in the rate costs grew between before the availability of cheap loans and after their availability.

Beat me to it and you're absolutely right. There's no need to guess what's going to happen here, we've already seen what happens elsewhere when the government injects a lot of money.

This seems reductive. Not all goods have inelastic demand and no substitutes or alternatives. Not every industry is supply limited. Said differently, not everything is immune to competition.

If cost of housing goes up, building and moving become more attractive by comparison. Instead of saving 500/mo by commuting, now you might save $1000 by relocating.

Rate limit edit: I said commuting, not going going to live in some random place.

> If cost of housing goes up, building and moving become more attractive by comparison.

Do you think "just move away from the city centers (where all the jobs that you used to need are) to random middle-of-nowhere wherever-we-have-space" will hold forever, and won't trail off once the initial phenomenon of everyone dispersing is finished?

Very obviously correct^

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