If everyone gets an equal raise (whatever the UBI is), wouldn’t the entire market simply adjust to price that in, leaving everyone in the same relative position?
I have not heard a convincing argument the other way, would really appreciate a link to one if you find one.
Naturally, implementing UBI would require the entire financial sector to adjust. We would likely need to significantly raise interest rates (Which, IMHO would be great) and have a period to manage inflation.
But beside the initial recalibration phase, I have not seen any convincing arguments for why prices on non-positional goods would increase. Even with the increase interest rates, we would likely see that prices on positional goods / assets would stabilize as dead-cheap capital is not available.
Spending power with no real alternatives (i.e. in monopoly/oligopoly conditions) isn't actually very useful IMO. It's mostly just more guaranteed money for the current monopoly/oligopoly -- you're just guaranteeing revenue streams.
In a pre-UBI world, you can at least assume that companies can't completely shaft employees because then no one can buy anything. If the government steps in to make sure people can still buy stuff, that has almost the opposite effect.
I think walmart & it's treatment of employees (with employees reportedly needing to ALSO depend on food stamps) as a perfect example of the system kind of working against itself. The fix for that problem is within our reach right now, but it's just unpopular for the usual reasons with the people with the ability to make the fix.
> Naturally, implementing UBI would require the entire financial sector to adjust. We would likely need to significantly raise interest rates (Which, IMHO would be great) and have a period to manage inflation. > > But beside the initial recalibration phase, I have not seen any convincing arguments for why prices on non-positional goods would increase. Even with the increase interest rates, we would likely see that prices on positional goods / assets would stabilize as dead-cheap capital is not available.
OK, so then how about we do this without the UBI bit and just raise interest rates? I'm not seeing where UBI actually has a material benefit here, and there are other real problems with raising interest rates, because losing access to cheap credit also hurts those at the bottom of the economy (arguably even more) -- the solution there is political, likely (i.e. lower income borrowers could somehow be advantaged, but then we have shades of 2008 all over again if excessive greed/moral hazard sets in).
In my first comment I referred the Scandinavian countries. Read up on the flexicurity model of Denmark.
> OK, so then how about we do this without the UBI bit and just raise interest rates?
You cannot within the confines of the responsibility of the monetary systems (Eg. The FED). What you are seeing now is that the FED "prints" money that accumulate at the top because the fiscal powers (Eg. the government) are p*sies who do not dare to redistribute - this is called the velocity of money. And there is a higher velocity of money when they are in the hands of the people than in the pockets of the rich.
Regardless, proposing UBI on American forums is generally like setting fire to a wasp nest. Americans have been conditioned to support the oligarchy in quite some decades now.
Denmark does not have UBI. They "just" have a good welfare system, good income redistribution policies, and strong labor policy.
They do not make the case for UBI, they make the opposite case -- that the problems of present can be solved without UBI.
> You cannot within the confines of the responsibility of the monetary systems (Eg. The FED). What you are seeing now is that the FED "prints" money that accumulate at the top because the fiscal powers (Eg. the government) are psies who do not dare to redistribute - this is called the velocity of money. And there is a higher velocity of money when they are in the hands of the people than in the pockets of the rich.
You can, and they have. In fact, much of the US wants the FED to lower rates right now, but they have not.
I agree with you that people lack the wherewithal to redistribute more effectively, or at least as a stated goal.
Trying to make sure I'm hitting the points you're noting here but the FED is not "printing" tons of money right now, they have tightened monetary policy, especially relative to the last ~6 years.
It's unclear if the use of "velocity of money" is right here -- I think you're referring to propensity to spend, which would increase velocity of money. Yes, poor people spend more of their income than rich people, and that is stimulative to the economy, and so arguably policies should be crafted that encourage productive work for pay rather than rent seeking or pure accumulation of capital. I'm not sure if that's your point, but that's what I take away from it.
> Regardless, proposing UBI on American forums is generally like setting fire to a wasp nest. Americans have been conditioned to support the oligarchy in quite some decades now.
Welp, that's kind of an unproductive way to end, but sure. Conditioned or not (I'm American), I'm still looking for a good argument for UBI and haven't found one.
Good arguments for better redistribution are easy to make, good argument for higher taxes are good to make, good arguments for better social safety nets are easy to make -- but still can't really find one for UBI specifically above the other options.
There are a lot of good arguments: stability of monetary systems, democratized marketeconomy, equality, etc.
Just like with other things there is an infinite number of solutions for a given problem.
I stick to Occams razor.
Note, I have no position on whether or not it would work in this way, but that is my understanding of the position of the those in favor of it.
It intuitively makes sense, and like most economic reasoning it's horribly simple. But economics is comprised to two parts: theory, and practice.
Practice always trumps theory. If practice defies your theory, it doesn't mean that the market is broken, or that there's over-regulation, or that your theory will eventually come true. It means your theory is just wrong. All economic theory are predicated on thousands or millions of underlying assumptions. If even just a few of those are not true, or aren't true in the way you think they are, then the theory can be wrong while simultaneously being logically perfect.
When it comes to the arguments against minimum wage, the theory is just wrong. Rising minimum wages do help people making minimum wage. If it does raise the COL, it's slowly, and not in the same degree as the minimum wage shift. In addition, a flat minimum wage still results in a rising COL. You can't simply pin the COL like that.
So knowing what we know about minimum wage, I think it's arrogant to claim the UBI would just result in a rising COL to eat up all the UBI.
UBI (if people trust that it will continue) will encourage people moving out of the cities as they don't need to be close to jobs.
I would hypotheses that this would 1) create new more local economies (where people can earn money) and 2) reduce pressure on the hyper metropols.
I would even hypothesize that because of this, it would have an adverse effect on the cost of living.
Butnthese a theories.
Obviously there are essentials that can effectively be at any price and you have to pay them if you can afford them, but everything else is fair game.
On the contrary, we would likely see non positional goods become cheaper as the market is alive and companies can continue to produce at scale.
Edit- although even that is an oversimplification because I think in some cases it might encourage people to make more money. I know a handful of people who intentionally limit their income because of gaps in means testing. eg there's a window where you start making too much to take advantage of some govt social services, but not enough to pay for those services yourself (healthcare is a big one)
Are you seriously proposing that we need people who are paid below subsistence?
Or was this more an argument for ubi?
Prices are as high as companies can get away with charging, and they can collude to get these prices higher if need be, or lie about a product, or spend decades as an industry convincing you that you need something you don't.
If the market worked as economists always scold us that it does when they want less socialism, it wouldn't matter a lick what someone's salary is. That doesn't affect supply and demand, after all.