That is a very strong statement that I don't think can be claimed at this point.

In my opinion, I feel things will simply shift under UBI. People will receive UBI, but then other things, like rent, food, etc. will all just magically get more expensive.

I cannot see any implementation of UBI working any better than things now unless the predatory nature of those in power is put in check.

Consider a very smart and very poor person. You walk up to him and say "Hey, want 1200 dollars?" Do you think he'll say "No, that would increase my dependence on the rich." I don't.

I just can't conceive of the mechanism. Slum lords try to separate the poor from their money now. Pretty much everyone does. The only difference is, the poor would have more money.

There's probably going to be predation on the mentally ill or incompetent. That could be solved by helping those people, limiting what they can buy, or harshly punishing the exploiters - some combination. But even if they were cheated out of their UBI I don't see how they'd be worse off (without assuming people wouldn't help the mentally incompetent if they had UBI which seems dubious to me).

Maybe UBI would come with some sort of rent or price controls. Or maybe the fear of massive inflation would temper the greed of the rent-seekers. I don't know how it would play out. And I have to say I'm generally in favor of UBI. Just thinking out loud about how it might not be as helpful as it could be.

Renters almost by definition aren’t capable of amassing enough capital to build new housing, so are at the mercy of the existing supply. If it is guaranteed that everyone has a capital-amassing stream of income available to them, they gain an ability to turn that stream into something longer term. Sure, this still may not be possible in areas with strict housing regulations, but a guaranteed, portable stream of income also provides people the means to move.

And why would they sell you land for less if they know you have $40k more of income? Everyone can pay that extra money, if I am a seller I am raising my prices accordingly.

Some people on UBI would happily trade worse living conditions for more spending cash. But that freedom of choice is what enables efficient resource allocation.

The article talks about an overabundance of CONSUMER GOODS, but no amount of deflating TV prices can make up for the fact that Rent, Healthcare, and College is what's putting pressure on the lower and middle class right now. UBI will inflate rent the same way cheap student loans inflate tuition.

Because it's not about mere money, but about power. Getting double the money you get now doesn't make you more powerful than e.g. Jeff Bezos. In some instances it might make you less (e.g. if the cost of living increases because of the extra money circulating, if you start depending on the extra money, etc.)

It sounds like you're saying most people wouldn't quit, which doesn't conflict with my statement, which is that "some people" would quit.

If you want to try to dispute that, you'll have a tough time with me, since I personally already have quit, even without the UBI, and from much more than $100k.

What do you think every landlord will do next year?

is priced in a similar way.

>I think rent in high-COL cities is more determined by high demand there than landlords' personal assessment of the residents' average incomes.

A landlord doesn't have to personally assess the average income of the residents. The high demand will roughly do the assessment for them.

>With UBI, people would be more free to move away from areas with high rent.

This is something UBI allows, but I'm skeptical whether people will actually do that. Remote work also allows people to do that, but until the virus it hadn't really been considered as a serious option in the vast majority of workplaces.

Yes but the cruical difference is that now, if I ask for remote work to move and the company says no I have to choose between having and income and moving. With UBI they say "no" I say "ok" and have income to fall back on.

The key thing UBI enables is the ability to meaningfully make a choice to leave your current job if you want to without destroying your ability to keep yourself alive.

Also, where would people move to? Many destinations are developing countries and thus the cost of living there will rise in the long term. Also, these expats would be heavily affected by foreign exchange rates.

People might indeed cluster up in certain places, buy property there and live a leisurely livestyle. These factors would make prices rise and in the long term it would become less attractive to move there. This happened in Spain where property prices in premium locations have skyrocketed because of well-off people from other EU countries buying homes there. Depending on how much the goverments of the target countries care about this, they might think about countermeasures, such as restricting property acquisition to locals.

If the outflux of money becomes significant, it will affect relations with the target country as the origin country will seek to reverse the flow. Trade deals will be affected, and developmental aids, if there are any, might be reduced. If it works, the target country might make it more difficult for expats to stay long-term. But the most straightforward approach might be to limit the UBI based on residency, or make the expat lose perks such as voting rights.

I am a supporter of the UBI theory but I have to say I am skeptical of the implementation. People are usually incentivized to move towards the places that provide opportunity - jobs, education, etc. UBI might dampen that incentive.

Given that most leadership systems are strongly influenced by the rich I have to wonder whether a system like UBI will be implemented in such a way that people are less dependent on the rich rather than actually becoming even more dependent.

Everyone needs to live somewhere. Landlords only profit if their properties are occupied, but they can simply decide to all increase their rent by $1000 a month, knowing that eventually, the only choice for some people will be to pay it or be homeless.

I have no idea if it would actually work this way in practice.

As someone who repairs and resells $200-$2k cars I assure you it very much does.

The price floor for a running, driving vehicle pretty much never goes below 2wk of pay at whatever the local minimum wage is.

(This does, indeed, fall under "some form of socialism" that the author deems magically "unworkable." Simply a tax code of affordable taxes for personal property - i.e. a home you own and live in - and high taxes for private rental property used to make a profit, with the intent that it should make financial sense to sell to an owner who will live in it.)

Do you have any evidence to support this type of absolute claim? People have been screaming about inflation since the Fed massively expanded their balance sheet in 2007. The only things we’ve really seen inflate are assets (buying housing, stocks, etc.) we haven’t seen much inflation in non-assets (renting, commodities, consumer staples).

Edit to add some specificity, although it's not "rent". Here [1] is a 3 bed/2 bath house in a very safe Chicago neighborhood for $325k. The local public elementary school is an 8/10 and the high school a 7/10.

[1] https://www.redfin.com/IL/Chicago/4824-N-Oak-Park-Ave-60656/...

If a significant number of readers here on HN click that link, driving traffic to that specific listing, I wonder if it would cause the agent to think there's more interest in the home than there really is, giving them the suggestion that they should increase the price.

It does have a "HOT HOME" banner on the first picture. Could that be from HN readers?

Only difference is that the guy who earns $2500 right now might be able to get a better job because he can quit without immediately losing his apartment.

As for dependency, the money won't magically spawn on the table, they will be earned by state on taxes and then paid to citizens/residents. So you depend on who is in power anyway since there will be many rules, exceptions etc. It brings another new universe for corruption, leftist politicians to promise (and deliver) higher payments that next generations will have to pay back and so on...

All these mental games, me, you, everybody... we can't get the full picture of everything mixing up with everything else - economy, mentality of individual and groups, greediness, black swan events, selfishness etc. and come up with a nice simulation how it will end up all joined together. That's just wishful thinking and people pick up side which they prefer, nothing more.

Which is not the case. Hence, rent will obviously not change, as will prices of products and services.

> the money won't magically spawn on the table

Exactly!

LOL, yes it will.

The first world country I'm from has, effectively, nation-wide rent control (varies by region) and rent increases are limited to something around 1%, set each year (tracking inflation somewhat).

In the US, this will work very poorly: a landlord can just bump your rent by exactly the UBI amount and get away with it. Otherwise, they would have to wait for a vacancy to set the rent. But eventually, I agree that the rent would just absorb the UBI in many cases.

What is the incentive for the owners of small apartment complexes? It seems clear. They need to renovate their apartments so that they can capture the new up-market demand. Successful, mid-tier apartments could buy up cheaper complexes to renovate them and charge higher prices (this happens even now).

The low-demand, low-price alternatives will fade away, because the land owners can make more money with slightly nicer, more expensive units.

They'll move to better neighborhoods? What's going to happen to the people living in those neighborhoods? It's not like there are houses sitting vacant...

A typical mortgage payment on that mortgage is $1,100.

Adding $1,000/month will put many renters above the minimum income they'd need. Keep in mind, a married couple will be getting $2,000/month.

There will be vacancies for the same reasons. People moving up-market.

Highest end homes will also increase in value. Everybody moves up, and homeless folks who are homeless due to loss of income will have a place to live.

Everybody moves up- meaning more homes being built- so you'd expect this to increase house production in the US, correct?

So, despite a disincentive for low payed laborers (like those who do construction) to go to work, the housing market will not just continue, but actually become more productive?

That $1100 a month- doesn't include home insurance, doesn't include property taxes, and assumes a $60k down payment, correct? Seems like a charitable number to pick.

They are already paying rent, and if married, they get $2,000.

If their rent is $600, they would have $2,000/month to save a down payment and then have $2,600 to buy a median priced home. That's enough to cover insurance and property taxes.

The standard down payment is 20%, so a $226k home would be $45,200.

Only if there are empty houses because people can't afford them will that scenario be able to play...

With an ability to command higher rent, renting becomes profitable on properties that were previously not profitable to build on. In the long run, I expect rent to fall relative to the current state of affairs as housing is overprovisioned (using the added income from more rent) and moves more towards a buyer's market. Furthermore, with UBI workers are in a stronger negotiating position so we'll see more work from home which also lowers rent by reducing competition in the cities.

It’s also illegal / breach of contract to increase rent based upon a person’s increased income as well unless it’s outside a lease period. I was told this as a landlord and I was mostly interested in getting a good tenant rather than trying to get the most dollars anyway. A bad tenant costs you far, far more than whatever you’d have increased your rent by.

This is a pretty privileged perspective to have and shows that you may not fully grasp what it's like to be poor.

Do you understand the costs of moving (both monetary and time spent)? Do you understand the cost of most likely having to quit and find a new job (if they are available)? do you understand the costs (socially and mentally) of having to leave your community/family of support?

The opportunity cost of what you are suggesting makes it much less feasible than you make it seem

It is, of course, possible to implement a UBI that is too low to make it practical to move, but I would argue that in that case, it is missing the "Basic" part, because it does not provide enough to meet real people's Basic needs.

The thing that gives "Capital" power is that you have it, no one else does, and you're trying to transform it into some arrangement that over time creates more value than it consumes.

The transformation applied can absolutely be done incorrectly, making subsequent capital value transformations more difficult to accomplish profitably given greater constraints on the means the capital allocator can bring to bear.

Nothing about UBI substantially changes the nature of that system, therefore, the real problem to be solved, (the asymmetry of means between capital allocators) given a system that optimizes toward capital control centralization (more capital fewer hands) without also being paired with wealth ceilings via tax extraction at the top and reinjection at the bottom.

Sure, that would definitely be one area where UBI would assist with but as I mentioned in another comment - it would kind of defeat the purpose of the UBI if people had to spend it on mitigating the consequences of people taking advantage of them receiving UBI

I don't have a good answer either... I just agree that UBI seems like a net positive.

Poor people don't have functional families or communities of support in a lot of cases, that's why they're poor.

it would kind of defeat the purpose of the UBI if people had to spend it on mitigating the consequences of people taking advantage of them receiving UBI

It would kind of defeat the purpose of making money with a job if people had to spend their earned money on mitigating the consequences of people taking advantage of them receiving money.

So... the takeaway is strive to earn less so you get preyed on less?

I don't agree. Jobs are much more than just income. They provide purpose, skills (possibly for life and future work), experience (in general and for acquiring future work), possible medical or investment benefits, connections (social and for future work) etc. All these things mean that there are many situations where earning less or having to move would be outweighed by the benefits.

This is not the case in my example - UBI is JUST income. If the providing of UBI creates more problems and negates the income, then it loses its benefit and purpose (not saying this would be a guaranteed problem inherent to UBI, but that was the premise of the OP)

I actually think that would be a better solution than UBI, figure out what American public housing has done wrong (namely the idiotic towers in a park idea) and fix it, say by producing lower density functional neighbourhoods that have proper streets, places for business, community services, etc. and just build masses of them. Housing is the biggest cost after all and it's a large public works project that could be carried out everywhere. You'd have to fix the problem of corruption in projects of that nature though and that's unfortunately a much bigger challenge.

There was an article on here a while ago about a successful undertaking in Greece to build massive amounts of new housing without major public investment, maybe just do that? https://www.bloomberg.com/news/features/2020-07-15/the-desig...

I think an issue with this approach is that it's top down, as as mentioned in the article, "those at the top can’t manage all the information about the economy".

A counter-argument may be to just let towns and cities decide what to develop then, since local people have the best information about their neighborhoods. However, 1. this is already the default method and has resulted in housing crises where NIMBYism is rampant. 2. UBI would also help in this case as you're increasing the demand for housing while increasing competition between people living there and not (assuming people want to move to the area in the first place).

What you are saying would work perfectly for a young college graduate, without much family or friends, who has no dependency or no one dependent on them.

Now imagine a young single mother or father that depends on their family for babysitting or caring for the child while they try to become functioning member of society.

Imagine someone with some health condition that needs access to certain medical facilities.

People live in cities and migrate to cities because they can access schools, colleges, entertainment, public transport, medical facilities, better opportunities, parks etc etc. They can't just pick and move and uproot themselves.

I think people who work in technology do not have enough exposure to the poor and struggling members of the society. I grew up in a really really poor family and when I talk to my coworkers it is very apparent that they don't understand poor people.

I am not a young graduate, uprooting now would be a big deal for various reasons. Neither are my friends in their 30's raising families - some of which are living with their parents for the kind of reasons you describe.

My point is that without being so close to the financial edge all the time, even less well off families can take a step back and make decisions that work best for the future. The stress associated with risk (like quitting a job) results in a scary amount of lock in for many people I know.

I'm pretty lefty but I sure wouldn't go so far as that. Tell them not to bleed the tenants totally dry. Try making rules. Try enforcing rules. If that doesn't work, THEN we can talk along 'kill all the landlords' lines, but I am just not convinced it's that simple.

I think there is room in a liberal market capitalist system with social supports (such as UBI, which is nothing more than a lower overhead social welfare system) to allow people to have property and stuff without it automatically going to Mao's worst nightmares. Yes, people are greedy, but that's not the only thing in the system.

That makes no sense at all. UBI is just an income redistribution scheme, thus it can only work if it's linked to productivity. Otherwise you create a system that's bound to fail and collapse in the times it's needed the most: an economic crisis.

With food stamps, and other welfare programs that already exist to cover your other costs you don't have to work to be able to afford living anymore. Sure you can't go anywhere or have a fancy new phone or car but your income from work could pay for those things instead of just barely being able to stay alive.

I don’t like this solution because it is a pretend-solution. What are the causes of poverty? Prevent them. What are the barriers to mobility in the job market? Alleviate them.

UBI helps but in my opinion it is just sweeping the problem under the rug.

Value capture by capitalists. Perverse incentives of means-tested welfare programs. Making choices that are suboptimal from an expected value perspective because they are better from a risk perspective when you can't afford to take risks.

> Prevent them.

UBI prevents or reduces all of those causes.

> What are the barriers to mobility in the job market?

People not having the resources to take time off their current job to retrain, either via formal training program or taking temporary lower-paid work in a different field, among others.

> Alleviate them.

UBI does.

I don't get why this one fear "omg rents will skyrocket!" gets trotted out as The Reason UBI will fail.

Prices will go up by some percentage of the basic income amount, but that percentage will be less than 100% of the difference. The landlord might raise rent from $1000 to $1600, but not to $3,000.

But what I am saying is that theoretical value for the new rent amount in that pricing model is $3000, not $2000 like the other poster was saying. Thus their arguments don't work.

Provide them access to the education you received (starting with primary school, not college).

Prevent their exploitation by the companies. Especially those that we often work for!

I would bet a better effect can be realized by investing in public education at the primary-high school levels. Make teacher salaries competitive with engineers. Enable all schools to have the equipment and teacher qualities they need.

The main issue in the world at the moment is income inequality, the things that you are listing stem from that, you can't fix education inequality without first addressing the income issue - UBI proposes that we tackle the source of the problem rather than trying to patch things up downstream

I'm assuming you accept that the poor are getting poorer and the wealthy are getting wealthier - how do you propose to stop that without UBI?

I do agree with the regulating capitalism better part. I just wish I had a better idea than repeating Paris 1794.

Because that money is coming from the rich. Would you say your boss/employer has less power over you the more you make? IF that is the case, it's not because of how much you make but rather because of how much value you have to the company. In the case of UBI, there is no value exchange, only a handout. If there is a value exchange, it's merely the prospect of less riots/civil unrest.

(This is not even to mention the wash effects of inflation, which are covered well in the other comments on this thread)

UBI will help the destitute, but if the person holding the purse strings, be it a billionaire philanthropist, the government, or your employer, and you're dependent on that to survive, that gives that entity power over you.

Take government grants and other forms of funding received by universities. Sure, it sounds nice, but the result is that institutions slowly begin to depend on these sources of funding to the degree that their successful operation and even very existence depends on them. This puts universities in a very dangerous position and this dependence has been used to steer universities in directions they might not otherwise have gone.

oh, all my tenants have an "extra" $2,000 a month? they can pay more. housing is inelastic so tenants are the ones who have to bear the increase.

and because building housing stock takes time

and because of zoning restrictions and other institutional constraints

and because of cultural reasons (e.g. to live near family, bc they prefer living in a certain environment like a big city etc.)

and because you (almost literally) can't live without shelter

...

Not really. If the Earth's surface was populated at the same density as, say, Paris, that would be over 3 trillion people.

> and because building housing stock takes time

Not a whole lot of time actually with modern techniques. See the speed at which some of the Corona hospitals were built.

> and because of zoning restrictions and other institutional constraints

Which only apply to existing cities.

Right now there are houses in the middle of Iowa - or even Detroit - that cost a small fraction of what a house in a city with good job prospects costs. If UBI became a thing, people would be able to move to those places. Not everyone would want to, but some would, and that would be enough to move the prices.

I'm willing to concede UBI (or other unrestricted cash grants) could impact specific segments of a market. But, I can't find good evidence one way or the other that those negative pricing impacts offset increases in productivity, wellness, etc.

Over the same time period that loans have become easily obtainable (via US government backing), massive amounts of regulation has also been imposed on colleges/universities.

While people love to talk about football stadiums, luxury dorms, and other amenities, one of the largest increases in the cost of running a college is administrators to keep up with regulatory demands.

I'm not claiming administrators are solely responsible, only that it's not as simple as "Uncle Sam gives students money and college spend every penny".

Additionally, public funding of colleges has dropped over the same time period. As of 2018, state funding of public colleges was down ~$7 billion since 2008. It was slashed during the down economy, but never brought back up again.

[0] https://www.experian.com/blogs/ask-experian/state-of-student...

The rapidly increasing headcount growth, including professor headcount growth is driving the increased cost which is driving increased borrowing.

Universities need much bigger class sizes, many fewer professors, and many fewer administrators. Overall headcount at universities needs to shrink by ~70% to get the cost back inline.

No politician, or university president is going to say that because it would be so brutal to oversee. But... students are suffering with massive debt loads and someone is going to have to make the right choices to cut those costs.

[0] https://washingtonmonthly.com/magazine/septoct-2011/administ...

I wonder, however, if administrations just take on a life of their own and grow bounded only by available budget. It seems like this happens in the private sectors with layer upon layer of management.

We have several teams of developers pushing out state-level regulatory updates to our software (and these updates are frequent and often done on short notice), plus more teams doing annual federal regulatory updates.

And again, I'm not claiming this is the largest contributor, only that it's one of many reasons (easy access to loans included as well).

"We find a pass-through effect on tuition of changes in subsidized loan maximums of about 60 cents on the dollar, and smaller but positive effects for unsubsidized federal loans. The subsidized loan effect is most pronounced for more expensive degrees, those offered by private institutions, and for two-year or vocational programs."

I've looked, but all I see is conjecture. Nothing academic. The academic articles I do find tend to assert the opposite - that any changes in consumer prices are smaller than increases in income, granting the recipient more buying power.

fwiw i noticed above you mentioned that there will be an increase in productivity, wellness etc. although i tend to agree with the wellness aspect (esp. compared to our current circumstances) the degree to which wellness would increase is also unclear. for some colinear studies, i'm thinking of finkelstein's work on medicaid expansion in oregon where they found exposure to medicaid increased reported well being of recipients.

and i don't think productivity increases under a ubi holds water on theoretical grounds.

you seem to be assuming large increases in productivity and wellness and other benefits and then asking if inflation will erode that, when we also need to consider that the possible benefits will themselves be attenuated, particularly for those already at lower incomes or those who will earn a ubi.

UBI would allow an unprecedented level of freedom for people to relocate with little risk, and that would itself have a massive influence on city make-up and the housing market. If a lot of the unskilled labor in the bay area actually chose to move somewhere else, wages for those people would either have to increase greatly to meet demand, or the area would finally have to allow much more cheap housing.

I imagine other shifts like that would play out large in small in almost all aspects of the economy. UBI entirely changes everything.

* employer wages for low-demand workers will drop, as competition for low-demand workers will not increase, and those workers will accept a lower wage reasoning that the UBI 'makes up the difference'

* if employer wages are not allowed to drop below a certain point (the minimum wage), then more disposable income will create increased demand for scarce resources (e.g., housing that is a bit better than currently occupied) thereby causing prices to rise.

I'm no Econ major, so happy to hear how my reasoning may be in error.

The logical leap that you are missing is that prices don’t always rise quickly enough as a response to increase in wages. What a person is willing to pay is only part of the pricing equation. You also have to consider what competitors are charging and how much potential margin there is to play with.

Inevitably though, all prices consolidate and all players in the market will charge more to meet the increase in wages, it’s just a slow process.

The only time it happens quickly is if each business conspires to raise prices simultaneously, which isn’t going to happen or may be illegal.

So yes, increase in wages or handing out UBI inevitably raises prices after a period of time, necessitating the need for even more increase in wages and more UBI. It’s not a one and done thing.

Because housing expenses are generally the single largest expense in any household budget, that means landlords are going to reap the majority of the benefit here. People selling homes also know that wages have gone up and by what amount, so this will impact the sale price of new homes. So, any amount of UBI would end up being a huge cash transfer from renters to landlords and other existing homeowners.

Isn't the other part of Adam Smith's supply and demand stuff the idea that competition will drive down prices? Sure, everyone's got another $2,000, but if I can undercut the guy who's trying to mop it all up, wouldn't I? And wouldn't someone else try and undercut me?

Wouldn't that bring prices down? And if not, why not? If there's another larger force at work keeping prices high and keeping people in poverty -- and if poverty is something we want to do something about -- doesn't that suggest that we need to constrain sellers' behavior in some ways we aren't really doing now (like laws against gouging)?

All prices? No. Clothing is now effectively free, for example. Prices of necessities are the only things you want to watch. Basic food products, healthcare, etc. Those prices have risen around the same as the rate of inflation or spiraled out beyond. Food prices cannot outstrip the inflation ever, because of food subsidy and/or ebt which is tied to it.

For food, some people buy bulk staples and some buy high-end food at Wholefoods.

The degree of substitutes and variety available on the market is staggering for consumer items.

We've seen this with higher minimum wages. The amount of inflation is much lower than than the wage increase, and poor people end up with more buying power.

It should also be noted that inflation is not immediately present following a cash stimulus. It takes time for inflation to set in as a response to market conditions and as such inflation is measured as an adjustable change over a given period of time. That said specific single time examples of UBI not adjusting inflation only demonstrates a faulty understanding of economics.

https://en.wikipedia.org/wiki/Inflation#Issues_in_measuring

Where do you think government's money come from? Financing UBI will require raising taxes.

empirically, however, things are sticky and so we have not observed concomitant decreases in employment with (small to moderate) increases in the minimum wage. my other guess (not sure if this is supported by the literature) this can also be because not only is the market sticky, but because workers were being paid a lower wage than their employer could have afforded.

There is plenty of literature that contradicts your assertion. Here are a few links...

https://medium.com/basic-income/wouldnt-unconditional-basic-...

https://www.peoplespolicyproject.org/2020/03/18/understandin...

https://ubi.earth/basic-income-doesnt-cause-inflation

What the other replies have failed to consider is that UBI is just injection of cash. It isn't a voucher for a specific class of goods, such as rent. It is just cash that can be used for absolutely anything. If that means burning cash on a $5000 handbag then so be it. Inflation is literaly the injection of cash into a market.

The problem with inflation is lost value. Cash is an abstraction of value to conduct an exchange. The real world worth of that abstraction is variable. When the availability of that abstraction increases disproportionately to a real world value it will be able to purchase less. The most common reason is that prices increase to follow the increased availibility of cash, but there are other reasons as well.

When everybody equally has uniformly increased purchasing power the natural counter-reaction is to reduce availability of goods and services. That can mean raising prices. It can also mean removing goods from market to make them more exclusive. Any means of restoring value to the prior state will happen to lower disruption to the transfer of goods.

Had you read the wikipedia article it would have addressed everything I just said.

Australia currently has a program where anyone impacted from the effects of the pandemic, receives $1,500 a fortnight- and yet is experiencing deflation. The very fact of this debunks your argument, as it is a significant portion of the population who is now receiving a cash injection. This money is not exclusively for rent, nor is it tied to food stamps; it is $1,500 to spend as you wish.

Further, The Reserve Bank Of Australia is in favour of these payments. And it's also worth noting, many economies have an inflation target of about 3%, which indicates that inflation is healthy and to so staunchly avoid anything that may affect inflation is a fools errand.

Regardless, please read more than a wikipedia article before holding such a strong opinion. The other commenter called you out for being lazy, and I wholeheartedly agree with them.

In this case the goal of stimulus is inflation and it isn't enough to repair the economic disruption.

Despite the sharp and historic deflation this is not unusual though. Pandemics are historically known for economic deflation. Europe experienced a devastating pandemic about once a century for more than 10 centuries in a row yielding plenty of economic evidence to this.

The most important thing to learn from this is that a sudden economic deflation hurts poor people and corrections insufficiently help poor people. Wealthy people are not directly impacted, at all. Attempting to correct for that difference with an economic stimulus, such as giving poor people cash, does not at all balance that disparity.

If anything this current pandemic illustrates that a UBI is an insufficient control for balance. Instead of focusing on what to do about poor people if the goal is to balance the disparities of wealthy people against poor people then wonder what to do about wealthy people. Tax the shit out of wealthy people and use that increased government revenue to grow the economy directly in ways only business can: increased infrastructure (there is more to that than just roads and telephone poles).

As for taxing wealth I am a huge fan of a complete estate tax and not a huge fan of income taxes. Take everything greater than $10 million of estate value when a wealthy patron dies.

They're also time-limited, and the funds come from outside the test group. An actual UBI at scale would need to be effectively permanent and self-funded.

What the tests have shown so far is basically that if you pump a bunch of outside funding into a small community it tends to make most of the recipients a bit happier. Which isn't much of a surprise. They take the opportunity to improve their employability because the experiment is going to end soon, leaving them to fend for themselves. Who can say whether that effect would still be there if the extra income were guaranteed for life? That certainly doesn't seem to be the case for many lottery winners, and many people who inherit wealth from responsible parents end up spending it frivolously.

WFH directly affects the relation between work and place to live. If that doesn't greatly impact rents, neither will UBI.

On the other hand, if it does, there's not much more to gain for UBI.

Maybe it's just my bubble, but unless someone had a tech job, they seem to hate WFH.

Both Barclays and Lloyds for example have flagged that they expect to reduce the size and number of offices, with Barclays' CEO saying "putting 7,000 people in a building may be a thing of the past".

I don't think it will be a quick process, not least because there are a lot of long term leases in place, but odds are a lot of businesses will use e.g. expansion or leases expiring as an opportunity to experiment with more working from home to see how it works before making new long term commitments, and assuming it works there is every chance there will be increasing pressure from shareholders etc. if people see competitors slashing office costs dramatically.

> In his latest remarks, Mr Staley appeared to cast doubt on the idea of abandoning those hubs, saying: "We also have a responsibility to places like Canary Wharf, like Manchester, like Glasgow." > > He added: "We want our people back together, to make sure we ensure the evolution of our culture and our controls, and I think that will happen over time."

Which sounds like more of a question of how to handle the fact they're sitting on vast amounts of land in long leases in prime locations and have realised leaving offices empty without being able to point to economic benefits will lead to all the wrong kinds of attention, while realising that it will take them time to make it happen smoothly.

Also further down in the article, it points out this:

> However, not all big banks take the same view. Last week, NatWest told more than 50,000 staff in a memo that they could continue to work from home until next year. > > The bank, then known as RBS Group, said it had been reconsidering how the bank works "in the longer term" and intended to tell staff about "future ways of working" later this year.

It's clear it will take a long time before things starts going back to normal any way, and every month these employers have to adjust to working remotely, and recover efficiency while working remotely, the incentive to go back to big offices will drop.

I also know someone who worked at UBS when they moved into their new London offices, and they'd totally ditched fixed offices for most staff and moved to hot-desking for everyone, with the intent of significantly reducing the proportion of staff in the office at any one day. That was well over a year ago. Many of these banks have been looking for ways to reduce their office footprints for years already.

I have no idea what UBI would mean for low-wage, on-premise jobs. A sufficiently substantial UBI would undermine such jobs, I guess...

In theory, yeah, sure, that is the textbook phrasing.

But the lowest tier jobs that are going to be affected is this scenario aren;t remotely close to the largest percentage of total wages, so I can't see any huge shift being induced.

UBI affects the cashflow of those making more than just subsistence money less and less, and I think that diminishing percentage is an aspect of this that gets lost in the battle of philosphicals.

IMO I don't believe those people doing miserable jobs with low pays take a significant part of wage expenses, related to higher managements. If there are data about proportion of the wage we'll get more information.

When it's not tolerable, people leave the cohort and move down a grade, to lower quality and therefore cheaper housing.

Obviously it's not tolerable if you don't have enough money left for food & essential bills.

Not sure why iPhone & Netflix come into this, because they are so extraordinarily cheap compared with rent, food and bills. But of course a phone is essential, and an iPhone very useful, cheap (on contract) and arguably essential these days - for some people it's their only access to the internet. People would not find it tolerable if they couldn't afford a few nice, cheap things, such as Netflix.

When you account for rent, food, bills and a few nice things, as far as I can tell that does take up all the income for many. Have you noticed that a lot of people aren't saving anything?

Of those who are saving, mostly they are saving for a deposit on a mortgage, and/or a pension.

Theoretically a nationwide increase in discretionary income could create new classes of goods that would be desired enough to compete with rent and phones. Or it might not and people would just spend more on rent and phones up to their new limit. Phones would probably move upmarket to capture this revenue as they are essentially globally competitive. Rent would not as much due to the nature of housing supply and the effort of moving cities.

And Netflix is $9/month. C'mon now.

If you increase the housing supply, the price falls. Increase it to a point where there are some vacancies and suddenly landlords don't have as much bargaining power to take your entire UBI. At some point a landlord is going to say "well better to fill it for $900/month rather than let it sit empty".

I think a huge part of UBI is making the economics of the essential things in life work out so normal people have the power when it comes to basic needs.

First, let's consider the price of the rent. Assume for a moment that somebody manages to fix all mental health problems, alcoholism and so on, and that magically everyone manages to find a good job that pays reasonably well. This is supposedly the dream land of the pure capitalists: everyone works and is productive and so no handouts are received. Well, what would you suppose happens to the rent in this situation? If everyone is able to pay, then rents would go up, wouldn't they? So the difference between UBI and this is only that in one case people don't necessarily have to work, while in the latter case they have to spend 8+ of their lives doing stuff they may not like.

What this means is that your main point is simply that you don't want people to have money to pay for housing, because that may make prices go up for you. You are literally advocating that some people must be homeless so that life for us is easier.

Secondly, the rent argument consistently ignores the fact that if you don't have to work, you can go live wherever you want. One could go live in Alaska and buy 1km2 of land for 10$ because who gives a shit? construct their own igloo or something and then live there forever. This would additionally free them up to spend a larger part of UBI on other products. Instead there is this weird assumption that people will forever cluster in SF or other highly populated centers, because apparently humans are ants and like to breathe pollution.

In any case, while that is the obvious conclusion (as you’ve stated), I never took the position that we merely need to fix mental health etc. I am not saying UBI will work but will make prices go up so I don’t like it.

I am saying that UBI won’t work, it will in fact make inequality worse, AND there’s a solution that will work. It’s the LVT. Once we have LVT, then we could do UBI and the upside would not get absorbed by landlords.

It’s odd to me that you’re claiming that I’m being dismissive of poor folks but you’re literally advocating moving to an igloo in Alaska as a solution?

For the other point, UBI as I know it must be financed by some sort of increased taxation of the rich, it is not the government blindly printing money and distributing it. I don't know whether that taxation should be LVT or something else, I'm simply talking about why the argument that UBI doesn't work due to rent is, in my opinion, incorrect.

How does LVT help poorer people live in cities? The competition for clustered housing continues, that's a fundamental cause.

Richer people still have an advantage over poorer people in economic competition. Instead of people renting and landlords scooping up all the UBI, with LVT you have people competing to buy housing and LVT scooping up all that people can obtain (whether it's UBI, earnings or something else).

Poorer people don't have much luck buying housing in the first place, because of mortgage gatekeeping, even when the actual cost of purchase (mortgage payments) is significantly lower then renting. Even when they do, they pay more for the same level of housing in the end (mortgage interest).

So a switch to a city economy where housing is primarily based around purchases would seem to be not so good for poorer people trying to live there, unless something can be done about access to long-term credit.

1) Public investments such as subways yield increases to public coffers (today, the landlords who happen to own land near a new subway station get a windfall off the city’s billions of dollars of investment). This would incentivize public investment.

2) Land speculation goes away, and development is strongly incentivized, so more units come online and push prices down.

3) Both of the above improvements, as well as private investments made due to public/communal value (such as HQ2 not being built in the middle of nowhere), would funnel huge amounts of money to public coffers. We as a democratic society can decide if we want service workers living in our cities (I reckon anyone who lives in reality does want this) and have the resources to fund making that possible. Things like functioning transit systems go a long, long way.

It means there are better incentives to build denser housing (redeveloping doesn't increase your property taxes, but as your area gets more desirable your land value tax goes up whether you redevelop or not) and public transit (because the city can fund it off the land value increases). So there's a bigger supply of clustered housing.

> Poorer people don't have much luck buying housing in the first place, because of mortgage gatekeeping, even when the actual cost of purchase (mortgage payments) is significantly lower then renting. Even when they do, they pay more for the same level of housing in the end (mortgage interest).

LVT helps a lot with that as well: property becomes less good as an investment, and you don't get to pay lower property taxes just because your bought a while ago.

It depends on why people want to live in cities. The people who are living in cities mostly for the vibrant community will probably want to stay there. The people who are living in cities because they can't get a job outside the city will no longer have that constraint, and some of those people will move away. Not everyone has to move away for competition to decrease.

For $500/mo sure. But if it's like people say and landlords try to raise rent $2k/mo like people are saying, then yes people would definitely move.

Also you could easily save $500/mo right now by moving from a big city to somewhere small. Right now, without UBI being a thing. The rent difference under a hypothetical UBI rent increase would be far more than $500/mo.

Rent is an auction, so there is a dynamic/negation about living in a place. It's not true that rents go up if "everyone is able to pay" - only if "everyone is able willing to pay"; where are competing cities with lower rents in this example?

That would be contrary to about 300 years of economic theory, so if you can prove it there's probably a Nobel Prize in it for you.

Increasing the supply of a good or service will only push the price down when enough of the demand has been satisfied. If the demand far outweighs the supply you're not going to see the price budge for a long long time.

This is basic Econ 101, not Nobel prize territory.

But yes, we should probably fix that before we implement UBI.

Today, your tax liability is tiny when you do this. This incentivizes landlords in hot markets to keep their land off the market, thus making the market hotter, this further incentivizing speculation, etc.

This is why you see empty storefronts or empty lots in incredibly expensive areas. The owner can sustain the cash flow loss today in exchange for higher prices tomorrow.

LVT would mean your tax burden is the same (moderate to high) whether you rent it out or do not rent it out, thus making it infeasible to sit and wait for a higher price tomorrow. This would bring more units onto the market and more efficient uses, thus bringing prices down.

Since LVT is often proposed as replacing other forms of taxation (or at least dramatically reducing them), the cost of actually building a dwelling or storefront also goes down — thus further incentivizing non-speculative behavior.

My only issue is that you end up making the govt more of an arbiter of what "value" is than it already is, which can end up causing issues.

1. The government today assesses land value. It also must assess the value of far, far more nebulous things that can be hidden, transfigured, created/destroyed, or moved offshore. Yes more importance would be tied to this singular assessment, but this assessment is singularly easy to assess!

2. The price/value itself would be set by the market. The assessment of that value, of course, would be by the government and you are correct there is risk of differential here (though mitigated by point 1)

3. Lastly, because land cannot be created, destroyed, or moved, a tax upon it is uniquely unable to either incur inefficiencies (deadweight loss) or to be passed onto tenants/consumers. This is contrast to every other form of taxation, which incur inefficiencies then get passed onto the consumer in the form of price increases anyway.

The reason why the speculator leaves the storefronts or lots empty is that putting them to use right now would prevent them from being used for something even more valuable in the future. If they could use the property for something productive now without impacting the expected future use they would happily do so and collect the extra income. Coercing them into putting the property to use immediately, via LVT or zoning rules or whatever, is thus inefficient and economically destructive. The speculation serves a useful purpose.

There is very clear profit in buying land for cheap and sitting on it until somebody wants it. Land doesn't depreciate unlike buildings. Building something on that land is often more risky for landowners whose business is pure speculation because at sell time the building will have to be torn down by the next user.

This is consistently evident in real world. It might not be in economic theories and textbooks which are designed only for utopia-land.

There is zero need for a private owner to hold it. The land will not disappear, it will always be there. Government on behalf of the community can hold it just as well without the incentive of preventing others of using it.

This makes land different from other goods where if there were no speculators (dealers who hold inventory) the market would dry up (stocks, bonds, used cars).

Land is in this regard more similar to concert tickets. There are speculators who acquire this limited commodity but their profit stems from preventing others getting them and selling it to them at a later date at incresead price.

Society looks at this type of business as highly unethical.

The land might not disappear, but it can very easily be rendered unfit for purpose through misuse or neglect.

Let's put this in concrete terms. Say we have a plot of land which is suitable for various kinds of development. We have a prospective buyer who is looking to build a house. They like this property the best but there are several other suitable options; let's say they'd be willing to pay $25k, but not $30k, to acquire this land as the site for their home. The home will be worth perhaps $250k (not counting the land itself) with an expected lifetime of at least a century with proper maintenance, and effectively can't be moved once build.

Development trends in this area suggest that in perhaps ten years' time there will be demand for some sort of commercial development—office space, retail, services, whatever. They aren't here yet, but if trends continue then 10 years from now someone would be willing to pay up to $100k for this piece of land. (The other sites that the first buyer was considering for their home would not be suitable for this purpose.) However, they're not going to pay $250k extra for a house that they're just going to have to tear down to make room, even if the owner of that house were willing to uproot their family and move somewhere else.

Without speculation there is no reason not to sell the property to the first buyer for $25-30k and let them build their house. However, this represents an economic loss of at least $70k ten years later (the $100k value to the future developer minus the $30k maximum value to the residential buyer) since the land is no longer available at that time for the commercial development. To make it available at that point would cost around $250k just to offset the value of the house, plus the cost of tearing it down, never mind the hassle of moving the family.

With speculation, there is someone bidding say $75k for the property and the residential buyer picks one of the other available properties instead—perhaps not their first choice, but a good enough alternative. The speculator limits the use of the property to such things as can easily be removed in ten years to make way for the anticipated commercial use. Perhaps that means leaving it empty, though it could also be turned into a park, short-lease retail space or transient housing, something that could easily be cleared up to make room when the future demand materializes. Then, if all goes well and they predicted the market correctly, they sell the vacant property for $100k and make their well-deserved profit.

Of course, it may not all go well, in which case they'll be forced to take a loss. Speculation only pays when you make the right predictions.

> Government on behalf of the community can hold it just as well without the incentive of preventing others of using it.

If government correctly anticipates that the land will have more value in the future, they can act like a private owner and buy the land and hold it until that use materializes. Where this breaks down is that the government isn't risking their own capital in the process; if they are wrong and the value of the land decreases instead it's not the government that pays the price, but rather the public. Which means they have less incentive than a private owner to accurately predict the future value of the property, and are more likely to lose money on average. When they do lose they don't go bankrupt; they just take more money from the public via taxes. This is merely an inefficient, socialized, and corruption-prone version of private speculation fueled by public funds.

Actually, you need water more than food. Why isn't fresh water $1000/gallon? Why do we have discretionary income at all?

Neither UBI nor any other policy changes that.

Housing costs in expensive markets are set primarily by land values and not by the value of the capital/building upon the land.

Yes you can make a dent in the problem it by zoning for more units, but you cannot zone more land into existence in high value areas.

For those who are convinced supply&demand doesn't work for dwellings, buy a rental and charge 10x the market rate. See how that goes. This applies to any business. For example, try selling something on Amazon/Ebay/Etsy/Craigslist. You can charge whatever you like for it. Whether someone will buy it is another thing entirely.

Everyone needs food, too, but ironically it's the unneeded food (like Starbucks) that's expensive.

If you work in an expensive city, pay $2000 for one room, good luck finding a room for $40.

It is precisely the problem that you cannot opt out of the housing market, at least when you need a calm and safe environment to think.

Even when you don't, it is probably illegal to set up a tent somewhere, and legal camping sites are pretty expensive and horrible, too.

How that should go is you get taxed at the same rate as if you had set it at a price it could be rented at, therefore encouraging you to set your price correctly.

That’s the LVT, that’s basically the entire thing.

Nobody pays income tax if they aren't making money. That's why they're called "income" taxes.

Density of land use isn't fixed. We can build in three dimensions.

Also there's tons of land that's hardly used at all in the form of golf courses. We should build cheap housing on them.

Works for whom?

In what way is the increasing ratio of rent to income working for renters?

Where those in power comfortably sit in inherited properties and wonder why the plebs does not eat cake.

I believe in the free market, but the housing market is not free.

Zoning laws are not price fixing. Practically every dwelling in a zone has a different price on it, because of supply&demand.

[1] https://www.youtube.com/watch?v=LsUS3ynhAKY&feature=emb_logo

https://www.businessinsider.com/supply-and-demand-model-of-l...

The assumption of a labor shortage because of low nominal unemployment is incorrect - the gig economy is thin margin as it is even with poor pay. It utilizes the previously "idle" labor in a marginal business model but without sufficient demand in other sectors it only provides a low floor.

If people are less beholden to their current situation and more able to move freely, isn't it just as likely that rents will go down?

(Aside from the fact that plenty of places use mechanisms to control rents, if this is a real problem)

Just because [1] increases, doesn't necessarily mean [2] does.

The problem with the high cost of housing in markets like San Francisco, is the wealthy capitalists owing real estate create regulations preventing any new housing from being developed.

If it was true, rents would keep climbing to 90+% of incomes but they don't. It would also imply that any other income income increases or redistribution (widespread pay rises, social security, etc etc) were pointless, you might as well give up on any kind of redistribution entirely.

Of course, if there was a UBI, there would be increased demand for stuff that low income people need like housing and food. That's the whole point of increasing equality! Shifting consumption from sports cars and chandeliers to food and shelter is the goal. But then supply would shift to compensate.

Another advantage of UBI is that even if you do wrongly assume it doesn't result in any net redistribution, it's still beneficial, because it smoothes income over the lifecycle, and a smoother income is much less stressful and unpleasant than a choppier income.

You can't just state that and it be true.

> It's understandable that people think like this in a place like SF where landlords have grabbed up a lot of salary increases, but it really doesn't work that way.

Yet, it does work that way. In every city I have ever lived in, it's worked that way. For rent in particular, any excuse that more can be paid leads to higher rent prices. A company built a new office nearby? Rent goes up. More "affluent" people are moving into a particular area? Rent goes up. And so on.

> If it was true, rents would keep climbing to 90+% of incomes but they don't.

Why? That's not the implication. Rent increases are done in a cleverly predatory way. Often times, rent is increased in small to medium steps but frequently, and the notice of such rent increases is notified in the minimum (if that) time legally required. That often leaves renters stuck because there are other, big surprise, expensive barriers to moving. Rent is a predatory system that maximizes the amount of rent that can be collected. That doesn't mean it goes to 90% of incomes as you claim, which nobody else is claiming.

My overall point is not about just rent. By providing UBI and not putting other protections and improvements in place, a capitalistic society will not just sit around and leave meat on the bones. Things will simply shift and people will still be in poverty. A poor educational system will still be there. Creditors will still be around. Etc.

Those things seem to be due to demand. A new office means that people can make more money living in that location, so are willing to pay more for accommodation there. More affluent people moving to a location means that they must see some value in living there. How does UBI increase the demand for housing in any one place (or at all)?

Will the same happen when everyone makes x more? Only if house ownership costs remain flat. I don’t think that will happen - cost and demand.

In the same way that you declined a promotion because everything would magically got more expensive.

If things simply shift, then there is no reason to expect any of these to change and we might as well implement UBI right now, because it doesn't hurt, right? If you are middle class now, then for you nothing changes except that your salary might include a line -$1000 salary decrease +$1000 UBI (no, if basic income were enough to retire, you would have retired already). Things change for low wage jobs, where your employer now represents a share of your income, not all of it, and you can negotiate without fearing of being hungry on the street.

I mentioned this in another comment, but I fear UBI will be an excuse for those in power to have even less incentive to care about other problems like education, healthcare, the credit system, consumerism, etc. I fear it will be the case of "we're giving you free money, what more do you want?" from the government and wealthy.

There are still market forces and people retain freedom to move.

“Predatory nature of those in power is put in check” UBI puts it in check by allowing the market to solve for everything while guaranteeing a minimum market participant power for all members.

Why?

Are the buildings x% better to live in?

Are the landlords providing x% better services?

No. The people who work there are producing x% more capital, therefore landlords take that x% and call it “cost of living.” This is not a new phenomenon in any regard, and UBI proponents must answer for it.

If their solution is rent control, then rent control is a solution even without UBI. Which of course it’s not a real solution, because then you’re distorting the price of housing and not going to get your construction/maintenance needs met.

LVT is a tax scheme that lets the market set prices for what it’s worth to live in an area (land rent/ground rent), then recoups that as a tax upon the people who claim special privilege to decide what to do with that land.

“UBI lets all the poor people leave” is not convincing at all.

So, the simple argument that UBI will not increase minimum rents by 2k a month overnight with no improvement in living conditions: landlords will have to compete to get the UBI out of individuals hands. Right now, the lowest income housing isn’t in competition for individuals, it’s competing for government approval and integration. If everyone individually has 2k a month to spend, they have the luxury of shopping around.

The value proposition for service workers in high-COL cities like SF is probably already bad. How would UBI make it worse? At least it'd be easier to move away from those areas. Maybe cities would have to pay serivce workers more to make sure they stay.

Companies can go ahead and pay more to keep them. You know what happens then? Prices go up more.

Where is all this capital flowing to? Landlords. Who didn’t pay for UBI, didn’t build the infrastructure, didn’t employ those people.

Yes, see retired social security recipients as an example. But you won’t find these folk renting in SF on a social security check.

SF’s desire for (inexpensive) service workers is a separate matter.

Do you dispute that?

The mechanisms are the same, though. Amazon putting HQ2 in a city causes rent to go up (higher productivity).

A coal mine developing a new, more efficient train to move coal around will also cause rent to go up (higher productivity).

2. That's a really naive sense of economic productivity. Here is a thought experiment.

A) Let's shut down all of Amazon HQ1.

B) Let's shut down the dams that provide 86% of Seattle greater area's electricity.

Which one of these entities is ACTUALLY responsible for that "productivity" then? And I bet you rents in Seattle without electricity would drop far greater proportionally than they do out by the dams. Rent follows incomes, not productivity.

I suspect you’re used to thinking of an information economy where supply is effectively unlimited and “best services command top dollar” is the principal factor in pricing.

There is a problem with limited supply of units, yes, but in reality the majority of cost of living comes from the second type of payment: the fee for the ground rent. The ground is in fixed supply.

With perfect development policy, prices would still go up, ground rent would continue to be seized by people who had nothing to do with its generated value.

The schools, employers, and natural appeal of SF makes its ground rent high. Landlords did none of that.

Draconian zoning laws dramatically restricting supply?

I love idiots screeching about big tech creating to much demand. Seriously? Too much demand is a bad thing? Hardly! How about reversing the crap zoning laws and NIMBY attitudes so supply can rise up to meet demand?

The SF housing crises was caused by a bunch of selfish people declaring through policy (zoning laws) that they have theirs and don't want where they are to change to accommodate others.

And this is supposed to be an enlightened leftist utopia? Talk is cheap until it can affect you personally is the real lesson of San Fransisco housing politics - playing out rather dramatically. Blaming landlords is laughable. San Fransisco has an embarrassment of jobs brought by the high tech companies in the bay area and instead of embracing them (by letting more housing be constructed) they resent them and blame everyone but the real root cause - severely restricted supply.

For many people, rent + other compulsory costs do exceed or exactly meet income. That’s precisely the problem.

People in power, i.e. those with money, don't like giving up money or potential profit. Without protections in place, prices will simply rise or adjust and people will stop worrying about unemployment. In the end, it just puts a different label on things, creating another category for poor people, and I doubt it actually improves anyone's lives. This is because the problems aren't necessarily all at the bottom. The majority of the source of problems are at the top of the socioeconomic ladder.

Utilized farm land and output per farmer has steadily gone up each year with basic food prices falling as an result. I guess I could imagine that if more people would want to become farmers because of UBI it could lead to farm land becoming more expensive which in turn would lead towards higher food prices. UBI will likely also increase prices for status food where there is a low supply and high demand, so I would expect a rise in cost for food that get associated with wealth and status.

For rent it is more complicated. Low income jobs tend to force people to live in cities that are near industries. UBI would allow said people to live outside cities which tend to have significant lower rent as there is significant more supply of cheap houses and cheap land to build cheap houses. Being poor however tend to have a behavior impact where people want to live close to relatives, which in turn often has the result of people staying in cities even if they have cheaper living elsewhere. It is a possible risk with UBI that in cities the rent will go up a bit in low income areas, and significant in high income areas in order to keep people with UBI from living there.

Of course they will, but that's missing the point. The point is that the newly printed money will no longer enter the economy through corporations (corporate debt) but through people and this will change the fundamental dynamics of the entire system. It's about changing the flow of newly printed money and how it enters our economy. So instead of corporations trying to extract money from the government and banks and using their control over people as a bargaining chip as they do today, they will have to focus on actually delivering value to people and keeping them satisfied.

Employees will not be disposable bargaining chips for corporations to get something from the government or from banks, people will be the focus of all economic activities because that's where the money is going to be coming from.

Consider that in 20 years, there will be x times more money in circulation in the economy that there is today. Right now, all that money has to pass through the hands of banks and corporations first this makes people dependent on banks and corporations; this is an unhealthy and unjust dynamic because it's people who are creating economic value, not banks or corporations. Why is the government assuming that banks and corporations are the most efficient way to distribute new fiat money into the economy? Aren't people inherently better at figuring out what they need?

Look where corporations got us, people are effectively being told what they need through targeted advertising.

We could give people money, or we could say "up to so many kilowatt/hours this is free" or "you are entitled to this set-amount of groceries for free". Or to combat prices that inflate for UBI, the government could be reporting what is a reasonable price.

Man I wish I had taken economics. I truly don't know all the ways this could harm us.

The point of the article, is that centralized planners are really bad at calculating these things, thus the eventual collapse of the Soviet Union and China moving to a much more market based economy.

I could see society changing as well. If 20 people got together and formed a commune, that commune is essentially self maintaining as they get an income, can grow their own food etc.

Currently, women can be stuck in abusive relationships which are challenging to escape. Having a reliable stream of incoming money can help then run away.

But I agree, abolish alimony and let UBI take care of that, so both spouses can freely go their own way if desired.

Bankers are the first one that will eventually support UBI legislation in the US.

Because they understand that UBI will be a profit center for them without some sort of limitation on predatory pricing and lending.

1. The increase in demand will first short-circuit the supply of basic essentials.

2. Banks will be the first ones to step in the gap to finance companies working to meet UBI demand

3. Then eventually over time, banks will begin extending credit to overextended UBI-powered citizens. The citizen is the conduit for government-to-bank revenue exchange.

If target and walmart, currently competing for business on opposite sides of the same street, both raise their margins on food and clothing in response to the implementation of UBI then they are clearly colluding and I would hope that an enormous antitrust thing would ensue.

But I'm no expert. You may be right.

It would be difficult to have predatory pricing if there's a suitable, free alternative.

It would take magic. The markets for most basic necessities are reasonably efficient. There's no major monopoly on them and it's not that hard for anyone to enter the market.

If scarcity was a driving force in creating the competition that capitalism deems necessary, then there would be no point in hoarding or passing down more wealth than could be spent in a lifetime. So, it's an obvious mistruth.

And if the price of all things will increase because some people are no longer starving and able to afford to pay more, perhaps that's a fair trade. We will optimize for more convenience, higher quality, and more novel products, then.

Perhaps this only illuminates how close people who feel they are doing well are to the people that take most of the prejudice for their lack of wealth. Maybe being a small business owner doesn't put you in the same world as Wal-Mart any more than being white and working class makes you basically equals to Elon Musk.

Perhaps it's the tide that lifts all boats and not how many have sunk around you.

It's called supply and demand, nothing magical about it. The only thing magical is leftists thinking this won't happen.

Housing is its own story because anti-development policies have constrained supply, which artificially forces prices up. However, 1) it's important not to conflate it with cost trends of other basic needs, and 2) there's a strong argument that increasing base-level income also increases mobility to lower-cost areas, which has a stabilizing effect on housing. The few reputable studies on UBI-equivalents I've seen show pretty minimal price inflation in comparison to the income gains, for example [2].

[1] https://fred.stlouisfed.org/graph/?g=1xKh

[2] https://www.aeaweb.org/articles?id=10.1257/app.6.2.195

It may be the case that in countries which spend less on health per capita than the US wait times tend to be longer on average (and I'm pretty sure the data says this isn't universally true), but that's not an inherent property of the single-payer system - and wait times for someone who would never be able to afford the surgery they need under the American system are infinitely shorter.

So you really think that the demand for, say, hip replacements, will grow indefinitely because the recipients don’t have to pay money for it?

> the nature compensates by limiting supply.

Which nature, and how does it limit supply? I can’t think of any reasonable interpretation of that statement that makes any sense.

There's nothing inherent in single payer systems that forces long wait times. And in my experience (Sweden), when you need care you get it. That in contrast with that it proved almost impossible to get to see an in-network doctor when I lived in Michigan.

When the government can just take your money out from under you, that starts making politics quite important.

Do note that there will need to be provisions for changing the amount of UBI. At the very least to index it to inflation. Heck, refusal to raise UBI for inflation for long enough would already screw over the people who depend on it.

this is pretty much an axiomatic property of the power concentration required to implement broad-scope social programs enforced by the state.

The problem I have with this is “who gets to define what is and is not a horrible job?”

Just not liking your job can’t be the litmus test here. If 95 percent of people doing a job thinks it’s a fine job and 5% hate it, does that make it a horrible job? What about 5% and 95%? When does a job become horrible?

Also, what about a generational change in attitudes or a difference in attitudes between regions. There are jobs I did that I consider decent honest work that I put myself through college doing that many people twenty years my junior would not even consider. There are jobs city folks would do that country folks would not do? There are jobs immigrants are fine with that native born citizens would consider horrible.

For those of us working hard and paying lots of taxes, we have expectations here since it's the fruits of our labor that are paying for all this. If we're expected to work so others don't have to, there needs to be solid justification that those of us still working agree with.

People would still want money. UBI isn't going to be enough for a lavish lifestyle, people will still want to work. It would make lower-paying activities like art/open source more viable though.

Not really. The income tax didn't exist before 1913 and the government was way smaller so there wasn't a even need to collect a lot of taxes. Are you thinking of the 50s? Because even in that time people just avoided to declare all their income (it was easier back then) or used other loop holes to avoid paying taxes [1]

[1] https://taxfoundation.org/taxes-on-the-rich-1950s-not-high/

Not to mention a lot of other social programs that would be folded into UBI and eliminated overnight. Social security, food stamps, rent assistance.... That's not enough savings to pay for UBI, but it's an appreciable chunk.

And the existence of UBI would imply the existence of a national registry, which would drastically change the equations regarding illegal immigration. Border enforcement becomes a lot less important to some anti-immigrant demographics, if those immigrants cannot receive any welfare. Police for fraud, sure, but maybe you don't need as many fences and armed guards patrolling the border?

I'm just saying the knock-on effects of such a drastic shift in society would be huge, so expecting a simple comparison of current costs and revenues is so simplistic that it's guaranteed to be off by a lot.

From welfare state: By giving it unconditionally.

From socialism/communism: You're still allowed to own "means of production", and you're also still allowed to try to maximize profits etc. as a company. Private property, especially owning a business privately, is still a thing.

> What incentive would there be for people to work?

You work because you want to lead a somewhat nice life, where you're able to afford things. UBI (at least the more serious proposals) would cover just the very basics: You'll be able to afford a roof over your head, food and other such basics. Want to afford some nice things? Need to work.

And this is in my opinion the beauty of UBI. Doing a crappy job until the end of my life for a crappy salary that doesn't get me anywhere? No way. Doing a crappy job for a while until I've saved up enough cash to afford something I want? Why not. It incentivizes to make crappy jobs that nobody wants (unless they must) more attractive; accelerating their automatization (see e.g. the garbage truck examples in this thread - people running behind it vs. having an automated crane to do it); giving power to those who currently have no option than to work whatever they're given, no matter how much they dislike it.

Exactly! I think there was an Article in the NYT a few months back about some Scandinavian experiments with UBI - they gave a bunch of people UBI to see what happens. If I remember correctly, there was a story about one guy who was previously on welfare, and creating some sort of hand drums was his hobby and he was occasionally asked by others if they could buy some from him, however he wasn't allowed to sell them because otherwise he would lose his welfare benefits. But risking to start a business wasn't really an option either, because it wasn't making enough/as much/as reliably as welfare did so he was really kind of in a crappy situation where he could have improved his life conditions on his own but sort of wasn't allowed to for legal reasons. UBI totally took this kind of pressure from him.

Of course, there were also those who essentially took a year off to essentially do nothing. And if UBI is introduced, there will certainly be a percent of people that decide that they'll just stop working (will be interesting how many come back, once they get bored). But I believe that those kind of people always have and always will exist - thanks to progress and automation, we're in a spot where society doesn't really need everyone to work anymore and still be able to function.

Edit: Or like parent just wrote, it can allow you to bootstrap a small business.

Situation in Germany for unemployment / welfare: 450sqft apartment, utilities included, TV, smart phone, 400€/mo cash. Where are those serious proposals that suggest making the UBI pay less than the current social programs?

The beauty of UBI is that government mandated minimum wage, with all its drawbacks, wouldn't be needed anymore. People would be able to refuse shitty job offers and not starve. Ultimately, employers would have to raise wages but not because of the law but because of workers' better negotiation position.

Ideally the money should come from the elite class that is accumulating the capital thanks to automation and monopolization. A huge part of this capital is currently spent in non-productive ways like speculation, lobbying and luxuries. This is what some socialists and social democrats are proposing, though most agree we have not reached the needed level of automation and advancement yet.

Neoliberals don't really want the UBI anytime soon, they just hijacked the term and are now bastardizing it just like they did with many other good leftist ideas because they found them either threatening to their interests or useful for their power games.

As other posters here have already noticed, "neoliberal UBI" will most likely be used to incite conflict and division between the lower and middle class. They will make the middle class pay the bill while promoting victim mentality and degeneracy among the lower class. This should produce a shitshow that will help keep the wage slaves distracted for the next decade or two until a true UBI becomes a possibility.

Have you done the math on this? The scale of UBI is so large that it has to mostly come from the middle class. A meager $20k UBI for all 300 million Americans would cost $6 trillion. Even if you liquidated the 100% of wealth of the top 400 Americans you'd only get $3 trillion, and you're only able to do that once, not every year.

The hubris in this is utterly breathtaking.

I’m interested in whether something tends to create a society that I think should exist for my children and their great-grandchildren (whom I’ll surely never meet).

Most of those things happen to have market-based outcomes in mind, but I’m open to good ideas that happen to be socialist, anarchist, communist, or any other broad label.

The average worker's income tax rate is ~40%, but they'll also have to pay for health insurance (included in welfare at a subsidized rate), pensions etc.

the real problem is that 50% of the population has a below average IQ. No matter what you do 15% will end up in financial trouble

So, to actually solve the issue you're going to need to decentralize and de-automatize. Otherwise lots of people are going to lose their economic and hence existential purpose.

You just described most jobs. The difference is that UBI would be something like a right, as opposed to jobs where you can be cutoff from your livelihood at a moment's notice.

> instead of earning their own via providing goods to the market (e.g. services)

We need to get over this Smithian vision of everyone being their own little entrepreneur. You'll see the job 'market' acts very little like a utility maximizing market when you get into the details. For example, see the endless posts on this site about 'culture fits' and ritualistic hazings posing as interviews.

A right can be withdrawn, especially as we a working towards outcompeting lots of people using machines. Then keeping a large population would be merely a hobby of the powerful.

> For example, see the endless posts on this site about 'culture fits' and ritualistic hazings posing as interviews.

Right, it is not perfectly efficient, but better than alternatives that are determined top down by rigid rules enforced by a powerful apparatus.

>You just described most jobs.

No. Now you depend on a lot of semi-powerful un-centralized instances, and not just one point of failure. And you can pick your poison according to your tolerance. It is not perfect, but it does not leave you at the mercy of one and only one entity without any recourse.

This is like Google banning you on gmail, and hence adsense and youtube, or Paypal or Visa banning you on their payment network, only a million times worse.

It is much easier to get locked out of the market for jobs that pay a living wage than you realize. If you have a bad credit report or a criminal record, those un-centralized instances start to behave like a single point of failure. And you definitely don't have any recourse.

I don't want UBI; I want people to have some assurance they will be able to eat tomorrow.

The notion of a right does not include material implementation of that right for you by others, it merely states that you have a right to earn it and keep it by your own work and effort.

https://en.wikipedia.org/wiki/Negative_and_positive_rights

The right to council in criminal matters, for example, is well established even in the U.S.

The idea that other people owe you specific goods or services just for existing—a.k.a. positive rights—leads directly to contradiction and conflict.

The AARP is a wildly powerful lobby, well out of proportion to the number of their members. People don’t live in fear of the AARP, I agree, but you might ask where does that power originate?

How do you possibly enforce that while things become ever more centralized and automatized. We are already losing to those in power and we are not even a tenth of the way there. E.g. there has been a massive decline of applications of anti-trust laws.

It shifts the power from employers to the state, not to the employees, the state then merely allows the former employees to play a little.

Like proportional representation, approval voting, banning corporate money from politics, etc.

I don’t think most people in poverty will work their way out of it. It’s a mindset and a lifestyle, in addition to a reality. UBI probably won’t change that.

It’s an interesting thought experiment: can you have a society without impoverished people?

Not starving, though, is something that can be directly impacted with UBI.

I'm less afraid of poverty now. More able to take risks. Less afraid of "losing what I worked so hard to get".

I think what you're talking about is "the underclass" - people who have no experience of earning a wage and have lived off government benefits for multiple generations. They definitely have a different attitude to life.

The way "it's a mindset and a lifestyle" reads is very harsh and diminishes the complexity of why poor people stay poor.

The relevant analogy is people telling those struggling with depression and anxiety to just stop being depressed and anxious. It doesn't work that way. There are other problems and barriers in the chemical imbalances in the brain that lead to these disorders. Yes, people with these conditions can have mindsets and make decisions, caused by both the disorders and potentially their natural psychology, that are not conducive to getting out or that got them in in the first place, but those are not the cause. The thinking and mindset is more of a multiplier or a catalyst to the underlying cause of chemical imbalances.

The same thing goes for those in poverty and in the lower class. Yes, mindset and decisions can lead to worse off poverty or a situation where you can't climb out of it. But those are not the primary causes in the general case. (Of course there are always exceptions and edge cases.) What are the causes? In my opinion, it's rampant consumerism (buyers don't just make the choices independent of other influences, they are heavily influenced and emotionally hacked to make the choices they do), a poor educational system, a poor support structure such as the problems with health insurance, racism and many other -isms, general socioeconomic inequalities and segregation, monopolies, capitalism, the credit system, city infrastructure and the requirement to own cars, the movement of jobs into cities, etc. And all of these have secondary effects that all feed into each other. It isn't clear how UBI solves these and doesn't just shift things around. I get the idea of UBI, but it seems to place all the blame on poor people.

So like I said, the situation is complex and can't be summarized by "poor people are poor because of their mindset and lifestyle choices".

I’m not saying all or even a majority, but I believe it’s a substantial subset and understanding the likely effects of UBI on a substantial subset of the targeted population seems wise.

Regarding UBI, I currently can't understand its potential effectiveness when more comprehensive reforms seem to be also missing. People are not being educated, employed, fed, given healthcare, etc., and I almost feel that UBI is going to blossom into this excuse to forget about those problems and thus the people facing those problems while minimally giving them chips to still play and lose at the table.

There absolutely are people who can't currently, or may never be able to, steer their life in a useful direction.

But most people? I'd say instead that most people are stuck in a poverty cycle because society is constructed that way.

When people are given enough money to be able to afford helpful choices, as opposed to scraping along at subsistence level, lots of people find their way to better, more stable, healthier, less stressed lives.

It's only a mindset when you don't have the means to climb out of it.

It's perfectly possible to build in security mechanisms.

> It's perfectly possible to build in security mechanisms.

Sure it is, but there would have to be someone with the power to do so and more importantly the interest to do so. That's something I simply don't see happening in the USA - check their health insurance system for a concrete example. If they're unable to copy the similarly capitalistic but freer system of Switzerland or other countries with mixed private/public health insurance, then what hope is there with the issues I listed and the UBI?

I just wanted to make clear that it's possible to implement UBI. There are many reasons against UBI, but not the ones you gave.

Personally, I'm against UBI for two reasons. First, it does not solve the fundamental problem, which is capital accumulation an ever increasing gap between the rich and the poor. The more money you have, the more money flows to you, and the gap has grown insane. Unless this trend is addressed and reversed, even UBI cannot prevent massive social unrest in the long run. Second, UBI makes it mentally and morally easier for employers to fire people and to lower wages even further. In the end, it will lead to a grossly impoverished class of UBI recipients who will work 6 days a week for $3.25 an hour to supplement their meagre UBI.

In my opinion a classical welfare state, maybe with a negative income tax, strong worker protections, tax-funded education and health care, and strong means to prevent wealth accumulation are the only ways to tackle the problem in the long run. Reforming hereditary laws and stopping almost all "financial products" would be a good start. Right now, once you have reached a certain threshold you can just live off by speculating on Wall Street and juggling around virtual money without ever producing anything of (non-monetary) value. That shouldn't be possible at all.

A deeper problem is that the whole model of existing economy is flawed, because it's based on permanent expansion, which leads to fast exhaustion of natural resources. It is simply not maintainable on Earth for more than 200 years from now.

I don't know how to break this to you, but surely you know there is already a grossly impoverished group of people working 6 days a week for $3.25 an hour without UBI.

If you add the UBI to their income they'll be hugely better off and they might even be able to choose between working those 6 days or staying at home and looking after their children, or caring for an elderly relative without the risk of being made homeless, or being unable to afford food for their family.

Maybe, maybe not.

For clarity, I am a fan of UBI. But I'd like to run through a hypothesis about an adverse effect.

If you add the UBI and costs go up accordingly, the real, marginal benefit they can obtain by working for $3.25 an hour will actually decrease.

This means someone who is in circumstances where they can currently earn a meagre income to tip the balance to being able to make ends meet in that circumstance, will find their ability to work the same amount in a UBI world will not tip the balance to being able to make ends meet.

In other words they will be pushed to change circumstance, towards more work and/or lower cost. E.g. move somewhere cheaper, work more hours.

This does not sound like a net benefit for the already impoverished. It sounds like a trap, because low-wage working will provide less marginal benefit to change what people can afford when they are stuck.

If someone is making ends meet by working at your (illegally low) wage, then having that wage _plus_ UBI means that they are UBI rate / existing wage times better off.

The wage's percentage of total income dropping is a red herring.

No one will be pushed to work more when they have _more_ resources at hand.

That's why I wrote "real", as in adjusted for inflation.

If you want to help poor people, start with radically capping and reducing rents per m^2 everywhere. And by "radically" I mean radically, not just halving them. That's one of the biggest problems in almost every country and it will get worse and worse if current trends continue.

US population is what, 300 million, ~75% of that are adults, multiplied by something like $35,000 is what, 8 trillion? The top 1% have a wealth of 35 trillion, US GDP is around 24 trillion - is it acceptable to spend 1/3rd of your GDP on eradicating poverty and creating a more equal society?

Also, we already depend on "the government" to make available (or protect) some pretty important stuff we depend on: rule of law, public safety, healthcare (in most developed countries), etc..

That is simply an impossibility for the majority of people.

For now.

Companies are accountable to customers in the continuous rolling election of the market. You can vote them out of your life at any time. It is the ultimate form of accountability. This is especially good because bankruptcy as a form of accountability can ultimately affect everyone in the company, whereas in reality almost all decisions made by governments are handled by unelected officials who persist across party elections and for which there's no systematic removal mechanism. They can't go bankrupt. In some countries they can't even be removed, as the civil service isn't directly controlled by the elected politicians. Mostly they fly under the radar, screwing things up for their entire lives.

At least with companies there's some sort of limit to how dysfunctional they can get before they lose influence and power.