UBI is less of a ‘fix’ for capitalism and more of just ‘harm reduction’. Especially as more and more jobs are automated.
As automation really takes off, it might even be necessary for the continuation of capitalism, saving the capitalists from the hordes of desperate unemployed people by making the unemployed people less desperate.
Also UBI is just possible in states that profit from the (post)colonial world order. It never has been a global solution / fix
Eh… Again, as automation rises, and productivity goes ever higher, UBI will become more and more viable, even places that didn’t benefit from being colonizers.
If we’re going to accept the paradigm that the few rich people who own all the robots get to keep all the profits from those robots’ work, then they will become extremely rich. And they’ll have plenty of money that can be taxed away and redistributed through a UBI system.
UBI needs to be paired with common sense price controls.
Without those, rent seekers will just charge more, likely MORE than nullifying the extra money
WITH price controls, though, it’s an excellent step amongst many towards eventually abolishing or at least defanging capitalism, which primarily survives through forcing artificial scarcity on people and calling it freedom.
Imagine a Ubisoft game and imagine how much of a premium you would pay over the price it sells for in order to NOT have Ubisoft involved with it at all. If you are anything like me, it is a non-zero number.
Now explain to me how Ubisoft is a profitable business when it reduces the value of products it is associated with…
“Oh everyone is getting $5000 a month? Maybe it’s time rent went up…” - Every landlord as soon as UBI is introduced. Every capitalist would try and get a piece of that pie.
This is a very Baby’s First Econ 101 view of the relationship between renters and rentees. Following the logic, you’d think landlords would enthusiastically support a higher minimum wage, bigger social welfare packages, less student debt, and more immigration. After all - on paper - this all leads to higher rents.
But, in practice, higher personal incomes unlock a whole host of options that landlords don’t like. Chief among them, UBI instantly gives everyone in the country a minimum level of credit-worthiness. And landlords primarily trade on their tenants’ inability to borrow money to buy a house.
Even more broadly, landlords don’t like competition. And another option all these policies opens up is locally managed community housing. Lumpen proles with a minimum income can exchange and pool their buying power in all sorts of ways that create backdoors in the economy landlords can’t rent-seek. Young people aren’t obligated to take low wage jobs, older people aren’t bound up in the workforce past their most productive years, and skilled professionals can do business directly with the community rather than getting gated behind state-run contractors or monopoly vendors.
None of that is to describe UBI as a panacea. But diluting the money supply and universalizing access to currency in a market economy has immediate and long-term tangible benefits that aren’t just subsumed by higher rents.
At an absolute bare minimum (and baring state-sanctioned thievery which remains in the cards) a landlord has to give you something to get that UBI. For someone with nothing, this is an immediate and obvious improvement in standard of living.
landlords primarily trade on their tenants’ inability to borrow money to buy a house.
Yes, and UBI would further increase home prices. If everyone can now afford an extra $1,000 a month for mortgages then they’ll be able to / forced to due to competition get a bigger mortgage and bid up prices for the home.
Same thing for rent, if everyone has an extra $1,000 a month they’ll just bid up rent prices until you’re back to square 1. Say there’s three people in a rental market, me who pays $1,500 for rent, another guy who pays $1,000 for rent and an unhoused person. After UBI he other guy may try to rent my apartment, so I now have to offer a higher rent to out bid him, and the other guy unable to get a better apartment has to now outbid the unhoused person to keep their place. Eventually this reaches an equilibrium where I’m paying $2,500 to outbid the other guy, and there now paying $2,000 to outbid the unhoused person. The housing hierarchy remains the same, and the landlord gets all the extra money.
The problem isn’t lack of money, the problem is a lack of supply and a hierarchical wage system that determines who gets that supply, UBI doesn’t address either of those problems.
Increasing aggregate demand without increasing aggregate supply just leads to inflation. UBI has no mechanism to increase aggregate supply and discourages the government from doing it because they are using all their money for UBI instead of building social housing, providing food etc. and they can turn to UBI and say that’s all you need now, we aren’t going to supply any services.
This is why we need universal basic services backed by a jobs guarantee instead. It still gives a mechanism to raise the floor on wages and benefits, private enterprise now has to compete with the government for labor, without causing inflation because the government is actually using the labor for productive purposes, eg. Building social housing, thus increasing aggregate supply.
UBI would further increase home prices
There is no evidence of this
The same can be said of your positive claims for UBI. There’s no evidence for anything on the macro scale for UBI since it’s never been done on a societal scale. The best we can do is theorize based off economic principles, which is what I was doing.
If you think my theory or reasoning is wrong show it.
There’s no evidence for anything on the macro scale for UBI since it’s never been done on a societal scale.
Social Security is UBI on a societal scale. And there is, if anything, a negative correlation between resident on SS and home resale value.
SS is not universal though, it effects a specific group. People on SS tend to be unemployed / underemployed. Yes if you compare home prices of a community with a high percentage of SS to the whole country home prices will be less. But that’s an unfair comparison, you have to compare them to a community with a similar pre-SS income level. So say the SS community average income without SS is $20,000 from pensions, 401k etc. if you compare that community with another with low to no SS with average income of $20,000 then the SS community will have higher home values.
Also people on SS tend to be the only ones in the US not trying to upgrade their housing, if anything they may be trying to downsize. So they aren’t trying to use their money to outbid someone else to go up the housing hierarchy. They also tend not to be renters so they don’t have to outbid someone else to keep their current housing.
I still don’t see how UBI wouldn’t result in inflation of some sort in the long run. I can imagine UBI having great effects in the beginning, sure.
I still don’t see how UBI wouldn’t result in inflation of some sort
Inflation isn’t just driven by the bottom dollar of the poorest spender. If the US surplus production + imports exceeds the demand created by UBI, prices would fall rather than rise. If US consumption diminished overall while UBI rolled out, inflation would fall. If the national economy raises taxes on the wealthy while it increases spending on the poor, you won’t see inflation. You’ll see resource reallocation.
I might point you to parts of the country that lack consumer infrastructure - food deserts, being the most prominent example. A neighborhood without a grocery store will experience higher cost to access basic food and food services than a neighborhood with one. UBI expands the incentive to build supermarkets in high-population low-income neighborhoods. The net result of new infrastructure in underdeveloped communities would (somewhat paradoxically) drive prices down, in the same way the advent of Big Box Retailers in major metro areas reduced consumer goods prices during the 80s/90s.
Capital improvements to areas with large populations of people with money to spend can generate a profit on the improvement while still reducing the cost of living for individual inhabitants.
Ask anyone who has moved from a rural underdeveloped neighborhood to a highly developed urban one, and you’ll find out the appeal is often lower overall living costs relative to wages - shorter commutes, cheaper goods and utilities, more public amenities. UBI can have the same impact on large low-income communities.
Thank you for the extensive answers, you formulate things in very easy to understand language.
UBI is a bandaid for capitalism by people not realising capitalism is the problem.
UBI is the easiest solution we might be able to actually implement.
Taxing the billionaires would be better, but they have billions to spend fighting the tax.
Just like complaining that EVs are worse than trains, sometimes the only solution we can manage is the worst one, but it’s still better than no solution.
it could also be a stepping stone. tearing down the entire global system takes time and until then there still must exist an economy, if only for external use. so if citizens of anarchistan want to go abroad they need some currency, and just giving a national credit card or whatever obviously isn’t going to work.
This is why we need universal basic services and not income. Guaranteeing basic services forces the government to increase production, eg. Build social housing, instead of just giving people money and leaving production to the market
An increase in aggregate demand without an increase in aggregate supply just leads to inflation.
Nah, more like top panel is UBI and bottom panel is the patchwork of bureaucratic means-tested aid we have now.
