[_heimdall]

Capitalism is based on, among other things, an expectation that free markets are pretty good at balancing out in the long run. If demand goes up only because access to money goes up, prices will rise.

Any increase in supply over time will eat up some of that price fluctuation, but for most products prices are more flexible than supply and a majority share of any capital increase will go towards prices rather than supply.

[dataflow]

> a majority share of any capital increase will go towards prices rather than supply

You actually made my point, I think: that the price increase need not necessarily be "roughly in line with that", but could be less.

This distinction is absolutely critical. Like I said in [1], if you put $3k in my pocket, and my expenses increase by $2k, that's a very different situation from if my expenses grow by $3k. It would mean there is a reachable equilibrium.

[1] https://news.ycombinator.com/item?id=43430867

[_heimdall]

When I said "in line" I didn't mean 1:1 or 100%. I may have picked a bad phrase there, I was intending to say that there would be a strong correlation between the two and that a majority of the extra Monet would go towards price increases.

I forget the general rule when it comes to companies, but there's a general percentage that is often how much a price increase on a company is passed on to consumers. If a company's tax rate goes up by 10% something like 8% of that is passed on to the consumer through price increases. I'd expect something similar with a UBI.

[dataflow]

> When I said "in line" I didn't mean 1:1 or 100%. I may have picked a bad phrase there, I was intending to say that there would be a strong correlation between the two and that a majority of the extra Monet would go towards price increases.

If so, then explain how you're making the jump from "prices increase some" to "you would need Marx style price controls" or "otherwise UBI will fail to cover the necessities"? If you give me $X and I spend $X * r of it due to price increases, and r < 1, then don't I have (1 - r) * $X left in my pocket, meaning it could be made large enough to cover the basic necessities? This isn't complicated math.

I don't get why "prices increase" is seen as such a mic-drop phrase that shows the system would fall apart. Prices already increase for all sorts of reasons, it's not like the economy falls apart every time or we somehow add Marx style price controls every time. Sure, prices increase some here too. And then what? The sky falls?

[_heimdall]

Price increases as a mic drop in my opinion and I don't mean to use it that way. As far as I can tell its just an inevitability with anything like a UBI.

With regards to my claim that we'd need strong price controls, a UBI needs prices to the basics to remain stable. I won't go down the road of trying to define what "the basics" are here, that's a huge rabbit hole so let's just leave it at the broad category in general.

If everyone can afford the basics, there is more demand for those items. Supply will likely increase eventually and eat up part of the demand increase, but the rest goes to prices. When those prices go up, the UBI would have to increase to match. The whole cycle would go on in a loop unless there's some lever for the government to control the prices of anything deemed a basic necessity.

[dataflow]

> When those prices go up, the UBI would have to increase to match. The whole cycle would go on in a loop unless there's some lever for the government to control the prices

No. Just because something increases forever that doesn't mean it won't stabilize. Asymptotes, limits, and convergence are also a thing. You're making strong divergence claims that don't follow from your assumptions.

[galaxyLogic]

Governments already provide "free income" in the form of free or subsidized services.

Say you have a fire-department even though you personally might not be paying anything for it because you are so poor that you don't pay any taxes. You have police protecting you and the army. You have free primary school at least.

So I think the question is, would it help for the government to provide more, or less, or the same amount of free services as it does currently?

Would it "increase prices" if healthcare was free? Not necessarily I think. At least not the price of healthcare. Government would be in a much better position to negotiate drug-prices with pharmaceutical companies, than individuals are.

[_heimdall]

If you have a government that runs a balanced budget, those services aren't free.

> Would it "increase prices" if healthcare was free?

That depends, who's ultimately footing the bill? If its paid for with taxes on businesses, yes most of that would be passed on to consumers in the form of price increases. If its paid for by consumer taxes, ultimately you will find consumers demanding higher wages and prices would again go up. If its paid for with tariffs, well we'll fins out soon but prices should go up there as well.

[galaxyLogic]

> those services aren't free.

They are free for poor people. For instance, basic education must be free, so we can have a productive work-force that can read and write and pay taxes in the future, which will make us even richer.

[LinXitoW]

In a UBI situation demand would shift, not just go up. If there's two hypothetical people paying the tax, a very rich person (>300.000 a year) and a poor person (<50.000 a yr), money effectively shifts from the rich person to the poor person (at least the majority). The poor person will have very different demands than the rich person.

Finally, we already do price controls and subsidies in many places, like food production. It's just that a big part of the advantage is soaked up by big companies.

[_heimdall]

Right, so prices for items the rich people want would fall and prices for items everyone else wants would go up.