One criticism of UBI that I see a lot is that corporations and landlords will just raise prices. Am I right in thinking that the way to combat this is to tax the everliving fuck out of stolen wealth so that corporations and parasites couldn't actually gain anything by price gouging?
Macroeconomics makes very little sense to me; I'm just a worker bee who's very angry about the status quo.
edit: it's 2022; how come autocorrect keeps changing things to be grammatically wrong
It would likely cause supply shortage driven inflation, you can't really tax against that.
UBI tends to have this sort of cooked in contradiction that It will both enable people to collectively work less and also the same amount of stuff will continue to be made at the same cost.
Say I own a widget making factory. 20% of my cost is labor, 50% is raw materials+consumables, 20% is fixed costs(rent/building repairs, machine purchases, etc), and 10% is profit.
UBI comes into effect and 10% of my workforce decides they don't want to work a grueling factory job for $15/hr anymore.
Now I can raise wages 25%, to replace/retain that 10%. But that drives up my labor costs per widget. So I have to sell my $100 widget for $105, just to make the same $10 a widget.
I can say, that's fine I'll just produce 90% as much and not raise wage, But now my fixed costs per widget have gone up. So now I have charge $102 per widget to make the same $10.
So even keeping profit in dollars the same, and accepting a lower margin I still have to raise prices.
But of course, all my vendors are going to be in the same boat. So despite raising my prices to cover the labor change I am still making fewer dollars per widget.
The answer is of course *handwave handwave automation*. Or actually - UBI for me the American, but not for whoever in Bangladesh is making the pajama pants, or the people in Mexico doing the field work harvesting my avocados.
Or you could undercut those same vendors for less profit. Large profits for business owners aren't a necessity.
One criticism of UBI that I see a lot is that corporations and landlords will just raise prices. Am I right in thinking that the way to combat this is to tax the everliving fuck out of stolen wealth so that corporations and parasites couldn't actually gain anything by price gouging?
Macroeconomics makes very little sense to me; I'm just a worker bee who's very angry about the status quo.
edit: it's 2022; how come autocorrect keeps changing things to be grammatically wrong
It would likely cause supply shortage driven inflation, you can't really tax against that.
UBI tends to have this sort of cooked in contradiction that It will both enable people to collectively work less and also the same amount of stuff will continue to be made at the same cost.
Say I own a widget making factory. 20% of my cost is labor, 50% is raw materials+consumables, 20% is fixed costs(rent/building repairs, machine purchases, etc), and 10% is profit.
UBI comes into effect and 10% of my workforce decides they don't want to work a grueling factory job for $15/hr anymore.
Now I can raise wages 25%, to replace/retain that 10%. But that drives up my labor costs per widget. So I have to sell my $100 widget for $105, just to make the same $10 a widget.
I can say, that's fine I'll just produce 90% as much and not raise wage, But now my fixed costs per widget have gone up. So now I have charge $102 per widget to make the same $10.
So even keeping profit in dollars the same, and accepting a lower margin I still have to raise prices.
But of course, all my vendors are going to be in the same boat. So despite raising my prices to cover the labor change I am still making fewer dollars per widget.
The answer is of course *handwave handwave automation*. Or actually - UBI for me the American, but not for whoever in Bangladesh is making the pajama pants, or the people in Mexico doing the field work harvesting my avocados.
What happens with the status quo is that you either outsource your widget factory to Bangladesh or you get more efficient machines so you can make the same number of widgets with half the people, letting the other half fend for themselves.
and?
The question was, why would prices rise because of UBI.
And the answer is: shrinking the labor force would raise wages and/or decrease production, even if gross profit remains fixed. Which means some hypothetical tax on "stolen wealth" whatever the fuck that is wouldn't effect it.
UBI's 'goal' is to shrink the labor force. Fewer workers, means higher wages and less production. Higher costs and lower supply means higher prices.
One criticism of UBI that I see a lot is that corporations and landlords will just raise prices. Am I right in thinking that the way to combat this is to tax the everliving fuck out of stolen wealth so that corporations and parasites couldn't actually gain anything by price gouging?
Macroeconomics makes very little sense to me; I'm just a worker bee who's very angry about the status quo.
edit: it's 2022; how come autocorrect keeps changing things to be grammatically wrong
It would likely cause supply shortage driven inflation, you can't really tax against that.
UBI tends to have this sort of cooked in contradiction that It will both enable people to collectively work less and also the same amount of stuff will continue to be made at the same cost.
Say I own a widget making factory. 20% of my cost is labor, 50% is raw materials+consumables, 20% is fixed costs(rent/building repairs, machine purchases, etc), and 10% is profit.
UBI comes into effect and 10% of my workforce decides they don't want to work a grueling factory job for $15/hr anymore.
Now I can raise wages 25%, to replace/retain that 10%. But that drives up my labor costs per widget. So I have to sell my $100 widget for $105, just to make the same $10 a widget.
I can say, that's fine I'll just produce 90% as much and not raise wage, But now my fixed costs per widget have gone up. So now I have charge $102 per widget to make the same $10.
So even keeping profit in dollars the same, and accepting a lower margin I still have to raise prices.
But of course, all my vendors are going to be in the same boat. So despite raising my prices to cover the labor change I am still making fewer dollars per widget.
The answer is of course *handwave handwave automation*. Or actually - UBI for me the American, but not for whoever in Bangladesh is making the pajama pants, or the people in Mexico doing the field work harvesting my avocados.
What happens with the status quo is that you either outsource your widget factory to Bangladesh or you get more efficient machines so you can make the same number of widgets with half the people, letting the other half fend for themselves.
and?
The question was, why would prices rise because of UBI.
And the answer is: shrinking the labor force would raise wages and/or decrease production, even if gross profit remains fixed. Which means some hypothetical tax on "stolen wealth" whatever the fuck that is wouldn't effect it.
UBI's 'goal' is to shrink the labor force. Fewer workers, means higher wages and less production. Higher costs and lower supply means higher prices.
Why would those prices rise when the people providing the same fixed good are still competing with each other? Why would they raise prices to make the 10% profit when they could keep prices the same and make a 6% profit for the same amount?
Also the "but they'll raise prices" can be mitigated by having a better tax setup. When our shitty tax system let's assholes with lots of money pile one loopholes and deductions so that they have a much lower tax rate than the average citizen, they have zero incentive to not turn around and gouge the average citizen for as much money as they think they can get away with. If you have tax structure that ensures excessive profits, those done to bleed people try, will just disappear after taxes. Well that can really incentive wealthy assholes not bleed people for every cent they can get because there will be little point in doing so.
I don't see how it could solved with tax alone. You could either go with huge marginal percentage based tax rates, at which point the elite will still try to accrue as much as they can because even a small percentage of a lot more is still more than they had before. As Warren Buffet put it, high tax rates will never stop the wealthy from trying to earn more money. Alternatively, if you go with some type tax cap, where 95% or 100% of income over a certain amount is taxed, that may incentivize some to stop profit-seeking, but more would-be land barons would just step in to fill those gaps. The only way to prevent price-gouging in a UBI setup is with actual price fixing.
One criticism of UBI that I see a lot is that corporations and landlords will just raise prices. Am I right in thinking that the way to combat this is to tax the everliving fuck out of stolen wealth so that corporations and parasites couldn't actually gain anything by price gouging?
Macroeconomics makes very little sense to me; I'm just a worker bee who's very angry about the status quo.
edit: it's 2022; how come autocorrect keeps changing things to be grammatically wrong
It would likely cause supply shortage driven inflation, you can't really tax against that.
UBI tends to have this sort of cooked in contradiction that It will both enable people to collectively work less and also the same amount of stuff will continue to be made at the same cost.
Say I own a widget making factory. 20% of my cost is labor, 50% is raw materials+consumables, 20% is fixed costs(rent/building repairs, machine purchases, etc), and 10% is profit.
UBI comes into effect and 10% of my workforce decides they don't want to work a grueling factory job for $15/hr anymore.
Now I can raise wages 25%, to replace/retain that 10%. But that drives up my labor costs per widget. So I have to sell my $100 widget for $105, just to make the same $10 a widget.
I can say, that's fine I'll just produce 90% as much and not raise wage, But now my fixed costs per widget have gone up. So now I have charge $102 per widget to make the same $10.
So even keeping profit in dollars the same, and accepting a lower margin I still have to raise prices.
But of course, all my vendors are going to be in the same boat. So despite raising my prices to cover the labor change I am still making fewer dollars per widget.
The answer is of course *handwave handwave automation*. Or actually - UBI for me the American, but not for whoever in Bangladesh is making the pajama pants, or the people in Mexico doing the field work harvesting my avocados.
What happens with the status quo is that you either outsource your widget factory to Bangladesh or you get more efficient machines so you can make the same number of widgets with half the people, letting the other half fend for themselves.
and?
The question was, why would prices rise because of UBI.
And the answer is: shrinking the labor force would raise wages and/or decrease production, even if gross profit remains fixed. Which means some hypothetical tax on "stolen wealth" whatever the fuck that is wouldn't effect it.
UBI's 'goal' is to shrink the labor force. Fewer workers, means higher wages and less production. Higher costs and lower supply means higher prices.
Why would those prices rise when the people providing the same fixed good are still competing with each other? Why would they raise prices to make the 10% profit when they could keep prices the same and make a 6% profit for the same amount?
Because they want to keep making money. Otherwise what stops someone from going to 5% profit and then 3% and then 1% and then no profit at all?
One criticism of UBI that I see a lot is that corporations and landlords will just raise prices. Am I right in thinking that the way to combat this is to tax the everliving fuck out of stolen wealth so that corporations and parasites couldn't actually gain anything by price gouging?
Macroeconomics makes very little sense to me; I'm just a worker bee who's very angry about the status quo.
edit: it's 2022; how come autocorrect keeps changing things to be grammatically wrong
It would likely cause supply shortage driven inflation, you can't really tax against that.
UBI tends to have this sort of cooked in contradiction that It will both enable people to collectively work less and also the same amount of stuff will continue to be made at the same cost.
Say I own a widget making factory. 20% of my cost is labor, 50% is raw materials+consumables, 20% is fixed costs(rent/building repairs, machine purchases, etc), and 10% is profit.
UBI comes into effect and 10% of my workforce decides they don't want to work a grueling factory job for $15/hr anymore.
Now I can raise wages 25%, to replace/retain that 10%. But that drives up my labor costs per widget. So I have to sell my $100 widget for $105, just to make the same $10 a widget.
I can say, that's fine I'll just produce 90% as much and not raise wage, But now my fixed costs per widget have gone up. So now I have charge $102 per widget to make the same $10.
So even keeping profit in dollars the same, and accepting a lower margin I still have to raise prices.
But of course, all my vendors are going to be in the same boat. So despite raising my prices to cover the labor change I am still making fewer dollars per widget.
The answer is of course *handwave handwave automation*. Or actually - UBI for me the American, but not for whoever in Bangladesh is making the pajama pants, or the people in Mexico doing the field work harvesting my avocados.
What happens with the status quo is that you either outsource your widget factory to Bangladesh or you get more efficient machines so you can make the same number of widgets with half the people, letting the other half fend for themselves.
and?
The question was, why would prices rise because of UBI.
And the answer is: shrinking the labor force would raise wages and/or decrease production, even if gross profit remains fixed. Which means some hypothetical tax on "stolen wealth" whatever the fuck that is wouldn't effect it.
UBI's 'goal' is to shrink the labor force. Fewer workers, means higher wages and less production. Higher costs and lower supply means higher prices.
I don't think that's true. The goal is to ensure everyone has a basic standard of living. It is theoretically more efficient to do this via UBI than via multiple complicated welfare and entitlement programs with lots of overhead. The assumption is that very few people will actually subsist on UBI, most will still work. But UBI will increase the bargaining power of labor and thus force a greater share of profits to got to labor, it will free more people to pursue riskier ventures which may ultimately result in economic growth, etc. It also theoretically provide necessary redistribution as automation allows capital to create more profit with less need for labor.
While racing light mechs, your Urbanmech comes in second place, but only because it ran out of ammo.
If we did a UBI, there would be inflation, because that's what happens when you flood the economy with money. Just like when you raise the minimum wage. Wages go up, and so prices go up.
It's just that it doesn't matter - you give someone 20% more money, prices go up by 3%, they still have greater purchasing power. We don't need to try to game the economy or punish people who raise prices, we just figure those effects into the calculus to figure out what a good UBI would be.
Beyond that, we absolutely shouldn't dismantle the social safety net if we get a UBI in place. People will need to rely on it less, which is good, but there will always be cases where the UBI isn't enough.
"My husband died and I have no job and three kids and no savings." -> "Fuck you, we're already giving you your $1000 per month, what more do you want?" isn't a great situation.
I submitted an entry to Lego Ideas, and if 10,000 people support me, it'll be turned into an actual Lego set!If you'd like to see and support my submission, follow this link.
So much of what is produced globally is wasted, though. Endless cheap junk that no one needs or wants, produced so that people can be paid for doing something "productive."
UBI would theoretically mean people wouldn't need to work all those stupid, useless, environmentally destructive jobs, no? I feel like that should go a long way toward squaring the circle.
One criticism of UBI that I see a lot is that corporations and landlords will just raise prices. Am I right in thinking that the way to combat this is to tax the everliving fuck out of stolen wealth so that corporations and parasites couldn't actually gain anything by price gouging?
Macroeconomics makes very little sense to me; I'm just a worker bee who's very angry about the status quo.
edit: it's 2022; how come autocorrect keeps changing things to be grammatically wrong
It would likely cause supply shortage driven inflation, you can't really tax against that.
UBI tends to have this sort of cooked in contradiction that It will both enable people to collectively work less and also the same amount of stuff will continue to be made at the same cost.
Say I own a widget making factory. 20% of my cost is labor, 50% is raw materials+consumables, 20% is fixed costs(rent/building repairs, machine purchases, etc), and 10% is profit.
UBI comes into effect and 10% of my workforce decides they don't want to work a grueling factory job for $15/hr anymore.
Now I can raise wages 25%, to replace/retain that 10%. But that drives up my labor costs per widget. So I have to sell my $100 widget for $105, just to make the same $10 a widget.
I can say, that's fine I'll just produce 90% as much and not raise wage, But now my fixed costs per widget have gone up. So now I have charge $102 per widget to make the same $10.
So even keeping profit in dollars the same, and accepting a lower margin I still have to raise prices.
But of course, all my vendors are going to be in the same boat. So despite raising my prices to cover the labor change I am still making fewer dollars per widget.
The answer is of course *handwave handwave automation*. Or actually - UBI for me the American, but not for whoever in Bangladesh is making the pajama pants, or the people in Mexico doing the field work harvesting my avocados.
What happens with the status quo is that you either outsource your widget factory to Bangladesh or you get more efficient machines so you can make the same number of widgets with half the people, letting the other half fend for themselves.
and?
The question was, why would prices rise because of UBI.
And the answer is: shrinking the labor force would raise wages and/or decrease production, even if gross profit remains fixed. Which means some hypothetical tax on "stolen wealth" whatever the fuck that is wouldn't effect it.
UBI's 'goal' is to shrink the labor force. Fewer workers, means higher wages and less production. Higher costs and lower supply means higher prices.
I don't think that's true. The goal is to ensure everyone has a basic standard of living. It is theoretically more efficient to do this via UBI than via multiple complicated welfare and entitlement programs with lots of overhead. The assumption is that very few people will actually subsist on UBI, most will still work. But UBI will increase the bargaining power of labor and thus force a greater share of profits to got to labor, it will free more people to pursue riskier ventures which may ultimately result in economic growth, etc. It also theoretically provide necessary redistribution as automation allows capital to create more profit with less need for labor.
This is an issue the earlier parts of this thread went around. In that UBI means different things to different people. It's something to 'free people from having to work' or is it just a cash replacement for all other welfare systems, is it essentially a boosted unemployment system or basically a negative income tax for wealth redistribution.
"By guaranteeing a standard of living, the artificial pressure to be productive is removed, and people can then choose to work to improve their standard of living or to pursue whatever their life goals would be."
Like, explicitly that is people leaving the labor force.
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MonwynApathy's a tragedy, and boredom is a crime.A little bit of everything, all of the time.Registered Userregular
So much of what is produced globally is wasted, though. Endless cheap junk that no one needs or wants, produced so that people can be paid for doing something "productive."
Err, this is axiomatically false. If no one wants it no one will buy it and it will no longer be produced (absent subsidies.)
Like I agree that people spend money on stupid shit, but if it isn't profitable it eventually goes out of production.
If we did a UBI, there would be inflation, because that's what happens when you flood the economy with money. Just like when you raise the minimum wage. Wages go up, and so prices go up.
It's just that it doesn't matter - you give someone 20% more money, prices go up by 3%, they still have greater purchasing power. We don't need to try to game the economy or punish people who raise prices, we just figure those effects into the calculus to figure out what a good UBI would be.
Beyond that, we absolutely shouldn't dismantle the social safety net if we get a UBI in place. People will need to rely on it less, which is good, but there will always be cases where the UBI isn't enough.
"My husband died and I have no job and three kids and no savings." -> "Fuck you, we're already giving you your $1000 per month, what more do you want?" isn't a great situation.
and yet most of the public seems to believe that the absolutely insane amount of inflation we've had is from the last stimulus check, as if direct payments have like a 500% inflationary effect per dollar given
stupid media
I feel like now if we pass a UBI every company will just double prices on everything until popular support crushes the UBI
So much of what is produced globally is wasted, though. Endless cheap junk that no one needs or wants, produced so that people can be paid for doing something "productive."
Err, this is axiomatically false. If no one wants it no one will buy it and it will no longer be produced (absent subsidies.)
Like I agree that people spend money on stupid shit, but if it isn't profitable it eventually goes out of production.
A lot of demand is artificially created via advertising, though. Billions of dollars spent on convincing people that they need The Thing, or that buying The Thing will make them happy. And we fall for it because we're all so overstressed and overworked that the momentary dopamine hit from buying something we won't care about a day or a week later is the only bright spot in our miserable lives.
Of course there's stuff people actually want, things we buy and use and they enrich our lives even though they're not strictly necessary for life. People have hobbies. People enjoy things.
But look at 90% of what's on offer at an average dollar store or Hammacher Schlemmer catalog and tell me anyone actually wants that stuff, as opposed to buying it because it's there and it's shiny.
If we did a UBI, there would be inflation, because that's what happens when you flood the economy with money. Just like when you raise the minimum wage. Wages go up, and so prices go up.
It's just that it doesn't matter - you give someone 20% more money, prices go up by 3%, they still have greater purchasing power. We don't need to try to game the economy or punish people who raise prices, we just figure those effects into the calculus to figure out what a good UBI would be.
Beyond that, we absolutely shouldn't dismantle the social safety net if we get a UBI in place. People will need to rely on it less, which is good, but there will always be cases where the UBI isn't enough.
"My husband died and I have no job and three kids and no savings." -> "Fuck you, we're already giving you your $1000 per month, what more do you want?" isn't a great situation.
and yet most of the public seems to believe that the absolutely insane amount of inflation we've had is from the last stimulus check, as if direct payments have like a 500% inflationary effect per dollar given
stupid media
I feel like now if we pass a UBI every company will just double prices on everything until popular support crushes the UBI
Companies set prices as a result of market forces not as part of a grand political conspiracy.
One criticism of UBI that I see a lot is that corporations and landlords will just raise prices. Am I right in thinking that the way to combat this is to tax the everliving fuck out of stolen wealth so that corporations and parasites couldn't actually gain anything by price gouging?
Macroeconomics makes very little sense to me; I'm just a worker bee who's very angry about the status quo.
edit: it's 2022; how come autocorrect keeps changing things to be grammatically wrong
It would likely cause supply shortage driven inflation, you can't really tax against that.
UBI tends to have this sort of cooked in contradiction that It will both enable people to collectively work less and also the same amount of stuff will continue to be made at the same cost.
Say I own a widget making factory. 20% of my cost is labor, 50% is raw materials+consumables, 20% is fixed costs(rent/building repairs, machine purchases, etc), and 10% is profit.
UBI comes into effect and 10% of my workforce decides they don't want to work a grueling factory job for $15/hr anymore.
Now I can raise wages 25%, to replace/retain that 10%. But that drives up my labor costs per widget. So I have to sell my $100 widget for $105, just to make the same $10 a widget.
I can say, that's fine I'll just produce 90% as much and not raise wage, But now my fixed costs per widget have gone up. So now I have charge $102 per widget to make the same $10.
So even keeping profit in dollars the same, and accepting a lower margin I still have to raise prices.
But of course, all my vendors are going to be in the same boat. So despite raising my prices to cover the labor change I am still making fewer dollars per widget.
The answer is of course *handwave handwave automation*. Or actually - UBI for me the American, but not for whoever in Bangladesh is making the pajama pants, or the people in Mexico doing the field work harvesting my avocados.
What happens with the status quo is that you either outsource your widget factory to Bangladesh or you get more efficient machines so you can make the same number of widgets with half the people, letting the other half fend for themselves.
and?
The question was, why would prices rise because of UBI.
And the answer is: shrinking the labor force would raise wages and/or decrease production, even if gross profit remains fixed. Which means some hypothetical tax on "stolen wealth" whatever the fuck that is wouldn't effect it.
UBI's 'goal' is to shrink the labor force. Fewer workers, means higher wages and less production. Higher costs and lower supply means higher prices.
I don't think that's true. The goal is to ensure everyone has a basic standard of living. It is theoretically more efficient to do this via UBI than via multiple complicated welfare and entitlement programs with lots of overhead. The assumption is that very few people will actually subsist on UBI, most will still work. But UBI will increase the bargaining power of labor and thus force a greater share of profits to got to labor, it will free more people to pursue riskier ventures which may ultimately result in economic growth, etc. It also theoretically provide necessary redistribution as automation allows capital to create more profit with less need for labor.
This is an issue the earlier parts of this thread went around. In that UBI means different things to different people. It's something to 'free people from having to work' or is it just a cash replacement for all other welfare systems, is it essentially a boosted unemployment system or basically a negative income tax for wealth redistribution.
"By guaranteeing a standard of living, the artificial pressure to be productive is removed, and people can then choose to work to improve their standard of living or to pursue whatever their life goals would be."
Like, explicitly that is people leaving the labor force.
Maybe in the narrow definition of labor force participation metrics, but I would expect it to look a lot more like the point at which you quit your day job to go full time on your Patreon comes down significantly.
While racing light mechs, your Urbanmech comes in second place, but only because it ran out of ammo.
One criticism of UBI that I see a lot is that corporations and landlords will just raise prices. Am I right in thinking that the way to combat this is to tax the everliving fuck out of stolen wealth so that corporations and parasites couldn't actually gain anything by price gouging?
Macroeconomics makes very little sense to me; I'm just a worker bee who's very angry about the status quo.
edit: it's 2022; how come autocorrect keeps changing things to be grammatically wrong
It would likely cause supply shortage driven inflation, you can't really tax against that.
UBI tends to have this sort of cooked in contradiction that It will both enable people to collectively work less and also the same amount of stuff will continue to be made at the same cost.
Say I own a widget making factory. 20% of my cost is labor, 50% is raw materials+consumables, 20% is fixed costs(rent/building repairs, machine purchases, etc), and 10% is profit.
UBI comes into effect and 10% of my workforce decides they don't want to work a grueling factory job for $15/hr anymore.
Now I can raise wages 25%, to replace/retain that 10%. But that drives up my labor costs per widget. So I have to sell my $100 widget for $105, just to make the same $10 a widget.
I can say, that's fine I'll just produce 90% as much and not raise wage, But now my fixed costs per widget have gone up. So now I have charge $102 per widget to make the same $10.
So even keeping profit in dollars the same, and accepting a lower margin I still have to raise prices.
But of course, all my vendors are going to be in the same boat. So despite raising my prices to cover the labor change I am still making fewer dollars per widget.
The answer is of course *handwave handwave automation*. Or actually - UBI for me the American, but not for whoever in Bangladesh is making the pajama pants, or the people in Mexico doing the field work harvesting my avocados.
What happens with the status quo is that you either outsource your widget factory to Bangladesh or you get more efficient machines so you can make the same number of widgets with half the people, letting the other half fend for themselves.
and?
The question was, why would prices rise because of UBI.
And the answer is: shrinking the labor force would raise wages and/or decrease production, even if gross profit remains fixed. Which means some hypothetical tax on "stolen wealth" whatever the fuck that is wouldn't effect it.
UBI's 'goal' is to shrink the labor force. Fewer workers, means higher wages and less production. Higher costs and lower supply means higher prices.
I don't think that's true. The goal is to ensure everyone has a basic standard of living. It is theoretically more efficient to do this via UBI than via multiple complicated welfare and entitlement programs with lots of overhead. The assumption is that very few people will actually subsist on UBI, most will still work. But UBI will increase the bargaining power of labor and thus force a greater share of profits to got to labor, it will free more people to pursue riskier ventures which may ultimately result in economic growth, etc. It also theoretically provide necessary redistribution as automation allows capital to create more profit with less need for labor.
This is an issue the earlier parts of this thread went around. In that UBI means different things to different people. It's something to 'free people from having to work' or is it just a cash replacement for all other welfare systems, is it essentially a boosted unemployment system or basically a negative income tax for wealth redistribution.
"By guaranteeing a standard of living, the artificial pressure to be productive is removed, and people can then choose to work to improve their standard of living or to pursue whatever their life goals would be."
Like, explicitly that is people leaving the labor force.
No it doesn't. Most people like to work, to keep busy, to see themselves as useful.
The only areas of labor that will see people leave are the ones that have relied on threat of starvation to ensure employment. They'll be forced to either improve their own practices or lose out to some other company that does in the competitiion for labor.
If we did a UBI, there would be inflation, because that's what happens when you flood the economy with money. Just like when you raise the minimum wage. Wages go up, and so prices go up.
It's just that it doesn't matter - you give someone 20% more money, prices go up by 3%, they still have greater purchasing power. We don't need to try to game the economy or punish people who raise prices, we just figure those effects into the calculus to figure out what a good UBI would be.
Beyond that, we absolutely shouldn't dismantle the social safety net if we get a UBI in place. People will need to rely on it less, which is good, but there will always be cases where the UBI isn't enough.
"My husband died and I have no job and three kids and no savings." -> "Fuck you, we're already giving you your $1000 per month, what more do you want?" isn't a great situation.
and yet most of the public seems to believe that the absolutely insane amount of inflation we've had is from the last stimulus check, as if direct payments have like a 500% inflationary effect per dollar given
stupid media
I feel like now if we pass a UBI every company will just double prices on everything until popular support crushes the UBI
Companies set prices as a result of market forces not as part of a grand political conspiracy.
If they're 100% rational, which many are not. Also profits are at record highs right now plan "raise prices blaming inflation, rake in cash" clearly works; why not the same thing + "UBI causing inflation" at start?
One criticism of UBI that I see a lot is that corporations and landlords will just raise prices. Am I right in thinking that the way to combat this is to tax the everliving fuck out of stolen wealth so that corporations and parasites couldn't actually gain anything by price gouging?
Macroeconomics makes very little sense to me; I'm just a worker bee who's very angry about the status quo.
edit: it's 2022; how come autocorrect keeps changing things to be grammatically wrong
It would likely cause supply shortage driven inflation, you can't really tax against that.
UBI tends to have this sort of cooked in contradiction that It will both enable people to collectively work less and also the same amount of stuff will continue to be made at the same cost.
Say I own a widget making factory. 20% of my cost is labor, 50% is raw materials+consumables, 20% is fixed costs(rent/building repairs, machine purchases, etc), and 10% is profit.
UBI comes into effect and 10% of my workforce decides they don't want to work a grueling factory job for $15/hr anymore.
Now I can raise wages 25%, to replace/retain that 10%. But that drives up my labor costs per widget. So I have to sell my $100 widget for $105, just to make the same $10 a widget.
I can say, that's fine I'll just produce 90% as much and not raise wage, But now my fixed costs per widget have gone up. So now I have charge $102 per widget to make the same $10.
So even keeping profit in dollars the same, and accepting a lower margin I still have to raise prices.
But of course, all my vendors are going to be in the same boat. So despite raising my prices to cover the labor change I am still making fewer dollars per widget.
The answer is of course *handwave handwave automation*. Or actually - UBI for me the American, but not for whoever in Bangladesh is making the pajama pants, or the people in Mexico doing the field work harvesting my avocados.
What happens with the status quo is that you either outsource your widget factory to Bangladesh or you get more efficient machines so you can make the same number of widgets with half the people, letting the other half fend for themselves.
and?
The question was, why would prices rise because of UBI.
And the answer is: shrinking the labor force would raise wages and/or decrease production, even if gross profit remains fixed. Which means some hypothetical tax on "stolen wealth" whatever the fuck that is wouldn't effect it.
UBI's 'goal' is to shrink the labor force. Fewer workers, means higher wages and less production. Higher costs and lower supply means higher prices.
Why would those prices rise when the people providing the same fixed good are still competing with each other? Why would they raise prices to make the 10% profit when they could keep prices the same and make a 6% profit for the same amount?
Because they want to keep making money. Otherwise what stops someone from going to 5% profit and then 3% and then 1% and then no profit at all?
And I'm saying I don't care about them wanting to maximize profits. If a company profits $100,000,000 and the owner "only" profits 3% because they had to pay drastically higher wages I'm in favor of it.
If we did a UBI, there would be inflation, because that's what happens when you flood the economy with money. Just like when you raise the minimum wage. Wages go up, and so prices go up.
It's just that it doesn't matter - you give someone 20% more money, prices go up by 3%, they still have greater purchasing power. We don't need to try to game the economy or punish people who raise prices, we just figure those effects into the calculus to figure out what a good UBI would be.
Beyond that, we absolutely shouldn't dismantle the social safety net if we get a UBI in place. People will need to rely on it less, which is good, but there will always be cases where the UBI isn't enough.
"My husband died and I have no job and three kids and no savings." -> "Fuck you, we're already giving you your $1000 per month, what more do you want?" isn't a great situation.
and yet most of the public seems to believe that the absolutely insane amount of inflation we've had is from the last stimulus check, as if direct payments have like a 500% inflationary effect per dollar given
stupid media
I feel like now if we pass a UBI every company will just double prices on everything until popular support crushes the UBI
Companies set prices as a result of market forces not as part of a grand political conspiracy.
If they're 100% rational, which many are not. Also profits are at record highs right now plan "raise prices blaming inflation, rake in cash" clearly works; why not the same thing + "UBI causing inflation" at start?
They don't need to "blame inflation". They will raise prices if they can raise prices. Lots of different things factor into that, such as if supply shortages and inflation are causing everyone to raise prices.
While racing light mechs, your Urbanmech comes in second place, but only because it ran out of ammo.
If we did a UBI, there would be inflation, because that's what happens when you flood the economy with money. Just like when you raise the minimum wage. Wages go up, and so prices go up.
It's just that it doesn't matter - you give someone 20% more money, prices go up by 3%, they still have greater purchasing power. We don't need to try to game the economy or punish people who raise prices, we just figure those effects into the calculus to figure out what a good UBI would be.
Beyond that, we absolutely shouldn't dismantle the social safety net if we get a UBI in place. People will need to rely on it less, which is good, but there will always be cases where the UBI isn't enough.
"My husband died and I have no job and three kids and no savings." -> "Fuck you, we're already giving you your $1000 per month, what more do you want?" isn't a great situation.
and yet most of the public seems to believe that the absolutely insane amount of inflation we've had is from the last stimulus check, as if direct payments have like a 500% inflationary effect per dollar given
stupid media
I feel like now if we pass a UBI every company will just double prices on everything until popular support crushes the UBI
Companies set prices as a result of market forces not as part of a grand political conspiracy.
If they're 100% rational, which many are not. Also profits are at record highs right now plan "raise prices blaming inflation, rake in cash" clearly works; why not the same thing + "UBI causing inflation" at start?
They don't need to "blame inflation". They will raise prices if they can raise prices. Lots of different things factor into that, such as if supply shortages and inflation are causing everyone to raise prices.
They absolutely do, because that's how they sell the price increases to the market, which might otherwise balk.
One criticism of UBI that I see a lot is that corporations and landlords will just raise prices. Am I right in thinking that the way to combat this is to tax the everliving fuck out of stolen wealth so that corporations and parasites couldn't actually gain anything by price gouging?
Macroeconomics makes very little sense to me; I'm just a worker bee who's very angry about the status quo.
edit: it's 2022; how come autocorrect keeps changing things to be grammatically wrong
It would likely cause supply shortage driven inflation, you can't really tax against that.
UBI tends to have this sort of cooked in contradiction that It will both enable people to collectively work less and also the same amount of stuff will continue to be made at the same cost.
Say I own a widget making factory. 20% of my cost is labor, 50% is raw materials+consumables, 20% is fixed costs(rent/building repairs, machine purchases, etc), and 10% is profit.
UBI comes into effect and 10% of my workforce decides they don't want to work a grueling factory job for $15/hr anymore.
Now I can raise wages 25%, to replace/retain that 10%. But that drives up my labor costs per widget. So I have to sell my $100 widget for $105, just to make the same $10 a widget.
I can say, that's fine I'll just produce 90% as much and not raise wage, But now my fixed costs per widget have gone up. So now I have charge $102 per widget to make the same $10.
So even keeping profit in dollars the same, and accepting a lower margin I still have to raise prices.
But of course, all my vendors are going to be in the same boat. So despite raising my prices to cover the labor change I am still making fewer dollars per widget.
The answer is of course *handwave handwave automation*. Or actually - UBI for me the American, but not for whoever in Bangladesh is making the pajama pants, or the people in Mexico doing the field work harvesting my avocados.
What happens with the status quo is that you either outsource your widget factory to Bangladesh or you get more efficient machines so you can make the same number of widgets with half the people, letting the other half fend for themselves.
and?
The question was, why would prices rise because of UBI.
And the answer is: shrinking the labor force would raise wages and/or decrease production, even if gross profit remains fixed. Which means some hypothetical tax on "stolen wealth" whatever the fuck that is wouldn't effect it.
UBI's 'goal' is to shrink the labor force. Fewer workers, means higher wages and less production. Higher costs and lower supply means higher prices.
Why would those prices rise when the people providing the same fixed good are still competing with each other? Why would they raise prices to make the 10% profit when they could keep prices the same and make a 6% profit for the same amount?
Because they want to keep making money. Otherwise what stops someone from going to 5% profit and then 3% and then 1% and then no profit at all?
And I'm saying I don't care about them wanting to maximize profits. If a company profits $100,000,000 and the owner "only" profits 3% because they had to pay drastically higher wages I'm in favor of it.
Your math or your terms are fundamentally wrong. Profit = Revenue - Costs.
If the cost of goods sold goes up, and the price stays the same, barring some offsetting increasing in total sales. Profit goes down. Not profit margin, not the 5% becomes 3%. But the $100,000,000 becomes $95,000,000.
Businesses that let their profit get eroded over time, go out of business.
So much of what is produced globally is wasted, though. Endless cheap junk that no one needs or wants, produced so that people can be paid for doing something "productive."
Err, this is axiomatically false. If no one wants it no one will buy it and it will no longer be produced (absent subsidies.)
Like I agree that people spend money on stupid shit, but if it isn't profitable it eventually goes out of production.
This is not true in many cases, there are many non-profitable industries that continue to exist due to government subsidies or massive amounts of investor dollars being funneled into them
Or a monopoly that would not be profitable if it had competition, or industries that abuse their power and influence to implement schemes like an inability for Medicare to negotiate drug prices
I think “ideal capitalism” assumes pure competition and profitably constantly destroying inefficient and non-profitable companies but the reality is… not that
One criticism of UBI that I see a lot is that corporations and landlords will just raise prices. Am I right in thinking that the way to combat this is to tax the everliving fuck out of stolen wealth so that corporations and parasites couldn't actually gain anything by price gouging?
Macroeconomics makes very little sense to me; I'm just a worker bee who's very angry about the status quo.
edit: it's 2022; how come autocorrect keeps changing things to be grammatically wrong
It would likely cause supply shortage driven inflation, you can't really tax against that.
UBI tends to have this sort of cooked in contradiction that It will both enable people to collectively work less and also the same amount of stuff will continue to be made at the same cost.
Say I own a widget making factory. 20% of my cost is labor, 50% is raw materials+consumables, 20% is fixed costs(rent/building repairs, machine purchases, etc), and 10% is profit.
UBI comes into effect and 10% of my workforce decides they don't want to work a grueling factory job for $15/hr anymore.
Now I can raise wages 25%, to replace/retain that 10%. But that drives up my labor costs per widget. So I have to sell my $100 widget for $105, just to make the same $10 a widget.
I can say, that's fine I'll just produce 90% as much and not raise wage, But now my fixed costs per widget have gone up. So now I have charge $102 per widget to make the same $10.
So even keeping profit in dollars the same, and accepting a lower margin I still have to raise prices.
But of course, all my vendors are going to be in the same boat. So despite raising my prices to cover the labor change I am still making fewer dollars per widget.
The answer is of course *handwave handwave automation*. Or actually - UBI for me the American, but not for whoever in Bangladesh is making the pajama pants, or the people in Mexico doing the field work harvesting my avocados.
What happens with the status quo is that you either outsource your widget factory to Bangladesh or you get more efficient machines so you can make the same number of widgets with half the people, letting the other half fend for themselves.
and?
The question was, why would prices rise because of UBI.
And the answer is: shrinking the labor force would raise wages and/or decrease production, even if gross profit remains fixed. Which means some hypothetical tax on "stolen wealth" whatever the fuck that is wouldn't effect it.
UBI's 'goal' is to shrink the labor force. Fewer workers, means higher wages and less production. Higher costs and lower supply means higher prices.
Why would those prices rise when the people providing the same fixed good are still competing with each other? Why would they raise prices to make the 10% profit when they could keep prices the same and make a 6% profit for the same amount?
Because they want to keep making money. Otherwise what stops someone from going to 5% profit and then 3% and then 1% and then no profit at all?
And I'm saying I don't care about them wanting to maximize profits. If a company profits $100,000,000 and the owner "only" profits 3% because they had to pay drastically higher wages I'm in favor of it.
Your math or your terms are fundamentally wrong. Profit = Revenue - Costs.
If the cost of goods sold goes up, and the price stays the same, barring some offsetting increasing in total sales. Profit goes down. Not profit margin, not the 5% becomes 3%. But the $100,000,000 becomes $95,000,000.
Businesses that let their profit get eroded over time, go out of business.
This is literally just the same thing except with dollar values instead of percentages. And profit margin fluctuates *all the time*.
One criticism of UBI that I see a lot is that corporations and landlords will just raise prices. Am I right in thinking that the way to combat this is to tax the everliving fuck out of stolen wealth so that corporations and parasites couldn't actually gain anything by price gouging?
Macroeconomics makes very little sense to me; I'm just a worker bee who's very angry about the status quo.
edit: it's 2022; how come autocorrect keeps changing things to be grammatically wrong
It would likely cause supply shortage driven inflation, you can't really tax against that.
UBI tends to have this sort of cooked in contradiction that It will both enable people to collectively work less and also the same amount of stuff will continue to be made at the same cost.
Say I own a widget making factory. 20% of my cost is labor, 50% is raw materials+consumables, 20% is fixed costs(rent/building repairs, machine purchases, etc), and 10% is profit.
UBI comes into effect and 10% of my workforce decides they don't want to work a grueling factory job for $15/hr anymore.
Now I can raise wages 25%, to replace/retain that 10%. But that drives up my labor costs per widget. So I have to sell my $100 widget for $105, just to make the same $10 a widget.
I can say, that's fine I'll just produce 90% as much and not raise wage, But now my fixed costs per widget have gone up. So now I have charge $102 per widget to make the same $10.
So even keeping profit in dollars the same, and accepting a lower margin I still have to raise prices.
But of course, all my vendors are going to be in the same boat. So despite raising my prices to cover the labor change I am still making fewer dollars per widget.
The answer is of course *handwave handwave automation*. Or actually - UBI for me the American, but not for whoever in Bangladesh is making the pajama pants, or the people in Mexico doing the field work harvesting my avocados.
What happens with the status quo is that you either outsource your widget factory to Bangladesh or you get more efficient machines so you can make the same number of widgets with half the people, letting the other half fend for themselves.
and?
The question was, why would prices rise because of UBI.
And the answer is: shrinking the labor force would raise wages and/or decrease production, even if gross profit remains fixed. Which means some hypothetical tax on "stolen wealth" whatever the fuck that is wouldn't effect it.
UBI's 'goal' is to shrink the labor force. Fewer workers, means higher wages and less production. Higher costs and lower supply means higher prices.
Why would those prices rise when the people providing the same fixed good are still competing with each other? Why would they raise prices to make the 10% profit when they could keep prices the same and make a 6% profit for the same amount?
Because they want to keep making money. Otherwise what stops someone from going to 5% profit and then 3% and then 1% and then no profit at all?
And I'm saying I don't care about them wanting to maximize profits. If a company profits $100,000,000 and the owner "only" profits 3% because they had to pay drastically higher wages I'm in favor of it.
Your math or your terms are fundamentally wrong. Profit = Revenue - Costs.
If the cost of goods sold goes up, and the price stays the same, barring some offsetting increasing in total sales. Profit goes down. Not profit margin, not the 5% becomes 3%. But the $100,000,000 becomes $95,000,000.
Businesses that let their profit get eroded over time, go out of business.
If businesses were content to make reasonable, but stable, profits instead of maximizing profits at the expense of everything else all the time, I might agree with you.
As it is, they can get fucked.
+13
Options
MonwynApathy's a tragedy, and boredom is a crime.A little bit of everything, all of the time.Registered Userregular
So much of what is produced globally is wasted, though. Endless cheap junk that no one needs or wants, produced so that people can be paid for doing something "productive."
Err, this is axiomatically false. If no one wants it no one will buy it and it will no longer be produced (absent subsidies.)
Like I agree that people spend money on stupid shit, but if it isn't profitable it eventually goes out of production.
This is not true in many cases, there are many non-profitable industries that continue to exist due to government subsidies or massive amounts of investor dollars being funneled into them
Or a monopoly that would not be profitable if it had competition, or industries that abuse their power and influence to implement schemes like an inability for Medicare to negotiate drug prices
I think “ideal capitalism” assumes pure competition and profitably constantly destroying inefficient and non-profitable companies but the reality is… not that
I specifically noted subsidies. Investors chasing the next high eventually run out of money or patience.
I'm trying to think of extent genuine, unregulated monopolies that would be unprofitable if they had competition but am coming up empty. The closest we get is something like single-supplier drugs, which I agree is a market failure (fuckin' Von Hayek agreed that there can't really be a rational market for healthcare and I 100% agree it should be state-run, but that's very much an exception rather than the rule.)
One criticism of UBI that I see a lot is that corporations and landlords will just raise prices. Am I right in thinking that the way to combat this is to tax the everliving fuck out of stolen wealth so that corporations and parasites couldn't actually gain anything by price gouging?
Macroeconomics makes very little sense to me; I'm just a worker bee who's very angry about the status quo.
edit: it's 2022; how come autocorrect keeps changing things to be grammatically wrong
It would likely cause supply shortage driven inflation, you can't really tax against that.
UBI tends to have this sort of cooked in contradiction that It will both enable people to collectively work less and also the same amount of stuff will continue to be made at the same cost.
Say I own a widget making factory. 20% of my cost is labor, 50% is raw materials+consumables, 20% is fixed costs(rent/building repairs, machine purchases, etc), and 10% is profit.
UBI comes into effect and 10% of my workforce decides they don't want to work a grueling factory job for $15/hr anymore.
Now I can raise wages 25%, to replace/retain that 10%. But that drives up my labor costs per widget. So I have to sell my $100 widget for $105, just to make the same $10 a widget.
I can say, that's fine I'll just produce 90% as much and not raise wage, But now my fixed costs per widget have gone up. So now I have charge $102 per widget to make the same $10.
So even keeping profit in dollars the same, and accepting a lower margin I still have to raise prices.
But of course, all my vendors are going to be in the same boat. So despite raising my prices to cover the labor change I am still making fewer dollars per widget.
The answer is of course *handwave handwave automation*. Or actually - UBI for me the American, but not for whoever in Bangladesh is making the pajama pants, or the people in Mexico doing the field work harvesting my avocados.
What happens with the status quo is that you either outsource your widget factory to Bangladesh or you get more efficient machines so you can make the same number of widgets with half the people, letting the other half fend for themselves.
and?
The question was, why would prices rise because of UBI.
And the answer is: shrinking the labor force would raise wages and/or decrease production, even if gross profit remains fixed. Which means some hypothetical tax on "stolen wealth" whatever the fuck that is wouldn't effect it.
UBI's 'goal' is to shrink the labor force. Fewer workers, means higher wages and less production. Higher costs and lower supply means higher prices.
Why would those prices rise when the people providing the same fixed good are still competing with each other? Why would they raise prices to make the 10% profit when they could keep prices the same and make a 6% profit for the same amount?
Because they want to keep making money. Otherwise what stops someone from going to 5% profit and then 3% and then 1% and then no profit at all?
And I'm saying I don't care about them wanting to maximize profits. If a company profits $100,000,000 and the owner "only" profits 3% because they had to pay drastically higher wages I'm in favor of it.
Your math or your terms are fundamentally wrong. Profit = Revenue - Costs.
If the cost of goods sold goes up, and the price stays the same, barring some offsetting increasing in total sales. Profit goes down. Not profit margin, not the 5% becomes 3%. But the $100,000,000 becomes $95,000,000.
Businesses that let their profit get eroded over time, go out of business.
This is literally just the same thing except with dollar values instead of percentages. And profit margin fluctuates *all the time*.
No it's not. If my cost go up $5 and I raise my price $5 my profit is constant but my margin shrinks.
If my prices go up and I don't raise prices, my profit and my margin both shrink.
Which is how you get situations, like under price controls, where no business is able to produce a specific good at a profit.
One criticism of UBI that I see a lot is that corporations and landlords will just raise prices. Am I right in thinking that the way to combat this is to tax the everliving fuck out of stolen wealth so that corporations and parasites couldn't actually gain anything by price gouging?
Macroeconomics makes very little sense to me; I'm just a worker bee who's very angry about the status quo.
edit: it's 2022; how come autocorrect keeps changing things to be grammatically wrong
It would likely cause supply shortage driven inflation, you can't really tax against that.
UBI tends to have this sort of cooked in contradiction that It will both enable people to collectively work less and also the same amount of stuff will continue to be made at the same cost.
Say I own a widget making factory. 20% of my cost is labor, 50% is raw materials+consumables, 20% is fixed costs(rent/building repairs, machine purchases, etc), and 10% is profit.
UBI comes into effect and 10% of my workforce decides they don't want to work a grueling factory job for $15/hr anymore.
Now I can raise wages 25%, to replace/retain that 10%. But that drives up my labor costs per widget. So I have to sell my $100 widget for $105, just to make the same $10 a widget.
I can say, that's fine I'll just produce 90% as much and not raise wage, But now my fixed costs per widget have gone up. So now I have charge $102 per widget to make the same $10.
So even keeping profit in dollars the same, and accepting a lower margin I still have to raise prices.
But of course, all my vendors are going to be in the same boat. So despite raising my prices to cover the labor change I am still making fewer dollars per widget.
The answer is of course *handwave handwave automation*. Or actually - UBI for me the American, but not for whoever in Bangladesh is making the pajama pants, or the people in Mexico doing the field work harvesting my avocados.
What happens with the status quo is that you either outsource your widget factory to Bangladesh or you get more efficient machines so you can make the same number of widgets with half the people, letting the other half fend for themselves.
and?
The question was, why would prices rise because of UBI.
And the answer is: shrinking the labor force would raise wages and/or decrease production, even if gross profit remains fixed. Which means some hypothetical tax on "stolen wealth" whatever the fuck that is wouldn't effect it.
UBI's 'goal' is to shrink the labor force. Fewer workers, means higher wages and less production. Higher costs and lower supply means higher prices.
Why would those prices rise when the people providing the same fixed good are still competing with each other? Why would they raise prices to make the 10% profit when they could keep prices the same and make a 6% profit for the same amount?
Because they want to keep making money. Otherwise what stops someone from going to 5% profit and then 3% and then 1% and then no profit at all?
And I'm saying I don't care about them wanting to maximize profits. If a company profits $100,000,000 and the owner "only" profits 3% because they had to pay drastically higher wages I'm in favor of it.
Your math or your terms are fundamentally wrong. Profit = Revenue - Costs.
If the cost of goods sold goes up, and the price stays the same, barring some offsetting increasing in total sales. Profit goes down. Not profit margin, not the 5% becomes 3%. But the $100,000,000 becomes $95,000,000.
Businesses that let their profit get eroded over time, go out of business.
The amount of money a business owner takes home at the end of the year, which was perfectly interpretable from what I said, does not have to be an arbitrary percentage of revenue.
In your widget example the business owners could take home less profit. 10% or anything else is not sacrosanct. Which they'll have to do if they want to actually compete without a labor force coerced through starvation.
One criticism of UBI that I see a lot is that corporations and landlords will just raise prices. Am I right in thinking that the way to combat this is to tax the everliving fuck out of stolen wealth so that corporations and parasites couldn't actually gain anything by price gouging?
Macroeconomics makes very little sense to me; I'm just a worker bee who's very angry about the status quo.
edit: it's 2022; how come autocorrect keeps changing things to be grammatically wrong
It would likely cause supply shortage driven inflation, you can't really tax against that.
UBI tends to have this sort of cooked in contradiction that It will both enable people to collectively work less and also the same amount of stuff will continue to be made at the same cost.
Say I own a widget making factory. 20% of my cost is labor, 50% is raw materials+consumables, 20% is fixed costs(rent/building repairs, machine purchases, etc), and 10% is profit.
UBI comes into effect and 10% of my workforce decides they don't want to work a grueling factory job for $15/hr anymore.
Now I can raise wages 25%, to replace/retain that 10%. But that drives up my labor costs per widget. So I have to sell my $100 widget for $105, just to make the same $10 a widget.
I can say, that's fine I'll just produce 90% as much and not raise wage, But now my fixed costs per widget have gone up. So now I have charge $102 per widget to make the same $10.
So even keeping profit in dollars the same, and accepting a lower margin I still have to raise prices.
But of course, all my vendors are going to be in the same boat. So despite raising my prices to cover the labor change I am still making fewer dollars per widget.
The answer is of course *handwave handwave automation*. Or actually - UBI for me the American, but not for whoever in Bangladesh is making the pajama pants, or the people in Mexico doing the field work harvesting my avocados.
What happens with the status quo is that you either outsource your widget factory to Bangladesh or you get more efficient machines so you can make the same number of widgets with half the people, letting the other half fend for themselves.
and?
The question was, why would prices rise because of UBI.
And the answer is: shrinking the labor force would raise wages and/or decrease production, even if gross profit remains fixed. Which means some hypothetical tax on "stolen wealth" whatever the fuck that is wouldn't effect it.
UBI's 'goal' is to shrink the labor force. Fewer workers, means higher wages and less production. Higher costs and lower supply means higher prices.
Why would those prices rise when the people providing the same fixed good are still competing with each other? Why would they raise prices to make the 10% profit when they could keep prices the same and make a 6% profit for the same amount?
Because they want to keep making money. Otherwise what stops someone from going to 5% profit and then 3% and then 1% and then no profit at all?
And I'm saying I don't care about them wanting to maximize profits. If a company profits $100,000,000 and the owner "only" profits 3% because they had to pay drastically higher wages I'm in favor of it.
Your math or your terms are fundamentally wrong. Profit = Revenue - Costs.
If the cost of goods sold goes up, and the price stays the same, barring some offsetting increasing in total sales. Profit goes down. Not profit margin, not the 5% becomes 3%. But the $100,000,000 becomes $95,000,000.
Businesses that let their profit get eroded over time, go out of business.
The amount of money a business owner takes home at the end of the year, which was perfectly interpretable from what I said, does not have to be an arbitrary percentage of revenue.
In your widget example the business owners could take home less profit. 10% or anything else is not sacrosanct. Which they'll have to do if they want to actually compete without a labor force coerced through starvation.
Right, but the 'plan' was prevent price increases via some tax plan, but Rising Costs means Rising Prices even if profit is static. There isn't a windfall to tax. The net profit doesn't increase because they raised prices.
The scheme requires: Costs to go up(higher wages), Prices to remain the same(lower profit), and to enforce this via some taxing mechanism where...every year the business must make fewer $ than the year or else be taxed on them at 100%?
So much hypothetical discussion about how pricing and inflation works. I would encourage everyone to start with much simpler questions:
1. How much UBI?
2. Who gets it (e.g. kids?)?
Then you can multiply out the cost rather easily, determine how much of it you want to raise in new taxes versus cutting existing benefits, which in turn gets you to feasibility and economic impacts. But it all has to start with the size of the proposed program.
If we did a UBI, there would be inflation, because that's what happens when you flood the economy with money. Just like when you raise the minimum wage. Wages go up, and so prices go up.
It's just that it doesn't matter - you give someone 20% more money, prices go up by 3%, they still have greater purchasing power. We don't need to try to game the economy or punish people who raise prices, we just figure those effects into the calculus to figure out what a good UBI would be.
Beyond that, we absolutely shouldn't dismantle the social safety net if we get a UBI in place. People will need to rely on it less, which is good, but there will always be cases where the UBI isn't enough.
"My husband died and I have no job and three kids and no savings." -> "Fuck you, we're already giving you your $1000 per month, what more do you want?" isn't a great situation.
and yet most of the public seems to believe that the absolutely insane amount of inflation we've had is from the last stimulus check, as if direct payments have like a 500% inflationary effect per dollar given
stupid media
I feel like now if we pass a UBI every company will just double prices on everything until popular support crushes the UBI
Companies set prices as a result of market forces not as part of a grand political conspiracy.
If they're 100% rational, which many are not. Also profits are at record highs right now plan "raise prices blaming inflation, rake in cash" clearly works; why not the same thing + "UBI causing inflation" at start?
They don't need to "blame inflation". They will raise prices if they can raise prices. Lots of different things factor into that, such as if supply shortages and inflation are causing everyone to raise prices.
They absolutely do, because that's how they sell the price increases to the market, which might otherwise balk.
There are different kinds of price increases. If you raise your prices because demand goes up, that's not the same as raising prices because your costs went up.
As least a portion of price increases right now are because gas has skyrocketed, meaning that shipping costs have gone up, which makes pretty much everything more expensive.
(You can argue that gas prices right now are partly due to fuckery, but that doesn't mean the grocery store isn't paying more to get bread on their shelf.)
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So much of what is produced globally is wasted, though. Endless cheap junk that no one needs or wants, produced so that people can be paid for doing something "productive."
UBI would theoretically mean people wouldn't need to work all those stupid, useless, environmentally destructive jobs, no? I feel like that should go a long way toward squaring the circle.
I don't see how. Those two problems are not related. UBI wouldn't change any of the various things that incentivize wasteful production. And addressing those things doesn't really involve UBI.
Produced goods aren't wasted because people need to work pointless jobs, they are produced because it's profitable to do so because of what costs are borne by manufacturers/sellers/etc or because there's no incentives to change how it's Always Been Done or things like that.
One criticism of UBI that I see a lot is that corporations and landlords will just raise prices. Am I right in thinking that the way to combat this is to tax the everliving fuck out of stolen wealth so that corporations and parasites couldn't actually gain anything by price gouging?
Macroeconomics makes very little sense to me; I'm just a worker bee who's very angry about the status quo.
edit: it's 2022; how come autocorrect keeps changing things to be grammatically wrong
It would likely cause supply shortage driven inflation, you can't really tax against that.
UBI tends to have this sort of cooked in contradiction that It will both enable people to collectively work less and also the same amount of stuff will continue to be made at the same cost.
Say I own a widget making factory. 20% of my cost is labor, 50% is raw materials+consumables, 20% is fixed costs(rent/building repairs, machine purchases, etc), and 10% is profit.
UBI comes into effect and 10% of my workforce decides they don't want to work a grueling factory job for $15/hr anymore.
Now I can raise wages 25%, to replace/retain that 10%. But that drives up my labor costs per widget. So I have to sell my $100 widget for $105, just to make the same $10 a widget.
I can say, that's fine I'll just produce 90% as much and not raise wage, But now my fixed costs per widget have gone up. So now I have charge $102 per widget to make the same $10.
So even keeping profit in dollars the same, and accepting a lower margin I still have to raise prices.
But of course, all my vendors are going to be in the same boat. So despite raising my prices to cover the labor change I am still making fewer dollars per widget.
The answer is of course *handwave handwave automation*. Or actually - UBI for me the American, but not for whoever in Bangladesh is making the pajama pants, or the people in Mexico doing the field work harvesting my avocados.
What happens with the status quo is that you either outsource your widget factory to Bangladesh or you get more efficient machines so you can make the same number of widgets with half the people, letting the other half fend for themselves.
and?
The question was, why would prices rise because of UBI.
And the answer is: shrinking the labor force would raise wages and/or decrease production, even if gross profit remains fixed. Which means some hypothetical tax on "stolen wealth" whatever the fuck that is wouldn't effect it.
UBI's 'goal' is to shrink the labor force. Fewer workers, means higher wages and less production. Higher costs and lower supply means higher prices.
Why would those prices rise when the people providing the same fixed good are still competing with each other? Why would they raise prices to make the 10% profit when they could keep prices the same and make a 6% profit for the same amount?
Because they want to keep making money. Otherwise what stops someone from going to 5% profit and then 3% and then 1% and then no profit at all?
And I'm saying I don't care about them wanting to maximize profits. If a company profits $100,000,000 and the owner "only" profits 3% because they had to pay drastically higher wages I'm in favor of it.
This isn't about maximizing profit. You proposed that people competing with each other would drive prices down or keeping them from going up as much, thus shrinking profits. But why would that cycle not continue indefinitely till there is no profit margin at all? At some point people are going to stop undercutting each other because there's no gain in those lower or non-existent profits for them. These people still want to make money. And I don't mean all the money or infinite money but just a non-zero amount of money.
If we did a UBI, there would be inflation, because that's what happens when you flood the economy with money. Just like when you raise the minimum wage. Wages go up, and so prices go up.
It's just that it doesn't matter - you give someone 20% more money, prices go up by 3%, they still have greater purchasing power. We don't need to try to game the economy or punish people who raise prices, we just figure those effects into the calculus to figure out what a good UBI would be.
Beyond that, we absolutely shouldn't dismantle the social safety net if we get a UBI in place. People will need to rely on it less, which is good, but there will always be cases where the UBI isn't enough.
"My husband died and I have no job and three kids and no savings." -> "Fuck you, we're already giving you your $1000 per month, what more do you want?" isn't a great situation.
and yet most of the public seems to believe that the absolutely insane amount of inflation we've had is from the last stimulus check, as if direct payments have like a 500% inflationary effect per dollar given
stupid media
I feel like now if we pass a UBI every company will just double prices on everything until popular support crushes the UBI
Companies set prices as a result of market forces not as part of a grand political conspiracy.
If they're 100% rational, which many are not. Also profits are at record highs right now plan "raise prices blaming inflation, rake in cash" clearly works; why not the same thing + "UBI causing inflation" at start?
They don't need to "blame inflation". They will raise prices if they can raise prices. Lots of different things factor into that, such as if supply shortages and inflation are causing everyone to raise prices.
They absolutely do, because that's how they sell the price increases to the market, which might otherwise balk.
There are different kinds of price increases. If you raise your prices because demand goes up, that's not the same as raising prices because your costs went up.
As least a portion of price increases right now are because gas has skyrocketed, meaning that shipping costs have gone up, which makes pretty much everything more expensive.
(You can argue that gas prices right now are partly due to fuckery, but that doesn't mean the grocery store isn't paying more to get bread on their shelf.)
And yet their profit margins are rising. Clearly they are passing the costs on and then some. The "and then some" is important, the story of inflation lets them get away with increases they wouldn't post otherwise.
So much of what is produced globally is wasted, though. Endless cheap junk that no one needs or wants, produced so that people can be paid for doing something "productive."
UBI would theoretically mean people wouldn't need to work all those stupid, useless, environmentally destructive jobs, no? I feel like that should go a long way toward squaring the circle.
I don't see how. Those two problems are not related. UBI wouldn't change any of the various things that incentivize wasteful production. And addressing those things doesn't really involve UBI.
Produced goods aren't wasted because people need to work pointless jobs, they are produced because it's profitable to do so because of what costs are borne by manufacturers/sellers/etc or because there's no incentives to change how it's Always Been Done or things like that.
I theorize two things:
UBI would end wage slavery and free people to build the lives they actually want, which would remove (a lot of) the need to fill the gaping void of despair with acts of mindless consumption.
UBI would free people from the endless cycle of buying cheap goods because it's what you can afford, but which are more expensive in the long run (Sam Vimes "Boots" theory of socioeconomic unfairness).
1 and 2 combined would make production of cheap and/or useless products largely unprofitable, because people would 1) not need to turn to buying cheap stuff as a dopamine fix and 2) would choose higher-quality goods once they're able to afford them (see: fast fashion).
Most people already prefer to buy high-quality, durable goods over cheap trash, but for too many people, cheap trash is all they can afford. Many companies exacerbate this by both selling cheap trash and paying insulting wages, thus locking workers into a de facto company store scenario where they can only afford to buy from companies who don't pay their workers a living wage.
For example, back of the envelope, there are 210M 18+ adults in this country and 120M children. Let's say we give adults $1,000/month plus another $500/month for each child they have. That's 12 x [(210Mx1000)+(120mx500)] = $3.24 Trillion.
For scale, current income tax revenue is $2.4T. So we would need to increase income taxes 150% if we didn't cut other programs. Or total federal tax revenue (including social security, corporate profit, etc) is $4.4T. So we would need to increase that by about 74% if we didn't cut other programs. All of this puts us probably into the "not feasible" range, unless we are making strong assumptions about people not being affected by incentives.
So that means we either have to make the benefit much smaller or cut other programs. The biggest one is Social Security. After that, Medicare/Medicaid/Obamacare. Then the military. If you are willing to contemplate cuts there, we might be able to put something together.
So much of what is produced globally is wasted, though. Endless cheap junk that no one needs or wants, produced so that people can be paid for doing something "productive."
UBI would theoretically mean people wouldn't need to work all those stupid, useless, environmentally destructive jobs, no? I feel like that should go a long way toward squaring the circle.
I don't see how. Those two problems are not related. UBI wouldn't change any of the various things that incentivize wasteful production. And addressing those things doesn't really involve UBI.
Produced goods aren't wasted because people need to work pointless jobs, they are produced because it's profitable to do so because of what costs are borne by manufacturers/sellers/etc or because there's no incentives to change how it's Always Been Done or things like that.
I theorize two things:
UBI would end wage slavery and free people to build the lives they actually want, which would remove (a lot of) the need to fill the gaping void of despair with acts of mindless consumption.
UBI would free people from the endless cycle of buying cheap goods because it's what you can afford, but which are more expensive in the long run (Sam Vimes "Boots" theory of socioeconomic unfairness).
1 and 2 combined would make production of cheap and/or useless products largely unprofitable, because people would 1) not need to turn to buying cheap stuff as a dopamine fix and 2) would choose higher-quality goods once they're able to afford them (see: fast fashion).
Most people already prefer to buy high-quality, durable goods over cheap trash, but for too many people, cheap trash is all they can afford. Many companies exacerbate this by both selling cheap trash and paying insulting wages, thus locking workers into a de facto company store scenario where they can only afford to buy from companies who don't pay their workers a living wage.
There's far more reasons for producing waste and cheap goods. The drivers of wasteful production are not the things you are talking about here.
And even with your second point, UBI isn't going to solve that because there's plenty of people out there in the middle class and above still buying the kind of goods you are talking about.
If we did a UBI, there would be inflation, because that's what happens when you flood the economy with money. Just like when you raise the minimum wage. Wages go up, and so prices go up.
It's just that it doesn't matter - you give someone 20% more money, prices go up by 3%, they still have greater purchasing power. We don't need to try to game the economy or punish people who raise prices, we just figure those effects into the calculus to figure out what a good UBI would be.
Beyond that, we absolutely shouldn't dismantle the social safety net if we get a UBI in place. People will need to rely on it less, which is good, but there will always be cases where the UBI isn't enough.
"My husband died and I have no job and three kids and no savings." -> "Fuck you, we're already giving you your $1000 per month, what more do you want?" isn't a great situation.
and yet most of the public seems to believe that the absolutely insane amount of inflation we've had is from the last stimulus check, as if direct payments have like a 500% inflationary effect per dollar given
stupid media
I feel like now if we pass a UBI every company will just double prices on everything until popular support crushes the UBI
Companies set prices as a result of market forces not as part of a grand political conspiracy.
If they're 100% rational, which many are not. Also profits are at record highs right now plan "raise prices blaming inflation, rake in cash" clearly works; why not the same thing + "UBI causing inflation" at start?
They don't need to "blame inflation". They will raise prices if they can raise prices. Lots of different things factor into that, such as if supply shortages and inflation are causing everyone to raise prices.
They absolutely do, because that's how they sell the price increases to the market, which might otherwise balk.
The idea that corporations don't A. Price Fix, or B. Make business decisions to try and sway national politics is pretty absurd to me, given how much they're currently raking in in profits and grocery stores are having to throw out because prices are so high
If businesses were rational, after all, they would be embracing work from home, all the data shows how insanely beneficial it is to a corporation's bottom line.
Like I get why Heavy Cream is expensive (although, here in Wisconsin, where dairy products are thrown out by the lake-full, its just cuz they can) , I don't get why soda waffles between $9 and $4 on a week to week basis
Shit, basic economics would tell you that in a period of record profits, a corporation would accept lower margins to keep prices down during a period of volatility, but instead its more like they're just raising prices and pushing a narrative that it's Biden's fault in an attempt to get a more favorable government. There are certain products and services that are more expensive because of unavoidable geopolitical reasons, but that seems to have spread to virtually everything without any rhyme or reason ..... (which, again, might make sense if the companies involved weren't seeing explosive profits)
For example, back of the envelope, there are 210M 18+ adults in this country and 120M children. Let's say we give adults $1,000/month plus another $500/month for each child they have. That's 12 x [(210Mx1000)+(120mx500)] = $3.24 Trillion.
For scale, current income tax revenue is $2.4T. So we would need to increase income taxes 150% if we didn't cut other programs. Or total federal tax revenue (including social security, corporate profit, etc) is $4.4T. So we would need to increase that by about 74% if we didn't cut other programs. All of this puts us probably into the "not feasible" range, unless we are making strong assumptions about people not being affected by incentives.
So that means we either have to make the benefit much smaller or cut other programs. The biggest one is Social Security. After that, Medicare/Medicaid/Obamacare. Then the military. If you are willing to contemplate cuts there, we might be able to put something together.
UBI would require massive tax increases.
I think that's just kind of a given.
If you can sell the idea that we need to increase tax revenue by 50% to get some form of UBI, you may as well bump it up by 75% and get a UBI that doesn't require huge cuts to necessary programs.
The smart way to do it would be establish UBI, leave everything else in place, note where program usage has fallen, and scale back expenditures after the fact.
I submitted an entry to Lego Ideas, and if 10,000 people support me, it'll be turned into an actual Lego set!If you'd like to see and support my submission, follow this link.
If we did a UBI, there would be inflation, because that's what happens when you flood the economy with money. Just like when you raise the minimum wage. Wages go up, and so prices go up.
It's just that it doesn't matter - you give someone 20% more money, prices go up by 3%, they still have greater purchasing power. We don't need to try to game the economy or punish people who raise prices, we just figure those effects into the calculus to figure out what a good UBI would be.
Beyond that, we absolutely shouldn't dismantle the social safety net if we get a UBI in place. People will need to rely on it less, which is good, but there will always be cases where the UBI isn't enough.
"My husband died and I have no job and three kids and no savings." -> "Fuck you, we're already giving you your $1000 per month, what more do you want?" isn't a great situation.
and yet most of the public seems to believe that the absolutely insane amount of inflation we've had is from the last stimulus check, as if direct payments have like a 500% inflationary effect per dollar given
stupid media
I feel like now if we pass a UBI every company will just double prices on everything until popular support crushes the UBI
Companies set prices as a result of market forces not as part of a grand political conspiracy.
If they're 100% rational, which many are not. Also profits are at record highs right now plan "raise prices blaming inflation, rake in cash" clearly works; why not the same thing + "UBI causing inflation" at start?
They don't need to "blame inflation". They will raise prices if they can raise prices. Lots of different things factor into that, such as if supply shortages and inflation are causing everyone to raise prices.
They absolutely do, because that's how they sell the price increases to the market, which might otherwise balk.
There are different kinds of price increases. If you raise your prices because demand goes up, that's not the same as raising prices because your costs went up.
As least a portion of price increases right now are because gas has skyrocketed, meaning that shipping costs have gone up, which makes pretty much everything more expensive.
(You can argue that gas prices right now are partly due to fuckery, but that doesn't mean the grocery store isn't paying more to get bread on their shelf.)
And yet their profit margins are rising. Clearly they are passing the costs on and then some. The "and then some" is important, the story of inflation lets them get away with increases they wouldn't post otherwise.
Get way with from whom? Consumers are not making purchasing decisions based on believing higher prices are the result of inflation. It's just are they still willing to buy X at the higher price. Prices are increasing because of a lack of supply compared to demand and rising costs. Inflation is a result, and a cause only in so far as it feeds back into increased costs.
While racing light mechs, your Urbanmech comes in second place, but only because it ran out of ammo.
So much of what is produced globally is wasted, though. Endless cheap junk that no one needs or wants, produced so that people can be paid for doing something "productive."
UBI would theoretically mean people wouldn't need to work all those stupid, useless, environmentally destructive jobs, no? I feel like that should go a long way toward squaring the circle.
I don't see how. Those two problems are not related. UBI wouldn't change any of the various things that incentivize wasteful production. And addressing those things doesn't really involve UBI.
Produced goods aren't wasted because people need to work pointless jobs, they are produced because it's profitable to do so because of what costs are borne by manufacturers/sellers/etc or because there's no incentives to change how it's Always Been Done or things like that.
I theorize two things:
UBI would end wage slavery and free people to build the lives they actually want, which would remove (a lot of) the need to fill the gaping void of despair with acts of mindless consumption.
UBI would free people from the endless cycle of buying cheap goods because it's what you can afford, but which are more expensive in the long run (Sam Vimes "Boots" theory of socioeconomic unfairness).
1 and 2 combined would make production of cheap and/or useless products largely unprofitable, because people would 1) not need to turn to buying cheap stuff as a dopamine fix and 2) would choose higher-quality goods once they're able to afford them (see: fast fashion).
Most people already prefer to buy high-quality, durable goods over cheap trash, but for too many people, cheap trash is all they can afford. Many companies exacerbate this by both selling cheap trash and paying insulting wages, thus locking workers into a de facto company store scenario where they can only afford to buy from companies who don't pay their workers a living wage.
The most important aspect of UBI is that poor people can room together and collectively purchase to save up and move out of their socioeconomic class
virtually every safety net we have specifically has measures to prevent you from doing this at present
If we did a UBI, there would be inflation, because that's what happens when you flood the economy with money. Just like when you raise the minimum wage. Wages go up, and so prices go up.
It's just that it doesn't matter - you give someone 20% more money, prices go up by 3%, they still have greater purchasing power. We don't need to try to game the economy or punish people who raise prices, we just figure those effects into the calculus to figure out what a good UBI would be.
Beyond that, we absolutely shouldn't dismantle the social safety net if we get a UBI in place. People will need to rely on it less, which is good, but there will always be cases where the UBI isn't enough.
"My husband died and I have no job and three kids and no savings." -> "Fuck you, we're already giving you your $1000 per month, what more do you want?" isn't a great situation.
and yet most of the public seems to believe that the absolutely insane amount of inflation we've had is from the last stimulus check, as if direct payments have like a 500% inflationary effect per dollar given
stupid media
I feel like now if we pass a UBI every company will just double prices on everything until popular support crushes the UBI
Companies set prices as a result of market forces not as part of a grand political conspiracy.
If they're 100% rational, which many are not. Also profits are at record highs right now plan "raise prices blaming inflation, rake in cash" clearly works; why not the same thing + "UBI causing inflation" at start?
They don't need to "blame inflation". They will raise prices if they can raise prices. Lots of different things factor into that, such as if supply shortages and inflation are causing everyone to raise prices.
They absolutely do, because that's how they sell the price increases to the market, which might otherwise balk.
There are different kinds of price increases. If you raise your prices because demand goes up, that's not the same as raising prices because your costs went up.
As least a portion of price increases right now are because gas has skyrocketed, meaning that shipping costs have gone up, which makes pretty much everything more expensive.
(You can argue that gas prices right now are partly due to fuckery, but that doesn't mean the grocery store isn't paying more to get bread on their shelf.)
And yet their profit margins are rising. Clearly they are passing the costs on and then some. The "and then some" is important, the story of inflation lets them get away with increases they wouldn't post otherwise.
Right, hence "a portion". I'm well aware that corporations are motherfuckers who will milk any catastrophe for a quick buck, but the inflation were seeing right now isn't wholly manufactured.
I submitted an entry to Lego Ideas, and if 10,000 people support me, it'll be turned into an actual Lego set!If you'd like to see and support my submission, follow this link.
If we did a UBI, there would be inflation, because that's what happens when you flood the economy with money. Just like when you raise the minimum wage. Wages go up, and so prices go up.
It's just that it doesn't matter - you give someone 20% more money, prices go up by 3%, they still have greater purchasing power. We don't need to try to game the economy or punish people who raise prices, we just figure those effects into the calculus to figure out what a good UBI would be.
Beyond that, we absolutely shouldn't dismantle the social safety net if we get a UBI in place. People will need to rely on it less, which is good, but there will always be cases where the UBI isn't enough.
"My husband died and I have no job and three kids and no savings." -> "Fuck you, we're already giving you your $1000 per month, what more do you want?" isn't a great situation.
and yet most of the public seems to believe that the absolutely insane amount of inflation we've had is from the last stimulus check, as if direct payments have like a 500% inflationary effect per dollar given
stupid media
I feel like now if we pass a UBI every company will just double prices on everything until popular support crushes the UBI
Companies set prices as a result of market forces not as part of a grand political conspiracy.
If they're 100% rational, which many are not. Also profits are at record highs right now plan "raise prices blaming inflation, rake in cash" clearly works; why not the same thing + "UBI causing inflation" at start?
They don't need to "blame inflation". They will raise prices if they can raise prices. Lots of different things factor into that, such as if supply shortages and inflation are causing everyone to raise prices.
They absolutely do, because that's how they sell the price increases to the market, which might otherwise balk.
There are different kinds of price increases. If you raise your prices because demand goes up, that's not the same as raising prices because your costs went up.
As least a portion of price increases right now are because gas has skyrocketed, meaning that shipping costs have gone up, which makes pretty much everything more expensive.
(You can argue that gas prices right now are partly due to fuckery, but that doesn't mean the grocery store isn't paying more to get bread on their shelf.)
And yet their profit margins are rising. Clearly they are passing the costs on and then some. The "and then some" is important, the story of inflation lets them get away with increases they wouldn't post otherwise.
Get way with from whom? Consumers are not making purchasing decisions based on believing higher prices are the result of inflation. It's just are they still willing to buy X at the higher price. Prices are increasing because of a lack of supply compared to demand and rising costs. Inflation is a result, and a cause only in so far as it feeds back into increased costs.
If you tell the consumer "prices are rising because fuck you, that's why" they're less likely to put up with it than "shrug, inflation's high all around, sucks, right?"
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Or you could undercut those same vendors for less profit. Large profits for business owners aren't a necessity.
and?
The question was, why would prices rise because of UBI.
And the answer is: shrinking the labor force would raise wages and/or decrease production, even if gross profit remains fixed. Which means some hypothetical tax on "stolen wealth" whatever the fuck that is wouldn't effect it.
UBI's 'goal' is to shrink the labor force. Fewer workers, means higher wages and less production. Higher costs and lower supply means higher prices.
Why would those prices rise when the people providing the same fixed good are still competing with each other? Why would they raise prices to make the 10% profit when they could keep prices the same and make a 6% profit for the same amount?
I don't see how it could solved with tax alone. You could either go with huge marginal percentage based tax rates, at which point the elite will still try to accrue as much as they can because even a small percentage of a lot more is still more than they had before. As Warren Buffet put it, high tax rates will never stop the wealthy from trying to earn more money. Alternatively, if you go with some type tax cap, where 95% or 100% of income over a certain amount is taxed, that may incentivize some to stop profit-seeking, but more would-be land barons would just step in to fill those gaps. The only way to prevent price-gouging in a UBI setup is with actual price fixing.
Because they want to keep making money. Otherwise what stops someone from going to 5% profit and then 3% and then 1% and then no profit at all?
I don't think that's true. The goal is to ensure everyone has a basic standard of living. It is theoretically more efficient to do this via UBI than via multiple complicated welfare and entitlement programs with lots of overhead. The assumption is that very few people will actually subsist on UBI, most will still work. But UBI will increase the bargaining power of labor and thus force a greater share of profits to got to labor, it will free more people to pursue riskier ventures which may ultimately result in economic growth, etc. It also theoretically provide necessary redistribution as automation allows capital to create more profit with less need for labor.
It's just that it doesn't matter - you give someone 20% more money, prices go up by 3%, they still have greater purchasing power. We don't need to try to game the economy or punish people who raise prices, we just figure those effects into the calculus to figure out what a good UBI would be.
Beyond that, we absolutely shouldn't dismantle the social safety net if we get a UBI in place. People will need to rely on it less, which is good, but there will always be cases where the UBI isn't enough.
"My husband died and I have no job and three kids and no savings." -> "Fuck you, we're already giving you your $1000 per month, what more do you want?" isn't a great situation.
UBI would theoretically mean people wouldn't need to work all those stupid, useless, environmentally destructive jobs, no? I feel like that should go a long way toward squaring the circle.
This is an issue the earlier parts of this thread went around. In that UBI means different things to different people. It's something to 'free people from having to work' or is it just a cash replacement for all other welfare systems, is it essentially a boosted unemployment system or basically a negative income tax for wealth redistribution.
"By guaranteeing a standard of living, the artificial pressure to be productive is removed, and people can then choose to work to improve their standard of living or to pursue whatever their life goals would be."
Like, explicitly that is people leaving the labor force.
Err, this is axiomatically false. If no one wants it no one will buy it and it will no longer be produced (absent subsidies.)
Like I agree that people spend money on stupid shit, but if it isn't profitable it eventually goes out of production.
and yet most of the public seems to believe that the absolutely insane amount of inflation we've had is from the last stimulus check, as if direct payments have like a 500% inflationary effect per dollar given
stupid media
I feel like now if we pass a UBI every company will just double prices on everything until popular support crushes the UBI
A lot of demand is artificially created via advertising, though. Billions of dollars spent on convincing people that they need The Thing, or that buying The Thing will make them happy. And we fall for it because we're all so overstressed and overworked that the momentary dopamine hit from buying something we won't care about a day or a week later is the only bright spot in our miserable lives.
Of course there's stuff people actually want, things we buy and use and they enrich our lives even though they're not strictly necessary for life. People have hobbies. People enjoy things.
But look at 90% of what's on offer at an average dollar store or Hammacher Schlemmer catalog and tell me anyone actually wants that stuff, as opposed to buying it because it's there and it's shiny.
Companies set prices as a result of market forces not as part of a grand political conspiracy.
Maybe in the narrow definition of labor force participation metrics, but I would expect it to look a lot more like the point at which you quit your day job to go full time on your Patreon comes down significantly.
No it doesn't. Most people like to work, to keep busy, to see themselves as useful.
The only areas of labor that will see people leave are the ones that have relied on threat of starvation to ensure employment. They'll be forced to either improve their own practices or lose out to some other company that does in the competitiion for labor.
If they're 100% rational, which many are not. Also profits are at record highs right now plan "raise prices blaming inflation, rake in cash" clearly works; why not the same thing + "UBI causing inflation" at start?
And I'm saying I don't care about them wanting to maximize profits. If a company profits $100,000,000 and the owner "only" profits 3% because they had to pay drastically higher wages I'm in favor of it.
They don't need to "blame inflation". They will raise prices if they can raise prices. Lots of different things factor into that, such as if supply shortages and inflation are causing everyone to raise prices.
They absolutely do, because that's how they sell the price increases to the market, which might otherwise balk.
Your math or your terms are fundamentally wrong. Profit = Revenue - Costs.
If the cost of goods sold goes up, and the price stays the same, barring some offsetting increasing in total sales. Profit goes down. Not profit margin, not the 5% becomes 3%. But the $100,000,000 becomes $95,000,000.
Businesses that let their profit get eroded over time, go out of business.
This is not true in many cases, there are many non-profitable industries that continue to exist due to government subsidies or massive amounts of investor dollars being funneled into them
Or a monopoly that would not be profitable if it had competition, or industries that abuse their power and influence to implement schemes like an inability for Medicare to negotiate drug prices
I think “ideal capitalism” assumes pure competition and profitably constantly destroying inefficient and non-profitable companies but the reality is… not that
This is literally just the same thing except with dollar values instead of percentages. And profit margin fluctuates *all the time*.
If businesses were content to make reasonable, but stable, profits instead of maximizing profits at the expense of everything else all the time, I might agree with you.
As it is, they can get fucked.
I specifically noted subsidies. Investors chasing the next high eventually run out of money or patience.
I'm trying to think of extent genuine, unregulated monopolies that would be unprofitable if they had competition but am coming up empty. The closest we get is something like single-supplier drugs, which I agree is a market failure (fuckin' Von Hayek agreed that there can't really be a rational market for healthcare and I 100% agree it should be state-run, but that's very much an exception rather than the rule.)
No it's not. If my cost go up $5 and I raise my price $5 my profit is constant but my margin shrinks.
If my prices go up and I don't raise prices, my profit and my margin both shrink.
Which is how you get situations, like under price controls, where no business is able to produce a specific good at a profit.
The amount of money a business owner takes home at the end of the year, which was perfectly interpretable from what I said, does not have to be an arbitrary percentage of revenue.
In your widget example the business owners could take home less profit. 10% or anything else is not sacrosanct. Which they'll have to do if they want to actually compete without a labor force coerced through starvation.
Right, but the 'plan' was prevent price increases via some tax plan, but Rising Costs means Rising Prices even if profit is static. There isn't a windfall to tax. The net profit doesn't increase because they raised prices.
The scheme requires: Costs to go up(higher wages), Prices to remain the same(lower profit), and to enforce this via some taxing mechanism where...every year the business must make fewer $ than the year or else be taxed on them at 100%?
1. How much UBI?
2. Who gets it (e.g. kids?)?
Then you can multiply out the cost rather easily, determine how much of it you want to raise in new taxes versus cutting existing benefits, which in turn gets you to feasibility and economic impacts. But it all has to start with the size of the proposed program.
There are different kinds of price increases. If you raise your prices because demand goes up, that's not the same as raising prices because your costs went up.
As least a portion of price increases right now are because gas has skyrocketed, meaning that shipping costs have gone up, which makes pretty much everything more expensive.
(You can argue that gas prices right now are partly due to fuckery, but that doesn't mean the grocery store isn't paying more to get bread on their shelf.)
I don't see how. Those two problems are not related. UBI wouldn't change any of the various things that incentivize wasteful production. And addressing those things doesn't really involve UBI.
Produced goods aren't wasted because people need to work pointless jobs, they are produced because it's profitable to do so because of what costs are borne by manufacturers/sellers/etc or because there's no incentives to change how it's Always Been Done or things like that.
This isn't about maximizing profit. You proposed that people competing with each other would drive prices down or keeping them from going up as much, thus shrinking profits. But why would that cycle not continue indefinitely till there is no profit margin at all? At some point people are going to stop undercutting each other because there's no gain in those lower or non-existent profits for them. These people still want to make money. And I don't mean all the money or infinite money but just a non-zero amount of money.
And yet their profit margins are rising. Clearly they are passing the costs on and then some. The "and then some" is important, the story of inflation lets them get away with increases they wouldn't post otherwise.
I theorize two things:
1 and 2 combined would make production of cheap and/or useless products largely unprofitable, because people would 1) not need to turn to buying cheap stuff as a dopamine fix and 2) would choose higher-quality goods once they're able to afford them (see: fast fashion).
Most people already prefer to buy high-quality, durable goods over cheap trash, but for too many people, cheap trash is all they can afford. Many companies exacerbate this by both selling cheap trash and paying insulting wages, thus locking workers into a de facto company store scenario where they can only afford to buy from companies who don't pay their workers a living wage.
For scale, current income tax revenue is $2.4T. So we would need to increase income taxes 150% if we didn't cut other programs. Or total federal tax revenue (including social security, corporate profit, etc) is $4.4T. So we would need to increase that by about 74% if we didn't cut other programs. All of this puts us probably into the "not feasible" range, unless we are making strong assumptions about people not being affected by incentives.
So that means we either have to make the benefit much smaller or cut other programs. The biggest one is Social Security. After that, Medicare/Medicaid/Obamacare. Then the military. If you are willing to contemplate cuts there, we might be able to put something together.
There's far more reasons for producing waste and cheap goods. The drivers of wasteful production are not the things you are talking about here.
And even with your second point, UBI isn't going to solve that because there's plenty of people out there in the middle class and above still buying the kind of goods you are talking about.
The idea that corporations don't A. Price Fix, or B. Make business decisions to try and sway national politics is pretty absurd to me, given how much they're currently raking in in profits and grocery stores are having to throw out because prices are so high
If businesses were rational, after all, they would be embracing work from home, all the data shows how insanely beneficial it is to a corporation's bottom line.
Like I get why Heavy Cream is expensive (although, here in Wisconsin, where dairy products are thrown out by the lake-full, its just cuz they can) , I don't get why soda waffles between $9 and $4 on a week to week basis
Shit, basic economics would tell you that in a period of record profits, a corporation would accept lower margins to keep prices down during a period of volatility, but instead its more like they're just raising prices and pushing a narrative that it's Biden's fault in an attempt to get a more favorable government. There are certain products and services that are more expensive because of unavoidable geopolitical reasons, but that seems to have spread to virtually everything without any rhyme or reason ..... (which, again, might make sense if the companies involved weren't seeing explosive profits)
UBI would require massive tax increases.
I think that's just kind of a given.
If you can sell the idea that we need to increase tax revenue by 50% to get some form of UBI, you may as well bump it up by 75% and get a UBI that doesn't require huge cuts to necessary programs.
The smart way to do it would be establish UBI, leave everything else in place, note where program usage has fallen, and scale back expenditures after the fact.
Get way with from whom? Consumers are not making purchasing decisions based on believing higher prices are the result of inflation. It's just are they still willing to buy X at the higher price. Prices are increasing because of a lack of supply compared to demand and rising costs. Inflation is a result, and a cause only in so far as it feeds back into increased costs.
The most important aspect of UBI is that poor people can room together and collectively purchase to save up and move out of their socioeconomic class
virtually every safety net we have specifically has measures to prevent you from doing this at present
Right, hence "a portion". I'm well aware that corporations are motherfuckers who will milk any catastrophe for a quick buck, but the inflation were seeing right now isn't wholly manufactured.
If you tell the consumer "prices are rising because fuck you, that's why" they're less likely to put up with it than "shrug, inflation's high all around, sucks, right?"
How about an industry CEO saying the same thing?
This behavior then drives inflation up and down the supply chain as the same logic applies in B2B stuff too.