I have not heard a convincing argument the other way, would really appreciate a link to one if you find one.
Naturally, implementing UBI would require the entire financial sector to adjust. We would likely need to significantly raise interest rates (Which, IMHO would be great) and have a period to manage inflation.
But beside the initial recalibration phase, I have not seen any convincing arguments for why prices on non-positional goods would increase. Even with the increase interest rates, we would likely see that prices on positional goods / assets would stabilize as dead-cheap capital is not available.
Spending power with no real alternatives (i.e. in monopoly/oligopoly conditions) isn't actually very useful IMO. It's mostly just more guaranteed money for the current monopoly/oligopoly -- you're just guaranteeing revenue streams.
In a pre-UBI world, you can at least assume that companies can't completely shaft employees because then no one can buy anything. If the government steps in to make sure people can still buy stuff, that has almost the opposite effect.
I think walmart & it's treatment of employees (with employees reportedly needing to ALSO depend on food stamps) as a perfect example of the system kind of working against itself. The fix for that problem is within our reach right now, but it's just unpopular for the usual reasons with the people with the ability to make the fix.
> Naturally, implementing UBI would require the entire financial sector to adjust. We would likely need to significantly raise interest rates (Which, IMHO would be great) and have a period to manage inflation. > > But beside the initial recalibration phase, I have not seen any convincing arguments for why prices on non-positional goods would increase. Even with the increase interest rates, we would likely see that prices on positional goods / assets would stabilize as dead-cheap capital is not available.
OK, so then how about we do this without the UBI bit and just raise interest rates? I'm not seeing where UBI actually has a material benefit here, and there are other real problems with raising interest rates, because losing access to cheap credit also hurts those at the bottom of the economy (arguably even more) -- the solution there is political, likely (i.e. lower income borrowers could somehow be advantaged, but then we have shades of 2008 all over again if excessive greed/moral hazard sets in).
Note, I have no position on whether or not it would work in this way, but that is my understanding of the position of the those in favor of it.
It intuitively makes sense, and like most economic reasoning it's horribly simple. But economics is comprised to two parts: theory, and practice.
Practice always trumps theory. If practice defies your theory, it doesn't mean that the market is broken, or that there's over-regulation, or that your theory will eventually come true. It means your theory is just wrong. All economic theory are predicated on thousands or millions of underlying assumptions. If even just a few of those are not true, or aren't true in the way you think they are, then the theory can be wrong while simultaneously being logically perfect.
When it comes to the arguments against minimum wage, the theory is just wrong. Rising minimum wages do help people making minimum wage. If it does raise the COL, it's slowly, and not in the same degree as the minimum wage shift. In addition, a flat minimum wage still results in a rising COL. You can't simply pin the COL like that.
So knowing what we know about minimum wage, I think it's arrogant to claim the UBI would just result in a rising COL to eat up all the UBI.
Obviously there are essentials that can effectively be at any price and you have to pay them if you can afford them, but everything else is fair game.
On the contrary, we would likely see non positional goods become cheaper as the market is alive and companies can continue to produce at scale.
Edit- although even that is an oversimplification because I think in some cases it might encourage people to make more money. I know a handful of people who intentionally limit their income because of gaps in means testing. eg there's a window where you start making too much to take advantage of some govt social services, but not enough to pay for those services yourself (healthcare is a big one)
Are you seriously proposing that we need people who are paid below subsistence?
Or was this more an argument for ubi?
Prices are as high as companies can get away with charging, and they can collude to get these prices higher if need be, or lie about a product, or spend decades as an industry convincing you that you need something you don't.
If the market worked as economists always scold us that it does when they want less socialism, it wouldn't matter a lick what someone's salary is. That doesn't affect supply and demand, after all.
