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Comment by jackcosgrove | Hacker News Reader

It would do exactly that. Scarcity is relative, so giving everyone in the world a basic income will simply raise the prices of basic goods such that many again would be unable to afford them even on a basic income. The best way to end hunger is to grow more food, not to give everyone more money.

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That really isn't true though. You can find the data on this almost everywhere: we produce enough food to feed the entire world's population more than adequately, but it doesn't get to the people that need it because of poverty. [1]

[1] http://www.worldhunger.org/articles/Learn/world%20hunger%20f...

You're advocating for demand-side stimulus by giving everyone money to spend on goods without increasing the productive capacity of the economy. This led to stagflation in the USA in the 1970s. There are other examples such as Venezuela today where simply giving out money does not improve welfare if the supply of goods and services does not grow as well.

That is only true if competition between the sellers of those goods is broken or there truly is a global shortage of all types of goods that can fulfill a basic need.

If competition is not broken, sellers will raise prices to be whatever the buyer can bear, not whatever it costs to produce the product.

That's not how competition works.

If I can produce my good for $10 and sell for $20 and my competition sells for $15, what will a consumer do? What will I do in response?

If and only if the competing sellers also raise their prices in step with yours. But that's generally not how the price rises for food, even for restaurants. It's more they're in line with imperfect competition where MR >= MC and in most cases MR is only but a fraction higher than MC (say 1-5% if we take grocery store business accounting profits as a measure which is around 1%). Basically, food markets aren't very profitable businesses compared to technology or entertainment where you have various legal restrictions on supply. There's nothing stopping a firm from starting up their own farms, bakeries, and the like. So, unless you can show me that MC for all firms is going to rise in step with each other versus demand for supply of food I can't say your argument holds water. I'm not saying there won't be a rise in the price, but rather than the rise in the price will be negligible for food. Now, for services or any other product I'd say you're right. And we'll see many goods come out of reach for the proof despite the injection of money. But that would likely be goods like housing and services of any kind like Internet or phone utilities. But for the rest of the economy, there's not much incentive to raise the price unless your costs of covering the extra demand is killing your bottom line. If it doesn't then you don't care either way.

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