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Comment by Jach | Hacker News Reader

Here's a simple if perhaps naive question. Suppose UBI is $x/yr. What's going to stop every apartment complex owner and every rental landlord from raising the cost of living on that property by $x/yr/tenant? Will the government start fixing prices? (I imagine that slightly more realistically all owners of physical resources, not just land owners, would raise prices as much as they can while still maintaining roughly the same profit percentage in order to compete with other owners to capture the new income, and so no single group of actors is likely to capture it all with one type of product.)

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That's the only thing I can see that can go wrong with basic income. I'd counter that with progressive property tax. So that if you own 5 accomodations, of which each can house a family, you might be better off with selling the sixth one than holding it, paying exorbitant tax and risking it might stay empty for too long. I would pump money earned from this tax back into basic income.

Such tax might be beneficial even now in some places. In Japan and Italy so many properties were bought out by people intending to profit from the rent that price of accomodation rose to the point that most young people can't afford to live alone and stay with parents instead.

In short - market. One landlord raises too much, tenants smash some buses and move to another apartment complex. Yes, there will be some inflation in rent market and other consumer goods, but unlikely so drastic.

UBI funds have to come from somewhere. Depending on the source of the money, UBI will either create low inflation or large inflation.

As a matter of fact, I suspect that recent min wage increase by feds is an attempt to induce inflation. All this money are going to be spent - basically creating larger money supply in consumer sector, and, maybe finally inducing some inflation feds are trying to start since 2008. Look at priced tags of recent tech acquisitions - some sectors of economy already value money much less than consumer sector.

Nobody here mentioned competition across sectors and price compression?

Competition across sectors example is land lord can ask for a 10% increase, but the renter is totally free to say forget it and downsize to a rental at the original rental rate, while buying a xbox or whatever with the new income. Or paying off that .edu loan. Or paying for healthcare. Or whatever. Mandatory expenses like healthcare, tuition, iDevices, they're free to go up as high as they want and probably will. Most things are not mandatory.

Price compression is the $10M skyscraper penthouse isn't going to change because its a rounding error, but this could have a huge effect in a slumlord area. Where I live is in between, I already make about 3x median household income so going to 3.5 or so isn't going to change much.

The same thing that keeps them from raising prices today:

Competition.

I don't know about where you are, but here in London there's more competition between buyers than between sellers.

If you give money to me and the people bidding against me, the money will end up in landlords' pockets for sure.

Well that's persuasive.

An alternative to fixing prices would be just to compete. The government could start building its own housing, recouping the costs straight back from UBI rents, and simultaneously holding privately-owned market prices to a more reasonable level.

Would this work for utility companies too? How about mega food corps (http://www.miaatipx.com/corporations1.jpg as an example), who probably have very good statistics about what percentage of the population in an area regularly buys (and "can't live without") their products, and thus figure out the optimal price increases for each area? Gas? Cars? And what about the partners of all these other companies whose customers are other businesses not individuals, but are going to start charging more and expecting the customer business to pass it along to their individual customer -- refineries, mines, mills, graineries, farms, storage warehouses... (As I mentioned before, everyone who has anything to sell will want as big a piece of this new income that they can get and will raise prices to try and find out how much they can capture without starting to make less profit than before. Over infinite time and with everyone having perfect information of the market, I think $x/yr would become the new $0/yr.)

Is it fair for me to think that universal basic income, if it has any chance of achieving its stated goals, is insufficient by itself at least when expressed as "give every living adult $x/yr" and nothing else? Now if the only effect of UBI is making a new $0 baseline and nothing else being changed on average, then it can't hurt that much by itself, so it may be worth trying in a limited area (such as a smaller country like the mentioned Switzerland) just to get an experimental result on record before trying it out on an economy the size of the US. But when you have to do all this other stuff to make UBI achieve its goals, like have the government build housing (it already does and has done that... http://en.wikipedia.org/wiki/Cabrini%E2%80%93Green), it makes me wonder why even bother with UBI itself and instead just get busy with the other things.

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