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A three-year UBI study done in Germany shows that a guaranteed monthly check increased labor market exploration and increased work satisfaction.
(www.pilotprojekt-grundeinkommen.de)
this post was submitted on 20 Apr 2025
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I understand how this works in small groups, the price of bread isn't going to go up if only a few people are richer.
I do wonder how this works for everyone.
I'm all for a more equal society, but I'm just not sure about UBI having the desired effect
I buy a loaf of bread every week, you buy a loaf of bread every week. We get ubi. Do we buy 2 loaves of bread every week with the extra income? I hear this every once in a while and don't understand what makes the price go up.
For housing I can see it, because so many are going without right now or renting and demand will climb with extra buying power. In my eyes that just means we need more built, and a higher price with proportionally less impact might encourage that building
As income inequality keeps climbing, the current system does much worse, with most of the buying power incentivising production of what only the wealthy can afford. Taking some of their buying power and giving purchasing agency to those who don't have it would incentivise production of things they would want instead. Vote with your wallet but the vote is more fair
Well the baker, knowing that everyone has twice as much money, puts his prices up because he knows the market can bear it. That's the way I reason it. Same with the landlord.
The only way I see that not happening is if the gov't literally fixes the prices of certain goods, which is already half way to a planned economy.
Or the government itself enters the food/housing market and competes against private firms with cheaper alternatives, forcing the firms to reduce their prices.
The good news is this simply doesn't happen (in civilized modern countries).
People with more money don't buy twice as much bread, they buy other things.
The bread maker is still competing with milk producers and video game makers and artists.
You can read about
price elasticityfor more details (and to not just take my word for it.)Highly inelastic goods (water, transportation, eggs) are the most likely to have runaway price increases.
But civilized countries already have public options to supply these items at cost :public water, public transport, food stamps.
This means we already have the necessary buffers against any impact by UBI. Any provider of an inelastic good who raises their price too far loses business to the public option.
Schwinn and Ferrari will all see slightly more sales with UBI as a few people use their additional income to purchase a bicycle or a supercar, but the bus lines must still run to keep them honest.
The risk is minimal because we already know what public consumption of these goods looks like, when they're free or heavily subsidized, in each civilized country.
I'm not saying people buy more bread, I'm saying the baker ups his prices for a single loaf and blames it on inflation.
The milk producer follows suit, citing the same reasons, as do the video game publishers. For evidence of this, look at the price gouging that all retailers did in recent years for absolutely no good justification.
This is the one saving factor I can see. Having some kind of free or subsidized alternative that industry simply cannot complete with, and forces them to reduce their prices. God I wish this was more prevalent.
Public water isn't a thing in the UK. It looks like it is from the outside, but it's all monopoly owned to the entity in your area.
And then the next baker just has to offer their bread at lower prices to gain an advantage. Seems like the sacred free market would solve this.
In a better world where corporations would rather compete than collude, and where small business can thrive on little capital without being bullied out of the market by bigger players
So capitalism is broken, you say? Broken to the point of needing to be replaced, you say? With a system that gives power to the people instead of corporations, you say? You make a compelling argument.
I completely agree. I just don't think dumping money at people which will be gobbled up immediately by price gouging food/shelter is the solution. Change the economy to a planned or resource-based one. Or add more competition to the market by having government provide cheap alternatives to food/shelter.
That's the solution I think all civilized nations will land at, plus universal basic income.
So everyone has an option for effectively free (since their UBI covers it) water, food, shelter, and transportation. But standard free market sources can compete to outdo the public options in any ways the public desires.
There's plenty still to do, since anyone invotating can outdo the public option, and make some extra money for their effort. While, at the same time, no one has to be quite as dragged down by an aunt with failing health who cannot work, anymore.
And any mega corporations that try to force everyone into closed lousy situations have to at least compete with the public option.
Of course, any mega corporations allowed to thrive will immediately try to kill off public options, which we do already see happen.
I don't fully agree with whom you're arguing with. But I will point out we've seen many markets and producers like eggs or rent - Colluding to raise prices in a similar manner.