undefined | Better HN

0 pointsmsandford10y ago0 comments

Remember also that people's wants are effectively unlimited in aggregate. If we could all have 100 foot yachts and spaceships and Ferraris we collectively in large majority would choose to have those things. You know, in the absence of any negative consequences for those actions.

A beef carcass might have 500 pounds of meat on it, but only 5-10lbs of that is tenderloin. If we all have enough money to buy tenderloin it doesn't immediately follow that cows are then made up of nothing but tenderloin. So the price of tenderloin will go up until the demand balances the supply again. You can take this and apply it nearly anywhere in the economy and find it'll be approximately correct for a great many situations.

0 comments

chongli10y ago

You know, in the absence of any negative consequences for those actions

And there's the rub. Even if we could make 500lb all-tenderloin cattle you wouldn't see people buying hundreds of pounds of beef tenderloin for themselves every day. Billionaries like Bill Gates can already afford millions of pounds of tenderloin yet you don't see him eating that.

Basic income might cause the price of tenderloin to go up a little bit but so what? It's not going to do anything to the price of corn or rice or wheat. Maybe the price of an apartment in Manhattan will go up a little bit (I doubt it) but not a house in rural Wisconsin.

msandfordOP10y ago

> And there's the rub. Even if we could make 500lb all-tenderloin cattle you wouldn't see people buying hundreds of pounds of beef tenderloin for themselves every day.

First off, we can't make an all tenderloin cow. And second, that's the problem! If filet cost 1/4 of what it did now consumption might go up 100x. And obviously, it can't. But people would try. Until the price went up enough that the market for tenderloin started to clear again. But people have this extra money, right? So they can afford to spend more on hamburger. Congrats, we've raised prices!

chongli10y ago

People have the extra money but they don't have to spend it on hamburger. They can spend it on durable goods as illustrated by the Discworld quote above. And just because demand for something goes up doesn't mean prices will. Often increased demand is a signal that a new market has opened up and this draws in competitors, causing prices to go down.

Look at the headlines about solar panels! Demand for solar panels is much higher today than it was 20 years ago and yet prices are dramatically lower.

j / k navigate · click thread line to collapse

0 comments

chongli10y ago

You know, in the absence of any negative consequences for those actions

msandfordOP10y ago

> And there's the rub. Even if we could make 500lb all-tenderloin cattle you wouldn't see people buying hundreds of pounds of beef tenderloin for themselves every day.

chongli10y ago

Look at the headlines about solar panels! Demand for solar panels is much higher today than it was 20 years ago and yet prices are dramatically lower.

j / k navigate · click thread line to collapse