Economic Solutions For Preventing Market Failures

The Problem of Planned Obsolescence - Veritasium

Wikipedia: The Phoebus Cartel

Planned Obsolescence is a result of a mismatch between a provider’s and a receiver’s values. It is most often between a corporation’s values and consumer values, although it can take place in other forms too. The only obsolescence that should be supported is technological obsolescence (e.g. replacing CRT monitors with LCD monitors).

Taxing natural resources could discourage many forms of planned obsolescence, by making cheaper products that degrade the planet’s resources more expensive, so that people buy them less, venders sell them less, and thus conserving more resources in favor of materials that are less taxing on the Earth’s resources (that may otherwise be more expensive without natural resource taxation). Planned obsolescence in phones and computers is a huge problem, considering that they require non-recyclable alloys of rare metals, which are running out. This could make the digital revolution collapse in a generation.

With design and styling, there is no “best”, there is only “different”. When it comes to planned obsolescence, there is no “best”, there are only differences in fashion and design.

The popular misguided perceptions that city rankings and college rankings are useful for choosing which schools to attend are both examples of socially-induced market failures. These are both useful examples of behavioral economics.

Companies with critical mass (e.g. Facebook, Twitter, Discord, Reddit, etc) have overwhelming advantages over startup competitors. Even if it’s possible for people to create open-source alternatives to rival these companies, it is often the case that nobody will use them if nobody else uses them since those companies have already achieved the necessary critical mass.

Cornering the Market

Sometimes you get something because you want to use it. Sometimes you get something because you want to stop someone else from using it. Even if you yourself have no use for it.

Article: Musk Proposed Hyperloop to Stop California High-Speed Rail.

If UBI is funded without LVT, it would have to vary depending on location, and production will plummet, among other problems.

COLA: Cost-of-Living Adjustment

LVT would eliminate the question whether UBI would increase rent or not. It is a proven economic theorem that Land Value Taxes cannot be passed onto the tenants. LVT would not punish landlords for building more housing, so the end result is that rents go down since property taxes are eliminated. Rents would decrease even further as the supply of housing increases since landlords would be incentivized to build more housing, since they could build as much housing as they like without worrying about increasing tax rates.

Since Land Value Tax would decrease the cost of rent, the cost of living would vary less by location because housing would become more affordable regardless of whether it’s a city or a rural area. This means that it wouldn’t be as necessary to provide differing UBIs depending on the recipient’s place of residence and the associated COLAs.

UBI would offer people more liquidity to move out of a high-rent area into a lower-rent area since it costs money to move from one place to another, especially if they’re living paycheck to paycheck and would have to take a few days off work in order to move all their belongings into a low-rent area. In theory, UBI would eliminate the need for them to take out a loan in order to afford to move out of their high-rent apartments and what not.

Funding UBI with NRT would also reduce the decrease in production that UBI would cause, since natural resources taxes do not punish people for doing labor.

If UBI is ever going to work, then it needs to be funded by Natural Resources Tax, and there needs to be Population Control in place, lest it will only accelerate the collapse of modern civilization.

UBI would reduce the disincentive for welfare recipients to work, but it would create a much broader disincentive to work. There are many people who would choose not to work, or choose to work less, if they received a free basic income.

This is true, but the people who do choose to work less would tend to be the less productive and least hard-working people in the society, so a UBI might discourage production less than we would think.

A UBI for say, $1000/month would have to come from somewhere, either from taxation or money printing. The person who imagined that he would be $1000 richer might find himself $1000 poorer in actual spending power.

• If UBI is funded by Natural Resource Tax, the GDP of the economy won’t be reduced by taxes since NRT doesn’t tax production.
  • However, UBI would still make the economy less productive because it would reduce the incentive for all individuals to work.
• Inflation is unlikely since no new money would be printed to fund the UBI.

Different UBIs would be needed to adjust for different costs of living at different locations.

• Georgism would make living in cities more affordable by encouraging landlords to build more (dense) housing. They wouldn’t have to pay property taxes, and NRT couldn’t be passed onto the tenants, so a Georgist UBI faces less consequences that a non-Georgist UBI faces.
  • The cost of living varies greatly by location, so a UBI in Manhattan may not be the same as a UBI received in the rural Western states.
  • When Georgism makes housing more affordable in both cities and rural areas, there is much less of a need to provide differing UBIs depending on the recipient’s place of residence.
• If a reproductive license and tax are required to have children, society would need less welfare in general, and this would leave one less thing for UBI to potentially exacerbate or fail to fix.

Proponents of UBI claim that people would be more free to pursue creative and intellectual endeavors if they were able to work less, but this ignores how we may have already surpassed Peak Idea Production: Why We Are Running Out Of Good Ideas. Since there is probably only a finite amount of new ideas that can be conceived in this world, this is a good point for arguing that UBI wouldn’t do much to improve society.

If there is a surplus of government revenue after all NRT is collected, then we may need to find better ways to spend the excess revenue than UBI.

• The most basic functions of government: law enforcement, court system, military, border patrol, coast guard, foreign affairs, fire departments, emergency services, etc
• Hard infrastructure: roads, railways, bridges, tunnels, water supply, sewers, electrical grids, and telecommunications (including Internet connectivity and broadband access).
• Soft infrastructure: educational programs, official statistics, parks and recreational facilities, etc.
• K-12 Education?
• Single-Payer Healthcare?
• Singapore’s Welfare System, plus some amount of LBD?
• Laborers’ Bonus Dividend (LBD)?: Laborers who work are paid NRT by the government for working. A percentage of the worker’s salary (as determined by the government) is paid in addition to whatever the worker is paid by the employer.