There’s quite a bit of chatter about so called “Universal Basic Income” again in some of the circles I frequent. It’s a simplistic policy, easy to understand but difficult to sell to the people who will feel like they are funding something for nothing for others. And it can do more harm than good if not coupled with wholesale reform of the tax system to stop fining people for doing economically beneficial things – such as working or investing to produce goods and services, or trading, things we want to encourage, and rewarding people for doing economically extractive things – monopolising natural resources we all need. Cities like Hull and Liverpool are demanding the power to trial a form of it.
Land, location, the thing that determines the cost of shelter, is the least elastic factor of production (they ain’t making more of it). So when you increase the income received by a whole group of people that will find its way into higher aggregate rents.
You would be taking from my and everyone else’s labour earnings – all I have alongside forty odd percent of the least well off in society with no “asset” in the form of property – to give a supposed net benefit to the poorest, which will tend to increase rents for them, and thus, because landowners can get a higher yield for the poorest land, that will increase rent for the rest of us. It’s like housing benefit already does that – sets a floor for location rents that effectively determines the floor for all housing above that level (to the tune of a hundred billion a year or more from have-nots to haves).
The “class” of people who end up the real net beneficiaries are those who already claim to “own” a part of the commons and you take from those who don’t or can’t. Doesn’t seem so equitable now does it?
Both – changing the tax system and giving people “free money” taken from others’ labour earnings – are big asks. The far more effective intervention is to switch the tax system from treadmill taxes (fines on my and your labour earnings, investment and trade, which reduce relative productivity for the whole economy) to land values (and other forms of economic rent – both on nature and on state protected privileged trades and professions), meaning that throughout one’s life, instead of paying both treadmill taxes to the state and rent to private estates, we would only ever pay for the land we use at any point in time.
That in itself will save more people more than handing out cash taken from others’ earnings ever will – for, basically, anyone without “property” and most of those with a small amount of property (i.e. one reasonable home). It will increase the productivity of labour primarily and increase demand for and therefore the bargaining power of labour, meaning much less need for nannying interventions in the labour market as people are empowered to stick two fingers up to a bad employer for instance.
Now that increase in the productivity of labour, and the resulting drop in the returns to capital will itself level the playing field as well as making us a much more competitive economy overall. That will increase in turn the returns to land, now being collected through land value taxes, for the public “revenue” the surplus over and above government spending from which can then be used to give an equal dividend to everyone (not a basic income – determined by some satrap in the Treasury but a right to an equal division of the social surplus created by the entire community).
So, if you are going to go to the barricades for one single big ask economic policy, it would be far, far more effective to focus on the tax switch. It is no coincidence that the person thought of as the “modern” world’s first major proponent of a citizens’ income of sorts, Tom Paine, suggested that it be funded from the ground rent of the country.
Quite apart from any of this, the tax switch is an absolutely essential element in being able to affordably and sustainably implement the sort of things we need to do to save the planet. Incentivising the most efficient use of precious monopolistic locations so people (again, usually the least well off) do not need to travel so far just to access the same opportunities as those who currently monopolise those locations do, so our built environment is constantly updated to take account of the most efficient energy techniques, so developers don’t just throw up boxes because they make most of their profit from the land because there’s a limit to what people can pay for location + buildings and so on and so forth.
UBI is a simplistic answer to one problem – sure, it is easier to understand. But you have to follow the trail of where that ends up to see who the net beneficiaries are. Land reform liberates all labour in ways UBI can only dream of.