Monday, 5 March 2018

Rural basic income ‘maximizes impact’ for society

Article by a YPP member on the BIEN website.

... From this we can see that, not only is a rural basic income an affordable way to conveniently pay benefits to those who choose to move to the countryside, but it will also indirectly increase wages, employment and job satisfaction in the city along with lowering rents. A rural basic income could thus affordably improve the lives of everyone.

I debated this with him. I'm not entirely convinced but it's a worthy thought experiment. Would it push up rents in the countryside or pull them down in urban areas? Not sure.

8 comments:

Ben Jamin' said...

So long as we all pay, and get paid what we are owed, the market can best allocate resources. Including the spatial allocation of labour.

No need to over complicate matters. Any Citizens Income shortfall funded from higher taxes on output would introduce extra deadweight loss that offset some of the benefits. But would also reduce rents and house prices overall.

Which is why funded from a LVT/reformulated CT, is best ie zero costs.

Would not reduce rents as paid by landlords, but would have exactly the same effect on tenant incomes thus affordability.



Sackerson said...

Compensates for the flow of money out of regions. You're familiar with this book?

https://www.amazon.co.uk/Ecology-Money-Richard-J-Douthwaite/dp/1870098811

ThomasBHall said...

It would still need to be funded by LVT- otherwise any rural property would see a rent hike equal to the CI available.

Ben Jamin' said...

@ TBH

Higher incomes don't feed into higher rents. Bigger differences in income between marginal and infra-marginal location do. Think Ricardo's Law of Rent.

Assuming the rural CI resulted in a net transfer of incomes back to the margins, it would result in a drop in rental incomes/selling prices throughout the UK from what ever source of tax used to fund it.

John McCone said...

In the booklet I published which the article is based on (called The Countryside Living Allowance) I advise that the income should be conditional on the recipient voluntarily agreeing to pay a Land Value Tax. For people who don't own property, the income is automatic, those who do own low value land might decide its a deal worth agreeing to, those who own high value land would probably opt out.

The booklet suggests using a kind of basic income as a bargaining chip to slowly phase in Land Value Tax (which wouldn't rise for marginal land, but could be very significant if clusters of new towns were built in the Countryside)

Mike W said...

John M, can I congratulate you for thinking about the introduction of LVT and CI in such an original manner (IMHO).One as the bait for the other.Very good. I will read your booklet later. My first thought though is, do I want to make voluntary LVT for any group? After all even the modern concession to the 'widow bogey'is just a rollover. LVT will face political burial like last time.I would worry that the countryside would be used as the next location! Just asking from first thought.

'It would still need to be funded by LVT- otherwise any rural property would see a rent hike equal to the CI available.'

Ben J - To be honest, I thought TBH was invoking law of rents. I assumed landowner will treat 'countryside CI', like EU farm subsidy, and bake it into the farmer's rent as well.

Ben Jamin' said...

@ Mike W

Rents arise from differences in locational productivity. If you think EU farm subsidies narrow those differences then they probably reduce rents too.

If a countryside CI redistributed incomes back to the margins, it reduce rental incomes everywhere else.

Mark Wadsworth said...

BJ: "Rents arise from differences in locational productivity"

Agreed.

"If you think EU farm subsidies narrow those differences then they probably reduce rents too"

The subsidies for farmland don't increase rural productivity, they probably reduce it. The payments don't go to people in rural areas, they go to faceless wealthy people who live in London.

What John meant is reducing income disparities, which taken in isolation would reduce rents in non-rural areas. Question is (and I don't know the answer) is to how to stop those payments seeping back into land rents in rural areas.