Should a Universal Basic Income Be Adjusted for Local Prices?
Lyman Stone
5013

“Welfare programs do many valuable things, but propel lasting economic prosperity they do not.”

True indeed. Now in contrast, a flat UBI that can pay the rent in a high cost city, will obviously provide lasting prosperity to areas with low cost of living, merely by paying for restaurant visits and cinema visits or anything else that people want for cultural/social spending, for everyone there, on top of living. It’s the nature of significantly increased regional aggregate demand, that leads to more stuff becoming viable to sell for a profit, in affected areas.

But yeah, this is indeed a bit of an open assault on the easy profits one can make from real estate today in popular cities, and I say that as someone close to a an architecture firm in the business. Still, it’d distribute opportunity to make money from building more evenly accross the country, so that’s not bad either.

edit: but surely, (popular) cities would consistently remain somewhat more pricey, given the improved proximity to wealthy persons and overregional company headquarters, and with that, opportunity to get deals to develop projects for those groups, or in case of many regular cities, you still get more people closely nearby, so again you at least get more customers, and more businesses to develop projects for, who serve those customer demands. So rural areas would never provide as much opportunity, but hey at least it’s something. And big cities would become more imporant based on population density, rather than who’s the big names/overregional industries in town.

Whether that’s a good or bad thing I’ll leave for you to decide, but given that I don’t see UBI as a tool to provide people a basic income, but rather in the long run, a share of the net wealth we produce by in part, respecting fundamentally flawed property rights, I find this to be tendencially a reasonable compromise.

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