June 10, 2018
Our economy is like a big game of Monopoly, except all the properties are already owned by other people (unless you’re lucky enough to inherit).
Every time you roll the dice, you land on a piece of property owned by someone else, subsequently owing that property owner their share of “rent”.
But unless you were blessed with a nice inheritance or parents financially supporting you, you don’t have any money to give to the landlord because you started off with nothing. So in order to pay off your debt, you must figure out a way to obtain that money. This means working for someone else willing to pay you for your labor.
Luckily a neighboring landlord is hiring for a property manager and takes a liking to you, so you get a job working for the other landlord.
Essentially we have a game where the ownership/rentier class doesn’t have to do any work of their own, yet profits off the labor of the non-owners.
As a non-owner, the only way into the rentier class is to save enough money to buy out the properties (one may not be enough) of the owners. The feasibility of this is dependent on income relative to expenses (wages relative to rent) and property prices. Unfortunately wages are so low relative to property prices that only a relative minority are ever able to achieve this mobility into the rentier class within their lifetimes.
As more and more players enter the game (more people being born, immigration) but the supply of paid jobs don’t increase at a sufficient enough rate to accommodate the influx of demand for work (automation), the players’ bargaining power in the labor market reduces. This means reduced compensation, benefits, working conditions, and job security. A glut of aspiring workers relative to quality job openings means that families and random strangers have to start moving in together to afford the rent, and some even go homeless.
Does this seem like a fair system?
It would appear as though the players starting off with nothing have too little power, while the incumbents — the rentier class who started off owning everything under your feet — have too much power. It seems unfair that one is forced to pay rent to some privileged person who doesn’t need to work, and the only way to get that money is to work for them.
How can we make the game more fair without eliminating property rights?
We can give each player $200 every time they pass “Go”.
Where does this $200 come from? It can come from taxes on unearned income (eg. land value tax), negative externalities (Pigovian taxes), or perhaps even out of thin air from the bank (QE for the people, Modern Monetary Theory).
This $200 is universal basic income.
Written by Jeremy Bernier who left the NYC rat race to travel the world, work remotely, and find the meaning of life.