Sunday, July 09, 2017

Basic Income, Open Borders

In my utopia money is created as a basic income and collected as a single tax on land. The tax centers, as it were, the wheel of circulation by giving landowners a reason to produce something that consumers want to give them money for. There would be no sales tax and no tax on income, which only complicate the free exchange of goods, services and labor. Since every citizen has a guaranteed basic income, minimum wage laws and welfare payments could be abolished altogether. It's often said that this utopia cuts across the division between left and right by abolishing poverty while supporting free enterprise. Could it also bring the left and right together on immigration?

That's the question I want to consider in this post. I used to think that the left would have to accept strict immigration controls in exchange for the basic income. But I think this missed an important consequence of the system I'm proposing. In my utopia, everyone would be able to find a place to live that leaves them enough money after paying rent to eat. I'm imagining that the basic income would be set just below what a person would make if working full-time at the minimum wage. The lowest paying jobs, meanwhile would fall well below the current minimum wage. This means that, from the point of view of someone who has no UBI but is working a minimum wage job, rents would be incredibly high. In order to survive on a minimum wage job you'd have to work way more than full-time, perhaps more than 24/7.

Needless to say, that would take the incentive out of immigrating to my utopia. At least the incentive to immigrate illegally without the prospect of good job. It is possible to imagine someone without UBI working full time to earn the same as a citizen who doesn't work at all. But it's hard to imagine that citizens wouldn't be supplementing their income by providing a few hours of cheap labor every week. In other words, the bottom would fall out of the exploitative labor market because people who are unexploitable would gladly take those jobs to earn a bit of extra cash for luxuries and vacations.

Also, there is no illegal labor market. Without sales or income taxes, all exchanges of (legal) goods and services would be aboveboard, since the government doesn't have to know about any of them. That means you can't even offer your employer "off-book" labor. Everything is off book in the relevant sense. No one is ashamed of any of their economic transactions.

From the point of view of the potential immigrant, my utopia is not a "land of opportunity" at all. The only way it becomes attractive is through legal immigration: it would attract very hardworking, very self-reliant people who are willing to apply formally and then apply themselves over a number of years towards earning citizenship and therefore the UBI. Someone living in the shadows would see only very high rents (even at the low end of the market) and very low wages. It would simply not be an attractive place to live unofficially.

I've been thinking of this as, not the Wall, but the Platform. It would allow people to cross the borders physically as they please on very expensive vacations or, in some cases, as investments in their future, bringing savings into play in order to ascend to the very high living standard in Utopia. Immigration policy would be all about deciding how many new citizenships should be granted every year, i.e., how many more people should be given the UBI, and on what criteria they should be granted. There would be no need to have any draconian border controls since there would be every incentive to apply formally for citizenship and no incentive to live in my utopia without it.

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