Switzerland’S Proposal To Pay People For Being Alive

[swissy_fit]

Whats Switzerland like for house price inflation? If the cost of living is already low surely they could contain any inflation with higher rates.

It's ludicrous in Geneva, have a look here..... http://www.homegate.ch/en

All the reasons for HPI in the UK are concentrated here - VIs, no land available(though that is a policy issue based on the utterly ludicrous idea that each canton should retain the ability to support itself with food, an idea that was fine 50-100 years ago), lots of foreign mafia money laundering with property, low rates, etc etc etc combined with MASSIVE demand.

All along Lac Leman on the Swiss side this is true, as far as Valais where things change dramatically.

But in Fribourg and some other cantons, it's all different, land policy is different, more space, less demand, for the price of a studio in Geneva you can build a modern family house (I mean a proper Swiss one with full ecotech not a UK shitbox) on 800m2 of nice land.

[Executive Sadman]

It's ludicrous in Geneva, have a look here..... http://www.homegate.ch/en

All the reasons for HPI in the UK are concentrated here - VIs, no land available(though that is a policy issue based on the utterly ludicrous idea that each canton should retain the ability to support itself with food, an idea that was fine 50-100 years ago), lots of foreign mafia money laundering with property, low rates, etc etc etc combined with MASSIVE demand.

All along Lac Leman on the Swiss side this is true, as far as Valais where things change dramatically.

But in Fribourg and some other cantons, it's all different, land policy is different, more space, less demand, for the price of a studio in Geneva you can build a modern family house (I mean a proper Swiss one with full ecotech not a UK shitbox) on 800m2 of nice land.

Why is that ludicrous?

I thought we were all supposed to 'buy local' and so forth.

[swissy_fit]

Why is that ludicrous?

I thought we were all supposed to 'buy local' and so forth.

The answer to that would be long, but it's all a convenient excuse and well out of date, it's used by the VIs.

For one thing, I doubt if the land in the canton could sustain the population now as it stands.

Agriculure has changed since, so has the population.

If they wanted a soluton they could find one.

They could negotiate a future crisis/food deal with Vaud (lots of land) or Valais(low population, very fertile) or with neighbouring France(also lots of land) to compensate.

The truth is, rather like in the UK, they don't want a solution.

[@contradevian]

The problem is, this won't happen until the land rent seekers are tackled.

If you don't have a way to stop land rent seekers from creaming off excess income, a CI will just be funnelled to land owners instead.

Yes you would need a Georgian land tax to morally justify the citizens Income as land is the ultimate monopoly. The alternative would be some kind of massive land reform.

Was watching something the other night on BBC2 about the cold war, and some old public information films were shown about the 'welfare state' and the NHS. The point being was both were a defence against against communism. 'You don't need communism when you can some of the benefits of it without all the violence'

Now the posh toff twits have got the upperhand they are reneging on the deal.

Edited November 14, 2013 by aSecureTenant

[tomandlu]

Now the posh toff twits have got the upperhand they are reneging on the deal.

Indeed. Not sure I believe it 100%, but it's certainly an intriguing question. Did communism in the east restrain the excesses of capitalism in the west?

[SHERWICK]

I think that is about the sum of it. Neither left nor right, but common sense to keep the wheels of capitalism turning.

Basically if people do not trade equally with each other, surpluses build up and to keep it going debts get issued. Instability and creeping monopolisation and collapse of demand ensures.

As Winkie said on another thread on the matter of Citizens' (or 'Basic') Income, on its own it would be inflationary - say if you just printed it up all the time. For me it has to go hand in hand with redistribution. The trick is to make sure that there exist incentives to work and getting the balance right is key. A Land Value Tax (and perhaps broader Wealth Taxes too) are really ideal as they benefit the richer thru' the process of debt issuance and unearned gains on the value of their assets from increasing the money supply.

But yes, the idea that people won't work is silly. In fact the distinction between work and play is often brought into sharp relief when you see these guys from the FT etc Twittering for their jobs....just like you. In fact, rather than the tons of 'make work' that we have now, we could witness a blossoming of value added.

Also a Citizens' Income could cut out a huge amount of bureaucracy and fundamentally alter the balance between the State and the individual. You no longer need to kow tow to petty bureaucrats and suffer the humiliations visited upon you by ignorant politicians appealing to their equally ignorant faithful. They should be serving US, not us being policed by them and feeding them.

You'd get rid of the minimum wage - making all work pay. You'd be able to get rid of all pensions that are subject to fraud and false promises (replace with an accessible 'Super ISA') and which largely benefit the rich and the public sector whose pensions are managed by weak politicians. You'd get rid of the vast majority of confusing benefits, the armies of civil servants and outsourced staff and the computer systems running their impossibility.

It won't be ideal but I can't think of a better way to go than starting with a simple Citizens' Income and Land Value Tax.

Great post. We're about to witness the next revolution in economics!

[ccc]

Why?

You answered it already. The land owners would have to give in to make it viable.

If it was brought in - they really wouldn't have a choice. If their 100 tenants who now pay £500 - could now only pay £400 ?

They couldn't exactly kick them all out. Nobody to take their place for the money they want.

[Traktion]

You answered it already. The land owners would have to give in to make it viable.

If it was brought in - they really wouldn't have a choice. If their 100 tenants who now pay £500 - could now only pay £400 ?

They couldn't exactly kick them all out. Nobody to take their place for the money they want.

If everyone is paid a minimum amount, the land owners will increase the rents to suit.

100 tenants who previously paid £500 would then end up paying £500+CI or whatever (assuming they weren't previously receiving benefits).

Why do you think they would only pay £400?

[swissy_fit]

If everyone is paid a minimum amount, the land owners will increase the rents to suit.

100 tenants who previously paid £500 would then end up paying £500+CI or whatever (assuming they weren't previously receiving benefits).

Why do you think they would only pay £400?

I take your general point but more specifically in Geneva, only a small proportion of the physically present population would be eligible for the payment.

I don't know what the figures are, but I'm sure at least 50-60% of the people are either not Swiss passport holders like me or don't have any legal status at all.

So the rent could not rise proportionally with the payment.

[tomandlu]

So the rent could not rise proportionally with the payment.

Perhaps to some extent, but rent-seekers seek rent. They need to be constrained by something other than their tenants' available income. That said, probably the best solution is an increase in supply, but a bit of progressive LVT in the mix wouldn't come amiss.

[Dorkins]

If everyone is paid a minimum amount, the land owners will increase the rents to suit.

100 tenants who previously paid £500 would then end up paying £500+CI or whatever (assuming they weren't previously receiving benefits).

Why do you think they would only pay £400?

Landlords always capture 100% of their tenants' pay rises do they?

Righto.

[Dorkins]

Perhaps to some extent, but rent-seekers seek rent. They need to be constrained by something other than their tenants' available income.

Landlords are constrained by competition with each other.

[tomandlu]

Landlords are constrained by competition with each other.

Which is fine if supply isn't constrained (and new supply is harder for LLs to acquire).

[wonderpup]

Indeed. Not sure I believe it 100%, but it's certainly an intriguing question. Did communism in the east restrain the excesses of capitalism in the west?

fear of a communist takeover was one of the ways that Roosevelt persuaded the rich to accept higher tax rates in the 30's- he told them they could either do it his way or talk to the Unions and the reds.

More job losses at Barclays today due to the switch to online banking- this is only going one way I think.

Ironically some kind of CI might be needed not to create a socialist utopia but to prevent the free market model imploding as the wages it depends on dry up.

[ccc]

If everyone is paid a minimum amount, the land owners will increase the rents to suit.

100 tenants who previously paid £500 would then end up paying £500+CI or whatever (assuming they weren't previously receiving benefits).

Why do you think they would only pay £400?

The huge amount of people 'earning' only benefits - would no longer be able to afford their existing rent. Therefore they would become the new base for rents. Yes those who were already earning would have more money - however the base would be lowered - and that is what everything starts from. Look at today. EVERYTHING to do with rents is based on what those on benefits can pay. Its the base that everything else is built upon.

[erat_forte]

The huge amount of people 'earning' only benefits - would no longer be able to afford their existing rent. Therefore they would become the new base for rents. Yes those who were already earning would have more money - however the base would be lowered - and that is what everything starts from. Look at today. EVERYTHING to do with rents is based on what those on benefits can pay. Its the base that everything else is built upon.

This is true but it is also the problem - how to get from here to there? It might be nice to imagine an overnight switch from the current rotten system to a nice clean CI, but there would be carnage amongst those who were "losing out", because of the inevitable delay between the switch, and [a] their landlord accepting a rent reduction and them realising they could now work odd jobs without losing benefits. I dont know what the answer to this one is.

[snowflux]

If everyone is paid a minimum amount, the land owners will increase the rents to suit.

100 tenants who previously paid £500 would then end up paying £500+CI or whatever (assuming they weren't previously receiving benefits).

Why do you think they would only pay £400?

Sounds like you've got the wrong end of the stick here. On average, no-one would be getting any more money. Those on benefits would get roughly the same amount of CI instead of benefits; those working would pay higher taxes, but their CI would ensure that their net income is about the same. So no more and no less money for rent. Rent-seeking is an entirely different problem.

[(Blizzard)]

.

Edited November 15, 2013 by (Blizzard)

[Traktion]

Landlords always capture 100% of their tenants' pay rises do they?

Righto.

Yes, pretty much. Why would they charge less?

[Traktion]

The huge amount of people 'earning' only benefits - would no longer be able to afford their existing rent. Therefore they would become the new base for rents. Yes those who were already earning would have more money - however the base would be lowered - and that is what everything starts from. Look at today. EVERYTHING to do with rents is based on what those on benefits can pay. Its the base that everything else is built upon.

Right, I see where you are coming from now then. I don't know what housing benefits are like over there, but replacing them with a lower CI could reduce rent at the lower end.

[Dorkins]

Yes, pretty much. Why would they charge less?

Because they are in competition for tenants with other landlords who are willing to accept less rent for a similar property.

Price discovery, innit.

Edited November 15, 2013 by Dorkins

[tomandlu]

Because they are in competition for tenants with other landlords who are willing to accept less rent for a similar property.

Price discovery, innit.

That assumes excess supply, which might be the case in some parts of the country.

[Dorkins]

That assumes excess supply, which might be the case in some parts of the country.

There is no need for there to be "excess supply" for price competition between suppliers to take place. More or less supply might affect the level of the market price that buyers and sellers end up agreeing on, but it does not change the fact that competition is taking place.

[tomandlu]

There is no need for there to be "excess supply" for price competition between suppliers to take place. More or less supply might affect the level of the market price that buyers and sellers end up agreeing on, but it does not change the fact that competition is taking place.

What you're sort-of ignoring (but acknowledging in the highlighted passage) is that, when supply is constrained, the buyers are in competition with each other as well.

[ccc]

This is true but it is also the problem - how to get from here to there? It might be nice to imagine an overnight switch from the current rotten system to a nice clean CI, but there would be carnage amongst those who were "losing out", because of the inevitable delay between the switch, and [a] their landlord accepting a rent reduction and them realising they could now work odd jobs without losing benefits. I dont know what the answer to this one is.

Indeed. It would a a painful transition for many. How that would happen i do not know. However i believe the general principle pisses all over what we have today. May not be perfect but better than what we have.