Weird UBI Argument About Rents

I am not that interested in arguing about UBI on a day-to-day basis, but I’ve now seen one silly argument against it enough times that I feel compelled to intervene. The argument is this:

In fact, workers may not even see much of the benefit of their UBI check: if their new gains are simply passed on to landlords and merchants through higher rent and prices, the benefits will be entirely illusory, even as people appear to be receiving an enormous handout.

Perhaps this argument comes up a lot because those in the chattering classes often live in areas where local policymakers refuse to do things to keep rents under control, e.g. by building out more space or fixing prices. But even if you live in such an area, it is still a shocking theory.

Its advocates may not realize how shocking it is because, in their mind, what they are arguing is that a UBI leads to higher rents that consume the value of the UBI. But what they are actually arguing is that a UBI increases disposable incomes and that increasing disposable incomes leads to higher rents that consume the value of the income increase. Stated this way, the shocking nature of the theory becomes clear: if true, the theory predicts that anything that increases people’s incomes is pointless.

The Fight for $15 is pointless. The fight for unions that can negotiate higher wages is pointless. The fight for a more generous welfare state is pointless. Nearly everything that people talk about with respect to the economy and what could be done to improve the plight of the bottom half is actually pointless. Why? Because in all cases the internal mechanism of those proposals — increasing disposable incomes — is counteracted by a corresponding rise in rents, according to this particular anti-UBI theory.

Needless to say, I think the theory is pretty obviously false. Rises in disposable incomes generally do leave people better off, even net of rent payments, even in places where local authorities allow the price of space to spiral out of control.

But if you think it is true, you really should ask yourself what the source of the problem you have identified is. If it’s the case that higher minimum wages, stronger unions, and more generous welfare states are all helpless against rent hikes, then maybe the issue you are worried about has nothing to do with the UBI and everything to do with your area’s dumb housing policy.

Land as soil and land as space

The argument that people can appropriate unowned land by mixing their labor with it has a lot of problems. Labor is not a substance, and so it cannot be mixed. Even if it could be mixed, it is not clear why mixing it with something transforms the unowned particles into owned particles. Even if you can get past the weird mechanics of mixing, such appropriation would seem to violate ordinary libertarian ethics of non-aggression because everyone except the appropriator has their previously-existing access to the land violently taken from them without their consent.

These are all problems that have been discussed extensively and advocates of the theory lack a convincing retort. But there is another fundamental problem that I have not seen discussed before. And that problem is this: “land” ambiguously refers both to “soil” and to “space” and the mistaken conflation of the two is what really drives the entire labor-mixing theory.

When you ask someone what they mean when they say that someone has “mixed their labor” with a piece of land, they usually reach for an agricultural example: a person mixes their labor with the land by cultivating the soil and planting crops. Insofar as agriculture was the overwhelming purpose of land at the origin of this theory, this makes sense. But the example does not explain how space comes to be own.

If someone cultivates the soil, then the labor-mixing theory should say that they own the soil, not the space the soil sits in. The space the soil sits in, which can be described by reference to lines of longitude and latitude or by drawing lines on a map, is not mixable. It’s a container. It’s territory. It’s not soil.

The difference between “soil” and “space” is very easy to see once you recognize that soil can be moved to a different space. The layer of topsoil a person has mixed their labor with could be shoveled into a truck and moved elsewhere. And, if that were to happen, the owner of the soil would not have had anything they mixed their labor with taken from them.

The same is true of any other labor mixed in any other space. A house built on some piece of land could be loaded onto a special truck and moved. I’ve seen them do it on TV. So could any other structure. For any given land claim, the objects that the labor was mixed with could be isolated and moved outside of the space.

So how does someone ever come to own the space itself rather than just the objects that were sitting in the space when labor was mixed with them? This is not a trivial question because it is in fact the space that is so valuable. That’s what land rents (these days especially) are being paid to: not to soil but to space.

As far as I can tell, the labor-mixing theory has no actual argument for how space can be owned, but has instead equivocated between different uses of the word “land” to move deceptively from “soil can be owned” to “space can be owned” without providing a separate argument for the latter.

The Legal Situation of DNAinfo and Gothamist

A week after DNAinfo and Goathamist unionized, its owner put the two publications out of business entirely. A lot of people have contacted me to ask whether this is legal. I don’t know all the details involved, but it probably is legal.

The key case here is Darlington Mfg. In that case, the NLRB had initially ruled that you cannot shut down a business in retaliation for union activity, but then the Supreme Court overturned that decision:

We hold that so far as the Labor Relations Act is concerned, an employer has the absolute right to terminate his entire business for any reason he pleases…

This rule holds only for completely closing down a business. It is a different story when an employer does a partial closing, a temporary closing, or moves the business elsewhere. In those cases, if the actions are done for retaliatory reasons, they may be illegal. But if a boss just ends the existence of a business altogether, there is no recourse.