The reality is that the supposedly rational act of moving is not what people do. They stay instead. The result is the demand for a levelling-up package.
I support the idea of such a package: many such areas do need help. But I also think that addressing the bigger question of why people do not move is just as important.
Is it because they do not have the capital required to move? That must be part of it. A new rent deposit is beyond the means of many, I suspect, having spent a long time looking at wealth data.
Or is it that the importance of family, place and connections is so strong that moving is simply not on people’s agenda? There remain, despite low incomes and higher risk, good reasons for staying that trump the economics of moving. If so, it shows how out-of-touch supposedly rational economics is with the reality of many people’s lives. That is a massively important lesson to learn.
In economics “rational” means “consistent”. If you prefer A to B and B to C then you prefer A to C.
But OK, let’s use this other definition of rationality that Spud prefers. People are rational calculators of what makes them better off. We might want to add in a bit about limited information and such but OK, at least a reasonable starting point. So, what is it they try to maximise through their calculation?
Spud is assuming money income. Which is nonsense. Economics assumes people maximise utility. Which includes things like continuing to live next door to Dear Old Mum so as to have her plum duff on a Thursday lunchtime.
Which does bring a larger amusement of course. For it’s absolutely all those – as with the Potato – which so loudly insiust that money isn’t everything who then insist that economics assume money is everything. When, in fact, right at the heart of economics is the agreement athat money isn’t everything. Yet still they rage because they’re clueless.
Well yes Tim. Sometimes I’m a penny pinching scrooge type. And other times I piss money on something because I can’t be bothered.
I suppose that’s what your economists call utility.
People in council / social / subsidised housing don’t tend to move because to do so loses that subsidy (which can be substantial).
One must not lose sight of the fact that some people move because they have to raise money to settle a libel claim. These are frequently the same people who do not mind moving away from friends and acquaintances because they don’t have any.
“Economics assumes people maximise utility.”
Which is economics-speak for ‘we don’t have a clue why people do what they do, so we’ll just invent some random factor called ‘utility’ and whenever someone does something we’ll declare that they did it because it maximised their utility’. Its an utterly circular (and un-disprovable) argument. Whatever a person does an economist will always claim it maximised their utility. It is of course therefore gibberish, like most of the rest of economics.
If you object to circular arguments, Jim, you’ll abolish much of the Social Sciences.
(The rest of Social Science doesn’t even rise to the standard of circular arguments.)
@ Jim
Utility is where someone with a lot of land, complains constantly they can’t make money from it, but doesn’t sell it because they are hoping for some massive undeserved payoff for residential development being permitted on it.
Thus resulting in land commanding a higher price than it should and continuing the circle of uncompetitiveness.
I don’t know why people would need capital to move. My wife arrived here from a foreign country with only a suitcase. The capital she had was between her ears. Extremely portable and impossible to tax. The ability to drive a hard bargain and to work hard were the only things she needed. Within two years, she owned a car, a house and a business. And they tell you minorities can’t get ahead in this country.
Boddicker,
There’s quite a market for people trading council/subsidised housing to move to other parts. My brother recently moved from a council flat in Tower Hamlets to sheltered accommodation in Leeds to be near his grandchildren. The way he described it it was quite straightforward, an internet clearing house with councils agreeing to allow it within reason. Often it’s multi moves as well.
“If you object to circular arguments, Jim, you’ll abolish much of the Social Sciences.”
Oh dear, how sad.