I am looking for a sound critique of the LVT. I have read some critiques of Rothbard’s critique and it seems Rothbard didn’t adequately debunk the LVT. Do any of you know of any better resources/arguments? Or should I consider the LVT a valid component of a free society? Any geo-libertarians here?
Also, apparently the LVT has been implemented with great success in Hong Kong.
All taxes are theft. No institutional theft can be compatible with the free society. Perhaps you should elaborate further on what is your question.
I tend to agree. Georgism is a relatively new idea to me though, and it is mostly a response to when all land is privately owned and therefore has only “rental value” to future persons. From this FAQ:
Geolibertarianism is the belief that each individual has an exclusive right to the fruits of his or her labor, and thus an exclusive right to the value of those fruits; and that all individuals have an equal right to land, and thus an equal right to the value of land.
By embracing this belief, geolibertarians are simply taking the core libertarian principle of self-ownership to its logical conclusion: Just as the right to oneself implies the right to the fruit of one’s labor (i.e., the right to property), the right to the fruit of one’s labor implies the right to labor, and the right to labor implies the right to labor – somewhere. Hence John Locke’s proviso that one has “property” in land only to the extent that there is “enough, and as good left in common for others.” When there is not, land begins to have rental value. Thus, the rental value of land reflects the extent to which Locke’s proviso has been violated, thereby making community-collection of rent (CCR) a just and necessary means of upholding the Lockean principle of private property. In the late 19th century, CCR became known as the “Single Tax” – a term often used to denote Henry George’s proposal to abolish all taxation save for a single tax on the value of land (irrespective of the value of improvements in or on it).
LVT is a tax, therefor it is incompatible with a voluntary society.
This presumes that land cannot be purchased. Also, there has never been a time when all land was privately owned.
No one has an equal right to property.
An anachronism, like most leftist libertarianism. Thankfully modern Georgists haven’t found a way to earn a living from tilting at windmills, or this stuff would be more widespread than it already is.
Thanks for the response, although there are still some nuisances I haven’t yet reconciled.
For example, yes, land could still be purchased in such a scenario - but might there be a greater tendency for landowners to withhold selling land at the greater profit of retaining ownership while still maintaining a profit stream through ongoing rent?
Also, yes, land has never been 100% privately owned in the past. But this is afterall the ideal of the libertarian philosophy - and I still see potential drawbacks to such an outcome as argued by Georgists.
I agree that no one has an equal right to property. But if individuals are to exercise self-ownership there needs to be available space to do so. If a libertarian society were to be overun by private landlords and rent-seekers, while in complete congruence with the NAP and the homesteading principle, this could theoretically become a mild (if not more than mild) form of slavery.
I am not convinced one or the other - I just think this is a valid concern.
It’s possible. But profits are not guaranteed, so that sort of outcome doesn’t worry me.
Sounds to me like property is implicit in a society where self-ownership is practiced. A non-issue.
These two are not the same thing.
So we can have slavery with the NAP? Contradiction?
There will be all sorts of concerns regardless of the way society is organized. There is no Utopian system. There will be risk, errors, problems and conflicts however things are organized. I am wary of systems which purport to solve issues that the market needs an opportunity to resolve before we imagine we can plan around them.
Land, in economic terms - also includes the oceans.
By golly josh.. we’re running out of ocean!?
Profits may not be guaranteed for all renters - perhaps a landlord can build another couple stories onto a building and take someone else’s share of the market - but it is essentially guaranteed as a whole, as people need to live somewhere, right?
You’re begging the question here.
Libertarians don’t hold all land being privately owned as an ideal?
My point exactly. The NAP can theoretically lead to oppressive conditions. It is a good rule of thumb, but there are blurry lines when we take the NAP to certain logical extremes. A society where everyone is subject to rent and can’t avoid it is certainly a form of slavery in my mind.
Conza,
Libertarians also advocate private ownership of parts of the ocean, so the logical ends are still there it just may take longer to get there.
What do you mean, “may not be”. They are not.
Your use of language in this discussion bothers me. He cannot “take” anything. He can earn a greater share of the market by having lower prices, more inventory to rent, better accommodations. In other words, by serving his clients better. But he certainly cannot TAKE.
So there is a persistent market for that good. That says nothing about how property ownership will be arranged, or where people will choose to live.
You’re claiming that it is implicit in existence that people must have somewhere to live, and my reply to you is an extension of that.
You conflated private property owners with rent seekers. Surely you know the difference?
Then the NAP would not be in effect.
Such as?
But someone owns the land right? So not everyone is subject to rent. And those who pay rent and no longer wish to can choose to buy land.
Semantic quibble. I don’t mean “take” in any immoral sense of the term.
Right, and I am saying there could very well be a tendency for landlords to not sell land privately and to only engage in rent once all land is owned privately, especially when this process maximizes profits (which in many ways it clearly does: selling land privately is a one time deal, but engaging in rent is an ongoing stream of income. Even if the very best renters in the market win out, they are still holding what amounts to a monopoly/cartel over land, which creates huge barriers of entry for new individuals to privately own land with the exception of inheritance).
You’re begging the question again. There is nothing inherently immoral about homesteading or rent (in fact there is very much that IS moral about it), but in a world where all land is owned privately and where individuals can ONLY seek land through rent is, to me, a topic of major concern for advocates of freedom (this is assuming rent is more of a profit-maximizer than selling land, which seems to be the case). It essentially becomes impossible for some individuals to ever own land privately, and we have essentially produced a new form of state - where landowners charge rent not at all unlike a form of taxes.
I am not saying this is necessarily an outcome of NAP or the free market, but it is a possibility, and I have yet to hear a good rebuttal for why this wouldn’t be the case. At best it seems we can cross our fingers and hope land is always plentiful and available for purchase.
Not if landlords make more money through rent and therefore aren’t willing to sell it.
Please note I am not a Georgist and I am completely open to a thorough critique of the LVT or a better argument for why it wouldn’t be necessary (that is why I came to the forums), but you have not provided one yet.
Perhaps a better angle at arguing the Rothbardian tradition of land-ownership is to explain how the Land Value Tax would lead to a much worser outcome.
The complaint is that an established ownership of land will put newborns at a disadvantage. That is simply a permanant feature of reality. The people that come before will always reign over the people that come after. It will manifest in countless ways under all circumstances.
Steven,
Your idea of profit maximization completely ignores time.
I thought it was interesting you used take, because it seemed to demonstrate your lack of understanding about markets. It is clearly the wrong word to use.
Which is a hypothetical and nothing more.
And yet people engage in many one time deals every day when they could choose to work on a residual payment or income model. The notion of wage labor vs capitalist investment is an example of this.
One of your mistakes is assuming landowners are a class (they act with the same interests). The interests and goals of each landowner are unique.
Again, you assume class interest (on a global scale apparently). This is why leftist libertarianism like mutualism and georgism fails. It’s not rooted in methodological individualism.
The Georgist argument which you are trying to articulate is the same as the “what if my neighbors landlock me” argument, used by people to justify public roads.
I wasn’t begging the question the last time.
That depends entirely upon the moral system we are talking about. We are talking about the NAP. Got it?
An anarcho-capitalist world.
Or ownership. Or are you claiming the land owners not individuals?
It’s not a concern, which is why Georgism is marginalized crankism, and we get a Georgism thread here about once a year, and we have to trot out the same old BS. Rothbard’s law comes into effect here. Henry George was great on many things, but the land tax was not one of them.
Charging rent is not a form of statism. The fact that people may have limited options on where to live, is a consequence of existence, not the fault of a lack of land, or a lack of homesteaders willing to sell land.
You assume (as Georgists do) a static model for the relationship between landowner and those without land. You assume all those without land will not be able to pool resources to buy land as a corporation or some other contractual organization, or that all landowners will maintain the cartel because …
You also assume that people would be born into a world with nowhere to stand, and that a society wouldn’t devise mechanisms to deal with eviction that didn’t result in slavery or instant death. That there would be no competition between landowners, that someone owning a desert would have no difference in his price or value proposition than someone who owned grassland, or mountains.
There are all sorts of possibilities. I have already addressed this. You cannot create guarantees with rules and taxes. The future is uncertain. That is why we rely on the market to create solutions and answers to challenges as they appear, instead of trying to plan out a Utopia.
Sure you have, you just refuse to acknowledge them.
Or maybe the market will create arrangements where there is a disincentive to hold property in perpetuity or try to charge outrageous rents. Oh yes, I believe those might be competition and the profit incentive…
Again, profit is not guaranteed.
You got it already. See below. All of the defenses of Georgism you have offered are based on hypotheticals that have never occurred and are unlikely to ever occur. But even if they did, how could you make a moral argument to subvert the market process?
Don’t waste that energy required to pump that blood into those fingers.
This concern of yours stems from a basic misunderstanding you have about land value and profits. All income derived from land ownership will tend to converge towards the rate of interest. The rent on land is basically the rate of interest. The capital value of land is, like any other factor of production, equal to the expected future rents minus the discount rate. Profit opportunities arise only on the account that there is a discrepancy between the present market value of a piece of land and the future rents that it actually renders. Entrepreneurs who can accurately predict this discrepancy can profit by buying land if it is undervalued and selling it when it is overvalued. Therefore, landowners who simply hold on to land for the sake of holding on land will incur losses.
There is obviously no advantage in owning land over say a factory, or a tractor, or whatever else has value due to the services it renders. In a Capitalist economy, the landowner is hopeless without the multitude of other factors of production required for production.
There is nothing special about land. The whole thing is a fallacy.
You can be a billionaire and not own any land in a Capitalist economy.
Cporter, why does it ignore time? Don’t entrepreneurs typically aim to increase profits over the long-term? Why wouldn’t rent maximize profits more-so than a one time sale? Not to mention you still retain ownership if you are only renting. I think there are clear advantages of rent over a one-time sale - mind explaining why this would be wrong?
Most anarchocapitalist theory is hypothetical, let’s analyze it logically.
I’m taking two assumptions that most anarchocapitalist will believe:
the libertarian ideal is to have all land owned privately.
entrepreneurs tend to maximize profits long-term
And then my added concern is:
rent will tend to lead to greater profits than the outright selling of land
therefore, this will tend to happen if all land is owned privately and there is no more land to homestead.
I think it depends on the nature of the good. Obviously entrepreneurs don’t rent out everything, like a car, because other competing firms are selling cars to others - so you don’t need to always rent one. The same can be said about land to an extent, but there is a fixed amount of land, and my hypothetical scenario is when all land is already owned privately. If cars were also in a fixed amount (and there were no substitutes), then people would presumably have to rent out one of these fixed cars to use. Perhaps someone would also sell a car because they found they didn’t need X amount of cars, but if cars are necessary for survival (as is land) this would be done to a limited extent and eventually there will be a rigid class of “car owners” and a class of “car renters.”
Perhaps I am mind-reading into landowners too much. Maybe some will become tired of maintianing property to rent, or there will be times when they need some quick, urgent cash so they decide to sell some extra land. This is a valid point. (Perhaps this is also what cporter meant by me “ignoring time”)
I am assuming class interest to the extent that Austrians presume entrepreneurs are profit-seeking. Now maybe my limitation is that I am only thinking of profits in the monetary sense.
I do find “landlocking” to be a worthy criticism of the homesteading principle. Given, I still think the homesteading principle is a great rule of thumb. If people can’t homestead wherever there is unused land (because it surrounds someones house presumably) than I think it is worth saying that the homesteading principle is not dogmatically true. What is wrong with that? And if law is arbitrated on the market I think there will be cases where an otherwise legitimate “homestead” may be overturned because of other oppressive qualities of the homestead. I don’t think we can automatically say, “Well if it’s not moral/peaceful then it’s not homesteading.” - that IS begging the question.
Why can’t we just agree that morality can get blurry in certain cases? It would help some thick libertarians to sound a little less dogmatic in their principles and to acknowledge cases where things are not dogmatically right/wrong.
Well, it’s a concern to me. You have brought up some good points but I am still not 100% convinced. I will admit, a part of me is playing devil’s advocate, but I think it doesn’t hurt libertarians to be more precise about their beliefs. A Georgism thread once a year sounds like a healthy refresher. :
You’re right- charging rent is not a form of statism. But if my only option is to pay rent at Place A or pay rent at Place B, it sounds pretty close to pay taxes at Nation A or pay taxes at Nation B. If you want to argue that the former situation isn’t possible/likely - stick with that argument - but don’t tell me the situation I am painting (however likely or unlikely) is desirable in a free society.
Fair points across the board, and this is the type of argument I wanted to hear - not the libertarian mantra “all taxes are bad, everything NAP is good” (I’m exaggerating, but that is sometimes how it feels when I try to dive into some of the nuisances of the libertarian philosophy.) Keep in mind, I wrote this thread in the form of a question - not to assert that Georgists “checkmated” anarchocapitalists.
Either I didn’t understand the deeper structure of your arguments or I wasn’t convinced. It is no benefit to me to preserve falsehoods no matter where they come from.
Maybe, but I’d rather hear some theoretical reasons for why/how this might be done rather than some version of “the spontaneous order of the market will take care of it.” I think sometimes in today’s statist world it is difficult to see exactly where markets end and government-influenced markets begin. Legal entities such as “corporations” are one example of this.
I think it is perfectly reasonable that if non-aggressive means inadvertently lead to oppressive ends that there needs to be some questioning on what exactly “the market” is and whether it is desirable in a free society.
I DO appreciate this conversation, and you will see me posting a lot more on these forums (sometimes being more contrarian than other times but ALWAYS with liberty on my mind). 
Actually no one owns “land”. They own homesteading rights. So if two people could use the same patch of land without interfering with one another, that would be jolly and neither would have the right to interfere. Example, radio waves broadcast through farm land.
So the price of land will just be bid up. Rents and opportunity costs can be used to calculate a NPV of the land, and then the land sells for around what the NPV is. The two prices are not independent.
You need respect for homesteading rights, which mirrors conventional “land ownership” closely. Its the only way to put a meaningful price on something, and prices induce conservation. The alternative is to attack homesteaders, discouraging conservation/entrepreneurship.
And I would claim this problem is not unique to land. There can be a limited amount of growable food, oil, clothes, etc…