Who cares whether the “value” comes from improvements around the landlord rather than from them? Do you base ownership on producing “value”? Do you own “value”? Provided the landlord is putting the land to its most profitable use, where is the problem? And say they do not put it to the most profitable use: why does that justify your usurpation of their land? They will have to pay to have it protected as it is, so why exactly should they pay any tax over and above this?
Firstly, as for your “profitable use” point - then yes, that is fine - its not a problem if it is in use - its a scare resource. But here is the problem if it is NOT in use. According to Ricardo’s Law of Rent, location is a problem - if the land is idle within the city - that causes urban sprawl and blight and artifically high rents -businessmen and labourers have to pay. for (i.e. those who contribute to society). If its out in the countryside, they will pay very little (here in Australia probably nothing in submarginal land, as is often the case). So, the reasons are: efficiency (higher rates of employment as idle land is relinquished and put into production, more profits for business due to lower rents, higher rates of consumption with all taxes abolished and lower rents and less urban sprawl) and equity (moving people from welfare onto work). We have social rules (e.g. don’t drive on the wrong side of the road). We also have economic rules - scare resources should be paid to that who will put it to productive use and we should not create artifical scarcity. If the land is in use, that is fine - they are a market player - they produce goods and services. As such, there are social and above all, economic justifications why.
Start with the basics. Read Ricardo’s book Prinicples of Political Economy - Ricardo showed income is distributed among landowners, workers, and capitalists. Ricardo saw an inherent conflict between landowners on the one hand and labor and capital on the other. He posited that the growth of population and capital, pressing against a fixed supply of land, pushes up rents and holds down wages and profits.
Case study: in London businesses are forced to pay a “rent wage” i.e. extra and higher wages so workers in London can afford the rent - rents fetching around 150 to 250 pounds per week. However, it was revealed that in London there are as much as 20 000 vacant buildings in the South end. Thus, Ricardo’s law is empirically valid.
Moreover, Fred Harrison also charts the fact that union protests and activity increases as rents increase (heh, perhaps unionists have confused the capitalist with the landowner). So there are “flow on” consquences.
Secondly, for the 5th time, it matters where the improvements or “value” come from as if they are due to the private sector or the government they are a surplus, in other words, theft from what is empirically the result of others (see previous post on where I discuss the differences between land speculation and other forms of speculation - the obvious scenario is a labourer makes infrastructure but then has to pay more in rent for something he or she produced). Otherwise, here is a speech which explains it in some detail:
"…Land monopoly is not the only monopoly, but it is the mother of all other forms of monopoly.
Land, which is a necessity of human existence, which is the original source of all wealth, which is strictly limited in extent, which is fixed in geographical position – land, I say, differs from all other forms of property, and the immemorial customs of nearly every modern state have placed the tenure, transfer, and obligations of land in a wholly different category from other classes of property.
Nothing is more amusing than to watch the efforts of land monopolists to claim that other forms of property and increment are similar in all respects to land and the unearned increment on land.
They talk of the increased profits of a doctor or lawyer from the growth of population in the town in which they live. They talk of the profits of a railway, from the growing wealth and activity in the districts through which it runs. They talk of the profits from a rise in stocks and even the profits derived from the sale of works of art.
But see how misleading and false all those analogies are. The windfalls from the sale of a picture – a Van Dyke or a Holbein – may be very considerable. But pictures do not get in anybody’s way. They do not lay a toll on anybody’s labor; they do not touch enterprise and production; they do not affect the creative processes on which the material well-being of millions depends.
If a rise in stocks confers profits on the fortunate holders far beyond what they expected or indeed deserved, nevertheless that profit was not reaped by withholding from the community the land which it needs; on the contrary, it was reaped by supplying industry with the capital without which it could not be carried on.
If a railway makes greater profits it is usually because it carries more goods and more passengers.
If a doctor or a lawyer enjoys a better practice, it is because the doctor attends more patients and more exacting patients, and because the lawyer pleads more suits in the courts and more important suits. At every stage the doctor or the lawyer is giving service in return for his fees.
Fancy comparing these healthy processes with the enrichment which comes to the landlord who happens to own a plot of land on the outskirts of a great city, who watches the busy population around him making the city larger, richer, more convenient, more famous every day, and all the while sits still and does nothing.
Roads are made, streets are made, services are improved, electric light turns night into day, water is brought from reservoirs a hundred miles off in the mountains – and all the while the landlord sits still. Every one of those improvements is effected by the labor and cost of other people and the taxpayers. To not one of those improvements does the land monopolist, as a land monopolist, contribute, and yet by every one of them the value of his land is enhanced. He renders no service to the community, he contributes nothing to the general welfare, he contributes nothing to the process from which his own enrichment is derived.
While the land is what is called “ripening” for the unearned increment of its owner, the merchant going to his office and the artisan going to his work must detour or pay a fare to avoid it. The people lose their chance of using the land, the city and state lose the taxes which would have accrued if the natural development had taken place, and all the while the land monopolist only has to sit still and watch complacently his property multiplying in value, sometimes many fold, without either effort or contribution on his part!
But let us follow this process a little further. The population of the city grows and grows, the congestion in the poorer quarters becomes acute, rents rise and thousands of families are crowded into tenements. At last the land becomes ripe for sale – that means that the price is too tempting to be resisted any longer. And then, and not until then, it is sold by the yard or by the inch at 10 times, or 20 times, or even 50 times its agricultural value.
The greater the population around the land, the greater the injury the public has sustained by its protracted denial. And, the more inconvenience caused to everybody; the more serious the loss in economic strength and activity – the larger will be the profit of the landlord when the sale is finally accomplished. In fact, you may say that the unearned increment on the land is reaped by the land monopolist in exact proportion, not to the service, but to the disservice done. It is monopoly which is the keynote, and where monopoly prevails, the greater the injury to society the greater the reward to the monopolist. This evil process strikes at every form of industrial activity. The municipality, wishing for broader streets, better houses, more healthy, decent, scientifically planned towns, is made to pay more to get them in proportion as is has exerted itself to make past improvements. The more it has improved the town, the more it will have to pay for any land it may now wish to acquire for further improvements.
The manufacturer proposing to start a new industry, proposing to erect a great factory offering employment to thousands of hands, is made to pay such a price for his land that the purchase price hangs around the neck of his whole business, hampering his competitive power in every market, clogging him far more than any foreign tariff in his export competition, and the land price strikes down through the profits of the manufacturer on to the wages of the worker.
No matter where you look or what examples you select, you will see every form of enterprise, every step in material progress, is only undertaken after the land monopolist has skimmed the cream for himself, and everywhere today the man or the public body that wishes to put land to its highest use is forced to pay a preliminary fine in land values to the man who is putting it to an inferior one, and in some cases to no use at all. All comes back to land value, and its owner is able to levy toll upon all other forms of wealth and every form of industry. A portion, in some cases the whole, of every benefit which is laboriously acquired by the community increases the land value and finds its way automatically into the landlord’s pocket. If there is a rise in wages, rents are able to move forward, because the workers can afford to pay a little more. If the opening of a new railway or new tramway, or the institution of improved services of a lowering of fares, or of a new invention, or any other public convenience affords a benefit to workers in any particular district, it becomes easier for them to live, and therefore the ground landlord is able to charge them more for the privilege of living there.
Some years ago in London there was a toll bar on a bridge across the Thames, and all the working people who lived on the south side of the river had to pay a daily toll of one penny for going and returning from their work. The spectacle of these poor people thus mulcted of so large a proportion of their earnings offended the public conscience, and agitation was set on foot, municipal authorities were roused, and at the cost of the taxpayers, the bridge was freed and the toll removed. All those people who used the bridge were saved sixpence a week, but within a very short time rents on the south side of the river were found to have risen about sixpence a week, or the amount of the toll which had been remitted!
And a friend of mine was telling me the other day that, in the parish of Southwark, about 350 pounds a year was given away in doles of bread by charitable people in connection with one of the churches. As a consequence of this charity, the competition for small houses and single-room tenements is so great that rents are considerably higher in the parish!
All goes back to the land, and the land owner is able to absorb to himself a share of almost every public and every private benefit, however important or however pitiful those benefits may be.
I hope you will understand that, when I speak of the land monopolist, I am dealing more with the process than with the individual land owner who, in most cases, is a worthy person utterly unconscious of the character of the methods by which he is enriched. I have no wish to hold any class up to public disapprobation. I do not think that the man who makes money by unearned increment in land is morally worse than anyone else who gathers his profit where he finds it in this hard world under the law and according to common usage. It is not the individual I attack; it is the system. It is not the man who is bad; it is the law which is bad. It is not the man who is blameworthy for doing what the law allows and what other men do; it is the State which would be blameworthy if it were not to endeavor to reform the law and correct the practice.
We do not want to punish the landlord. We want to alter the law…"
Finally, to your point about usurpation - it is not usurpation - it is economic rationalism - do the sums - make yourself a profit by using it. Land values go up, generally, due to population growth and windfall gains, as noted above. I’m not sure what you meant by “they pay to have it protected as it is” - I assume you mean a mortgage - which are probably exoberant (hence the recent correction) - anyways, chances are they are not pay “over and above this” - remember a criticism of LVT is that it drives land prices down, not up.
In the meantime, why do I get the feeling I am debating with 15 year olds here?
PLEASE FOR THE LOVE OF GOD BEFORE YOU SAY THE THINGS YOU SAY… THINK ABOUT IT…think about every possible alternative and counterargument and ABOVE ALL do some research into your assumptions. All I have so far on this site is riff-raff comments on how evil government is (so evil it cannot even be allowed to build roads) and unresearched claptrap about how Georgism is somehow socialist - but when you look at the reality is is not at all the case, as discussed above pro-families, pro-decentralisation, pro-capitalist. Btw, I think its a cultural issue: we down here don’t hate government the way most US libertarians do.
I still want to know what ownership has to do with value. One does not own value. BTW, lose the attitude and shorten the posts. It’ll do you a world of good. I’m so sorry that you find the “riff raff” anti-state mentality here irksome. Perhaps we find statist apologia even more irritating, though.
I don’t think Henry George would agree with you on this point.
Who is craziest, Georgists or Randians?
Why is it that all Georgists seem to be arrogant and obstinate? For people so wrong, you guys sure are over the top.
One would have to not understand markets, to make a statement as erroneous as this.
The oppression of travel! The tyranny of movement! We shouldn’t have to get dressed. Our bosses should let us all work from home. In bed! While sleeping!
As transportation has evolved and increased, so has distance to work. Has it ever occurred to you that people might not mind driving for an hour while listening to the radio to sit in an air conditioned office, rather than slough around in a corn field?
Socialism.
I don’t know, they both creep me out, but I have to say that the Georgists are the most amusing, because their theory about land, would also apply to air and water. Also, most of the anti-propertarian left seem to have one fatal flaw in common. Societal and technological innovation are making their quack theories seem more and more anachronistic every day.
Hard to say. Randroids suck on IP and the prohibition of competitors to the government in the provision of defence (and philosophically with their closed system stance.) Georgists seem to think value can be owned.
Well the thing is the theory of land taxation proposed by Henry George is correct, but it’s a small theory. Georgists are weird because they turn this small, marginal theory into something that will be the salvation of mankind.
In comparison Ayn Rand wrote a huge intellectual edifice for people to worship.
Oh. I thought we were talking about which acolytes were craziest, not the Founders of the religions.
That’s always the issue isn’t it? No one thinks L. Ron Hubbard was crazy.
Now that you put it that way, you’re absolutely right.
The Molynoids beat both.
In which way a theory supporting taxation, that is, robbery, is correct ?
Not exactly, of course there are (many) people that subscribe to the Austrian method in economics that are opposed to taxation at all. But the Austrian approach is ontological and not necessary normative. To clarify, the ontological question is what effect do what kind of taxes have, while you are asking the normative question what taxation do you support (or by implication oppose).
The reason many supporters of the Austrian School do oppose taxation is there prioritization of the principle of property. i.e. Because they are libertarians. Arguments derived via the Austrian method may however be suitable to argue against taxation as well.
“I suppose you are from stateless Somalia or Comrade America. Anyways, Georgism has never been tried (while Marxism has and statelessness as in Somalia). Furthermore, don’t look at meaning look at purpose - yes, the State can do that -perhaps you should move to Switzerland and employ their direct democratic to change the world? And, to borrow your phrase, clearly the fact you recognise that the “state…can steal and kill” means it is working over you, not with you.”
Yes, I am from ‘comrade’ America. First off, anarchism in Somolia is not going to be the same as, say anarchism on Times Sqaure New York, so don’t try to use Somalia as an example of anarchism being ‘bad’. Compared to the surrounding states, Somalia is a zone of liberty. Could you please cite an example of a time when a state WASNT over me, where it couldnt rob and kill its ‘subjects’? The evidence that a Georgian state wouldnt be is not convincing.
“So for the record: you don’t own a car, you don’t go to work - i.e. you don’t use roads?”
Your example of socialist roads is one of the most common straw men used against anarcho-capitalism. The state has declared nearly all roads its property - I hardly have a choice. But my point was why should my stolen money be used on roads I dont drive on? Or, as with your other example, used for vouchers for kids I dont have? This is not taking into the fact that I dont believe in state schools either, but I guess under Georgism I would be forced to pay for them as well.
“As for the firearm - I don’t know - but thats a moot point. As I pointed out earlier, I believe economic freedom brings responsible social conservatism - I, of course, am from a country where we don’t shoot each other”
How is a moot point? If there is a arbitrary ‘authority’ telling me I could not purchase a firearm, than it by definition is not free. And your last line there makes me think you’re also a gun grabber.
“Actually, capitalism is about competition - monopoly, actually, means you dictate the rules, competition means other peoples influence what the rules of the game are. No wonder you hate LVT. You want power to be centralised in your hands.”
The only monopolys in history have been with the help of state privlage. Try again.
“As to your second point, you misunderstand - (idle) land is purposely with-held from the market (http://www.earthsharing.org.au/2008/12/08/2008-i-want-to-live-here-report-release/), while landowners wait for it to increase.”
So? I fail to see a problem with this.
“Again, don’t look at meaning, look at purpose. We need rules in society - as Wittgenstein points out, we cannot have a “private language” - we cannot have an individual as all thigns are governed by conventions, rules and signs.”
Why is it you assume that in a free society there would be no rules? Languages dont need to be regulated by the state, so I reject your example.
“What you have FAILED to show is how Georgism is a “tyrannical socialism” when in fact everything your ideas intend (free market access, self expression etc) actually occur under Georgism: easier market entry, increased output, production over speculation, lower levels of unemployment”
Apparently the ‘self expression’ of charging market rent wouldnt occur. The rest of your assurtions are unprovable.
“With all respect, dear Sir, I would say your anarcho-capitalist views are unstable and represent the end of liberty just as the status quo - you have failed to show me how your model will remove the boom bust cycle, ensure society and the individual progress by positing resources into production not speculation, increase competition, take a massive whack out of poverty and won’t end up like Somalia.”
I was unaware we were comparing the merrits of market anarchy and georgism. My purpose was merely to point out some of the fallacies with georgism.
“..and thirdly - boosts private property ownership, boosts employment rates, market competition.”
Prove it.
“Georgism may sound like socialism..”
That’s because it is.
Perhaps there has been some confusion. Market anarchists reject the state, in all its forms. Telling us that we could simply change a few things and we’d be one step from utopia wont change that.
It is fairly well documented in sociology classes (here in Australia) of the problems of travelling 2.5 hrs to get to work and 2.5 hrs back. 
I thought the problems were self evident. Thus, the statement “As transportation has evolved and increased, so has distance to work. Has it ever occurred to you that people might not mind driving for an hour while listening to the radio to sit in an air conditioned office, rather than slough around in a corn field?” is a problem in Sydney, Australia where congestion is endemic and most people use trains instead
As for your right to use guns, yeah, look I’m Australian - we don’t have gun nuts here. Hence, you value guns, we value the beach, meat pies and cricket. We have 4-7 murders a year per capita. This was a moot point for the purpose of this post…Although it is true that gun laws were tightened here after 2 men over the period of 4 years killed 54 and 21 people in a killing spree with a rifle. Oh and this gives me an idea – I want to start up a forum on abortion and the death penalty from an Austrian perspective. Will do so shortly.
But, anyways, liberty student, in this post I shall refute the following points:
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That Georgism is socialism (in fact, George and Marx were rivals and hated each other with a passion)
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“One would have to not understand markets, to make a statement as erroneous as this” - you asser this but never explain what you mean (I will, however, show you that it is in fact YOU who misunderstands how capitalism works)
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“Why is it that all Georgists seem to be arrogant and obstinate? For people so wrong, you guys sure are over the top”. Sorry, I haven’t heard how I am wrong, nor have I seen evidence to suggest your models are “right”. I won’t address point that in what follows I will not address this point, suffice to say, perhaps like Georgists like Churchill, Einstein, Vickery etc - we are internationally recognised for our ideas and I suppose have reason to be arrogant.
Nevertheless, Jon Irencius and Juan this post is for you also - so far no one on this post has actually posited any real DATA or EMPIRICAL EVIDENCE, or even used logic to refute Georgism. When I said value I, of course, meant land value i.e. land rent (discussed below) - note the presumption that common phrases or words carry the same meaning. I have a feeling I am arguing with Wikipedia-readers who have never ever picked up Henry George and actually read him. Also, regarding your suggestion, that my posts are shorter - I suggest yours be longer - as I said you actually need an .
Oh and sicempertrannis see my replies below as well - note I agree with you the state advances monopolies and I explain several problems with land being with-held from use (economic and social). The irony is the state is going to get bigger and bigger and bigger - as failing to understand the land market, gives the state a handy pretext to “intervene” (see below). I also reject the proposition that LVT is a tax in the classical definition - it taxes something which cannot be produced and rent is an economic “surplus” by definition.
ISSUE I: RESOURCE ALLOCATION, EFFICIENCY AND COMPETITION
In The Road to Serfdom, Hayek stressed that the market pricing mechanism is an information gathering system. In a world of imperfect knowledge, pricing signals enable people to transmit their preferences as efficiently as humanly possible. In an ideal world, each of us would be rewarded for all the benefits that we create; and we would accept personal responsibility for the cost of the damage we inflict.
However, it is impossible for the private pricing system to deliver the full value direct to those who create it. Why? Because competition, by equalising prices between people and places, denies individuals of some of the value they create. This value is externalised out of the labour and capital markets, and deposited in the land market (as discussed above, with Ricardo’s Law of Rent). The same problem applies to some of the costs created by an individual or enterprise: markets cannot internalise all of these, and impose the consequences on those who create them. Luckily, the land market provides the solution. It is not a failure of the free market per se but rather the social rules that determine the outcomes.
I discussed above the major differences between land speculation and other forms of speculation – the major difference is, of course, the quid pro quo rule. In L and K markets, participating individuals are engaged in the value creating process. But individuals as owners of land in the R market are anomalies. The rents they claim are a pure transfer of income. There is no exchange by the individual landowner – there is no quid pro quo, no exchange of like for like value. In other words, “rent” is a “surplus” (we discussed above how even in speculation in business the quid pro quo rule still applies –people starve, labor disappears, increase interest, you starve capital, tax landowners, the land is still there). Thus, Hayek’s ideal that “each of us would be rewarded for all the benefits that we create; and we would accept personal responsibility for the cost of the damage we inflict on others” is undermined by the very laws of competition which he prescribed as necessary for the market economy.
Thus, two new moral axioms emerge:
(1) All people deserve private property rights: land use and the property upon it, labour and capital. However, people who own property rights to labour and capital have a shared stake in rents, which by their co-operation, they help create as a group of individuals (i.e. a community) (and often, if not always, services which they use) – people are entitled to the absolute fruits of their labor;
(2) People who own the title deeds to land do not have an equivalent claim to rent created by others (even if they may have some claim - Originally the idea behind a rate was to secure a pro rata contribution from landholders towards infrastructure which provided common benefits - such as a dam, a road or a bridge. Rates were often voted for by landholders in their collective interest. Similar phenomena can be observed today when agricultural co-operatives levy their members for rates to contribute to weirs etc.).
For now, reframe for pointing out oddities which contradict these two proposition; in part II I discuss the counterarguments.
For now, it is important to note that Hayek concedes that there is case where legal arrangements would not lead to efficient outcomes. Ideal outcomes are achieved only when “the owner benefits from all the useful services render by his property [i.e. L or K] and suffer from all the damages caused by others by its use”. It therefore seems to me that an owner that keeps ALL of the rent, subverts Hayek’s proposition that “the owner benefits for all the useful services rendered by his property”. Labour and capital are in conflict with land; the rent market, by definition, is a social collection agency – land market power originates from the ideals of a feudal society, hardly the emblem of liberty. Although privatise rents remain a socially constituted value the way wages and returns on capital are not. This is where modern libertarians have gone wrong.
Indeed, it is easy to see how LVT advances the Austrian ideal that “we are all entitled to the fruits of our own labour” and free market entry by entrepreneurs; monopoly and higher rents mean opportunities are not shared by the propertyless (i.e. to set up shop) sas revealed below. An owner can quarantine his assets and deprive people of a finite resource that cannot be easily replaced by importing land, from say, Antarctica to create more land in say, central London. If people decline to work, they are replaced by migrants. If the owner of capital destroys his assets, new K can be made or transported from places where it is underused. But the owner of land which is located in places where people need to live and work, exercises HUGE and destructive influences by withdrawing his site from production and the LOSS of that location cannot be replaced (hence, my discussion above about idle sites located within the city). This is power with a nth degree. Let’s do a case study to see how not having LVT hampers the supposedly “free” market.
CASE STUDY: SUPERMARKET BANKS ON LAND
Source: Julia Finch, “Small Shops get chance to fight back”, The Guardian, March 10, 2006.
In 2006 the OFT (Office of Fair Trade) called the competition commission to conduct an inquiry into the dominance of the big 4 supermarket chains. Evidence had surfaced that the land banks held by Tesco and Asada could be a constrain to competition. John Fingleton said that his “primary concern related to the land banks as barriers to entry into the retail sector”. Supermarkets steadily increased their share of the market at the expense of 39 000 independent retailers. The corner shops were constantly shrinking – the OFT found that:
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750 sites were acquired by one of the big 4 retailers and had been either vacant or leased out such that it prevented the buyer using the land for retailing food;
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The big 4 had purchased, or had options to purchase, 468 strategically located sites across the country which “could be used to strict entry by potential competitors”.
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some sites were held vacant for up to 8 YEARS, adding to urban sprawl and therefore the cost of infrastructure funding – depriving investment and employment opportunities in the towns which actually needed them, adding to the need for welfare programs.
5% of shop owners had gone out of business.
Earlier we saw similar problems in Australia:
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2500 vacant lots in just one small town in Melbourne, Australia
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1000 vacant commercial sites in the same site
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levels of vacant land and high unemployment have a correlation of 0.87.
Austrian economists agree that vacant sites are a HUGE problem for the entrepreneur. Kirzner in Competition and Entrepreneurship (1978) observed that monopoly and anti-competitive behaviour can only occur where there is selective access to superior natural resources. Access to land, whether as sites, minerals or electromagnetic spectrum, can create incumbency advantages. A system of land tenure based on “first come, first served” means that future generations cannot by definition have access to what turn out to be superior resources on the same terms as the first generation. This has implications for competition policy. How can one expect a competitive market when some market participants start with superior access to natural resources needed for production? For example, and as noted above, a retailer with a large number of superior sites can engage in thinly disguised predatory pricing to defeat new entrants at the margin.
One of the hidden virtues of LVT is that, just as it squeezes out harmful speculation; it also squeezes out monopoly advantages. By charging on the current market value of natural resources, it exerts a gentle pressure on oligopolists or monopolist not to withhold sites from production or under-utilize them with a view to gaining advantage in downstream product markets. The tax reflects not the return the oligopolist or monopolist actually gets from his sites but what he could get. If he seeks to enjoy “the best of monopoly profits, a quiet life” and to rely on the infra-marginal fat in his imputed rents to under-cut competition he will find himself still left with the same tax liability on his land or site values. This is simply another instance of how land value taxation pushes resources towards their highest and best use and discourages uneconomic withholding of resources. What the tax does invisibly, and with increasing effectiveness as it is raised, is to ensure that each member of the community has access to resources on equal terms – a sine qua non of an effective competition policy.
Arguably, this could reduce many, if not all, “market failures” (predatory pricing, poor wage rates, monopoly). The “market failure” doctrine is damaging to public welfare, as it legitimates, for the general public, the panoply of government interventions – regulation, subsidies and taxes – when the remedy is very simple: LVT (Hong Kong and Pittsburgh do not have these problems cited above – see previous post how 4000 vacant commercial sites came down to just a few hundred in both cities).
CHALLENGE QUESTION: I challenge the right honourable gentlemen above to come clear and state, whether as Libertarians, they support FREE competition OR monopoly; whether they support higher prices OR lower competitive prices. If you support competition and adore lower prices, due to more competition and more output, you would be a Georgist. Indeed, it would seem your libertarian ideas are all talk; it is the geolibetarians that actually deliver. Libertarians share the same limitation as socialism – they prefer to discuss the intention of their policies, but not the outcomes. Libertarians talk about “the free market” and “liberty” but cannot deliver due to the reasons cited above. Geolibetarianism is more concerned with outcomes like lower unemployment, more competition and lower prices.
As such, all your views are dismissed; you have NOT provided me a model which would reduce unemployment, remove poverty or allow for greater competition and free entry into the market place. Your views are the ash heap of history.
ISSUE II: PROPERTY RIGHT ISSUES - REXAMINED
Politicians and economists fallaciously assume public and private prices are diametrically opposed forces.
- Wrong. Murray Rothbard erroneously claimed that George’s pricing model entailed the transfer of ownership of land to the state. This shows his appallingly ignorance, indeed, “Rothbard does not argue with HG, he misunderstands him”. In fact, Henry George, stressed that this was NOT necessary: possessory rights under the status quo via title deeds need not be disturbed. Thus, he says very clearly and lucidly in Poverty and Progress:
“I do NOT propose either to purchase or to confiscate private property in land. The first would be unjust; the second needless. Let the individuals who now hold it still retain if they wanted to, possession of what they are placed to call their land and use it however they want to use it”.
He goes on to say he supports local governments over a federal government.
The highlighted segment clearly promotes decentralisation, not centralisation.
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We also saw in a previous post how LVT defended property rights against the state (i.e. McClelland v R) where the Crown said the land was theirs, when, in fact, the fact the individual was paying LVT meant it was clearly his; LVT also resolves land right disputes as we saw in the McCormick case – “well who was paying the LVT?” the judge asked. No system can guarantee land rights and private property, practically like this, in the same way as Georgism can.
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Hayek also claimed it was “difficult to breakdown commercial rents down to its components parts, separating that element that was due to enterprise of the individual owner and the value which arose from communal influences”. No such practical problem exists.
Firstly, most people would recognise how this separation occurs in relation to their own homes (and indeed, here in Australia we are required by low to dissect the components).We pay insurance on the value of the bricks and mortar, our home! The premium value specifically states and THEN excludes land (which will NEVER EVER be stolen by a thief or burnt down by an arsonist).
Second, countries which were ranked the freest in the world, in the latest Prosperity Index, all have LVT – in Australia (which ranked first), New Zealand and Denmark fiscal authorities have no difficulty agreeing with owners about the value that is liable in taxation – indeed, in Australia, in the fiscal year 2006-7 only one appeal for re-assessment/appeal was made – ironically, the owner complained because he thought the land was worth more not less!
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Homeownership, in America, is the largest in Pittsburgh, where they employ LVT. Thus, physically, increasing private property tenure. Again, this can only occur under a Georgist system.
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Hayek’s dilemma is also resolved in the following paper: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=27040
As such, the criticisms against Georgism are misguided and empirically incorrect. List out what the intention of libertarianism is, and you will see Georgism produces those intentions as real outcomes. The objection by Rothbard and Hayek (although Hayek was a closet Georgist, as I implied in previous posts) were nebulous. Furthermore, the outcome of their views are, in fact, counterproductive, hampering the “free market" itself – their views simply deterred advocates of the free market from examining George’s fiscal solution to systematic failures. This helps explain why libertarians, today, erroneously turn their hostility to government without actually understanding how capitalism works – the primary cause of friction is the economic junction boxes that are interfaced between the labour, capital goods and rent markets – is due to a combination of failed government policies which simply exacerbate, through interventions and subsidies, rents at the expense of labour and capital.
Once correctly analysed, I think it is safe to conclude that we have a synthesis between left and right – a pricing system which unites the spectrum in understanding the obstacles that PREVENT people from realising their dreams (e.g. employment, owning their own home etc). I have also implied that the prices of local governments can be integrated with private transactions. Prima facie, it sounds hostile to private property, but in reality, and in practice, this public finance is NOT hostile to private property – but in fact strengthens it. Thus, there is NO conflict between people’s natural desire to co-operate with others to fulfil their aspirations. If public and private prices were synchronised, the psychological obstacles to political consensus would evaporate – equality and efficiency are not mutually exclusive forces.
ps I remind readers, again, that abolishing the central bank, the state and all taxes will NOT stop the boom bust cycle – in fact, it would make it worse as we saw in Australia (before Federation) in the 1890s ‘Great Melbourne Land boom’. This boom ended with 30% unemployment - most savings and investments were deposited /funnel into land speculation market – hence why we saw “malinvestments” even under a free banking system with a 100% gold standard - very low interest rates due to land banks competing with commercial bank rates, driving them down to 2%, still produced a boom bust cycle. I have yet to see a theory produced here which would eliminate the boom bust cycle - a GeoAustrian synthesis, on the other hand, as noted above with the work of Fred Foldvary can.
pps Market anarchists I hear people call themselves - yes, this is a forum of “Austrian” economics and a forum regarding a question about which tax would Austrians be somewhat content with (scroll to the top of the page) - not a site for market anarchists, questioning market anarchists - luckily, one, for Georgists the facts speak for themselves (your model, as vague as it is, has good intentions, but on the facts the outcomes reveal the same limitations as the status quo) and two, you assume that society does not exist - which is not the case - as language itself is a social interaction. One cannot have a private language ( http://www.cogs.susx.ac.uk/users/ctf20/dphil_2005/Photos/wittgensteins_beetle.pdf ) and therefore, implying there are rules and signs which mean for practical purposes man is a communal being while being an individual - co-operative individualism, Georgism synthesising left and right, so instead of judging things by intentions, we look at outcomes.
pps Although I suppose there is one way to settle this. We should do an experiment - lets set up two islands for 20 years - one a Georgist colony, the other a market anarchist colony. Pour 10 000 people in each. Let them breed. Implement the various theories of each. And see what happens
I make a $5000 bet that a) the market anarchists will form a government of some degree (naturally) in the long run and b) more people would be employed on the Georgist island, the Georgist island would have higher GDP and growth rates than the anarchist market island. Last I heard Somalia, which is as close to market anarchism, is not doing as well as Hong Kong (or indeed most of Africa), which adopted Georgist policies -
Oh and yeah, I believe in universal harmony - simple does it. The laws of physics or the natural sciences or economics, while messy, sporadic and frenzied, can be distilled into a simple, precise, lucid equation.
God, what a blast of hot air. Please, look up the word “concise” and learn to incorporate the concept into your posts.
It’s as concise as a erudite man can be. I thought I’d give you lads a sample of how a real looks like.
For you see, the writing is concise - short sentences and the like - but its detailed (so you want me to be less detailed). This is the creed of the philistine - a good reply does not just present views in favour, but assesses possible counterarguments against.
And yes hot air indeed - I hope you would come to your senses
ps I love how this forum has deviated from ad hominem attacks to comments on style rather than substance.
Maybe if we ignore him he will go away. 3,400 word copy & paste rants have me tapping out in submission.
The substance of your argument has been roundly and soundly refuted here and elsewhere before, so trudging through your swamp of verbage would be a waste of my time. I am, however, willing to take the time to point out that you are a condescending windbag, and frankly, a bore.