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Georgism
- axlee 6y agoIs it what Norway is doing with their Sovereign wealth fund financed by nationalizing oil surplus?
- EGreg 6y agoThere was a time - for over half a century - when Progress and Poverty was the best known economics book in the world. If you buy one, it has a who’s who of people endorsing it, from famous economists to writers to presidents. And somehow, in the last 50 years, we have all forgotten it, and some people only remember the land tax. Not only that, but the same debates rage today, about why there is still so much poverty even while there has been so much progress. Libertarian people know Ayn Rand and Murray Rothbard before they know Henri George, about whom Milton Friedman had a lot of good things to say.
- chii 6y ago> why there is still so much poverty even while there has been so much progress there's been an objective improvement to the % of people in poverty over the past few centuries. It's just that there's an even larger improvement to those who were rich, relative to the improvements to the poor. If you had a choice, you would choose to be poor today, than to be poor a century or two ago.
- bsanr2 6y agoWhy does this matter?
- bsanr2 6y agoNo, seriously, why does it matter that poverty has "improved" over the years? It still exists. It still leads to suffering and brutal, undignified deaths. Is collapsing in your trailer, abusive nursing home, or city street any better than in your hovel or, well, city street, 150 years ago? Like everyone else, society must answer the question, "What have you done for me lately?".
- MiroF 6y agoYes, and peasants under feudalism were much better off than they were as cavemen - none of that justifies economic/social stagnation
- JSavageOne 6y ago> If you had a choice, you would choose to be poor today, than to be poor a century or two ago. The classic false dichotomy that somebody always feels the need to point out in justifying the status quo.
- roenxi 6y agoThe status quo is a jawdroppingly fast and totally unprecedented reduction in poverty [0]. If my goal were to reduce poverty; my strategy would be to defend the status quo. [0] https://ourworldindata.org/extreme-poverty https://ourworldindata.org/extreme-poverty
- MiroF 6y agoYou see how that's non-responsive to the parent, right?
- roenxi 6y agoIf parent wanted a direct response they should have posted a concrete suggestion. There wasn't a lot there to respond to. Technically speaking; there isn't anybody who would even blink at the idea of making things better. The status quo exists because there are a bunch of people who think [proposed change] makes things worse. Poverty isn't even a particularly important aspect of the decision making process and its extreme form might be eradicated in a generation if Africa gets hit by the same forces as Asia. It will be difficult to make such rapid improvement out to be in need of major changes.
- banads 6y agoAnd yet, there are more people living in poverty than the entire global population in 1950.
- chii 6y agothere are a lot more people now than in the 1950's too. As a proportion, is the poverty rate higher today than before? Are the currently poor today better off than the same relative level of poor in the 1950s?
- EGreg 6y agoI upvoted you, to counteract the downvotes. You are correct... obviously science and technology have improved the lot of the ordinary person, and made us all much, much richer. The main issue is that automation tends to hurt workers while it helps consumers. And since most people are both — they have to work harder and harder just to stay in place. Until we put in place a UBI and universal health insurance, pass overtime laws to shorten the workweek etc. we will have technology creating demand shocks for human labor, as happened before the Great Depression on farms, and has gradually happened in manufacturing, and is about to happen to white collar jobs and menial jobs. In the 50s, a single man could support an entire household on one paycheck. Women didn’t compete with men for those jobs, but rather did jobs that now are not valued by the market. Automation didn’t make employers not need their employees, so they would retain them for decades as they built experience. Today, we have two year stint— wait that was 20 years ago, today we have temp jo— ait no, that was last decade, now it’s the gig economy with no protections. You see where I’m going with this? Automation and outsourcing is once again putting people in a race to the bottom. Yes, electronics are cheaper than ever. But some things like rent / land just go up in price, they need a UBI. Paid for by land taxes maybe. Edit: funny, I am getting downvoted also, for agreeing with you
- MiroF 6y ago> Edit: funny, I am getting downvoted also, for agreeing with you If the parent was being downvoted for a certain view, why is this at all surprising?
- jhpriestley 6y agowould you really choose "the wire" over "little house on the prairie"? How can such a comparison possibly be "objective" anyway?
- nabla9 6y ago"The rent of land, therefore, considered as the price paid for the use of the land, is naturally a monopoly price. It is not at all proportioned to what the landlord may have laid out upon the improvement of the land, or to what he can afford to take; but to what the farmer can afford to give." — Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, Book I, Chapter XI "Of the Rent of Land"
- toohotatopic 6y agoThis assumes that the farmer has to remain a farmer. This can be true for one generation, but the next generation can choose another profession. People don't become farmers if they have to pay too much.
- MiroF 6y ago> This assumes that the farmer has to remain a farmer. How does it assume that?
- toohotatopic 6y agoOtherwise it wouldn't be a monopoly and the farmer wouldn't have to accept the offer. The farmer, or rather, the human, can source resources from other markets and sell goods or services that don't depend on farmland. Once that happens, and nobody accepts the high price, the landlord has to lower the price until somebody accepts his offer.
- MiroF 6y agoThe existence of substitutes doesn't make a monopoly no longer a monopoly. Bell was still a telephone monopoly even if I could have used carrier pigeons instead.
- toohotatopic 6y agoIt's not the same. You cannot transport voice over a pigeon, at least not instantly. If you don' allow substitutes then every brand has a monopoly on the products of their brand. Technically that's a monopoly. But nobody complains about McDonalds having a monopoly on McDonalds burgers.
- aww_dang 6y ago"Rather than nationalize land outright, the single taxers would levy a 100 percent tax on the annual land rent — the annual income from the site — which amounts to the same thing as outright nationalization." --Murray Rothbard Georgism is reasonably well known among free-market enthusiasts and libertarians.
- tlholaday 6y agoRothbard's error: under land nationalization, state actors decide who uses the land; under single tax, who uses the land is determined by auction.
- aww_dang 6y agoThe single quote is understandably a narrow view of the larger article. My view is that the 100% tax on income from the land removes profit motive and price discovery in a way which is similar to outright nationalization. However, I agree with your assessment of the quote as a stand alone item. https://mises.org/library/single-tax-economic-and-moral-implications https://mises.org/library/single-tax-economic-and-moral-impl...
- snidane 6y agoIt removes profit incentive of reselling land to somebody who wants to use it. It doesn't remove profit incentive of the activity you'd want to perform on that land. Land under 100% LVT only becomes an input to production. And makes it unprofitable for holding it for somebody else. When you are in business of making apple pies you simply buy apples as input. You don't need any middlemen holding them for you if you can hold them yourself.
- EGreg 6y agoIn fact it is similar to the error of those who equate slavery and wage slavery. With the latter, you have a choice of employer, even without safety nets.
- sudosysgen 6y ago
- rikroots 6y agoBack in a different life, I worked on the Lyons Inquiry which looked at English Local Government finances. Final report was issued in 2007[1]. As part of the work we had to look into Land Value Taxes as a supplement/alternative to Council Tax and Business Rates. There's nothing wrong with the idea. The big issues were mainly around introducing a new tax system and the massive upheavals and uncertainties businesses and people would face as part of the change. Winners and losers, etc. Given the uproar surrounding the later introduction of Universal Credit I'm glad Sir Michael chose not to recommend LVT in his report. Anyway - anecdote time. One of the big questions we asked at the start of the Inquiry was: "Why tax property?" After long consultations with the most senior Experts and Gurus across Government and Academia the answer came back: "Because it's there." [1] https://www.webarchive.org.uk/wayback/en/archive/20070411120000/http://www.lyonsinquiry.org.uk/index8a20.html https://www.webarchive.org.uk/wayback/en/archive/20070411120... (I'm mainly commenting because it's an opportunity to show off the Inquiry's website. I built that! I had to do it in my "spare time" because we didn't have a budget for the work. This version is from 2007, but the original code was written in 2004 in PHP and after that most of the work was adapting the site to add events, display responses received, etc. Simpler times!)
- MiroF 6y ago> The big issues were mainly around introducing a new tax system and the massive upheavals and uncertainties businesses and people would face as part of the change. Winners and losers, etc. It's funny how we introduce massive upheavals all the time - ending this social program here, injecting trillions of dollars there, but this one addition is considered infeasible. I suspect that the primary problem with George's theory is that he underestimated the political power of rent-seekers.
- rikroots 6y agoThe Inquiry didn't happen in "splendid isolation", and the recent history of property taxes across the UK was not a happy one. Property rates were replaced in 1990 by the Poll Tax (Community Charge) which led to protests and riots across the country. Council Tax was introduced in a rush in 1993 ... and the poor design of the system is not easy to hide. The Inquiry was set up in 2004 because there was a legal requirement to undertake a property revaluation before 2005 which, as things stood, would have led to massive changes in people's tax burdens (winners and losers). The Government wanted a way out of the problem - but the Inquiry didn't give them one: Lyons decided that revaluation was essential and should go ahead. The Government sorted the issue in time-honoured fashion by changing the legislation to remove the need for a revaluation, and changing the Inquiry's terms of reference. And so it goes ... > It's funny how we introduce massive upheavals all the time - ending this social program here, injecting trillions of dollars there, but this one addition is considered infeasible. My understanding is that things are done in at least 51 different ways in the US. Maybe one of the smaller, more progressive States in the Union will be willing to try out some form of LVT in the near future?
- yufeng66 6y agoThe founding father of the Republic of China, Dr. Sun Yat-sen, was heavily influenced by Georgism. He believed all income derived from land, including appreciation of the land, should be heavily taxed. He incorporated it into three principle of the people, which is the cornerstone Kuomintang ideology. But nobody would argue Taiwan is a Georgism heaven right now. Why? Rich and political powerful people own the land. Georgism as a practical matter is very difficult to push through.
- zozbot234 6y agoDoesn't Taiwan (in common with other Asian countries) mostly allocate land to the private sector via long-term leases, as opposed to ownership of indeterminate duration? That would be enough to regard it as quite Georgist.
- em500 6y agoNo, most of Taiwanese property is freehold. You might be thinking of Hong Kong and mainland China, where almost all private property is leasehold.
- sudosysgen 6y agoLeasehold land is mostly a thing in communist countries that claim to temporarily implement capitalism.
- neilparikh 6y agoOne example (maybe the only example?) of a capitalist country with leasehold land is Singapore. The land policy there seems to have worked relatively well.
- WilliamEdward 6y agoIt is because the rich and powerful own the land that georgism is hard to push through. You could implement georgist laws simply, but the rich and powerful have connections that you don't and politics will always favour them, so you won't get any of that policy to hold. This isn't georgism's fault in particular, but the fault of just about any tax scheme.
- snidane 6y agoThis part about Georgist economics is quite startling. You have an economical theory following in the footsteps of classical economists at the beginning of industrial revolution like Adam Smith and David Ricardo. It becomes incredibly popular with massive amount of followers. You were not an intellectual back then unless you knew about this school. Somehow it offered a way out of the societal mess, but costing great fortunes to the economical parazites - monopolies (neo-aristocracy). Some people in the school argue it was strategically removed from the society by funding a competing economical theory which removed land from the 3 factors of production and kept only 2 - labor and capital. Thus divert the attention from the real parazite (monopolist, rentier and landlord - someone who monopolizes land) to the conflict between employer and employee as depicted in the Marxist view on societal problems - which actually never existed. So the new aristocracy (Rockefellers, Carneggies and others) decided to fund and found universities with the main purpose of destroying Georgism and promoting red herring economical theories instead - such as Marxism and neoclassical economics, both of which remove the parasitic monopolist and landlord out of the picture. By not fighting with their enemy directly and thus making the georgist theory indirectly more popular it was a smart move for them to silence it down by promoting other theories instead, which is exactly what happened - from the most popular theory of economics to nonexistent to this day. No mention of it in economics curricula around the world - which suggests economics as taught in universities today is a fraudulent wannabe science or form of propaganda or both. http://dollarsandsense.org/blog/2017/04/the-dissing-of-henry-george.html http://dollarsandsense.org/blog/2017/04/the-dissing-of-henry... Mason Gaffney (famous Georgist) wrote a lengthy piece on this topic - Neoclassical Economics As a Stratagem against Henry George http://masongaffney.org/publications/K1Neo-classical_Stratagem.CV.pdf http://masongaffney.org/publications/K1Neo-classical_Stratag...
- alexmingoia 6y agoThe problem with georgism is that “unimproved value” is a non-market price. It’s just made up by whoever is appointed assessor. Georgism conflates made up “value” with market “value”. Ultimately some person has to assess the value of the unimproved land, meaning someone anointed to write down whatever number they want. Value is subjective. There is no such thing as “unimproved land value”, unless you’re talking about the last sale price of a particular unimproved lot. Property taxes in general have this problem, but it’s very acute with unimproved land. Unimproved land is one of the most non-fungible goods there is.
- deleted 6y ago[deleted]
- nabla9 6y agoThere is brilliant way to solve it so that value and market-value meet. Keep the land always in market. It's called Common Ownership Self-Assessed Tax (COST). Land owner would self-assess the value of assets they possess, pay a tax on that value. The owner would be required to sell the asset to anyone willing to purchase them at this self-assessed price. If you value the land high for any reason and want to keep it, you must self-assess the value higher than anyone is willing to pay for it and pay tax for it. If value it too low, someone might buy it.
- andruby 6y agoThat would mean anyone who has enough money can buy the land that people live on just to harass them. It’s an interesting idea, and I like it in principal, but I also like living in my house on my land knowing that I need to give permission before someone can buy it.
- nabla9 6y agoThere would be likely exception for normal sized houses where people actually live or if there is way to asses the value other way. Pay normal n% tax and they can't buy it. Mansions and expensive property would be always on the market.
- acd 6y agoI think commons like fish in the ocean and air quality in cities should be priced. If of you fish its not free you pay to the country whos fish you fish. If the fish is extinct or heavily MSC on the red list the price is sky high in the millions this is to protest the species and our eco system so future generations can enjoy that fish. By pricing eco systems and sustainable common resources. We avoid tragedy of the commons where few extract all value from common resources for free. Ie such a new economic system would price the rain forest at its true value to humans and earth eco systems. Carbo emissions would also be priced differently. Tradegy of the commons https://en.m.wikipedia.org/wiki/Tragedy_of_the_commons https://en.m.wikipedia.org/wiki/Tragedy_of_the_commons
- travisporter 6y agoThe Marine Stewardship Council (MSC) is an independent non-profit organization which sets a standard for sustainable fishing.
- spangry 6y agoSounds like you're describing Pigovian taxes: https://en.wikipedia.org/wiki/Pigovian_tax https://en.wikipedia.org/wiki/Pigovian_tax
- acd 6y agoThanks for point out Pigovian taxes! It seems to be a field of Environmental Economics.
- thruflo 6y agoThe UN did a major study on the economics of ecosystem biodiversity, ie the value of nature and how to price it into the economy: http://www.teebweb.org http://www.teebweb.org
- wnavarre 6y agoThe land value tax is a Pigovian tax. The idea is that your exclusive use of the land denies others access and they deserve compensation.
- JSavageOne 6y agoI've yet to see a single valid objection as to why LVT (Land Value Tax) should not be the primary tax, yet it's nowhere to be found in the political dialogue. Such a shame that the majority of the tax burden instead falls on the working class while the landowners get a free ride.
- oDot 6y agoIt actually makes much more sense to use a uniform sales tax: (1) If you spend more, you're taxed more. Obviously this is better for poorer people, who spend less, but also for rich yet reserved people, who keep most of their money in the bank (which lends it) and are earning an income (=productive). Both will not penalized. (2) It's much hard to raise, because people will just stop buying stuff, which is much easier than quitting a job to not pay income tax (3) Being uniform, it doesn't choose favorites. Everything is taxed the same
- blahbhthrow3748 6y agoSales tax fails to capture the accumulation of capital, so (1) is kind of bogus. If you make 100 billion dollars and invest it you and several generations of your family coild live comfortably without ever working and your tax burden would only depend on your spending. A sales-only tax incentivized rent seeking, basically, because the rentiers pay the same taxes as the renters while accumulating capital.
- LVTfan 6y agoand so often it gets invested in land, which includes not just the sites under our feet, but vital natural resources, the kind that are finite in supply.
- oDot 6y agoIf you take a look at the data, "investing in land" wasn't as luxurious as it is today, due to government actions inflating the market.
- 6y ago
- revnode 6y ago> The main Georgist policy recommendation is a tax assessed on land value. Georgists argue that revenues from a land value tax (LVT) can be used to reduce or eliminate existing taxes (for example, on income, trade, or purchases) that are unfair and inefficient. Fine in theory, the reality is that you get nailed for property taxes AND income taxes AND sales taxes AND everything else. If a government CAN tax it, it will and will not restrain itself.
- watertom 6y agoAll income should be taxed the same. We should move to a a progressive tax system with zero deductions, eliminate capital gains, and inheritance taxes. Make the top tax rate of over $5M be 54%. We already know the effective tax rate for each bracket. Once we factor in the additional tax revenue from the top bracket we can adjust the other rates. I would consider a true capital gain exception. For the investment in new and private busines investment that generates revenue. This horseshit of buying stock and holding it for a period of time is NOT capital investment. The company does not benefit from the purchase of stock once they go public. It’s a scam to allow the rich to avoid taxes.
- perilunar 6y ago> All income should be taxed the same. Why? There's a big difference morally between earned and unearned income.
- NumberWangMan 6y agoA lot of people focus on the fairness of the Land Value Tax, but the consequences of using one are just as interesting if not more. This tax has been put into practice in some cities in Pennsylvania, and there's evidence that it has a whole bunch of positive effects on the city, due to the way that it incentivises improving your property and making the most of your land (since you're going to be taxed on it pretty much the same either way). https://www.strongtowns.org/journal/2019/3/6/non-glamorous-gains-the-pennsylvania-land-tax-experiment https://www.strongtowns.org/journal/2019/3/6/non-glamorous-g... I think we should be replacing property taxes with land value taxes pretty much everywhere. Aside from the benefits mentioned in the Strong Towns article linked above, putting the right incentives in place to build more densely in high-demand (aka high land value) areas would be a boon to making cities and towns more walkable and more amenable to public transit, and therefore reducing sprawl and pollution. It wouldn't get us all of the way, but it would help.
- CydeWeys 6y agoI sort of agree that replacing property taxes with land-value taxes would make sense, so long as you can actually do the value assessments fairly and impartially. What doesn't remotely make sense to me is the suggestion that LVT should be the primary or even only tax, which you see others arguing for here in the comments.
- tlholaday 6y ago> What doesn't remotely make sense to me is the suggestion that LVT should be the primary or even only tax When you were new to arithmetic, did it remotely make sense to you that the number of integers and the number of even integers was the same? If you find a surprising conclusion, consider reading the argument. Perhaps you will discover that you agree with the premises and the reasoning, and the conclusion will seem less surprising.
- free_rms 6y agoIf the arithmetic for this tax scheme doesn't seem to remotely work out, ruminations on the nature of infinity aren't going to set me at ease with it. Here in the finite world, most of the money moving around is in services, while most of the land is disconnected from that economy. How are you getting 1-2 trillion in tax revenue from land without making, say, farming economically unviable? Will it just be riddled through with exceptions and carveouts?
- emilfihlman 6y agoWhy should only bigger communities together own something? If I want to fuck out in the middle of nowhere and do my own thing, why should others be allowed to harass me there? Additionally the government printing money, giving it to us and then requiring us to give it back does not create value, it creates a loop that causes work for nothing.
- neilparikh 6y agoUnder Georgism, in practical terms, you would still be able to do that. The value of land in the middle of nowhere would be essentially 0, so you wouldn't need to pay much LVT. You may still need to pay some LVT, to reflect that the state is still providing you some services (in particular, enforcing your claim to the land).
- deleted 6y ago[deleted]
- perilunar 6y agoFor a libertarian take on Georgism, see Geolibertarianism: https://en.wikipedia.org/wiki/Geolibertarianism https://en.wikipedia.org/wiki/Geolibertarianism
- badrabbit 6y agoEnds justify means?
- wazoox 6y agoAn interesting and derived point of view is geolibertarianism : http://geolib.com/essays/sullivan.dan/royallib.html http://geolib.com/essays/sullivan.dan/royallib.html
- LVTfan 6y agoMay I suggest that if you've not read Henry George's thought yourself yet, you take some time with them? There are two sections of the Schalkenbach site devoted to them -- first, the books, articles and speeches themselves, and then an introduction to HG's thought, with perspectives from a number of writers, mostly recent. With the latter group is a short version of Progress and Poverty entitled "Significant Paragraphs." His vision and clarity are remarkable and inspiring. 120 years ago, his ideas were widely understood throughout the English speaking world. (There were also a lot of hilarious misinterpretations by people who hadn't read, as is often the case.) And if you explore a bit, you'll find some good websites and blogs devoted to his thought.
- wnavarre 6y agoOne of the most superficial ways that Georgism obviously beats Marxism is that Georgists will tell someone interested exactly what to read, will acknowledge very explicitly the few parts that are incorrect or misguided. Marxists meanwhile hem and haw about what an aspiring Marxist should read and will hand-wave away any contradictions.
- heymartinadams 6y agohttps://www.progress.org/articles/a-more-prosperous-vancouver https://www.progress.org/articles/a-more-prosperous-vancouve...
- firloop 6y agoA great essay on Georgism: “Georgism is an accelerationism, as it attempts to unchain capital—not from the restraints of humanity, but those of land, which eats cake in the stands as it watches capital and labor fight over crumbs.” https://gravitylobby.club/trashcan.html https://gravitylobby.club/trashcan.html
- yesbabyyes 6y agoAllegedly, Karl Marx called Georgism "capitalism's last ditch ". I can't find a source, but this was an interesting collection of historical thoughts: https://merionwest.com/2019/06/02/through-letters-the-gap-between-henry-george-and-karl-marx/ https://merionwest.com/2019/06/02/through-letters-the-gap-be...
- LVTfan 6y agoMany people who were first influenced by Henry George's ideas became impatient with the "organicness" of them, and moved to promoting socialism because they thought it would achieve their objectives more quickly. But George was convinced that it had to grow organically. George Bernard Shaw was perhaps the most famous of them. Henry George had public debates with several socialists (Serge Shevitch was one - 1887; Henry Hyndman another). They're great reading.
- LVTfan 6y agoMany people who were first influenced by Henry George's ideas became impatient with the "organicness" of them, and moved to promoting socialism because they thought it would achieve their objectives more quickly. But George was convinced that it had to grow organically. George's simple reform would provide the level playing field, and not involve "command and control." George was very much the small-d democrat and very much the capitalist -- but a purer capitalism, not land monopoly capitalism. And he could accurately be called a mensch! George Bernard Shaw was perhaps the most famous of them. Henry George had public debates with several socialists (Serge Shevitch was one - 1887; Henry Hyndman another). They're great reading.
- JadeNB 6y agoMonopoly was based on, or one might say perverted from, a game created to inculcate Georgist ideas in children: https://en.wikipedia.org/wiki/The_Landlord%27s_Game https://en.wikipedia.org/wiki/The_Landlord%27s_Game .
- pharke 6y agoSo this seems all well and good for urban areas but what about rural land ownership? Or is that not a concern here?
- LVTfan 6y agoRural areas don't need the kinds of infrastructure that urban areas need, but they need some. They need schools, they need roads and maintenance. They'd love to have broadband. They may need drainage or water systems that serve undense communities. They need emergency services, courts, and a variety of other things that civilized people who live in communities find valuable. (My use of "civilized" is in no way a criticism.) We are social beings, and there are things that are more efficiently done by the community as a whole. Earlier, someone referred to the Henry George Theorem. I think it holds in rural places, too. And unimproved land value seems to me to be the reasonable "tax base."
- pharke 6y agoMy question was more to do with how the improved value would scale for rural land that had a lot of use but can't generate as much income. Many rural businesses require a lot of land area but only produce a modest income which is possible under the current setup because land prices and taxes are low. There would have to be a lot of consideration given to the population density and the types of improvements made.
- LVTfan 6y agoRural land values will remain low until there is significant economic activity and particular demand for land IN THAT PLACE. To the extent that land, say, 10 or 20 miles away is just as suited for the user's purposes, the next piece of land that comes on the market is quite adequate, and the rural business can locate wherever, not pay a premium. I am reminded of a famous passage from Henry George's book "Progress and Poverty" (whose subtitle is "An inquiry into the cause of industrial depressions and of increase of want with increase of wealth ... The Remedy") known as The Savannah. http://progressandpoverty.org/files/george.henry/pp042.html http://progressandpoverty.org/files/george.henry/pp042.html, starting at the 10th paragraph (the paragraphs are numbered in this particular file). Incidentally, George dedicated P&P as follows: "To those who, seeing the vice and misery that spring from the unequal distribution of wealth and privilege, feel the possibility of a higher social state and would strive for its attainment."