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Source link: http://archive.mises.org/1610/murray-rothbard-and-henry-george/

Murray Rothbard and Henry George

February 23, 2004 by

Both Austrian economics and Georgist economics stem from studying the nature of man, from individual actions, from praxeology. However, they arrive at different conclusions regarding the cause of the business cycle. Both the geolibertarians (Georgists) and the Austrian libertarians start from the same axiom of self-ownership, yet arrive at different conceptions of property. The argument between these two factions has been largely ignored, which is unfortuante. Rothbard, however, dealt with it.

Rothbard criticized the Georgists in The Single Tax: Economic and Moral Implications and Power and Market. One Georgist response is provided in The Geolibertarian FAQ by Todd Altman.


I believe that Altman is right when he says Rothbard took a wrong turn in saying that “since all right would be siphoned off to the government, there would be no incentive for owners to charge any rent at all.” Here, Rothbard’s assuming that the land value tax ” would be set by an actual ground-rent charged by the landlord, rather than being an assessed value that would have to be recouped.” I see no reason why the land value tax would necessarily be equal to the rent. From there on, due to his methodical nature, I believe Rothbard continues on the wrong path (with respect to that point).


However, there is a counter-point to the challenge to Rothbard’s assumption. The socialists say that rent is unearned income, and thus theft, making no distinction between the value of land as is and the value added to it by man’s labor. The Georgists refine this socialist argument, saying that the portion of rent earned because of the inherent value of the land is unearned, while the portion earned because of the improvements the landlords have made on the land due to their labor (or those they acquired the land from) is earned. This Georgist assertion has both theoretical and practical problems*.


The theoretical problem is that, from a certain point of view, we receive many benefits due to things we did not earn, both good and bad. Does anyone deserve have the type of mentality that causes him to want to rape women? Did Ghandi earn his natural gift of being an extremely kind and wise man? Did Stephen Hawking earn his genius? Did Micheal Jordan earn the natural talent, the mental strength, that made him into arguably the best basketball player ever? Did the heirs to the Rockefeller fortune earn that fortune? I am not a cripple, but did I earn the fortunate luck of not being a cripple? Did the cripple earn his or her unfortunate disability? Does the child born into a loving family earn that blessing? Did St. Lucifer earn his evil soul which caused him to be cast from heaven and set about as the epitome of evilness, did he deserve to come into existence evil? Did God earn Hiis existence as a perfect entity, free of any flaws?


I can go on and on, but the point is obvious. There are many things in life that we neither earn nor don’t earn, neither desrve nor don’t deserve — they simply are. To follow the logic of the Georgists to it’s completion opens the door to socialism, because we didn’t earn the benefit that the underlying untransformed land provides; and we didn’t earn the improved value we brought to the land by transforming it with our labor, as we didn’t earn the skills, talents, and physical abilities necessary to transform the land. This logic does not necessarily lead to socialism, as it does not follow from the assertion that “I haven’t earned anything that constitutes me and my work” that “everyone else deserves what constitutes me and my work”. But the door is still wide open.


The practical problem is that, while you can divide the value of land between the portion due to it’s natural state and the portion due to labor exerted on it, you can only arguably do this in theory and not practice. Since I as the rent-seeker don’t have the option of specifying what I’d pay the landlord to live on his land were it an untransformed mess, there’s no way to determine the untransformed value of the land, even from one individuals subjective standpoint. The value I attribute to something can only be objectively defined by a market transaction; thus, the value I ascribe to the untransformed land I am now sitting on simply cannot be determined, not even by myself. Sitting iin my house right now, it is a truism for me to say I value the land I own more in it’s transformed, as opposed to untransformed, state. If I was typign this from laptop in a nuclear fallout are of the desert, it would be a truism to say that I would value that same land more if it were untransformed b y man’s actions (unless I wanted to die). However, those are qualitative, not quantitative, statements. To tax the “unearned value of the land” we would need to determine what the value of the untransformed land is to the current landlord, which I have already shown is impossible, as determining value in monetary units requires a free-market transaction, and we cannot alternate between a transformed and untransformed state.


Even if we could magically alternate, we still could not determine at what price an individual values the untransformed land, as we would need a market transaction know anything about the value individuals place on something, which would require him to sell it to someone else. However, even a sale does not necessarily tell us how much the seller valued the property in monetary terms. It merely tells us that that price was one price in a range of prices at which the seller was willing to sell. The seller will not sell at any price below that, and will, according to neoclassicals, sell at any price above that. Of course, the neoclassicals err there in assuming a homo economus; the Austrians make no such assumptions, and allow for both economic and moral considerations on the part of sellers and buyers. Considering the economic side of man alone, there is no reason why a man wouldn’t sell a candy-bar for $1,000,000 to a mentally retarded rich heir who really wanted it. Only when considering the moral dimension of man as well as the economic dimension can we allow for the possibility that a seller may refuse to sell at that high bid price (or will give it to the buyer for less than that absurd bid). The value the seller ascribed to his property would necessarily be the lowest price at which he would be willing to sell the untransformed property. So, the only way the Georgist tax-collector could determine what to peg the LVT at would be to read the mind of the current land-owner, in never-never-land where we can alternate between transformed and untransformed land.


The other problem is that now that we’ve forced the landowner to sell the land (which creates a disturbing coercion problem for libertarians in-and-of itself), he no-longer owns the land. The new buyer owns the land. Yet, the price at which the new buyer bought the land does not necessarily represent the monetary value he ascribed to the magically untransformed land (again, assuming never-never-land, where we can alternate between transformed and untransformed land). It only represents one price in a range of prices at which the buyer was willing to buy the land. The monetary value that the buyer subjectively ascribes to the land is the highest price at which he is willing to pay to obtain that land.


Again, if we succumb to the neoclassical fallacy of assuming homo economus there is no price so low that a buyer would not be willing to buy the land for it. According to the neoclassical delusions, I could not possibly refuse an offer by a prospective buyer to sell me his wife as a prostitute in exchange for $2; indeed, I could not even object to the idea that women could be used as units of monetary exchange. I would simply calculate that this I was buying sex with the man’s wife for a very cheap price, and did not have to “buy” the possibility of sex for the very expensive price for which one normally has to pay for that consideration in a person’s mind (namely, the “price” of love, sacrafice, devotion, respect, and so-on and so-forth). But I digress far from my criticism of Georgians (that criticism was aimed at neoclassical economists, not Georgian economists).


The criticism of the LVT which Rothbard levies is even more broad, which is that you cannot determine the value of the untransformed land, as the Georgians describe it. Their terminology discusses that as some absolutely determinable number. Yet, the value of untransformed land will be subjective, and will vary from people to people, and even from person A in situation X to person A in situation Y, or time X and time Y. As a vacationer, I will say that the value of the untransformed land in Antactica is zero — I wouldn’t pay anything for it. Indeed, it has negative value, from my pov — you’d ahve to pay me to go there. As a researcher, it may have some value, as the cold temperatures could be used to store samples, without paying freezors. And that is only how the untransformed value varies for the same person, depending on the time and situation. What about between persons? To me, the value of the untransformed land at the crator of a volcano, where lava is getting ready to flow out, is zero. In fact, it has infinite negative value — you couldn’t pay me enough moeny to go anywhere near a volcano that’s going to explode at some uncertain point in the near future. However, to a vulcanologist, this untransformed land would have great value. As Rothbard rightly notes, any attempt to to peg the value of the untransformed land would be arbitrary. Thus, Rothbard’s assumption that the land value tax would be set to the rent rate is not as unjustified as it first seems — why not? An army of arbitrary tax assessors could arbitrarily deem it that high.


The Georgist response to this, I anticipate, would be that you don’t have to determine the value of the untransformed land to the landlord. You just have to determine it’s highest value anywhere. For example, I may not personally attribute any value to an active volcano, but may still buy it, so as to sell it’s use to a vulcanologist, who does value it. Yet, this runs into my earlier criticism that even in the case of completely untransformed land, you cannot determine how much an individual values it unless you can read his or her mind (that is, you can’t tell the absolute lowest price at which he’d be willing to sell, or the absolute highest price at which he’d be willing to buy). And you also run into the practical problem of determining the highest value placed on the property by any individual (thus, it’s highest valued use).


Of course, the Georgists can always say that all they mean is the value (price) at which the untransformed land is sold in the free market. To that, I will step back one step and say that you can’t do that, because you can’t magically alternate between transformed and untransformed land. I will also say that it’s immoral to do that, as it would require forcing a sale of property by the owner, which constitutes the initiation of aggression. Also, by forcing the owner to sell, you’ve changed what would otherwise be the price of the magically untransformed land on the free market, because you’ve created a pressure on him to sell, which will drive the price down. Thus, you have defeated your own objective, and will almost necessarily underestimate the price at which the untransformed land sells on a free market without coercsion (by coercing the owner to sell, you’ve lowered the price). Thus, you have under-estimated the land-value tax.


Of course, Georgians could just ignore all of these difficulties and arbitrarily declare, by State fiat, what the untransformed value of the land is, thus what the unearned income is. This would be transparent and easily demolished. It would also be incorrect. Or they could bend over backwards trying to deal with all of the nuances by armies of tax assessors and philosopher kings. They would still be just as incorrect, though they would have bamboozled the public into thinking there’s some merit to the process; however, in going through all of this, they will have eliminated a large portion (possibly all) of the wonderful taxes funds they claim would be provided by the LVT.


What good is it differentiating between earned rent due to your transformation of land, and unearned rent due to the “value fo the land” if you can’t determine the point of that differentiation in practice?

{ 44 comments }

Brian W. Doss February 24, 2004 at 3:00 pm

I dont know why the trackback ping isn’t working, but I have responded to this post over at Catallarchy.net.

David Friedman February 26, 2004 at 12:10 am

One sophisticated criticism of the idea of basing taxation mainly on land was published by David Ricardo, responding not to Henry George, who I think hadn’t been born yet, but Adam Smith. Smith had suggested that rent was a particularly suitable thing to tax.

Ricardo’s response was that if rent was the main thing taxed, the value of land would depend very much on political decisions. So land would tend to be held not by the people best able to make use of it but by the people best able to predict and manipulate the political system that set the taxes.

The obvious Georgist response is that the tax is supposed to based on some objective measure of pure land rent, to which the obvious response, suggested by your piece, is that measuring that is hard, which leaves lots of room for politics.

Tracy Saboe February 26, 2004 at 1:50 pm

The Free State Project (unfortunately) seems to have a decent number of georgists in it.

It’s very frusterating to me because I won’t be able to abolish the property taxes is they get their way, even though property taxes is in my oppinion the most evil kind of taxation. (It turns you into a surf and forces you to rent your land from the government.)

Anyway, here’s a reprint of one of my best posts against this nonsence.

http://forum.freestateproject.org/index.php?board=46;action=display;threadid=5808&start=0

BTW (if it’s OK to make a Plug) we need Austrians in the Free State Project.

Tracy Saboe

BillG February 26, 2004 at 2:21 pm

I wonder if David Friedman would like to comment on his father’s quote from Todd’s FAQ?

Milton Friedman
“In my opinion, the least bad tax is the property tax on the unimproved value of land, the Henry George argument…”

http://members.aol.com/_ht_a/tma68/geolib.htm

BillG February 26, 2004 at 2:29 pm

Tracy-

The assertion that the government insuring the collecting of a rightful debt and then returning it directly to the locals in the form of a pro-rata citizens dividend (see Thomas Paine’s “Agrarian Justice”) means that you are renting your land from the government (as in the government owns the land)is false.

BillG February 26, 2004 at 2:38 pm

David H.-

I believe the charge from the Geo-Libertarians is that the private ownership of land without the distribution of the extrinsically created rent is incompatible with the first principle of self-ownership.

David Heinrich February 26, 2004 at 4:56 pm

My explanation of Milton Friedman’s comments — in many ways, Milton Friedman isn’t a libertarian. Milton Friedman wants to make the government more efficient, which is a disturbing thought. As Rothbard notes in Milton Friedman Unravelled (http://mises.org/journals/jls/16_4/16_4_3.pdf):

Quote:
“Milton Friedman has revealed his quintessential ro-income tax and egalitarian position in numerous ways. As in many other spheres, he has functioned not as an opponent of statism and advocate of the free market, but as a technician advising the State on how to be more efficient in going about its evil work.”

Rothbard then notes Milton Friedman’s role in the creation of the with-holding tax, one of the most horrible developments in The State, which has allowed It to tax at far higher rates than would otherwise be possible.

To be fair, Milton Friedman has contributed to a greater respect for liberty and a greater interest in libertarian ideas in many ways. Overall, he supports greater liberty and a smaller State, which is a good thing. Despite being flawed in some areas, Milton Friedman’s “Capitalism and Freedom” is a strong defense of liberty (http://www.amazon.com/exec/obidos/ASIN/0226264017/ludwigvonmisesinst/104-3932720-0298346).

David Friedman February 27, 2004 at 6:59 pm

Bill G writes:

“I wonder if David Friedman would like to comment on his father’s quote from Todd’s FAQ?

Milton Friedman
“In my opinion, the least bad tax is the property tax on the unimproved value of land, the Henry George argument…” ”

I think it’s a real quote.

But there is a large difference between saying it’s the least bad tax, which is a position a variety of economists have supported from Adam Smith on, and saying it is a good tax, which is the usual position of Georgists as I have observed it. And there is also a difference between a tax on the site value of land and a tax that collects all of the site value of land–just as there is a difference between an income tax and an income tax with a rate of 100% on all income.

David Friedman February 27, 2004 at 7:27 pm

“My explanation of Milton Friedman’s comments — in many ways, Milton Friedman isn’t a libertarian. Milton Friedman wants to make the government more efficient, which is a disturbing thought. As Rothbard notes in Milton Friedman Unravelled” …

I last got into this argument a very long time ago, when Rothbard published two articles in a libertarian journal he then dominated, one attacking my father in particular and one attacking the Chicago School in general. I wrote a response, contrasting what Rothbard said my father believed with what my father said he believed–quoted from published work. The editor refused to accept it, pretty explicitly on the grounds that if Murray Rothbard and Milton Friedman disagreed about what Milton Friedman’s views were, Rothbard was right.

I doubt it is worth reviving the controversy–I would rather argue about my ideas. However …

“Rothbard then notes Milton Friedman’s role in the creation of the with-holding tax, one of the most horrible developments in The State, which has allowed It to tax at far higher rates than would otherwise be possible.

An event which occurred during WWII. My father agrees that the withholding tax is a bad thing–he may even have agreed at the time. But he thought winning the war was a good thing.

People interested in my critique of Rothbard’s attack on another economist he dislikes–Adam Smith–may want to use Google to search Usenet for my exchange with Vincent Cook (on the newsgroup humanities.philosophy.objectivism) dealing with Rothbard’s two volume book on the history of economic thought. I think it provides pretty clear evidence that one ought not to trust Rothbard’s account of other people’s views.

For a later post by me summarizing the argument, see:

http://groups.google.com/groups?q=Rothbard+%22Adam+Smith%22+author:David+author:Friedman&hl=en&lr=&ie=UTF-8&selm=ddfr-2610992347550001%40ddfr.vip.best.com&rnum=2

Wirkman Virkkala February 27, 2004 at 8:11 pm

I was pleased to see Heinreich touch on the issue that most concerns me regarding the Georgist proposal, in his paragraph beginning “The criticism of the LVT which Rothbard levies is even more broad…”

Georgists distinguish between the site value and the value-added-through-labor of any parcel of land/space. And yet it seems obvious that site value increases (and decreases) according to the entrepreneurial successes (and failures) of human endeavor. Location theory, as elaborated by von Thunen and many scholars after, strikes me as much more interesting than Georgist tax proposals. And it strikes me that the elementary propositions of location theory falsify the claims of the Georgists. (But I’m not a location theorist, so what follows is my fallible grasp of the issues.)

The value of an unused (or abandoned) parcel of land may double or triple if a nearby business – or even a city park – becomes attractive overnight. But when the public fascination with the nearby attraction wanes, the value of that unused parcel can plummet. This can change yearly, monthly, even daily… How would the tax assessors handle it?

It seems to me that Rothbard has to be right, and George wrong. It may be the business of entrepreneurs to guess correctly the values of location, location, location, and then the added-on services they dream up, but remember: they often fail. The idea that tax assessors would be better at these evaluations seems nuts to me. Tax assessments on the value of property can’t be anything but economically somewhat arbitrary figures for the extraction of loot. This is not science here, but the art of extortion (though “legalized,” of course). Georgists in charge don’t strike me as better extortion artists than what we have now. They say they’d extort less, but…

Considering the difficulties of assessment of value, I don’t see the logic for Milton Friedman’s “least bad” judgment of the land tax. It strikes me that a percentage extorted from the net earnings of an enterprise would be much less bad, if only because a tad less arbitrary.

But I’m not trying to argue for any tax!

Wirkman Virkkala February 27, 2004 at 8:11 pm

I was pleased to see Heinreich touch on the issue that most concerns me regarding the Georgist proposal, in his paragraph beginning “The criticism of the LVT which Rothbard levies is even more broad…”

Georgists distinguish between the site value and the value-added-through-labor of any parcel of land/space. And yet it seems obvious that site value increases (and decreases) according to the entrepreneurial successes (and failures) of human endeavor. Location theory, as elaborated by von Thunen and many scholars after, strikes me as much more interesting than Georgist tax proposals. And it strikes me that the elementary propositions of location theory falsify the claims of the Georgists. (But I’m not a location theorist, so what follows is my fallible grasp of the issues.)

The value of an unused (or abandoned) parcel of land may double or triple if a nearby business – or even a city park – becomes attractive overnight. But when the public fascination with the nearby attraction wanes, the value of that unused parcel can plummet. This can change yearly, monthly, even daily… How would the tax assessors handle it?

It seems to me that Rothbard has to be right, and George wrong. It may be the business of entrepreneurs to guess correctly the values of location, location, location, and then the added-on services they dream up, but remember: they often fail. The idea that tax assessors would be better at these evaluations seems nuts to me. Tax assessments on the value of property can’t be anything but economically somewhat arbitrary figures for the extraction of loot. This is not science here, but the art of extortion (though “legalized,” of course). Georgists in charge don’t strike me as better extortion artists than what we have now. They say they’d extort less, but…

Considering the difficulties of assessment of value, I don’t see the logic for Milton Friedman’s “least bad” judgment of the land tax. It strikes me that a percentage extorted from the net earnings of an enterprise would be much less bad, if only because a tad less arbitrary.

But I’m not trying to argue for any tax!

David Heinrich February 28, 2004 at 2:12 am

Prof. David Friedman

I’d be interested in the specific paper by Rothbard criticizing Milton Friedman, and your response.

Regarding your discussion of Rothbard’s *History of Economic Thought*, I think it is a little bit too quick to say that the alleged errs of that book mean one should be hesitant about Rothbard’s take on history in general. I believe that he didn’t finish that book before he died, so an unfinished version was published; what modifications he may have made are unknown. I don’t have a reference on that, and this is just from memory, so I could be completely wrong — if so, I apologize in advance.

At any rate, I don’t think Rothbard’s obligated to paint a flattering picture of any economist. I think there is nothing wrong with focusing on negative aspects of economists works, especially ones that have been traditionally heralded. Those economists, if still alive, may not like it, nor may their admirers, but I don’t see anything particularly wrong with it (just critical).

Your most interesting statement was, I think, here:

“‘Smith proposed taxing the export of wool,’ and not explaining that what Smith proposed was that the absolute ban on the export of wool be lifted and replaced by an export tax, is delibeate dishonesty, even though the statement is literally true.”

This is I think what the crux of the argument boils down to. With regard to this, I don’t think it’s particularly atrocious. I think it’s just Rothbard. From my understanding, he wasn’t interested in making excuses or filling out historical context to rationalize what he thought were immoral positions. It seems that for Rothbard, it usually doesn’t matter that someone’s views are “less statist” than the typical view; what matters to Rothbard is where individuals views *are* statist. It seems that to Rothbard, it wasn’t relieving that Smith supported the elimination of the ban — in Rothbard’s mind, that is an obvious non-event, something that simply should be period — but rather disheartening that Smith supported an export tax.

It appears that sometimes when treating economists, Rothbard turns a blind eye to anything he would consider good, and only sees what he would consider bad.

Mark Thornton February 28, 2004 at 11:10 am

David is correct that Milton does not like the withholding tax, would like to see it abolished, and that he only supported it as a wartime measure. Yet another reason to never go to war and another example of why we should never support “wartime measures.”

With respect to Rothbard’s critique of Smith, it is important to note that Smith would often support something, while at the same time criticising it so its difficult to determine exactly where he stood on issues. Readers could come away with many interreptations. I’m not a Smith scholar, but I have found that in my own research that touches on Smith’s writings that he badly mangled critical historical facts and badly misled his readers. I can’t tell if the mistakes were due to his shallow knowledge or if they were deliberate misrepresentations.

David Friedman February 29, 2004 at 1:09 am

David Heinrich writes:

“It seems that for Rothbard, it usually doesn’t matter that someone’s views are “less statist” than the typical view; what matters to Rothbard is where individuals views *are* statist. It seems that to Rothbard, it wasn’t relieving that Smith supported the elimination of the ban — in Rothbard’s mind, that is an obvious non-event, something that simply should be period — but rather disheartening that Smith supported an export tax.”

If that were Rothbard’s position–and if he were honest–don’t you think he would have mentioned the existence of the export ban? He can’t expect his readers to know about it.

“It appears that sometimes when treating economists, Rothbard turns a blind eye to anything he would consider good, and only sees what he would consider bad.”

Except, of course, when he arguing in favor of the economist in question, when he does the opposite–as in the case of Turgot.

Turgot proposed to the King of France that the entire French educational system be nationalized, with central government control. Smith discussed the question of government subsidies to education, concluded that they were not unjust but that it might be more prudent to have an entirely private system. Rothbard, without mentioning the former fact or accurately describing the latter, argues that Turgot is much more libertarian than Smith.

I have no objection to Rothbard criticizing people he disagrees with. My objection is that his criticisms are routinely dishonest. For more details, see the old Usenet post of mine that I already cited.

Mark Thornton writes, I think about Rothbard on Smith (although I may be misunderstanding him):

“I can’t tell if the mistakes were due to his shallow knowledge or if they were deliberate misrepresentations.”

I think if you go through the examples I cited in my old Usenet post, you will see that they cannot be explained as honest errors due to Rothbard’s ignorance. And if they could be explained that way, it would have been highly irresponsible for Rothbard to have written the book in question, since that would mean that he was unfamiliar with the work of an economist whom he criticized at some length.

Smith’s discussion of an export tax on wool is in the context of his discussion of the ban on exporting wool, which he devotes significant attention to. The “martial spirit” comment is in a context radically different from the way Rothbard represents it. It’s true that a careless reader might well conclude that Smith was unambiguously in favor of public schooling–and some have. But that doesn’t explain Rothbard’s failure to mention Turgot’s much worse position on the same issue, when contrasting Turgot to Smith.

jeff February 29, 2004 at 6:17 am

Thornton was speaking of Smith, not Rothbard, and obviously so.

Mark Thornton February 29, 2004 at 8:20 am

Yes, I was speaking of Smith, not Rothbard. I was saying that Smith either had a shallow knowledge of his subject (on the fine points related to my research–I’m not condemning everything he wrote) or he was trying to paint a slanted or misleading picture of the facts. The two examples that come to mind are his treatment of Cantillon and his treatment of the “regulated” companies.

BillG October 3, 2005 at 5:39 pm

labor-based property rights to the fruits of one’s labor are absolute as they are a natural extension of your right of self-ownership.

whereas law-based property privileges are conditional as all privileges (private laws) shift costs off of the entitled and onto society (negative externalities) that are supposed to be justified by a greater good argument.

Locke was very clear about what the conditions were for turning common property (land, water, air, minerals, oil, etc) that pre-exist human labor into first law-based property privileges and then into labor-based property – his proviso and spoilage clauses.

The reason why is because beyond the proviso (enough and as good left for others) the last bundled ownership privilege appears (economic rent) which can only be satisfied by sacrificing the absolute labor-property rights of the excluded if the entitled monopolized the economic rent as it creates a legal and monetary obligation in essences shift costs onto society.

The only way to protect our absolute labor-based property rights is for the economic rent to remain owned in common (an equal citizens dividend for all) while the other four bundled law-based property privileges (use, exclusion, possession, transferability) can remain in private hands.

Lockhart October 7, 2009 at 8:57 am

Because valuation of land in the hands of landlords has been irregular and unfair, it is assumed that it must always be so. Nothing is more erroneous. Valuation has hitherto depended on the caprice or passions of men; it is possible to base it on their reason. By having the right to value conferred on them landlords have been given motives to value from their own immediate point of view.
But an adequate valuation is necessary in the interests of business. The alienation of capital and labour from land is largely due to the manner in which land has been controlled. Excess of rent, insistence on slightly unreasonable conditions, indifference to the cultivation or development of their land on the part of owners, prevent land, capital and labour from being properly co-ordinated.

Economic science has made the existence of certain facts and the operation of certain laws clear enough to make an improvement in economic practice possible and even easy. There is a thing called economic rent. Rent is that part of the produce from any undertaking which remains after their accustomed returns have been reserved to the capital and labour engaged in it, the part which is normally due to land. But no serious use is made of this knowledge. Rents and prices above its economic value are frequently paid for land. When this excess is carried far enough, widespread unemployment and business depression occur. Wages, interest and rent fall.

Rents should be fixed by the government valuation because that valuation is the only available record of economic value, and no sound economic conditions are possible, unless the users of land are paying neither more nor less than the economic value of land. The valuation of land is one of the most fundamental activities in economic practice, and is subject to strict and unvarying laws. It is peculiarly-and exclusively a governmental or communal function.
The interpretation of the taxation of land values by some exponents gives the impression that it is to be the taxation of the highest bids or offers. They believe that these offers represent the actual values of land, and they propose not only to use them as the basis of taxation, but suggest that they should continue to be the amounts payable as rent. They contend that any other method of fixing values and rents is Socialism in a reprehensible sense of the word, and an interference with the liberty of individuals. Henry George was afraid of corruption, if the State should do anything more than take the value by means of a tax. He said it was not “necessary that the State should bother with the letting of lands, and assume the chances of favouritism, collusion and corruption that might involve. It is not necessary that any new machinery should be created. The machinery already exists. Instead of extending it, all we have to do is to simplify and reduce it. By leaving to landowners a percentage of rent, which would probably be much less than the cost and loss involved in attempting to rent lands through State agency, and by making use of this existing machinery, we may, without jar or shock, assert the common right to land by taking rent for public purposes.” ( Progress and Poverty, Bk. VIII, chap. ii.)

Whether corruption was unusually prevalent among officials in the United States, or whether Henry George had not fully considered the practical application of his principle, this emphatic statement is out of harmony with the requirements of that principle itself, and with the results of experience. He modifies this statement in a later work, and leaves the question open: “Whether or no,” he says, “this would prove finally the best way of obtaining for the community the full return which belongs to it is hardly at this stage worth discussing.” (Social Problems, chap. xix.)

If the value of land belongs to the community, the management of this value also belongs to it. The taxation of land values carries with it a Government valuation of land. The Government valuation evokes the active interest and criticism of the landowners. Their activity opens the doors and invites or necessitates the interest of all other parties to produce an all-round, representative valuation. No one can say when the machinery for this purpose will be full-grown. When local men have their voice in valuing local land, the valuation will really express “the general sense of fair play and justice.” And before this valuation all others will disappear.

Some argue that the economic value of land cannot be ascertained to-day, that a fair rent cannot be fixed, because land is withheld from use, and economic conditions are generally unsound. But the elements of economic science are never destroyed by a breach of economic laws, any more than the elements of physics are destroyed in a railway collision, or in the fall of a building. Experienced valuers can measure the demand for land, and its worth in money, to-day as accurately as ever they will measure it. That demand is less than it would be under free conditions, but, however it may alter, the art of measuring or valuing it is always the same. There are restrictions on the use of land which obstruct the free course of demand, and are unreasonable from the community’s point of view. When the valuer after consulting local opinion had decided that restrictions were unreasonable, they would be removed, and capitalists and labourers would then be allowed to express their demand freely. On the same principle, and with the same object of maintaining the value of land, reasonable restrictions would be imposed, and with demand operating on this basis its measurement would be simple and absolutely certain.

Zorg April 4, 2010 at 3:04 am

“If the value of land belongs to the community, the management of this value also belongs to it…”

There ya go. There’s your communist blather that underlies all this nonsense.

Tell me, how did “the community” come to own the land? Did 1,000,000 people rush out into
the wilderness together at one time and claim their future city collectively? Or did individual
human beings venture out into the wilderness by ones and twos and families, with no
guarantee of success or safety, to stake a claim on land which NOBODY OWNED? And didn’t those
individuals make the trails, the roads, and all the other improvements? And didn’t they also
sell parts of their land after creating something worth buying to the second wave of settlers
who would willingly PAY for what others before them had given value to?

The countless interactions of people buying and selling, even while under the burden of the
state and its criminal banking system, is what created all these places that people want to
live in. How does a latecomer to “the community” have a claim against all the property owners
there (for how long?) who PAID for their property (for how long?) and don’t know him from
Adam?

While we’re at it, how large is this “community”? Does some bum in NJ have a claim on
landowners in CA? Does some dude living in a shack in the mountains have a claim against
some dude living in a nice apartment in the city?

How can you define this supposed community which apparently owns all the land? How did
they come to own the land if individuals cannot own the land and the community is nothing
more than a group of individuals? What sort of magic leap of logic gets you from “no one
can own land” to “everyone owns the land together”? Don’t you see that you destroy the
meaning of ownership with this sleight of hand? Which land? Which people? If indeed each
parcel is settled by an individual and not some amorphous group of people who don’t even
exist yet or are thousands, hundreds, or even tens of miles away from the land in question,
what is the basis for saying that the undefined amorphous group (how do you gain membership
into this racket?) OWNS land that its members CLEARLY and OBVIOUSLY had NOTHING TO
DO WITH in the first place???

If you say that all people own all land on the planet collectively, how is that any different than
communism? This is an axiom which is self-contradictory and not derived from any rational
premise concerning self-ownership, homesteading, free trade, free association, non-aggression.
It seems to negate liberty at its root – property. And, of course, the contradiction being that
as it negates property it claims to affirm it!

So you turn everyone supposedly into owners, but they are not, are they? No, the actual
people (individual human beings in the flesh) are RENTERS who OWE a continual TRIBUTE to
some group (which group? how did they acquire this right? who can be a member?) in perpetuity, without a contract, subject to violence for refusal to pay said tribute. And if you say something
stupid like, “Well, they owe the rent to themselves,” that’s just another absurdity. You can’t
owe yourself something (in a legal sense). These are just transfer payments from one group
to another.

It fails, like every other tax argument, on numerous grounds. If I pay rent to the “community”
so that the “community” can pay me a “dividend,” then why don’t I just keep my money in
the first place and save on transaction costs? Clearly it is the taking which is the purpose, not
the giving since you can only “give” this money back to people after you take it. And, naturally,
none of this is by voluntary contract, is it? For no one in their right mind would agree to it
if they didn’t have a gun to their head. Well, a few might, just as a few might agree to live
under any conceivable scheme.

Can the beneficiary of this scheme show that he or she owned the land for which they
are receiving rent by the continual threat of force? Obviously they cannot show that they
owned the land, that they have a right to collect rent (I thought rent was evil, right? Ha!), that
they have the right to imprison or fine or kill any victims who refuse to submit to this robbery.
They cannot show a contract or a history of documentation or testimony from neighbors saying
that they owned the land. This is nothing but FICTION.

There’s no point to listening to statist arguments for new tax schemes of any stripe since
it is the state, as an institution of violence and monopoly, which rules by force and will
write the rules as they go along for anything which can be dreamed up by social planners.
Since the individual property owner is a mere pawn in this game, why would anyone even
consider this or any other statist garbage like the “Fair Tax” or VAT or the Glorious Majestic
Oneness Tax of the True Equality? It’s all the same. It’s just different flavors of tyranny.
Take your pick. They all suck.

Fraggle May 26, 2010 at 8:08 pm

An awful lot of what you said can be applied against you, mainly because at the end of the day, landlords are governments. They make rules, they tax (collect tribute), they enforce these by exclusion and their powers are limited only by geography. That they get people to sign something before exercising those powers is irrelevant. (Ironically it’s a show of that power) They hold all the cards. For the tenant, the choice is simple, submit to a landlord or die. That the death is by enforced vagrancy rather than outright execution is also irrelevant.

The anarchist dream can, even in theory, only work until all land is owned. (In practice, it happens sooner because of the non-uniform way land value accrues, and because land is considered owned in perpituity on the flimsiest of bases, it’s easy to reach the point of total ownership even if there appears to huge tracts of unused land – that’s certainly the case in the UK, and from what I can tell it’s the case in the US also) At that point, you immediately have the creation of 2 classes, the landed and the landless and because the landless must pay the landed to exist, they become slaves. That that is the inevitable result of allowing eternal rights to land via a single, one-time act or payment, is the lesson of Henry George.

Anarchy is just another flavour of tyranny. Take your pick. They all suck.

Bruce October 18, 2010 at 1:18 am

It seems like everyone here agrees that a person has a right to the fruits of his labor. The Georgist argument is that unimproved land is common property, as it is not the result of labor. My question is: How do people come to own land? In a frontier setting where huge tracts of land are un-used, the most common way to claim ownership of a piece of land (correct me if I’m wrong) is to improve it. You clear the timber, you build a log cabin, the land is yours. In that case, wouldn’t the ownership of the land itself be the fruits of one’s labor? Isn’t the primary, if not only, enticement to tackle the dangers and hardships of frontier life the opportunity to own the land that one improves upon?
The frontier days being largely behind us, the main means by which one comes to own land at present is by an exchange of money. How does one come to have the money? It is earned through labor or investment! Even if the money is inherited, at some point someone worked for it, to be able to pass it down.
Surely no one could make the argument that land in Manhattan is equal in value to land in the desert. Yet, what is it that makes Manhattan land worth more? The combined labor of all its previous owners, and the owners of the land around it, to improve it, and build the city into what it is today, a cost which is built into the price of the land for those who purchased it and own it now. Are we to argue that the person who owns land in Manhattan should pay land tax on it as if it were unimproved swamp land never inhabited by either native or colonist? If that’s the case, wouldn’t it be that the Manhattan land owner is under-paying, and the desert land owner is over-paying? If not, wouldn’t the increased tax on the Manhattan land essentially be a tax on the labor of all those who improved it? Which, again, is built into the cost the current owners paid. It just seems to me that a tax on land is, in one way or another, essentially a tax upon labor.

Bruce October 18, 2010 at 1:45 am

Also, it is quite a bit of mental contortionism to equate all renters; an affluent person paying rent in an Upper East Side apartment is a far cry from serfdom.

Keith Gardner January 17, 2010 at 12:26 am

my property tax forms listed the land value and the developed value. you estimate the value of the development and subtract the average sales price in the area. land value can be reasonably determined. land value taxes are already calculated. you can’t expect it to be accurate just as you can’t expect income taxes or sales taxes to be accurate.

also, modern georgists generally agree upon the use of the citizen dividend to distribute the land rent collected to everyone. this is true of libertarians and progressive like mlk and thomas paine. libertarians favor this because it better respects the free market when used to replaced state monopolies on social services. you want the receiver of a citizen dividend to choose what they want rather than the state choosing it for them.

the citizen dividend negates such arguments by absurb neoclassical libertarians, such as the free stater, claiming lvt used in conjunction with citizen is the most evil of taxes when the average land owner would have much less taxation than they do now because they would also be receiving the citizen dividend.

a model is not reality. it merely helps us understand a principle. the principle of Henry George is not invalid because one application fails a reality test. no principle can uphold the test of reality. the goal is to understand henry heorge and the goal of agrarian justice.

neoclassical libertarians are just looking to scam the people with the foundation funded austrian school of fraud and theft by proposing such absurbities that all property taxes should be eliminated in texas and replaced with a sales tax on property so that the working class will not only have to pay taxes but will have to pay interest on it to the banks. hello? there is no such thing as a free lunch, but a banker scam is quite common.

as henry george stated himself, taxes will not go away because those who profit on taxation will lobby to protect it.

Zorg April 4, 2010 at 2:07 am

“as henry george stated himself, taxes will not go away because those who profit on taxation will lobby to protect it.”

So you admit that this is just another extortion racket? And the reason we need this extortion
racket to replace the existing one is that it will profit a different group of people who will
then lobby to protect it?

You are confirming the critique that David Friedman referenced here! This scheme will be
run by politicians who will pervert it (starting from Day One) to their own twisted
purposes and those who “lobby” them most successfully. Can there be any doubt?

It seems to me that all collectivist statist schemes are always sold as these pie-in-the-sky
plans where civic minded “public servants” serve the masses with saintly virtue and
philosophic precision. In reality, of course, it’s ALWAYS just a mob with guns.

Listen, this is no different than every other extortion racket. No matter what restrictions
you think it will have, they will dissolve in the face of real politics. Just think of the US
Constitution. The ink wasn’t dry on the thing before it was all a matter of interpretation
by whoever the hell had the POWER to say “this is what it means.”

The income tax was touted as just being for “the rich” and at a ridiculously low rate.
How long did that last?

On the economics, it seems clear to me that the high price of real estate is driven
primarily by the credit monopoly and the FRB fiat money system. Credit is created and
turned into money against real estate assets. But if you had a free society, then people
couldn’t create money at will and lend it out at interest in order to artificially bid up the
price of real property. If this system were allowed to fall of its own weight, there would
be massive deflation of these values. If you can’t create credit, you have to rely on
savers who are willing to lend you their savings (or builders who will give you credit from
their savings, or spot you their labor up front, etc.). THAT is real economics. That process
will eventually assign the realistic monetary values to land and houses. The only real price
to anything is the free market price. Since landowners and homeowners are sitting on
a lot of digits which were simply made up as values, there’s a whole lot of real buying and
selling to be done once this evil system fails the way it must.

If the dollar itself were allowed to fall, then my guess is that you’d have plenty
of people selling land in order to obtain a more liquid asset like real commodity money
(gold and silver). Then all that “unused” land would flood the market as landowners would
want to maximize their cash holdings after being wiped out by the phantom “dollar” and
the deceitful FRB monopoly.

I think we forget that “dollars” are created against real estate and that they are not real
commodities, not real money. The present system is just a scam to get working people
to produce the supposed wealth represented by the phony “dollar” IOU issued by banks and
gov’ts at virtually no cost to them. They issue it and we have to back it after the fact
with thirty years of payments from other funny money earned on the market which was
also issued by banks out of nothing so that we end up paying 3X the initial price of the house
or land back to the bank (and the gov’t in various ways too).

The other contributing factor, and this is huge, is the tight control exercised by the state
over the use of property. I’m talking about Regulation with a capital R. In many places, you
can’t buy land and just live on it. You can’t park an RV on it even without all sorts of rules
(cash out of your pocket) piling on top of you. You’ve got zoning laws which prevent people
from selling off little pieces of rural land cheap because it has to be 10 or 20 acres or whatever -
so say the local gods. Et cetera.

Take all this garbage away, allow homesteading of state-owned (so they claim) lands, and
you solve your land problem. People heavy into land will want to trade some land for hard
currency if they can’t count on the automatic “appreciation” over time due to INFLATION.
Without being supported by the counterfeiting racket, speculation in land seems a whole lot
riskier. Why not cash out and get gold instead and pursue business interests directly?
Really. What do people want with unused land if their free ride of inflation produced
appreciation ends? We see what happens. People walk away. They sell. They retrench.
They start over. Then savers and renters, if they are freed of state control, can seek
their advantage in the market as it should be. Any free market will tend toward equilibrium
and will flush out all the crap over time if allowed to function.

So let’s try freedom for once, huh? : )

Fraggle May 26, 2010 at 8:23 pm

Without being supported by the counterfeiting racket, speculation in land seems a whole lot riskier.

Only in the short term, and only in opportunity cost. Long term, land is the absolute best investment. At some point, *somebody* is going to want or need it enough to pay you whatever you want for it, and in the meantime you have no obligations to it once you own it. It’s free money.

Keith Gardner January 17, 2010 at 12:43 am

i say just tax the real value at a lower percentage and sent different rates for different types of property. you will always have chronic inaccuracy, whether from lateness of valuation or lack of data.

however, it is still better to collect and distribute rent on the value of god’s developed property than to collect and distribute tax on the value of man’s labor.

i do agree the average person who owns an average should have to pay no property taxes. go ahead and eliminate property taxes up to a certain value on a primary residence. all other property is income property or being used to store wealth, which should be taxed, since an individual is stealing god’s gifts from others to generate an income or store wealth. some would say just ban such use of property. i say, there is still some free market value in it, just compensate the valid owners, all citizens who chose not to take land.

as people store their wealth in land, expand their business by buying more land, or use land to extract rent, the supply of land decreases, causing the price of land to increase. this happens at a rate greater than wages. the working class, your offspring, will have an increasingly higher cost of living because of the increase cost of land. it is only through economic growth at which the obviousness of this hidden.

you all would be better off if income taxes and social services were replace with land value taxes and citizen dividends. you can add sales taxes since there is the voodoo marginal utility thing and since sales taxes are an indirect tax on land since it taxes the income-producing activity of land or what is extracted from land. it also makes for a good transition from an income taxed system to a land taxed system. you would just need a prebate, or citizen dividend, as the fair tax proposes.

i’m a pretty flexible georgist.

Keith Gardner January 17, 2010 at 12:55 am

good example of intellectual nonsense obfuscated by funded intellect to distract from more serious issues involving common sense and social injustice:

< "Milton Friedman has revealed his quintessential ro-income tax and egalitarian position in numerous ways. As in many other spheres, he has functioned not as an opponent of statism and advocate of the free market, but as a technician advising the State on how to be more efficient in going about its evil work."

Rothbard then notes Milton Friedman's role in the creation of the with-holding tax, one of the most horrible developments in The State, which has allowed It to tax at far higher rates than would otherwise be possible.

To be fair, Milton Friedman has contributed to a greater respect for liberty and a greater interest in libertarian ideas in many ways. Overall, he supports greater liberty and a smaller State, which is a good thing. Despite being flawed in some areas, Milton Friedman's "Capitalism and Freedom" is a strong defense of liberty (http://www.amazon.com/exec/obidos/ASIN/0226264017/ludwigvonmisesinst/104-3932720-0298346).>>

Keith Gardner January 17, 2010 at 1:06 am

I dare call the Ludwig von Mises Institute no different than the liberal institutions funded to promote socialism. It is a fraud, like the IPCC, to distort truth.

It is a victory that the Ludwig von Mises Institute was pressed to even bother trying to debunk the repressed economic thought of Henry George.

I guess truth has a way of leaking into the minds of independent thinkers. I understood Henry George principles before I even knew the name.

Zorg April 4, 2010 at 12:49 am

“I dare call the Ludwig von Mises Institute no different than the liberal institutions funded to promote socialism. It is a fraud, like the IPCC, to distort truth.”

Ah yes, the evil fraud of private property, free markets, and non-aggression. We can’t
have that! :-/

“I guess truth has a way of leaking into the minds of independent thinkers. I understood Henry George principles before I even knew the name.”

What is the principle of georgism? The “right” of the mob to loot property owners?

When the taxman cometh and the evil property owner decides not to pay the lovely,
gentle humanitarian egalitarian tax on the arbitrarily decided “value” of his land
artificially separated esoterically by paid political appointees of the local Monopoly
from the “value” of his improvements, what “principle” do they employ as they
fine/kidnap/imprison/kill him?

Let me guess. Is it the you-have-no-right-to-exist-unless-we-say-so principle? By golly,
I think it is!

All of these collectivist ideas are the same. Somehow, somewhere, some way, they’re going to force “equality” out of the barrel of a gun. It’s for your own good and you’re going to like it – or else!

How about, instead of instituting a whole new kind of extortion racket by the violence of the
state, you simply allow people to voluntarily associate? Those who actually believe in your scheme
will be free to choose it and those who do not will not be threatened, molested, robbed, or killed
for the crime of owning land. Wouldn’t that be an ethical solution to the problem of the fact that
collectivists think they own the whole world and every person and resource on it while
individualists only lay claim to what they can personally (and in voluntary cooperation with others) homestead, produce, and/or purchase?

If you strive to be an “independent thinker” hoping for “truth” to leak in to you, maybe this
would be a good place to start. If you became an advocate of a free society, then you would
certainly be able to institute georgism among georgist land owners across any artificial borders.
With this voluntary association, you could collect your “tax” from georgists and distribute it
to all the members of your society as you wish. You just couldn’t impose the scheme on others.
So if your plan is beneficial you will attract more and more people to it. If not, then you won’t.

Now if you reject this peaceful and ethical solution which involves no violence nor threats of
violence against others, then clearly your real interests would seem to lie elsewhere. You should
ask yourself of what value your principles are if, in order to carry them out, you must perpetrate
violence against otherwise peaceful people who have committed no other crime but the
purchase of property.

Keith Gardner April 4, 2010 at 4:27 am

You don’t understand that land title is statist theft. Land is an alienabled right for all people.

And I assume by the propaganda you consume that you also don’t understand that commodity-based fiat corrupts and distorts the free market, in both the commodity in which the currency is based and across all commodity markets. And I also assume by the propaganda you consume that you also don’t understand that deflation is theft.

Currency is very distinct from commodities. Currency should maintain value so it doesn’t distort commodity markets. Commodities should change in value in response to supply and demand.

Zorg April 4, 2010 at 1:18 pm

“You don’t understand that land title is statist theft.”

You’re right. I don’t understand that. But I do understand the communist dogma that
“Property is theft.” Is that what you mean?

But then if land title is theft, how can “the community” own land and demand rent?
I think what you must mean is that it is theft for some but not for others. You also must
mean that demanding rent under threat of violence by several people is not theft
but NOT demanding rent under threat of violence by one person is!

Do you know what a contradiction is?

“Land is an alienabled right for all people.”

I think you mean “inalienable”. But that doesn’t help me understand what you mean either.
Which land is an inalienable right to which people for what reason? I do not own any land.
Do you? If you do, may I claim my right? If you don’t, maybe a friend or family member of
yours is hoarding what is rightfully mine? Can you put me in contact with them or with
georgists on some internet forum who are eager to see justice done by divesting themselves
of the land they have stolen from me?

And I know other people who do not own any land. They would also be interested in claiming
their rightful property from the evil land-hoarding hordes of your acquaintance.

They can’t charge a price for it either since it’s my right, so I’m eager to sign the paperwork
asap. Let me know the details.

If you or your friends balk at the idea, then I might start to doubt your sincerity just like I
doubt the sincerity of every other something-for-nothing scheme pushed by people who
claim to have rights and powers that others don’t.

“you also don’t understand that commodity-based fiat corrupts and distorts the free market”

You’re right again. I don’t understand, first of all, what “commodity-based fiat” is, nor that it
distorts the free market. I never heard of such a thing. What is it? It sounds like it should be
banned immediately lest it harm the children.

“you also don’t understand that deflation is theft.”

Sure. Well, everything is theft, right? Except when it’s not, right? Yeah, I know the routine.

“Currency is very distinct from commodities. Currency should maintain value so it doesn’t distort commodity markets. Commodities should change in value in response to supply and demand.”

You have a currency which is not a commodity and not tied to commodities and
never changes “value” because it is not subject to supply and demand? How is that possible?
What is it?

How are you going to implement it? By force, right? Which sorts of punishments do you have
in mind for people who refuse to use it? Perhaps the same punishments designed for those
who refuse to pay the tribute?

How did you come to the conclusion that money is an edict you can pronounce over others
against their will? Do you understand that that is the only way such an absurdity can exist?

You should spend some time learning about what money is. It will help if you can remember
that trade means voluntary trade and not force. If you’re against voluntary trade then there’s
really no use in discussing money since everything in the make-makes-right philosophy
simply boils down to which gang can exercise the most control over its intended victims. So
therefore, whatever gang this happens to be then defines what money and property are.
And if you don’t like it, you will be punished, and that’s the end of it.

Keith Gardner December 28, 2010 at 5:24 am

“property is theft” is anarchist dogma. i don’t believe in anarchism because i believe it to be an impossible state of society since force will always rule in some capacity when there is more than one person in a given region. the austrian school of economics believes in anarchy. their brand of anarchism is called anarcho-capitalism. anarcho-capitalists oddly believe in state intervention. they believe the state should write fiction giving title to land. they also believe the state should intervene in commodity markets by declaring that gold should be money, giving gold fictional value in markets, giving those with gold a free lunch at the expense of economic growth.

if you believe in your premise of anarcho-capitalism and want to use it for your arguments, take it all the way. don’t stop at the point where the state gives you the right steal a free lunch and force people to be homeless because they can’t afford to put their feet on the ground. you’re not a classical liberal. you never will be because you’re funded by the bankers who want to monopolize the money supply and the planet. the founding fathers agreed with henry george. they didn’t agree with the rockefeller foundation libertarians. you are a tyrant. classical liberalism was about liberty versus tyranny, not anarchism vs. statism.

CalgaryGuy April 26, 2011 at 10:03 pm

In a free market for money, if people choose to use gold as a medium of exchange that is not derived from a state declaration. No one would be forced to accept gold as legal tender as they are with paper currency.

In a post below you talk about corporations being a fictional person, who do you think creates that fiction, the state? In an anarcho-capitalism world that doesn’t believe in the state, what makes you think there would be corporations?

My problem with georgism/geoism/geolibertarianism (whatever flavour you want to call youself) is who would truly own anything? My house is built with wood and other natural materials, clearly I could pay for the labour involved to put those materials together but under geo I would have no claim on the wood or the metal nails holding it together, etc. Even if you restrict it to just unimproved land use fees at market value, who would ever build anything? Even if I owned the building (which is still in doubt), I have no guarantee that I would control the land it sits on next year.

Keith Gardner December 28, 2010 at 5:31 am

“property is theft” is anarchism. anarchism is an impossible state of society. you debate as if you can remove all elements of the state because statism is evil. yet, you seem to like to believe the state should write fiction granting you title to land. you seem to believe the state should write fiction declaring gold to be legal tender. you seem to believe that the state should corrupt the free market for gold by declaring it money. you would like that, wouldn’t you? you love the state rigging the market to grant you a free lunch with your land and gold. too bad the classical liberals and the bible disagree with the anarcho-capitalists.

Graeme Bird May 26, 2010 at 8:42 pm

“To follow the logic of the Georgists to it’s completion opens the door to socialism, because we didn’t earn the benefit that the underlying untransformed land provides; and we didn’t earn the improved value we brought to the land by transforming it with our labor, as we didn’t earn the skills.”

Surely its possible to meet Henry part-way here? Everyones model is of necessity a simplification of reality. I read Rothbards refutation of Georgism, and I accept it as a refutation of 100% Georgism. I don’t accept it as a refutation of meeting Henry halfway. Or perhaps one eighth of the way. I think some of the observations Henry made, have to be taken into account.

It may be that we accept the land tax in the medium-term on our way to anarcho-capitalism. It may be that we don’t accept the land-tax at all, and find a better way around Georgist realities.

As I stress, Rothbards refutation, to me didn’t seem total. It only appeared to be a total refutation of the fullest application of Georgism.

As a matter of practical politics and economic policy we might take account of Georgism by prioritizing that there be no vertical restrictions on land-use. We might stress to the laity that whereas horizontal restrictions are one thing, but that vertical restrictions are always anti-social.

In my country you have these first-home-owner buyers grants. Now of course you’d want to get rid of them. But an appreciation of Georgism might have us at least cutting them back on low-rise. We have capital gains tax on house sales, but maybe that could be waved, if the person is selling out to the neighbor, to consolidate the property, such that high-rise might be plausibly built on the consolidated block.

You work from where you are now. And there is many ways to appreciate Georgist observations, without going the whole way or even without instituting the land tax. I think the important point would be that if tax reform isn’t strongly revenue negative it must be avoided like the plague. I think that reform ought to try to avoid destroying a fellows cash-flow and capital value at the same time.

Georgists must realise that sound money reform may collapse many asset values by as much as two-thirds. Bearing that in mind, even if they are partially right, the Georgist realities may be taken into account, without recourse to any new land tax, any time in the next few decades.

Graeme Bird May 26, 2010 at 9:17 pm

“Did Ghandi earn his natural gift of being an extremely kind and wise man?”

A bit of a doofus in sober reality.

” Did Stephen Hawking earn his genius?”

Seldom talks about anything real.

” Did Micheal Jordan earn the natural talent…”

Now you are talking.

Keith Gardner December 28, 2010 at 5:05 am

Untax property and let me know how great that free lunch was when you sold the land of your children to a corporation. The state writing fiction claiming that a fictional person owns God’s Earth sounds like “anarcho-capitalism” to me. Look mom, freedumb works!!!

Keith Gardner December 28, 2010 at 5:41 am

debating austrians is a lot like debating bill clinton. they’re slippery, depending on your definition of “is” of course, which tends to change to suit one’s desire for a free lunch by the grace of the state writing fiction.

El Tonno December 28, 2010 at 7:01 am

Pffff…..

More intelligent things have come out of the local bum’s tea party convention.

Beefcake the Mighty December 28, 2010 at 7:13 am

LOL, this from a guy (Gardner) who doesn’t understand the difference between value and price.

Keith Gardner December 7, 2011 at 10:55 pm

The Georgists are coming to take the Libertarian Party back from the Rockefeller Foundation’s (UN, Federal Reserve, Standard Oil, Chase Bank) Austrian School of Economics.

According to Austrian deduction (reduction), 1 equals 2. The Austrian School of Economics is the same junk political economics as Karl Marx. It was used to setup the false neo-liberal left/right paradigm. Austrian Economics is Marxism with a pretty ribbon to attract those looking to steal a free lunch with gold and land.

I’m a Libertarian. I believe in the separation of commodity markets and state.

Michiel Boesveld July 15, 2011 at 10:39 am

How wrong can you be; it is very well possible to determine the (market)value of untransformed land. In Amsterdam the land is leased by the city. For some new developments the rent is determined by offers of real etstate developers. That rent is the value of untransformed land!

Keith Gardner December 7, 2011 at 11:04 pm

Milton Friedman promoted the idea of the citizen dividend and paying off the national debt with Greenbacks. I think Milton Friedman was a closet Georgist who spoke the truth when the bankers weren’t looking. He even gave good advice to Bill Still by steering him away from gold. Bill Still will win the nomination for President on the LP ticket.

Keith Gardner December 7, 2011 at 11:09 pm

I’m a Libertarian. I believe in the separation of commodity markets and state.

I do not believe Austrian deduction that 1 equals 2. I do not believe money is gold. I do not believe land is human toil nor the fruits of human toil.

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