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Source link: http://archive.mises.org/4926/henry-george-and-the-tariff-question/

Henry George and the Tariff Question

April 19, 2006 by

The problem identified by Henry George, in Protection or Free Trade, is that of poverty, and more specifically, wages and unemployment. What follows from that is George’s systematic and all-embracing dissertation of the effects that protectionist and free-trade policies have on the wealth of a nation and its individuals. Naturally, he arrives at a conclusion that is decidedly in favor or free trade — as opposed to protective prescriptions — as a surefire solution to the ills of poverty. FULL ARTICLE

{ 80 comments }

Trevor Acorn April 19, 2006 at 8:19 am

Excellent, Excellent article. Thanks for taking the time to put this together.

BillG (not Gates) April 19, 2006 at 9:37 am

Karen De Coster wrote (copied from Wikipedia):

“However, unlike more individualist forms of libertarianism, geolibertarianism holds that all land is owned collectively by society and may not become private property. Therefore, if individuals use the land they must pay rent to the community for doing so. They hold that private property is the product of labor, and since land itself was not created by human labor, it cannot rightfully be considered the property of any individual.Geolibertarians generally advocate distributing the land rent to the community via a land value tax, as proposed by Henry George and others before him.”

BillG responds:

not to pick nits but…

I think it more clear to say that:

geo-libertarians holds that all land is original held in common and that it is just to enclose it for personal exclusive use up to Locke’s proviso (enough and as good left in common for others) but that beyond the proviso the location starts to accrue economic rent that must remain owned in common (as an individual right) while the use, exclusion, possession, transferability remains owned privately – so that the absolute rights to labor and hence the right of self-ownership of all those being excluded is not violated.

if the economic rent is retained by the landowner then it FORCES a legal and material obligation on those being excluded.

some geo-libertarians believe that it is ok for the economic rent to be collected, retained and spent by the state as public revenue so longas it is spent in such a way as to benefit all equally.

others believe that the ecoonomic rent must be shared directly and equally between individual members of the community inorder to not conflate collective ownership (a group right) with ownership in common (an individual right).

Paul Marks April 19, 2006 at 9:38 am

Perhaps I missed it but I do not think that Murry Rothbard’s careful refutation of Henry George’s opinions on land is mentioned in the article.

Certainly the article is about Henry George free trader – but this thinker is mainly remembered for his opinions on land, so the refutation should have been mentioned.

Many economists do not take enough care with Henry George’s opinions on land (perhaps they are uneasy about the connection with the opinions of David Ricardo, James and John Stuart Mill and even Herbert Spencer in his youth – and so just want to pass over the subject as quickly as possible) but Rothbard took great care over the subject.

I hold that Henry George was utterly wrong about land – but his views should be treated with respect, and a careful refutation is the correct way of showing this respect.

BillG (not Gates) April 19, 2006 at 9:49 am

Paul Marks wrote:

“Perhaps I missed it but I do not think that Murry Rothbard’s careful refutation of Henry George’s opinions on land is mentioned in the article.

Certainly the article is about Henry George free trader – but this thinker is mainly remembered for his opinions on land, so the refutation should have been mentioned.”

BillG responds:

and Rothbards refutation has been refuted by Dr. Harold Kyriazi in “Libertarian Party at Sea on Land”

Here are a few examples from that work:

“Well, what about idle land? Should the sight of it alarm us? On the contrary, we should thank our stars for one of the great economic facts of nature: that labor is scarce relative to land…Since labor is scarce relative to land, and much land must therefore remain idle, any attempt to force all land into production would bring economic disaster. Forcing all land into use would take labor and capital away from more productive uses, and compel their wasteful employment on land, a disservice to consumers. ” [Rothbard]

of course, the economic rent shared between neighbors in a community would and could do no such thing, as those who strive to put idle land into productive use would have to bid against other land users for labor, and only the best uses of labor and land would win out.

thus, rather than forcing all land into use, sharing economic rent would discourage all but the most productive use of land, just as any market tends to allocate resources most wisely.

Rothbard’s last sentence should be phrased in a way that makes more sense:

“Forcing land users to pass over ideal idle land and utilize marginal land instead, is wasteful of human labor and natural opportunities, a disservice to all mankind and a boon only to landlords and land speculators.”

david Chaplin April 19, 2006 at 10:13 am

the writer closed with a schumpeter quote: ‘ He was a self-taught economist, but he was an economist’. I’d warrant thats the best kind!
( Richard Feynman tended to the same view in physics…..).
What follows is regrettably tangential to the main point of the article, but I hope Ill be forgiven. Take it from me, the more ‘trained’ an economist is, the less likely he is to have any insight at all. I studied economics at both undergrad and post-grad level, and was fed nothing but the tired old neoclassical/Keynesian orthodoxy, carefully structured around the expositional and largely ficticious ‘debates’ between components of that orthodoxy – indeed, the entire honours course in monetary economics was structured as a stylised ‘debate’ between the ‘Keynesian’ and ‘monetarist’ schools, played out on the IS/LM field of Hicks’s making – a sterile and bogus debate three decades old,

Im embarrassed to say that during that entire time, ( 4 years!) the only academic exposure I ever got to AUstrian thinking was a dismissive one-paragraph reference in a textbook to Austrians as a school that ‘tends to focus on the process of adjustment to equilibrium, rather than the equilibrium itself’ Still, in the manner of many students, I fed the professors what they wanted, just the way they liked it, (y’know … stick to the party line, but inject a little bit of criticism to show some independent thought to differnetiate yourself from the rest of the drones), and got very good marks all the way through. But they didn’t give me much by way of understanding – held it back.

Just about everything I know about economics today I have absorbed or thought through long after having graduated! And I only stumbled into bona fide Austrian thinking after having ‘independently’, if fuzzily and sloppily, come to the same sort of conclusions that are standard fare, old hat, for Austrians, that emerged from my attempts to resolve and make sense of the fundamental shortcomings of the General Equilibrium framework, and to understand the Keynesian muddle and what he actually meant.

Later, a happy coincidence placed mises.org in front of me, and I discovered with mixed feelings that most ( no, all!) of what I had fondly thought to have been my own half-baked ideas and hunches, were indeed on the right track, and look at the intellectual heritage and rigour behind it! verily, a road to damascus experience.

yes, ‘Self-taught’ in economics is no basis for derision or qualified praise. I suspect that had Henry G not been self-taught, and had studied in th eorthodox schools of his day, he may never have left these thoughts!

thanks – nice article.

Paul Marks April 19, 2006 at 10:26 am

Why should a landowner keep land “idle” – if he is interested in maximising his income he will either use it himself or sell or rent it to someone else.

However, if someone wishes to keep his land unused (for example as a nature reserve) that is his choice and nothing to do with Henry George or anyone else.

(by Rothbard’s refutation I was thinking of the technical economic arguments in “Man, Economy and State” which, I admit, that you touch on but, of course, there is more to go into – really the stuff, on both sides, must be read in full – we can not deal with it in a comment thread).

As for the Lockian Proviso – well this is to move into theology (and I do NOT mean that as an insult).

Locke held (like Pufendorf) that the Book of Genesis means that the Earth is given by God to mankind collectively hence the need to justify private ownership (even after their religion fell away one can still see this view in James Mill and the young Herbert Spencer).

Other thinkers (such as Grotius) did not interpret the Bible this way – and held that unoccupied land is unowned (not owned by all of mankind) till someone claims it by occupation.

So there is not need to “justify” private ownership.

Both Common Law and Roman Law follow this principle.

BillG (not Gates) April 19, 2006 at 10:58 am

Paul,

I believe collective ownership and ownership in common are actually opposite with one being a group right needing prior approval from all the other owners (consensus) or their delegated authority (the state or proteection agency) before use/access whereas ownership in common is an individual right where the sole role of the state is to protect individual property rights from infringemnt from other individuals after the fact.

if you treat the material world that exists prior to labor as unowned rather than owned in common you will never be able to (at some specific point) rectify the statement that classical liberalism/libertarianism is based on the fundamental principle of the right (not having to be purchased or gifted) self-ownership.

this is the neo-classical school’s achilles heel of which Austrians are thoroughly entrenched.

Paul Edwards April 19, 2006 at 11:01 am

Nice article.

To amplify this point,

“In short, in order for an import duty to fall on the backs of foreign producers, it must not add to the price of the goods. On the contrary, “the only possible way in which an import duty can encourage home producers is by adding to the price” (George 1886, p. 87). This attracts more producers to the industry in the hopes of the superior profits that are to be obtained. Thus import duties do add to the price of goods, and must do so in order to “encourage” domestic producers to engage in the competitive production of goods that are otherwise more efficiently gained through trade with foreign producers. The procurement of premium profits is one intention of protective tariffs in the first place.”

Yes, and the manner in which this price increase obtains, is through a reduction in foreign suppliers of the affected imported commodity. Although, in the short run, the tariff could not do anything but fall entirely on the backs of foreign producers, once the marginal importers are eliminated due to this added cost, the supply is then reduced, and prices must therefore rise.

BillG (not Gates) April 19, 2006 at 11:08 am

Paul Marks wrote:

“if he is interested in maximising his income he will either use it himself or sell or rent it to someone else.”

BillG responds:

he is rewarded by maximizing his future income via speculation and idleness at the expense of the property rights to labor of those he excludes.

speculation to capture land rent is then placed in direct competition with labor, sanctioned and enforced by the state (or dlegated protective agency), and labor is forced into further competition as wages are driven to subsistence levels (after the economic rent has been extracted).

Paul Edwards April 19, 2006 at 11:30 am

BillG,

The libertarian ethic precludes the concept of an implied collective ownership of what we would call “unowned land” because it necessarily leads to conflict, which any ethic is intended to allow for the avoidance of, rather than encourage.

The only ethic that allows humans to avoid conflict is the principle of homesteading and the institution of private property, starting with self-ownership. Period. There must be an objective connection between property and its owner. There can be no collective ownership of property or a question of whether the original appropriator (homesteader) will have to ask permission of other late-comers to confirm that he is indeed justified in claiming ownership the property he has homesteaded.

Allowing late-comers to arbitrarily assert by decree, ownership over property already appropriated by someone else is a simple recipe for conflict. To avoid such conflict, objective events that have a time and place and an action that can be known to tie owner to property must be presupposed. There is no room in this for Locke’s proviso which is entirely arbitrary, and compels an owner of land into a perpetual condition of possible non-ownership by a late-comer’s decree. That would only create conflict. Late-comers must find their own previously unowned land or trade their legitimately acquired property with legitimate land owners to obtain title to land as well.

A consequence of this is also that there are only individual rights and no such thing as a group right. The individuals of a group each have rights; while the group is just an abstraction of the several individuals possessing these rights.

BillG (not Gates) April 19, 2006 at 12:22 pm

Paul Edwards wrote:

“The libertarian ethic precludes the concept of an implied collective ownership of what we would call “unowned land” because it necessarily leads to conflict, which any ethic is intended to allow for the avoidance of, rather than encourage.”

BillG responds:

I agree…that is why I corrected the Wiki statement to read “ownership in common” rather than “collective ownership”

collective ownership means prior consent of all owners (or delegated authority) before use hence a group right.

ownership in common means free to use/access so long as one’s use/access does not infringe upon any other individual’s equal access/use right.

one must take action before being judged as to whether you are infringing…

Paul Edwards wrote:

“Allowing late-comers to arbitrarily assert by decree, ownership over property already appropriated by someone else is a simple recipe for conflict.”

BillG responds:

it is not necessary to claim common ownership over the land that has already been justly enclosed via appropriation just the economic rent to insure the property rights of the excluded are absolute in regards to their labor.

the conflict is inherent to the nature of humanity.

inorder to exist we must occupy space and two people can not exist in the exact same location at the same time without one using force against the other.

Paul Edwards wrote:

“To avoid such conflict, objective events that have a time and place and an action that can be known to tie owner to property must be presupposed. There is no room in this for Locke’s proviso which is entirely arbitrary, and compels an owner of land into a perpetual condition of possible non-ownership by a late-comer’s decree.”

BillG responds:

yes, the objective events are market forces (not personal utility) that determine the value of a location as two or more people compete for access beyond Locke’s proviso.

ownership of land is a bundle of rights not a single right that include:

1. use
2. possession
3. exclusion
4. transferability

all of these remain owned by private individuals as justly enclosed from the commons.

it is only the equivalent of land ownership it’s return that MUST remain owned in common to protect the absolute property right to labor of those being excluded.

Paul Edwards wrote:

“Late-comers must find their own previously unowned land or trade their legitimately acquired property with legitimate land owners to obtain title to land as well.”

BillG responds:

if you believe this statement to be true then there is no logical way that you can believe that we all have a right (not to be bought or gifted) to self-ownership because to exist is to occupy some location somewhere…if all locations are legally occupied then one can not access the earth itself to derive our sustenance with paying a tribute to someone else.

Paul Edwards wrote:

“A consequence of this is also that there are only individual rights and no such thing as a group right. The individuals of a group each have rights; while the group is just an abstraction of the several individuals possessing these rights.”

BillG responds:

I agree – I don’t believe here is such a thing as group rights.

Ken Zahringer April 19, 2006 at 1:27 pm

This is a nice theoretical debate, guys, but I have some practical considerations to bring up.

1) BillG, all locations are not legally occupied, and that condition will likely never occur. When space becomes scarce enough in a particular area, it becomes profitable to create more, in the form of multi-story buildings, for example. What you are saying, in essence, is that an increase in demand for space will not result in an increase in supply. I think that is a bit of a stretch.

2) Say I accept the concept of paying rent to “the community”. How, then, do you assess, collect, and distribute this rent without some organization that would make the IRS look like a Sunday School class? How do you calculate rent when there is only one landlord? This would necessarily become a government function, or government by another name, with all the attendant power plays, political decision making, rent-seeking, etc. Sounds a lot like feudalism to me, with Congress as King.

You make some good points about the lack of a firm moral basis for private land ownership, and it certainly different than ownership of the produce of my labor or capital. And I’ll admit I don’t have a good answer for you. Yet. But it does seem that your proposed cure is at best no better than the supposed problem, and probably a lot worse.

It seems to me that most of the purported problems with private ownership of land are like the other “failures” of capitalism. They are due not to the unfettered activity of the market, but rather to power and privilege interfering with the market.

Yancey Ward April 19, 2006 at 1:58 pm

Ken Zahringer,

You asked how would one calculate rent when there is only one landlord. There are two answers, I think: (1) a purely arbitrary number is assigned and (2) whenever a lease is up, the new lease is auctioned off, and highest bidder become the lessee, and the bid becomes the entire rent. Where I disagree with a lot of the geoists on this matter is that many of them want either option (1) or a combination of (1) and (2) in which parcels for which there is only one bidder (the old lessee with his house, for example), then a rent is assigned based on the bids for contested lots.

Paul Edwards April 19, 2006 at 2:03 pm

Hi BillG,

“it is not necessary to claim common ownership over the land that has already been justly enclosed via appropriation just the economic rent”

But the ownership of the property and its services which is the rent it produces are both exclusively that of the original appropriator. For a late comer to claim a right to the income this land produces is the same as a late comer claiming at least partial ownership of this land. What right does one have to the income that property produces without an implicit right to the ownership in the property? The two are not separable in a free market.

“…there is no logical way that you can believe that we all have a right (not to be bought or gifted) to self-ownership because to exist is to occupy some location somewhere…if all locations are legally occupied then one can not access the earth itself to derive our sustenance with[out] paying a tribute to someone else.”

But to exist implies many things in addition to the need for standing room, not the least of which is to eat and wear clothing. If I am not a producer of food or clothing, am I justified in forcing the farmer to subsidize my food consumption or the textiles to subsidize my clothing? I have to pay for these things. I do not consider them tributes. My right to life, liberty and property are not infringed by the necessity of me paying for these things; rather they are affirmed for me and all others.

Paying for land is no less upright than paying for food. If all the land was legitimately owned and you wished access to some, you should have to pay to rent or buy some land from an owner. This does not imply lack of self-ownership, it implies property rights. Just as the farmer must not be forced to subsidize other’s food consumption, the land owner must not be forced to subsidize other’s need for standing room.

We use land, capital and labor, with which to produce, and from this production, we are able to pay for rent or the mortgage, food etc. These are all necessities for survival, as are many others. None warrant the confiscation of property for their attainment.

BillG (not Gates) April 19, 2006 at 2:47 pm

Paul Edwards wrote:

“But the ownership of the property and its services which is the rent it produces are both exclusively that of the original appropriator.”

BillG responds:

but let’s be clear Paul – only at the expense of the superior absolute rights to the fruits of labor of those being excluded (beyond Locke’s proviso).

there are no fruits of labor involved by the landowner:

1. they don’t physically produce the land
2. they don’t physically participate in the creation of the unimproved land values (economic rent)
3. in an economic rent sharing scenario there would be no purchase price to land.

where exactly are the landowner’s labor inputs being appropriated?

Paul Edwards wrote:

“For a late comer to claim a right to the income this land produces is the same as a late comer claiming at least partial ownership of this land. What right does one have to the income that property produces without an implicit right to the ownership in the property? The two are not separable in a free market.”

BillG responds:

ownership of land is not a single right but actually a bundle of rights – any one of which can be alienated by the owner.

-use
-exclusion
-possession
-transferability
-economic rent (beyond Locke’s proviso)

if we didn’t have economic rent attach to all locations beyond Locke’s proviso then in order to assert my “equal liberty doctrine” I would have to be arguing that the lands would need to be continuously apportioned so as to give everyone an equal share.

but luckily that is not necessary as the economic rent is the EQUIVALENT of ownership.

of course if you start with the proposition that all land starts out as owned in common and enclosed justly as exclusive private use up to Locke’s proviso then this would make a heckuva lot more sense to you…then all that is required is the acknowledgement that only the economic rent needs to remain owned in common to protect the absolute property rights to labor of the excluded.

Paul Edwards wrote:

“But to exist implies many things in addition to the need for standing room, not the least of which is to eat and wear clothing. If I am not a producer of food or clothing, am I justified in forcing the farmer to subsidize my food consumption or the textiles to subsidize my clothing? I have to pay for these things. I do not consider them tributes. My right to life, liberty and property are not infringed by the necessity of me paying for these things; rather they are affirmed for me and all others.”

BillG responds:

food and clothing are the products of someone’s labor whereas land and the rental value of land is not.

infact if I had direct access to land I could labor to produce these things myself – all that is required is an equal access opportunity right but no guarantees…barring that an equal sharing of the economic rent will suffice.

if there were a way to do this, would you ever agree that people must pay someone else a tribute to breath and call it freedom?

land is not a necessity…it is synonomous with life itself as inorder to exist by definition you must occupy some space somewhere.

Paul Edwards wrote:

“Paying for land is no less upright than paying for food. If all the land was legitimately owned and you wished access to some, you should have to pay to rent or buy some land from an owner. This does not imply lack of self-ownership, it implies property rights. Just as the farmer must not be forced to subsidize other’s food consumption, the land owner must not be forced to subsidize other’s need for standing room.

We use land, capital and labor, with which to produce, and from this production, we are able to pay for rent or the mortgage, food etc. These are all necessities for survival, as are many others. None warrant the confiscation of property for their attainment.”

BillG responds:

if self-ownership is a right that neither has to be purchased or gifted then how can one exist without occupying space – somewhere?

and if it is all legally claimed then you must pay someone which violates your right of self-ownership.

BillG (not Gates) April 19, 2006 at 3:08 pm

KenZ wrote:

“When space becomes scarce enough in a particular area, it becomes profitable to create more, in the form of multi-story buildings, for example. What you are saying, in essence, is that an increase in demand for space will not result in an increase in supply. I think that is a bit of a stretch.”

BillG responds:

the economic rent being the unimproved land values that need to be shared, you are describing improved values via the landowner’s labor (or hired) and thus strictly private property.

KenZ wrote:

“How, then, do you assess, collect, and distribute this rent without some organization that would make the IRS look like a Sunday School class?”

BillG reponds:

don’t they have property taxes were you are Ken?
just drop off the assessment and collection of taxes on buildings and viola – a Land Value Tax system!

how hard is it to wire a quarterly payment into everyone’s bank account?

I did it last night to the IRS…

KenZ wrote:

“How do you calculate rent when there is only one landlord?”

BillG responds:

which one landlord are you referring to Ken?

there would be no change in the fact that private individuals own the bundle rights of land ownership (use, exclusion, possession, transferability)

KenZ wrote:

“Sounds a lot like feudalism to me, with Congress as King”

BillG responds:

I believe I am actually remedying fuedalism which is the system we live under today were for most, merely existing requires a payment as tribute to a landLORD.

KenZ wrote:

“And I’ll admit I don’t have a good answer for you. Yet. But it does seem that your proposed cure is at best no better than the supposed problem, and probably a lot worse.”

BillG responds:

if by “a lot worse” you mean that absolute rights to the fruits of your labor are protected for ALL then I’d have to respectfully disagree with you…

KenZ wrote:

“It seems to me that most of the purported problems with private ownership of land are like the other “failures” of capitalism. They are due not to the unfettered activity of the market, but rather to power and privilege interfering with the market.”

BillG responds:

and the libertarians biggest blind spot is not realizing that the state via government granted privilege allows the landowner’s to monopolize the economic rent at the expense of the right to self-ownership because it FORCES a legal and monetary obligation on them that can only be satisfied by forfeiting their labor products – a tax in kind but not in substance.

BillG (not Gates) April 19, 2006 at 3:15 pm

Yancey Ward wrote:

“a purely arbitrary number is assigned” in response to a question about how land values are determined.

BillG responds:

it is only purely arbitrary if one confuses personal utility value with market value…

the market, the public and the community are all the same thing.

we just call it the market when it expresses
itself economically, the public when it expresses itself politically, and the community (or society) when it expresses itself socially but in all cases, it is the aggregate effect of individual actions.

while each individual action is subjective and appears arbitrary, the aggregate effects are easily objectiely measured.

David J. Heinrich April 19, 2006 at 3:20 pm

Bill G.,

I’ve followed the Georgists for a while, and I must confess, this whole “we need breathing room” (space to stand on) thing seems absurd to me. Of course, we “need” breathing room, but we also “need” food, and many other things; doesn’t mean we’re entitled to steal it.

(1) Just because you’re born, doesn’t mean you’re entitled to anything from me. Georgist doctrine on land says I (legally) owe you something just because you exist.

(2) We may not create the actual base land itself — but only the improvements to it — but we do discover it. To discover land is an act of labor itself. It requires journey, movement, and so-on and so-forth. In short, it requires venturing out of the relative known safety of where-ever you are currently living to find something better. It is hardly just that after I have discovered valuable land (say, a waterfall and a fertile field next to it), you start taxing me on the “inherent land value”.

(3) It should also be noted that although we do not create base land, we also do not create our bodies. Hardly means we’re not entitled to the right to our own bodies.

(4) It is ridiculous to posit land becoming so scarce that we wouldn’t have a place to live or stand. If land starts to be come extremely scarce, there are economic incentives to either build more land — either by building highrise buildings, or digging into the earth — or to discover more land (e.g., in the distant future, space; or, in the more near future, homesteading and privatization of the ocean).

Yancey Ward April 19, 2006 at 3:25 pm

Bill G,

So if community A decides the economic rent is $1000/acre/year, then that is a market value? Sorry, but that sounds arbitrary to me. I like my auction system much better since it allows those excluded souls to determine the extent of their exclusion, and if I occupy land that no one else bids for, then I bid zero and pay no rent.

Paul Edwards April 19, 2006 at 4:22 pm

BillG,

I’m going to wait for you to answer this important question of David’s.

“It should also be noted that although we do not create base land, we also do not create our bodies. Hardly means we’re not entitled to the right to our own bodies.”

and to amplify, do we not owe others and do they not owe us some say in what we each do with our nature given personal talents, and do we not all own a share in the incomes of others resulting from them, given that certainly some of us earn more not just because of the improvements we make on ourselves, but also due to the talent and gifts we are born with.

BillG (not Gates) April 19, 2006 at 4:28 pm

Yancey Ward wrote:

“if community A decides the economic rent is $1000/acre/year, then that is a market value? Sorry, but that sounds arbitrary to me.”

BillG responds:

as I said: while each individual action is subjective and appears arbitrary, the aggregate effects are easily objectively measured.

where is the “objectively measured” referenced in your statement?

it would include the past sales & lease data via auction that you suggest.

BillG (not Gates) April 19, 2006 at 5:02 pm

David H wrote:

“I’ve followed the Georgists for a while”

BillG responds:

from the gist of your (response with all due respect) apparently not very closely as we shall see..

David H wrote:

“I must confess, this whole “we need breathing room” (space to stand on) thing seems absurd to me. Of course, we “need” breathing room, but we also “need” food, and many other things; doesn’t mean we’re entitled to steal it.”

BillG responds:

we don’t “need” space to stand on…

to exist IS LITERALLY to occupy space (they are one in the same) as it is physically impossible to exist without occupying space – no?

any other things that you list that we need are produced via human labor and thus private property.

David H wrote:

“Just because you’re born, doesn’t mean you’re entitled to anything from me. Georgist doctrine on land says I (legally) owe you something just because you exist.”

BillG responds:

actually what Georgist doctrine says is that if we all have an absolute right to our labor as the natural extension of self-ownership then inorder to create a just society based on the concept of equal liberty no one should have to pay a tribute to another who has been privileged by the state (a right does not have to be purchased or gifted presumably we are born with rights) merely to exist and access the earth inorder to excercise the very right we are suppose to be upholding and that provides all of our sustenance…

David H wrote:

“We may not create the actual base land itself — but only the improvements to it — but we do discover it. To discover land is an act of labor itself.”

BillG responds:

and so does being born require a certain amount of labor on the part of the baby as it is part and parcel of human nature to asserting our independence, a life long process…

David H wrote:

“It is hardly just that after I have discovered valuable land (say, a waterfall and a fertile field next to it), you start taxing me on the “inherent land value”.”

BillG responds:

it is just for you to retain the bundled private ownership rights that reward your individual labor efforts (use, possession, exclusion, transferability) via original appropriation so long as your exclusive use does not impose an economic cost on anyone else.

so it is only at the point of imposing economic harm (Locke’s proviso) that you are required to share the economic rent…

David H. wrote:

“It should also be noted that although we do not create base land, we also do not create our bodies. Hardly means we’re not entitled to the right to our own bodies.”

BillG responds:

we are created via our parent’s labor and in utero (within the space that the mother is occupying) the fetus goes through the initial stages of the process of asserting their individuality/independence at the same time as the parents “gift” that life to the forming child.

David H wrote:

“It is ridiculous to posit land becoming so scarce that we wouldn’t have a place to live or stand. If land starts to be come extremely scarce, there are economic incentives to either build more land — either by building highrise buildings, or digging into the earth — or to discover more land (e.g., in the distant future, space; or, in the more near future, homesteading and privatization of the ocean).”

BillG responds:

I only posit that all land is legally occupied.

building more land is not unimproved value but rather improved value and thus private property.

homesteading all other space in the universe is perfect legitimate and just until and unless economic rent appears – then it must be shared to achieve simply justice based on equal liberty.

Paul Edwards April 19, 2006 at 5:53 pm

BillG,

So much in Georgist theory, seems to hinge on the fact that we did not create land, that makes it important to understand precisely what it is about not having created land that makes land ownership not fully possible, but yet self-ownership possible, given that we did not create ourselves either. Why does the fact that we did not create ourselves, not render self-ownership laden with provisos and exceptions regarding who has what claim on the income we earn which will naturally be influenced by natural talents we have been given at birth and had nothing to do with creating them.

What is it between a human and self, given that he did not create his self that is different between a human and land, which he also did not create, that allows him to claim self ownership, yet unable to claim complete homesteading based land ownership?

Since we did not create ourselves, would you not argue that we owe others and they owe us some say in what we each do with our nature given personal talents, and do we not all own a share in the incomes of others resulting from them, given the certainty that some of us earn more not just because of the improvements we make on ourselves, but also due to the talent and gifts we are born with and did not ourselves create.

BillG (not Gates) April 19, 2006 at 7:10 pm

Paul-

our parents make us via their labor…
we immediately start to assert (take action) to establish our individuality in utero.

as the fetus asserts their independence the parents at the same time “gift” their life to them having created them from their labor…

David J. Heinrich April 19, 2006 at 8:55 pm

Bill G,

Thank you for your thoughtful response.

1. Before continuing, I’d note that all Georgist schemes must require a State of some kind; there is no other way to tax. Now, once you create a State, you create all kinds of inherent and unavoidable problems. Working from within the Georgist scheme (but not the libertarian scheme), a State only engaging in Land Value Tax (and no other activities) would not be inherently criminal. However, the practical reality is that there are economic incentives to expand, to distort, etc.

Let’s just say that I accept this argument about the economic rent of the land. That still hardly justifies creating a State.

2. True, it is physically impossible to exist without occupying space. It is also physically impossible to exist (for any length of time) without eating food. That hardly means that person X is entitled to stay on the land of person Y, anymore than he would be entitlted to eat food produced by Y.

As I said before, land-ownership is just as justified as the ownership of anything else. You might say that there is some natural “value” of the land that we didn’t create. However, I’d even argue that’s really not valid. You created the value of the land by discovering that land (you then utilized that value by homesteading the land).

Let’s say that you and myself are on an island, and we’re both living by trying to catch fish. The fish are rare, and far out, so this is a lot of work. So, I start looking around the island to find an alternative source of food. Let’s say that I wander to the other side of the island, nearly starved, and find an apple tree. I then begin picking apples off of the tree and eating them. In essence, I’ve homesteaded this tree. I made the effort to go out and find it.

Now, it’s arguable that if I just pick apples from one side of the tree, and do nothing else, I’ve only homesteaded the right to pick apples from that side of the tree. However, to make matters simple, let’s say I somehow work the entire tree: I give it fertilizer, I treat various infections, I clear out competing plants and trees, I cut down taller trees blocking out its sunlight, I water it, etc. Clearly, I’ve homesteaded it.

Now, the important point here is that not only do I own the improvements I made to the tree, but also the tree itself. It wasn’t just my labor in picking from the tree and caring for it, but my labor in finding it in the first place.

Now, lets say that your fish stock runs out. You wander about, and find me at my tree. Clearly, you aren’t entitled to the fruits from the tree. I’ve homesteaded the tree, and made the effort initially to find it. You, as a second-comer, don’t have a claim to it before me. Of course, we can trade, and you can give me something in exchange for a oranges, and so-on and so-forth. I could offer you a salary in apples on contingency of you carrying out the improvements to the tree I was doing; I could alternatively issue out “equity” in the tree.

3. I agree, being born, we have no obligation to pay tribute to those priviledged by the State. I fail to see how this relates to the fact that as the homesteader of some land, I don’t owe anyone else some of it’s value, and I can exclusively decide who’s admitted to it, or sell it, or use it as I please.

Perhaps your saying that if all land were owned, then those newly born would “have to pay tribute”? Well, I argue that’s rather silly, for a few reasons: (1) We can create more land; (2) Simply being born doesn’t entitle you to any land. It is certainly the case that you have to be born in some physical space; but that hardly means you have the right to stay in that physical space. You may be born in a stranger’s house; that hardly means you have the right to stay there.

4. Ok, you might say that being born requires a certain amount of labor on the part of the baby and the mother. It does not follow from that that the baby is entitlted to stay on the land he or she is currently occupying. The justness of the LVT does not follow from that.

In short, what the Georgist doctrine is trying to do is force a positive legal obligation on others. That is, it creates a “positive right” of individuals that would require positive obligations to be forced on others. Yet, positive legal rights are contradictory; as they, by definition, require the violation of rights which are truly justified (namely, negative rights).

5. Locke’s proviso is arbitrary, unjust, and ultimately meaningless. Since all costs are by definition subjective, to talk about me “not imposing a negative economic cost on others” is arbitrary; someone could say that me using a waterfall for drinking imposes a “negative economic cost on them”. Really, all that is is a reworded version of the “externalities” fallacy.

In some sense, any homesteading of a piece of property — or of anything for that matter — imposes an kind of “cost” on others, in the sense that they cannot use that particular resource (even if there are other substitutes available).

6. You can argue that our parents created us through their “labor”, and that we start asserting our individuality. However, it again does not follow from this that the LVt is justified.

7. Fair enough, building more land is not — in the Georgian paradigm — unimproved land, but new improved land: a new creation (see #8 for a criticism of this). However, your point about it being just to homestead frontier-land in (say the universe and ocean) is just until economic rent appears ignores the labor of discovering that land.

8. This leads into my last point. I would argue that there is something fundamentally wrong, from an Austrian economics standpoint, with the Georgist position on land. Namely, I will posit a different value for land in it’s natural state: Zero. Prior to being discovered by man, and prior to man discovering or guessing how land might be used, any as-of-yet unhomesteaded land is worthless. As all value is subjective, and can only exist through the valuations of men, it is wrong to say that undiscovered, unhomesteaded, or unused land has any inherent value.

BillG (not Gates) April 19, 2006 at 10:06 pm

David H. wrote:

“I’d note that all Georgist schemes must require a State of some kind; there is no other way to tax. Now, once you create a State, you create all kinds of inherent and unavoidable problems.”

“Let’s just say that I accept this argument about the economic rent of the land. That still hardly justifies creating a State.”

BillG responds:

David,

even in the absence of a state the economic rent (a tax on wages) is FORCED upon the excluded beyond Locke’s proviso violating their absolute right to the fruits of their labor.

so the question isn’t whether or not to have a state or whether or not to have economic rent (a tax)..the only question we have before us is who is going to pay the economic rent and who is going to receive it!

and the answer to that question reveals everything there needs to be known about whether or not we will uphold property rights to labor and whether or not there will be simply justice via equal liberty for all.

David H. wrote:

“It is also physically impossible to exist (for any length of time) without eating food”

BillG responds:

if I have free and clear access to land I can either labor to create my own food or trade my labor for my food.

I can’t labor to create land and I can’t labor to purchase land unless I have someplace to labor upon without having to pay a tribute to someone…

David H. wrote:

“the important point here is that not only do I own the improvements I made to the tree, but also the tree itself. It wasn’t just my labor in picking from the tree and caring for it, but my labor in finding it in the first place.”

“You wander about, and find me at my tree. Clearly, you aren’t entitled to the fruits from the tree. I’ve homesteaded the tree, and made the effort initially to find it. You, as a second-comer, don’t have a claim to it before me. Of course, we can trade, and you can give me something in exchange for a oranges, and so-on and so-forth. I could offer you a salary in apples on contingency of you carrying out the improvements to the tree I was doing; I could alternatively issue out “equity” in the tree.”

BillG responds:

the answer needs more clarification…

1. who owns the land I am wandering around on?
2. is this the only tree bearing fruit?
3. is this the only source of sustenance after the fish are gone?

a clearer analogy would be a desert island with no water except you stumble across a fresh water spring first and claim it as yours.

then I come along later upon the same spring which I would have discover too, in need of water to survive…

do you have a legal, moral, ethic obligation to share the spring or else I die?

I say yes you do.

David H. wrote:

“Perhaps your saying that if all land were owned, then those newly born would “have to pay tribute”? Well, I argue that’s rather silly, for a few reasons: (1) We can create more land; (2) Simply being born doesn’t entitle you to any land. It is certainly the case that you have to be born in some physical space; but that hardly means you have the right to stay in that physical space. You may be born in a stranger’s house; that hardly means you have the right to stay there.”

BillG responds:

if you “create more land” then it is by definition improved (not unimproved) land value and strictly private property as it is produced by labor.

I am glad to hear you finally admit that you have no right to self-ownership…

if you admit we are born into a specific space yet are not entitled to be any specific space then there logically can not be a right to self-ownership

why should we continue the dialogue?

David H. wrote:

“what the Georgist doctrine is trying to do is force a positive legal obligation on others. That is, it creates a “positive right” of individuals that would require positive obligations to be forced on others. Yet, positive legal rights are contradictory; as they, by definition, require the violation of rights which are truly justified (namely, negative rights).”

BillG responds:

the force eminates from the initial occupancy…at a certain defined point in time (Locke’s provso) it forces a legal and monetary obligation on those that are excluded that can only be satisfied by violating the right to the fruits of labor.

a positive legal obligation requires that someone provide a good or service to you that violates their right o the fruits of their labor.

there is nothing required of the landowner:

1. they don’t create the land
2. they don’t produce the economic rent
3. in a rent sharing system there is no purchase price to land.
4. the discovery of the original land is not unique because the person being excluded is there bidding on access having gotten there via their own labor too.

David H wrote:

“Locke’s proviso is arbitrary, unjust, and ultimately meaningless. Since all costs are by definition subjective”

BillG responds:

you are confusing personal utility value (subjective) with market value (objective).

David H. wrote:

“In some sense, any homesteading of a piece of property — or of anything for that matter — imposes an kind of “cost” on others, in the sense that they cannot use that particular resource (even if there are other substitutes available)”

BillG responds:

if there is “enough and as good left in common for others” (Locke’s proviso) why would I pay you to access what you have enclosed when I could homestead for free?

David H. wrote:

“You can argue that our parents created us through their “labor”, and that we start asserting our individuality. However, it again does not follow from this that the LVt is justified.”

BillG responds:

people were asserting that if you didn’t create yourself like land then there could be no right of self-ownership.

I am saying the baby in utero is in the process of asserting independence through instinct (the nature of being human) and that the parents own the baby and then gift ownership of that life at the same time as the baby asserts independence (a child to adult process)

David H. wrote:

“your point about it being just to homestead frontier-land in (say the universe and ocean) is just until economic rent appears ignores the labor of discovering that land.”

BillG responds:

as in your apple tree analogy or my spring analogy the second person has to travel to the location in question too…

David H. wrote:

“I will posit a different value for land in it’s natural state: Zero.”

BillG responds:

the market value of a discovered homesteaded piece of land may be zero too (no economic rent) if enough and as good is left in common for others.

David H. wrote:

“As all value is subjective, and can only exist through the valuations of men, it is wrong to say that undiscovered, unhomesteaded, or unused land has any inherent value”

BillG responds:

yes, prior to Locke’s proviso a particular piece of discovered, homesteaded land may have great personal utility value but no market value but beyond Locke’s proviso as two or more people compete for access they both individually subjectively determine if it makes more economic sense to locate where someone else has vs. go homestead another location.

that valuation is the market value and is the economic rent plus any labor involved in homesteading it by the current occupant.

tz April 19, 2006 at 10:43 pm

Tariffs v.s. Free trade is a false dichotomy. Normally the laws differ between states such that somewhere between custom and fiat, regulations will interfere with one or the other market.

For a current example, we call it “free trade” when the Chinese government at some level kicks a farmer off his land that his family has been on for a generation, gives it to a businessman (usually a connected party hack), who then is free to pollute and foul the nearby countryside or city. They have a different idea about IP (patents, copyrights, trademarks) than we do – without saying it is right or wrong to have IP, only that it would be nice to pay $1 for a CD of Windows 2000 without any protection and I’m sure the Chinese would do it and probably are.

So are laws banning the import of unlicensed merchandise protectionism or not? What about those that impose a fee that simply recaptures the regulatory differential? The other side of a tariff is a subsidy which are also not talked about – if the manufacturerers here got a subsidy instead of imposing a tariff against foreigners, would that really be different? But isn’t throwing the farmer out and allowing pollution without recourse a subsidy and is it free trade between one subsidized party and one non-subsidized one?

I’ve also mentioned the simple case of stolen merchandise – it tends to be cheaper than honestly gained goods. Is it unfree to have laws against trade in such things?

Between very similar cultures free trade is easy because they will either both steal or neither will steal, both will subsidize, or neither will. When you have very different cultures (Japan didn’t use tariffs, they had an import customs approval maze; Mexico simply depreciated its currency), it is more difficult.

George T. Kysor April 19, 2006 at 10:55 pm

“All concepts are “mental constructs.” What they refer to, however, are real-life entities and actions, with life-and-death significance.” – George Reisman [via email]

General Motors per se cannot act, nor is it a “real-life entity.” Being a well advertised legal fiction, General Motors is a concept held by many people, but that doesn’t somehow
imbue it with life and substance. Your problem here, as I see it, is to overlook the fact that people were buying stock in – and making contracts with – a mental construct.

George T. Kysor April 19, 2006 at 11:04 pm

oops, wrong article!

David J. Heinrich April 19, 2006 at 11:05 pm

Bill G.,

Addressing a few key points…

1. You say that the Georgist system does not require the existence of a State. Could you please explain how rent for the “unimproved value” of the land could be collected and distributed without a State? If there is a way, I would be much less inclined to be as opposed to Georgism.

2. I’d argue that on that island that we’re on, no-one “owns” the land that we just walked accross (although each of us would have homsteaded an easement*). True, you had to expend the labor to get to the apple tree as well; however, in my example, I did so first. My claim is the only non-arbitrary claim, as the first appropriator.

3. It may very well be that, despite this, I have the moral obligation to not deny you of apples from my tree completely; however, that does not mean I have the legal obligation. Consider that I have the moral obligation to be a good summaritan, to engage in polite and civilized debate, to respect you as a person, to be faithful to my girlfriend, etc. However, I do not have a legal obligation to do any of those things (unless I sign a contract).

4. Another problem I have with Georgism: you refer to the market value of land. Yet, the market value of land can only be determined on the market. This implies that it must have been sold. Furthermore, to have an accurate price, it must be a liquid asset. As we all know, land is not a liquid asset; in short, land-markets are illiquid. You can look at the selling prices of other pieces of land, but land isn’t a homogenous good like gold; it is extremely heterogenous. Now, you might say that we can have assessors; however, that is rather arbitrary.

5. Also, that it is the unimproved (but discovered) land that you’re trying to get a market-value of, that makes matters all the more difficult, as the land in existence is (in fact) most likely improved.

6. I have never said that we don’t all have the right to our own bodies. All that I have said is that newborns I(and thus everyone) don’t have the right to stay on someone else’ property.

7. Now, it seems to me like this is your concern: it seems that it may conceivably be that someone born has no place where he would be allowed to stay (have the right to stay) under libertarianism. This is actually something I’ve thought of. So, what do you do? I would say clearly a newborn doesn’t have the right to stay in where-ever it happens to be born (e.g., the hospital) indefinately (that is, beyond the time the hospital, by nature of its business, is required to allow mother and child to stay).

So, what then? Well, here’s a thought. I’m not so sure I agree with this, bnecause there are some philosophical problems with this position. However, here it goes. I could argue that by virtue of intercourse, a couple accepts that the baby that could be created would have rights (I assume you did not mean to say the parents “own” the baby in the sense that they can dispose of it or destroy it; rather, I assume you referring to “owning the baby” as in owning the custodial rights to the baby).

Thus, the baby has rights, and the parents, by creating it, accept certain minimal responsibilities to it. Namely, not to abort it. But also, further on, the fundamental responsibility to allow it a place to stay (namely, their home) and to take care of the baby, or take reasonable efforts to insure it is taken care of (e.g., free-market orphanages, churches, adoption agencies). Thus, a baby couldn’t just be born and then the parents just throw it in the garbage legally, or leave it in the desert, etc; they also couldn’t expel it from their property without taking reasonable efforts to transfer custodial rights (and custodial obligations) to someone else.

Now, what this implies is that, as Stephan Kinsella has pointed out to me, that the parents have an indefinate obligation to the child (if they don’t find someone else to take it on) should the child not ever declare independence (e.g., the child is extremely mentally retarded).

Now, Rothbard objects to this line of reasoning. He argues that, if there is an obligation to care for the chil, when does it end? I don’t find that a convincing argument, since there’s no reason to say this obligation isn’t perpetual unless the child nullifies it by declaring independence (which is the usual situation). However, his more important objection is, “How precisely do the parents obtain this positive legal obligation to the chil?” Now, some might argue that the act of intercourse is what creates the obligation. However, intercourse by itself isn’t a contract. The baby doesn’t even exist yet, so how could that possibly be accepting a positive obligation to an entity which doesn’t even exist yet?

An alternative justification of the positive legal obligation to one’s children would be that by not aborting it at the early stages (when it isn’t discernably human with the capacity for thought/awareness). However, I take issue with this, as it doesn’t address the sentiment of this kind of objection; those arguing for parental obligation to provide living space and care for their children would also argue that abortion is murder. Furthermore, it doesn’t solve the issue, because it is still susceptible to the criticism of “contract with an entity that doesn’t yet exist”.

….

Let’s try a different appraoch. To illustrate the moral point, let me assume (unrealistically) that all land has been homesteaded, and that as much land that can be created has been created. E.g., we have dug to the center of the Earth and have buildings extending to the ozone layer, and cannot yet homestead space. Furthermore, let us assume that — contrary to correct economic theory which would tell us that people, in this situation, would establish a procreation balance so-as to “just replace themselves” — people have children at rates faster than the zero population growth rate.

a. Everyone owns themselves. Everyone is a self-owner. This follows from argumentation ethics.
b. Everyone has the right to homestead property, or acquire it. Currently, every occupiable physical space is owned by someone.
c. Now, lets’s say that Mary has a baby. What then? Since all land is owned, can the baby be bounced from one piece of land to another, indefinately? Well, in short, no. The mother would not be able to do such, because clearly she (and her mate) are the one’s responsible for the baby existing; for them to move it off of their property and onto someone else’s (without their consent) would constitute aggression against that other person.
d. But what about the baby on their property, then. Can they just let it die? Well, again, we’re back to the problem in the above situation. Where’s the rational argument that you have a legal positive obligation to your baby?

Well, that little thought-experiment at least deals with one problem, and expands to others (e.g., the homeless). In a world completely privatized, you couldn’t necessarily bounce people from one piece of land to another, becuase that constitutes aggression against the land-owners.

However, this doesn’t address the question of the positive parental obligations.

Yet, I think that for anyone to actually think that this might be a practical problem one day…well, if you think that, you might as well not even believe in free markets. I mean, to even posit taht this might be a possible problem in a completely free world…you have to posit that the free market just doesn’t work.

* I’d argue that for easements, there can be multiple owners of an easement “title” to the same land, because easements do not imply exclusive use or real complete homesteading.

P.M.Lawrence April 19, 2006 at 11:07 pm

With regard to Locke’s approach and the whole homesteading method of establishing ownership, I take the view that making use does not so much create ownership as – by adverse possession – do two things: demonstrate the lack of any other sound claim, and show (rather than create) a claim to continue that use undisturbed, i.e. it provides evidence for ownership rather than creating it.

But that doesn’t rule out the possibility of other ways of providing such evidence, or of getting into the special connection with the land that owning it is. (And, of course, it is misleading to describe all forms of connection as ownership in our sense of the term – which is something that has come up here in Australia.)

On this whole “discovery equals effort” business, I’d like to extend that. I’ve noticed that a great many cases of “non-working” landowners and their working tenants actually involved the landlords settling the tenants there in the first place. For instance the Dutch Patroon system in New York, and the proprietors of Price Edward Island and various colonies such as Pennsylvania.

With regard to that last, there was a thread around here quoting Rothbard (I think) acclaiming the inhabitants of Pennsylvania for rejecting and scofflawing the proprietor’s rights, particularly to quitrents, in fact making him practically bankrupt. (Of course, he should have machinery in place to exercise the economic resources that quitrent was supposed to buy off.) This struck me as in fact a case where justice was not done by people power, but precisely the reverse. The Patroons were similarly abused, although not harmed as much, but the Prince Edward Island proprietors were bought out.

Francisco Torres April 20, 2006 at 12:25 am

Tariffs v.s. Free trade is a false dichotomy.

Maybe you should look at the definition of dichotomy, tz. A tafiff is a restriction, the contrary of free. There is no false dichotomy.

Som April 20, 2006 at 12:52 am

The reason George was a geolibertarian is because he, like locke before him, fallaciously belived that property rights come from “mixing ones labor” with something to cause ownership. But this a bad theory because it’s derived from the labor theory of value. Kant recognized the absurdity and derived that ownership was a priori of human nature (eventhough he didn’t explain why) as dicussed in an early article, “kant on property”

Austrians should reject locke’s initial aquisition theory COMPLETELY! It rests on the faulty labor theory of value as We have the correct subjective theory of value, which should apply to property (including unlabor land) as well.

I think the right approach is derive a philosophical theory of all private property from the austrian definition of liberty. Hell maybe i’ll do it!

BillG (not Gates) April 20, 2006 at 6:15 am

Som wrote:

“The reason George was a geolibertarian is because he, like locke before him, fallaciously belived that property rights come from “mixing ones labor” with something to cause ownership.”

BillG wrote:

George like other classical liberals believed the fundamental property right we first have is that of self-ownership…

“Though the earth, and all inferior creatures be common to all men, yet every man has a property in his own person. This nobody has any right to but himself.” — John Locke, 2nd Treatise of Government, Ch. 5

“The property which every man has in his own labour, as it is the original foundation of all other property, so it is the most sacred and inviolable.” — Adam Smith, The Wealth of Nations, Bk 1, Ch. 10, Pt 2

“The right of life and liberty–that is to say, the right of the man to himself–is not really one right and the right of property another right. They are two aspects of the same perception–the right of property being but another side, a differently stated expression, of the right of man to himself. The right of life and liberty, and the right of the individual to himself, presupposes and involves the right of property, which is the exclusive right of the individual to the things his exertion has produced.” — Henry George, A Perplexed Philosopher, p. 210

Som wrote:

“this a bad theory because it’s derived from the labor theory of value.”

BillG responds:

no, the labor theory of values is derived from the labor theory of ownership which is one and the same as the fundamental right to self-ownership.

Som wrote:

“We have the correct subjective theory of value, which should apply to property (including unlabor land) as well.”

BillG responds:

and George has the value from OBLIGATION theory which is an exception to his value from production theory (a combination labor and subjective theory of value)

“The various ways in which value may originate, embrace (l) the value which comes from the exertion of labor in such a way as to save future exertion [value from production]; and, (2) the value which comes from the acquisition of power on the part of some men to command or compel exertion on the part of others [value from obligation]”

as when the obliger is a slave, or a prisoner, or an indentured servant, or a serf – land fits into this category…

BillG (not Gates) April 20, 2006 at 7:21 am

David H wrote:

“You say that the Georgist system does not require the existence of a State. Could you please explain how rent for the “unimproved value” of the land could be collected and distributed without a State?”

BillG responds:

no, what I said is that the economic rent attaches to all locations beyond Locke’s proviso whether or not a state is present.

in a state of anarchy, if the landowner collects the economic rent then they are forcing a tax on the wages of those they excluded.

in a perfect system, the landowners realizing they are violating the self-ownership rights of those being excluded would voluntarily share the economic rent with their neighbors (and they with him).

David H. wrote:

“I do not have a legal obligation to do any of those things [provide water from the well or fruit from the original unimproved tree]

BillG responds:

then I would suggest there can not be any right to self-ownership in your system (although I think land is a much clearer example)…

David H. wrote:

“the market value of land can only be determined on the market. This implies that it must have been sold.”

BillG responds:

market value not personal utility is the subject of taxation and assessments.

when land value is substantially taxed and the owner continues to hold the property, it is safe to assume that the land’s utility to that person is either greater than or roughly equal to the market value…otherwise, he would sell it.

however, none of that is any of our business as our business is to levy a charge that reflects the pcommunity’s loss of access to that land, for it is the community that would either use that land or rent it out to another if the title holder were not holding it exclusively.

David H. wrote:

“I have never said that we don’t all have the right to our own bodies. All that I have said is that newborns I(and thus everyone) don’t have the right to stay on someone else’ property.”

BillG responds:

and if for all intent and purpose all lands are previously legally claimed then there is no place to stand without having to pay a tribute to someone else violating your right (not having to be purchased or gifted) of self-ownership.

———-

regarding positive parental obligations…

David-

I am trying to square the fundamental right of self-ownership with a world where all of the land mass is legally claimed.

if a right does not have to be purchased or gifted at what point when a parent relinquishes their obligation, where they had been gifting a place for their children to be, can a person frely excercise their right of self-ownership without having to pay for said right?

1. like the very air we breathe, is a naturally-occurring geographic location (“land” for short) — by *definition* — something that exists independently of human labor, and thus something which (unlike houses, cars, clothing, etc.) never has to be “provided” by human effort?

2. when it comes to human beings, is it universally true that to “be” is — by *definition* — to be “somewhere,” i.e., to occupy a naturally-occurring geographic location on the earth?

[Note: the phrase, "to be," simply means to be alive, and thus is merely a differently stated expression of the right to life.]

3. is the right to “be” (and hence any right derived from it) a right that a person simply has, i.e., a right that does not have to be “purchased” or otherwise “acquired” from someone else?

4. is the right to “be” an equal right, i.e., a right held equally by everyone (by virtue of being a human being)?

5. if I state that someone is “accessing,” say, a ten-acre island, does common sense dictate that that someone is not physically occupying the entire island, but merely the *part* of it on which he happens to be standing at the moment?

6. if the answer to each of the first five questions is “yes,” then does not logic dictate

(a) that there is also an equal right to be “somewhere” (on the earth); and

(b) that to deny that everyone has an equal right of access to the earth is, therefore, to deny that everyone has an equal right to life itself?

Brian Drum April 20, 2006 at 7:42 am

Som,

The labor theory of appropriation (i.e. Lockean homesteading) and the labor theory of value (i.e. quantity of labor involved in production determines market price) are two completely different things. The homesteading theory is wholey independent of the labor theory of value.

Peter April 20, 2006 at 7:45 am

With regard to that last, there was a thread around here quoting Rothbard (I think) acclaiming the inhabitants of Pennsylvania for rejecting and scofflawing the proprietor’s rights, particularly to quitrents, in fact making him practically bankrupt. (Of course, he should have machinery in place to exercise the economic resources that quitrent was supposed to buy off.) This struck me as in fact a case where justice was not done by people power, but precisely the reverse.

If you assume that the “proprietor” had a valid ownership claim to the property, you’re absolutely right. However, Penn obviously didn’t homestead all of Pennsylvania (and possibly not a single square inch of it!), so had no such valid claim. The residents, however, did!

Yancey Ward April 20, 2006 at 8:25 am

BillG,

If there is only one bidder for a lease, and that bidder bids zero, then who is being excluded, and why should the economic rent on this land not be zero as well?

BillG (not Gates) April 20, 2006 at 8:35 am

Yancey Ward wrote:

“If there is only one bidder for a lease, and that bidder bids zero, then who is being excluded, and why should the economic rent on this land not be zero as well?”

BillG responds:

if there is no economic rent then that means Locke’s proviso is still intact (enough and as good left in common for others) then no one is being economically harmed by the exclusion therefore it is just.

first appropriation/homesteading is always just before Locke’s proviso and only just afterwards if the economic rent is equally shared amongst neighbors within a community…

David J. Heinrich April 20, 2006 at 9:53 am

Bill G.,

Interesting argument. It is true that, to exist, one has to exist somewhere; and if one has the right of self-ownership, one shouldn’t have to pay others tribute for it.

However, the problems with Georgism (even of the non-Statist variety) don’t go away. Part of the problem with saying, “if the land value is taxed, and the owner continues to stay there, presumeably he values it more than the market-value, otherwies he would let it go” is that you cannot separate out the “unimproved” value of the land (or rather, it’s value if just discovered by people) from the value-added by human labor.

Another problem, still, is that you cannot determine the market-value of the land. You again refer to the market-value of the land, which you would tax, without stating how we determine that market value. Yes, market value is objective, in that we can all see it (although in is, of course, subjectively determined between buyer and seller). However, true market value can only be determined by voluntary selling and buying of the particular asset in question if it is an illiquid heterogenous good.

Also, regarding standing-space, could I not, after homesteading a plot of land, consume it entirely? Then no-one else could use it for any life-sustaining activities anyways. The problem with the Lockean Proviso is that, in reality, it would prevent us from homesteading any land at all. After all, said homesteading and use is use that some future generation can’t engage in.

Now, I can see you’re point. It would seem that the “right of self-ownership” is merely fluff if, once being born, you can be pushed from one piece of property to the next, and denied any opportunity to survive. I would argue that, as the world approaches a state of complete private ownership, private courts would enforce stricter rules regarding the homesteading of private property, and also regarding abandonment.

However, let us consider one more economic reality: if the world isn’t completely privatized (as is the current state of affairs), and there is still homesteadable land which can sustain life (also the current situation), you still have to work and “pay tribute” to survive. Let’s say there’s some area of forest that is completely unhomesteaded (as are arguably all of the “national parks” in teh US). You could rightly clear out an area of land, plant crop there, and survive there. However, you would have to work to survive. Indeed, the work would be very hard. To merely survive, you may have to work all day.

Now, compare that to the “work” you have to do by engaging in the free market and the division of labor; to merely “survive” in a free-market economy, you have to work, what, a few hours a day? Even getting paid $4 an hour, if you work 3 hours, that’s enough for breakfest, lunch, and dinner (admittedly, at McDonalds). The point is that it’s not such a burdensome requirement that people have to work to survive in the free market. Furthermore, the reality of the matter is that as land becomes more scarce, it’s price will increase; thus, owners will large areas of land will have great economic incentive to sell off most of that land, where it will go to its most highly valued uses.

Paul Edwards April 20, 2006 at 10:38 am

David,

“But what about the baby on their property, then. Can they just let it die? … Where’s the rational argument that you have a legal positive obligation to your baby?”

I was thinking you were going to provide that rational argument that one has a legal positive obligation to one’s baby. But since you did not, I will ask, are you suggesting that there isn’t one?

David J. Heinrich April 20, 2006 at 10:48 am

Paul,

I’m not suggesting there isn’t a rational positive legal obligation to feed one’s baby. I’m saying that I don’t know how to rationally justify that (given that the contract argument seems invalid, and we don’t have positive legal obligations).

BillG (not Gates) April 20, 2006 at 10:49 am

David H. wrote:

“Interesting argument. It is true that, to exist, one has to exist somewhere; and if one has the right of self-ownership, one shouldn’t have to pay others tribute for it.”

BillG responds:

by George you’ve got it!

David H. wrote:

“you cannot separate out the “unimproved” value of the land (or rather, it’s value if just discovered by people) from the value-added by human labor.”

BillG responds:

the private sectors does it every day…

when a private insurance company gives you insurance on your house they don’t give you insurance on your location because it can’t be destroyed…they cover you for the replacement value of your home (improved values).

David H. wrote:

“You again refer to the market-value of the land, which you would tax, without stating how we determine that market value”

BillG responds:

yes, while each individual action is subjective and unpredictable as it relates to a specific location where personal utility value come into play for someone who doesn’t want to sell, the aggregate effects are fairly easily measured and can almost always be determined objectively.

there is a great body of assessment knowledge built up over time and with the advent of computer technology it has become more sophisticated and accurate.

I guess the fall back position would be for everyone to self-declare their property values which means they are all immediately for sale based on the stated valuation!

David H. wrote:

“The problem with the Lockean Proviso is that, in reality, it would prevent us from homesteading any land at all. After all, said homesteading and use is use that some future generation can’t engage in.”

BillG responds:

but that is the beauty of HG’s idea…homesteading is just up to Locke’s proviso and only afterwards if the equivalent of land ownership, the return on land (economic rent) is shared equally between neighbors in a community as an INDIVIDUAL right protecting labor-based property rights of those excluded and thus self-ownership.

David H. wrote:

“Now, I can see you’re point. It would seem that the “right of self-ownership” is merely fluff if, once being born, you can be pushed from one piece of property to the next, and denied any opportunity to survive.”

BillG responds:

not an “opportunity to survive”…

literally no right to life because to exist IS to occupy some space *somewhere*

David H. wrote:

“I would argue that, as the world approaches a state of complete private ownership, private courts would enforce stricter rules regarding the homesteading of private property, and also regarding abandonment.”

BillG responds:

David,

the specific case I am making is that anywhere that economic rent TODAY attaches to locations under scarcity conditions (beyond Locke’s proviso) the excluded are being denied their absolute property rights to their labor and hence denied their right of self-ownership!

David H. wrote:

“However, let us consider one more economic reality: if the world isn’t completely privatized (as is the current state of affairs), and there is still homesteadable land which can sustain life (also the current situation), you still have to work and “pay tribute” to survive. Let’s say there’s some area of forest that is completely unhomesteaded (as are arguably all of the “national parks” in teh US). You could rightly clear out an area of land, plant crop there, and survive there. However, you would have to work to survive. Indeed, the work would be very hard. To merely survive, you may have to work all day.”

BillG responds:

I deny that your current state of affairs is true!

is there anywhere in your location that doesn’t have economic rent attached to it?

regarding having to work to survive…

YES, obso-positivo-lutely!

we all have an inalienable, individual equal access OPPORTUNITY right to freely access the planet to ATTEMPT to derive our sustenance from the earth so long as we do not infringe on the equal access opportunity right of any other individual to the same.

requiring any positive liberty where another human being is FORCED to provide a good or service that required labor to produce is THEFT and violates the absolute right we all have to our labo and thus self-ownership.

David H wrote:

“to merely “survive” in a free-market economy, you have to work, what, a few hours a day? ”

BillG responds:

if we share the economic rent equally maybe we wouldn’t – if we so choose – even have to “work”…

Yancey Ward April 20, 2006 at 11:04 am

BillG wrote: I guess the fall back position would be for everyone to self-declare their property values which means they are all immediately for sale based on the stated valuation!

My response: No, the fall back position, and the only rational way to determine such things on the market, is to open-auction leases at the time of origination, with the proceeds becoming the economic rent. However, even this system will not produce the full protection of labor based property since the old tenant may bid more simply to avoid the cost of removing his improvements, which, to my mind, is a violation of his/her labor product.

Paul Edwards April 20, 2006 at 11:55 am

Hi David,

“I’m not suggesting there isn’t a rational positive legal obligation to feed one’s baby. I’m saying that I don’t know how to rationally justify that (given that the contract argument seems invalid, and we don’t have positive legal obligations).”

Fair enough, but I’m going to make some propositions and I’m interested in your feedback:

If there IS a rational positive legal obligation to feed one’s baby it must come from that fact that the position that there is such an obligation is rationally justified. Legal (ethical) conclusions can only be validated via a consistent argumentative justification.

Next, Kinsella’s argument in fact provides this justification. My interpretation of the weakness you attribute to Kinsella’s position is that there is no contract between the parents and the child at the point of conception, and that therefore, the parents cannot be construed to have accepted a positive obligation to an entity that does not yet exist.

But the question isn’t really of contract. The question is cause and expected results. Sex is known to produce dependent babies; therefore the parents knew their activity could result in a child. The parent’s actions with their known potential consequences put the child into the predictable position of being dependent on the parents for its life. So the parents, by virtue of knowingly putting this individual’s life in their hands obtain a positive obligation towards the child.

I think a valid analogy is two people rough-housing on a dock, and accidentally knocking someone else who cannot swim off the dock into deep water. There is no contract, no intent to harm, and yet, these two jokers are responsible for the life of this person sinking in the lake because they could reasonably expect that their actions could produce this very outcome. I think there is justification in the proposition that to let that person drown when he could be saved would be very close to murder.

By this very same argument, knowingly acting to create a dependent human life is to accept obligations to take care of this life or find someone who is willing to take on this responsibility. Is this a rational justification for legal obligations towards one’s child?

BillG (not Gates) April 20, 2006 at 12:13 pm

Paul-

how do you square this positive obligation with the fundamental tenet of classical liberalism:

the right of self-ownership?

if you believe that a right is something we humans are born with that doesn’t need to be purchased or gifted…at what point does this “transfer” take place?

I think it is along a continuum from the time of conception to the time of emancipation where the parent has custodial rights and meters out different privileges and corresponding duties as the child matures and develops reasoning skills with the attending asserted independence that evolve.

Paul Marks April 20, 2006 at 12:27 pm

Followers of Henry George tend to be very determined people and I do not believe that I will convince any of them.

For the record Murry Rothbard’s refutation (whether successful of not) is to be found in his “Man, Economy and State” (1962 if my memory serves).

As for me – as I said above I do not accept that the world was given by God to all people, therefore “justifying” private ownership is not (to me) needed. I also, therefore, reject the Lockian Proviso.

On the Land Tax – this is not a special tax.

It is no different (in moral terms) from an income tax or a poll tax.

Nor is there any special level it should be (if it should exist at all).

Nor is there a moral difference between “idle” land than “nonidle” land.

Whether a man chooses to farm land, build a factory or it, or keep it as a nature reserve is up to him.

The old land tax in Britain varried from 20% of the rentable value to 5% of the rentable value (depending on when in the 18th century one is talking about).

Local government rates (tax on the rentable value of land) also varried.

And yes (of course) the rent of a land that includes a factory or housing is likely to be higher than farmland – and so the tax is likely to be higher. Indeed after 1929 farmland stopped being taxed at all (partly because farmers were doing so badly).

In the United States I believe the lowest property taxes are to be found in Alabama (Constitutional limitations on taxing and spending going right back to 1901).

None of this is a special area (even though David Ricardo thought it was).

There is no moral difference between money gained by rent and money gained by sweat – or money gained by a bet.

Money is money, it either belongs to you or it does not.

And rent belongs to the landowners – if you do not like it then buy him out. Do not tax him and pretend you are doing something noble.

Taxes may be a lesser evil (if the alternative is invasion and the greater violation of property in person and possessions), but no tax is noble.

“We are only taxing landlords” or “we are putting heavy taxes on unused land” is not relevant.

Nor is there any “correct” rent and hence way of calclating the special tax.

Rent like any other price is a matter of the buyer and seller.

Two areas of land.

Area A is rented out to a farmer at X Dollars an acre.

Area B (exactly the same type of land) is not rented out – because this owner wants to keep it as a nature reserve.

Neither choice is something that should interest government either way.

What is the least harmful form of tax – now here we get into Rothbard’s “Power and Market” (the “third volume” of the two volume Man, Economy and State although it came out about eight years later – 1970 not 1962).

There is NO FORM OF TAX THAT DOES NOT DO ECONOMIC DAMAGE – not a land tax not any tax. Some taxes may cause more damage than others (whilst raising the same revenue) but the difference is so small (compared with the damage done by taxes in total) that it is not worth spending energy on.

The point is to keep all taxes (in total) as low as possible (as a percentage of the total economy) – and the only way to do that in the long term is to cut govenment SPENDING.

Whether it is David Ricardo, or James Mill or Gossen or Henry George there is no non harmfull way of giving the government lots of money to spend on nice things.

Paul Edwards April 20, 2006 at 12:37 pm

Hi BillG,

“how do you square this positive obligation with the fundamental tenet of classical liberalism:

“the right of self-ownership?”

Does my drowning bystander analogy fail to illuminate how it squares? If you put someone in a position such that their life depends on you, you have obligated yourself to save their life. We can’t bump someone into the lake and watch them drown and be justified through “self-ownership”.

“if you believe that a right is something we humans are born with that doesn’t need to be purchased or gifted…at what point does this “transfer” take place?”

“I think it is along a continuum from the time of conception to the time of emancipation where the parent has custodial rights and meters out different privileges and corresponding duties as the child matures and develops reasoning skills with the attending asserted independence that evolve.”

How does this show an inconsistency with a parent’s obligation to a child and the right to self-ownership? (or does it?)

BillG (not Gates) April 20, 2006 at 12:46 pm

Paul Marks wrote:

“There is NO FORM OF TAX THAT DOES NOT DO ECONOMIC DAMAGE”

BillG responds:

Paul,

but you do agree though that because land is fixed in supply, collection of economic rent does not hurt production – no?

what is the exact economic damage that we do if instead of the excluded paying the economic rent to the excluders the excluders are to required to pay the excluded?

the economic rent is no easier to wish away than say gravity – it is a naturally occuring phenomena that attaches to all locations as two or more people compete for access to what they have subjectively determined will bring them an economic advantage to locating someplace else…`

Paul Edwards April 20, 2006 at 1:06 pm

Paul Marks,

“As for me – as I said above I do not accept that the world was given by God to all people, therefore “justifying” private ownership is not (to me) needed. I also, therefore, reject the Lockian Proviso.”

Very few people accept that the world was given by God to all people, especially since such a view would be wildly contrary to human nature, the nature of reality, and the Scriptures themselves (where individuals often are given exclusive ownership of land).

However, I’m not sure what the quotes around “justifying” are intended to indicate, because I think you do, in fact, implicitly feel that private ownership can be and is indeed justified, and that furthermore the Lockean proviso is unjustified.

All arguments we put forth here and in our own minds are attempts at justifications and proofs of the validity of the various propositions we hold to be true. That applies to the question of property ownership as well.

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