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George's book is referenced (prominently) in this page of the UBI Master Directory.


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>Landowners however can just sit back and collect rent. Given that land is fixed, it's way easier for landowners to collude than it is for either labor or capital (sans land) to unionize.

Where I live in the Dominican Republic land prices are sky high. Comparable to coastal California land.

The land owners just wait.

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Jump links to the appendix look broken, but I found Ctrl-F "Appendix-A" or whatever seems perfectly serviceable to locate the linked section, as well as to jump back to where it was referenced after you're done.

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1. I still don't understand the insistence on saying that workers are paid out of production rather than capital. For one thing, it seems transparently false - the review mentions the example of workers building a ship, which might take a year, but they still get paid even before the ship is built. It argues that they are paid from the partly-built ship, but they're clearly not - they're paid out of the saved money that the person who founded the shipbuilding company brought in (or borrowed). You could even demonstrate this by having the capitalist put highlighter marks on the particular dollar bills they bring to the venture, and then you will see that the workers get paid in highlighted dollars. But also, who cares? What hinges on this totally theoretical point? I still don't feel like the review/book explained this very well.

2. Would a land value tax unfairly benefit eg Google (who maybe need a little land for their HQ and a server farm, but land is only the tiniest fraction of their costs) compared to eg farmers (who need lots of land)?

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"As for compensation for risk, George says that risk averages out and disappears when you take the God's eye view and sum all of society's transactions together. If I take the winning side of a bet and you take the losing side, I enjoy gain, you suffer loss, but the amount of wealth in the world hasn't actually increased as a result of our bet."

But there are many bets which don't have people on both sides, an consequently a societies total transactions and economic activities can be more or less risky in aggregate.

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So how does this work empirically? I Googled Land Value Tax experiments, and the first result is a write-up on Harrisburg in 1982 and Allentown in 1996, which fixed blight and helped protect vulnerable groups through the use of LVT. Pennsylvania lets you tax land value more than building value.


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IANAGeorgiat - pretty committed Austrian, in fact - and I am enormously impressed by this review, and by the conceptual elegance of Georgism.

Like many other theorists, I find his analysis of the situation into its constituents astute, but am not sold on the solution until and unless it's empirically tried thoroughly. So here is what I've updated on, and the questions that have opened up for me as a result of reading this:

1) This summary has convinced me that the Austrian account of the 'mixing of labour' theory of ownership WRT that not created by the hand of man is not complete (it is hand-wavish as the best of times), and that a greater nuance is needed there to flesh it out. Good opportunity for theoretical *and* practical work!

2) The question of the equilibrium dynamics that result from this theoretical lacuna - the equilibrium being critiqued here being that of nearly all the gains of productivity and wealth (in the Georgist sense of those terms) being captured by rent, and the resultant unjust and overall shitty results - I am now convinced is a real one.

3) George does not address some very important question - who, whom? being the biggest one. There may be ways to fairly calculate how much the various levels of aggregation - neighbourhood, town, county, larger level entity, state, country, etc (and in some sense the world? potentially applicable to question of pollution, etc, and other commons problems?) - contribute to land value, thus leading to the rippling everywhereward of positive incentives. But who can be trusted to actually do this calculation, and not be a dickwad about it? What prevents higher-level landlords, etc, and all the resultant garbage just happening at a higher level - thus making everyone the milch cow of the state instead of Ms. Nguyen?

4) The problem of identification and sentiment is real, and I'm not going to pretend it's not. Stability is power, transience is impotence, as the ever astute Sir Appleby said of the civil service and elected politicians, respectively. I damn well want to be able to buy land in a city I expect to be a nice place and continue to live there because I saw the opportunity and took a risk on it. If I'm not renting to anybody, what the fuck, man, how can you just tell me to get up and get out?! This is outrageous! I live here! My friends and community are here! My extended family lives here! Fuck you and your economic optimisation, we're human beings, not soulless automatons in the service of economic efficiency (as *YOU* conceive of it - what happens if I don't agree with you?!). Completely unaccetable.

But... the problems are real, too! What is to be done?

Here's a proposed solution that immediately suggested itself to me:

a) If you rent out your land but do not use it yourself, then you have to pay the LVT.

b) If you use the land yourself, then you do not pay the LVT while you're using it, but your capital gains tax is massive - so there's still *some* gain to speculation, but very little/modest compared to what it is now.

c) If you sometimes own/use the land and sometimes rent it out, then some combination of the above two that I haven't though of but I'm reasonably confident exists and someone may be able to elucidate as a fun intellectual puzzle?

This clearly prevents the situation where I don't actually have property rights in the land which is my property, thus forcing me off my land; yet it also ensures that the only reason I'd have to *not* move off it and move somewhere else - or even better, develop it, pay the land rent, and collect on my investment in the improvement - is because I *actually want to stay there and/or use the land*, not just because I'm usuriously/avariciously HODLing.

I presume this has already been thought of by *someone*. (If not, you may thank me for making this not inhuman and Molochically horrible!) Any Georgists care to help me with this?

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Anchor links (to appendices) are once again broken, linking to a different page entirely. Please replace them with relative links. (Or to this same page, which should work, although relative is of course better.)

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Just a really great article!

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Best mind-shifting thing I’ve read in a while. Thanks for the great write-up.

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While I find Georgism tempting, my problem with it is that, essentially, exclusion of rival uses for land is an externality, thus LVT is a Pigouvian tax, and "Coase plus Pigou is too much of a good thing" (http://www.daviddfriedman.com/Laws_Order_draft/laws_order_ch_4.htm). The issue, as I see it, is not that land is enclosed, but that that enclosure was accomplished by force (as in TFA's Henry VIII example) meaning that the market never had a chance to compensate the victims.

Whereas in a Friedmanite ancap utopia, I only recognise your title to some land because my protection agency has made a contract with your protection agency which includes some kind of land registry. Which *maybe* means that if an LVT works as well as advertised, then one would get written into those contracts, on a bilateral basis? This went in an unexpected direction...

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Great review! So what are some good arguments against Georgism? The link "If the Land Tax Is Such A Good Idea, Why Isn’t It Being Implemented?" doesn't really answer the question IMO, it reads more like a guide for how to argue for Georgism at the local level. Why aren't land taxes common and popular?

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I'm still having trouble picturing how a land value tax is supposed to work.

If someone just doesn't pay, do you seize the land? That's how property taxes work. But if you seize the land and not the buildings on it, what happens? Or, if you don't seize the land, how do you collect?

If the tax exceeds what anyone reasonably expects to collect in rent or use-value, can they renounce ownership? What happens to the land then? Or does it become a hot-potato?

Is the tax based on the rent the land does receive? The rent it could receive? The rent, minus that part which is secretly the super's wages? The sales price? All these things seem gamable.

If an owner-occupier can defer the tax until sale or death, does this include a corporation? Because they can defer indefinitely, or be bankrupt when the time finally comes. For that matter, do we expect individuals to be able to pay when the tax finally comes due?

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"According to Ralph Gabriel's Course of American Democratic Thought, in New York alone 200,000 people came to see his body lying in repose, half of which had to be turned away. For context, that one crowd was roughly the size of 1% of the entire population of New York at the time."

I'm assuming this is a typographical error. Shouldn't it read "10 % of the entire population of New York at the time"?

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I'll always be happy to read an excoriation of the British over the Famine, but the tragedy was that it wasn't *deliberately* engineered, it just crystallised out of a set of conditions that had been set up for various historical and political reasons, and that only needed one little push for the entire thing to topple. I suppose George would feel vindicated in the post-famine era in Ireland, where people learned the (wrong?) lesson and "land hunger" became a thing - if you owned your own land, you couldn't be evicted. More land = more success and security. George would say "this is my textbook example of the wrongful use of land and how you set up further poverty and misery down the line".

Okay, let's step back from Irish history for a moment.

"Okay, but won't the landlords just pass the land tax on to their tenants?

By George, no. Rent is a price, and price is governed by supply and demand. Supply of land is fixed, so land value tax has no effect on supply. What about demand? Except in cases where it causes the economy to boom (a good thing), land value tax won't increase land value – what it always does, however, is reduce the demand for land by speculators. If it costs nothing to hold on to land, of course I'm going to want to grab some and HODL. If the rent I could hope to gain is taxed away, I won't bother."

Except that (a) if it's not profitable to charge high rents, I'll just hold on to my land. If it's not worth the while of speculators to pay me an inflated value for it, it's not worth me doing anything with it. Even renting it out, because you'll tax me on the value of the land and the rent will go to paying that, so I lose nothing even if I gain nothing by letting it lie idle for weeds to grow on. Indeed, if I manage things correctly, I may even be able to offset my tax liability against it as a loss! (b) land is valuable in proportion to demand. Large English estates often went under due to being "land rich, cash poor" and the shift in generation of income from 'rental income' to 'returns on investment' in the 19th century was driven by this (c) landlords will *always* find a way to pass on taxes to the tenants.

Let me tell you about a deliberate little fiddle of a rent scheme that everyone, including the government, winks at. HAP http://hap.ie/ is a new scheme that came in a few years ago to replace the former rent subsidy schemes in operation. At the time, still in the throes of the aftermath of the economic collapse, many landlords were willing and indeed glad to take on tenants who were in receipt of rent subsidies. However, as the economy improved and rents began to rise to the market rate, landlords were now reluctant to take those tenants as they could only afford a certain fixed rent. They preferred to go for tenants that they could charge full whack.

What to do? You had a problem of people waiting for social housing, who could not by themselves afford private rented accommodation, and thus a resulting homelessness problem. On the other hand, you're paying out taxpayers' money. If the rental allowance is *too* generous, this will lead to rent hikes because landlords *will* charge up to the limit. You as the government are caught between the rock of paying more and more in subsidies as landlords up the rent - which makes the voters angry - and the hard place of increasing homelessness - which makes a different sub-set of voters angry.

So, despite the fact that this is not supposed to happen, prospective tenants were given "nod and a wink" advice. When signing the rental agreement, the landlord would put down the notional value of rent charged - whatever the amount of the allowance was. Then the tenants would pay, out of pocket, a top up on that so the landlord was getting as near to market rate as possible. So the scheme to help the low-paid and those on social welfare avoid having to pay most of their money on rent ended up with... the low-paid and those on social welfare still having to pay most of their money on rent.

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This would seem to dovetail magnificently with old school Space Libertarianism, and the allure of the Endless Frontier.

On the desolate icy expanses of Callisto and Pluto, and especially home on Lagrange, where the only land is locked up in cylinder habitats and is vacuum is free, virtually all of the value of land will have to come from capital.

Until some wiseguy buys up the rights to all the asteroids and starts speculating on rocks in the Kuiper Belt...

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"George notes that the mass die-off of the Black Death in England in the 1300's significantly reduced the productivity of the individual laborer, and yet wages went up. That's because the decreased population also caused a massive drop in competition for land, in turn causing rents to plummet. (For more detail on this read about the Peasants' revolt, also known as Wat Tyler's rebellion).

George says the opposite happened during the reign of Henry VIII, who seized the lands of the church and those held in common by the peasants, and handed them out to newly minted aristocrats, which was followed by suppressed wages."

Yeah but it wasn't just "after the Black Death, land was cheap". Before, if there were three jobs for ploughmen going and you had ten peasants, then you can get away with paying a groat and a kick in the pants to your prospective employees. After the Black Death, if there are three jobs for ploughmen but also four jobs for blacksmiths, five jobs for millers, and six jobs for gravediggers (since the previous holders of these positions all took sick and died), and you have ten peasants, then you have to offer more than a groat and a kick in the pants. Maybe you have to go as high as three groats and no kicks to get a ploughman. Particularly if you took advantage of the low rents to add on twenty acres to your farm, now you *really* need ploughmen to make this profitable. Land can be zero to rent but it does you no good if all the peasants who would have worked it keeled over dead from the plague.

You've mentioned the Famine, but does George say anything about the Highland Clearances, where the value of land now lay in sheep-rearing rather than having tenantry on it?

"In the first phase, clearance resulted from agricultural improvement, driven by the need for landlords to increase their income (many landlords had crippling debts, with bankruptcy playing a large part in the history). This involved the enclosure of the open fields managed on the run rig system and the shared grazing. Especially in the North and West of the region, these were usually replaced with large-scale pastoral farms stocked with sheep, on which much higher rents were paid, with the displaced tenants getting alternative tenancies in newly created crofting communities, where they were expected to be employed in industries such as fishing, quarrying or the kelp industry. The reduction in status from farmer to crofter was one of the causes of resentment from these changes.

The second phase (c.1815–20 to 1850s) involved overcrowded crofting communities from the first phase that had lost the means to support themselves, through famine and/or collapse of industries that they had relied on (such as the kelp trade), as well as continuing population growth. This is when "assisted passages" were common, when landowners paid the fares for their tenants to emigrate. Tenants who were selected for this had, in practical terms, little choice but to emigrate. The Highland Potato Famine struck towards the end of this period, giving greater urgency to the process."

Going back to the Famine, the effects would have been mitigated if the landless labourers, who relied on the potato crop as their main food source, could have been absorbed into industrialised towns and cities as in England during the period of agricultural collapse post-repeal of the Corn Laws. But again, for various reasons, Irish industry had been deliberately crippled in order not to be competitor with British industries and to keep Ireland open as a market and as a producer of agricultural goods to feed Britain.

The appeal of "One Weird Trick" - in this case, the introduction of a land tax - to solve tangled problems is a perennial temptation to the human race, but simple answers generally don't work that well for complex problems.

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>>Today land value tax is widely considered to be the only tax that doesn't suffer from Deadweight Loss.

Generally on board with LVT, but you may wish to add Pigouvian taxes on e.g. carbon emissions.

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The Land Value tax has another key benefit: it has falsifiable predictions, and can be implemented incrementally and achieve incremental benefits (as we've seen in some IRL implementations). Georgists sound like marxist cranks citing 19th century economists, but georgism itself is like an MSG that can be sprinkled over just about any political philosophy and 'fit in'.

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Going back and removing about 85% of the "By Georges" would be a considerable improvement to this essay.

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Simply implementing a Land Value Tax in the manner that George suggested will almost certainly trigger a banking/financial and economic crisis as the rents that this tax seeks to eliminate have been a) capitalised into the price of land and b)the land in question has been levered up to a very high degree. The LVT will cause a significant fall in prices which will lead to defaults, bank failures and even personal bankruptcies (e.g. a middle-class family with a 90% LTV mortgage in a metropolitan city). For example, the same problem applies in removing farm subsidies where the value of subsidies has been capitalised and levered such that any removal will trigger bankruptcies and financial losses.

This is not a criticism of George as the same conditions may not have applied in his time. One possible solution is to introduce the tax in stages with a modest tax to begin with.

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Very well written!

I have a comment on Malthusianism. As a biologist, I tend to think that our escape from the Malthusian cycles experienced by most mammals has to be temporary.

Humans are not having a greater number of surviving offspring in a more prosperous world (mostly) because they have invented birth control mechanisms (actually, turning from clan societies to individualism is also probably important). In the past, humans did not need to have a great desire to have babies to reproduce well; it was enough if they had a great desire to have sex, and that led them to having as many babies as possible. Natural selection didn't need a desire to have many kids.

Now that we have birth control, and all born kids are helped to grow up safely by safety nets in societies, natural selection will grab hold of any heritable trait that causes humans to want or to produce more kids than others. Today there's nothing better, biologically, than to want to have a big family of kids. If this desire is even partly heritable, it should spread. It will take a long time because of our long generation time, but eventually human population should be back to large families of kids.

I mean, you can't escape the greater reproduction caused by heritable traits leading to their greater spread, even at the age of em it will be an important thing in evolution. Does anyone know anything to disprove this or to raise a hope that the non-Malthusian period can last?

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There are some practical issues with a LVT. I describe how this tax could be implemented here: https://gideonmagnus.medium.com/a-simple-way-to-tax-land-3cbf7b81887d

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This is very good. I was vaguely aware of Georgism before but this has moved it from mildly interesting to morally and economically urgent in my mind

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If you're going to use a town in Saskatchewan as your example of the middle of nowhere there are far better choices than fictional Podunk. Try Ituna, Elbow, Eyebrow, or, my hometown, Moose Jaw! All real towns!

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How will a LVT interact with the distortions in the market caused by the fact that buying property abroad is one of the few ways for citizens of the PRC to get around strict capital controls?

Also do Georgists expect that the benefit of an x% LVT will be roughly linear in x? (i.e. can we introduce a partial LVT as an experiment and increase, decrease or remove it according to wether it brings the benefits that Georgists claim it will?

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Is it still possible to submit books for review? I kind of missed my chance but have one I think that both Scott and the crowd would enjoy.

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> The two main things Malthus got wrong were failing to anticipate 1) advances in food production technology like the Green Revolution, and 2) that humans can control their own fertility rates.

Well, 1) is debatable (and IIRC wrong), and 2) is plain wrong - AFAIK Malthus was the one (though probably not the first ?) that pushed hard for the education of women in order to curb fertility rates - which now we know is working ! (This includes him founding schools to educate girls !) There's a reason why late 19th century feminists called themselves "malthusians"...

He had some weird ideas about contraception (that "don't do it" would work in practice, for a couple living together), but then there's only so far that an Anglican priest at the time could conceive of...

I'll note that you have NOT proved your stated "strong form of Malthusianism" wrong, and also that you seem to equivocate between whatever Malthus supposedly said or wrote (and which Malthus ? People can and do admit they were wrong...) and between an inform strawman of "Malthusians" (not the abovementioned feminists I assume ?) - are you sure that your "strong form of Malthusianism" actually corresponds to the claims ?

Malthus(ians) being a favorite punching bag these days, you should be very careful to cede to the temptation to add a few cheap shots of your own, we've recently seen how this happened with Galen(ists) and Aristot(e)l(icians) :



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[Formatting note: appendix links are broken. Also sorry if this comment is overly long and repetitive.]

While I'm sure this is a good introduction for people who haven't heard of this idea before, I went into this with a lot of questions (ranging from my ignorant confusions to unanswered criticisms) about Georgism and LVT, and unfortunately this didn't answer any of them.

I *do* like the idea of Georgism in theory. My hangups:

1. How do you actually calculate the Land Value Tax, in a literal sense?

I always hear from people selling Georgism that tax assessors do it already. But I know nothing about accounting and whatnot; how does that actually happen in practice? Also, why is it done, aren't property and land both taxed the same right now? How do we know that these assessments are accurate, especially if it doesn't currently matter all that much? Even if it currently assesses it accurately, surely if property taxes go to 0% and land value taxes go to 90%, every landowner will suddenly hire a bunch of lawyers dedicated to disguising value from land as value from improvements? And of course one of the big points is that this all has to apply to *all* economic land, not just actual physical land (more on that later).

One solution that I appreciate just because of how different and clever it is is Harberger taxation. (It's an idea used for everything in Weyl's radical exchange system (which I think of as capitalism minus private property), but for Georgism we do it just for land.) The idea is that you self-assess the value of the unimproved land and pay the tax on that, with the catch being that you have to be willing to sell the land at that price to any buyer.

Clever, right? But I don't understand how it works in practice. How can middle-class homeowners reasonably be expected to manage that burden? If they set a price too low, they lose everything, right? After all, what happens if some smart developer actually buys up the land beneath my parents' home? They don't own the actual home, but doesn't owning the land give you the right to tear down and rebuild any structures on it? (If not, then how on Earth does the land have any value?) In practice, how does it work today when land is owned by one entity and the building by another (if that does happen today in practice)?

I suppose the best solution would be that, when my parents bought the house and land in the first place, they would have had the opportunity to pay an extra fee to take the land off the open market temporarily. How big is that fee, how long can the off-market period be, how do you assess the land value in the meantime (you can't just go at what it was worth when it was sold, right? It could radically change, and smart speculators will take advantage of that). Since we're talking about such a massive tax here, I think these questions aren't just nitpicking, but actually matter a lot!

2. What about making new land?

You say that e.g. turning water into land just counts as an improvement. But doesn't it change the analysis if no one currently owns the "land"? (This isn't super relevant right now for physical land, but it could become so if sea-steading or spacefaring ever get off the ground (and also see next point).) The big selling point of Georgism is that the supply of land is fixed, and therefore a land tax doesn't reduce incentives to make new land. But doesn't the presence of a land-value tax disincentivize you from going out to virgin land and bringing it into the market? (I'm actually not sure how this worked in practice for physical land; do people have to pay the government for permission to do this or something?) This isn't necessarily a knockdown argument against Georgism, since property taxes have this disincentive too, but if I'm right on this, it seems important to admit that it's a case where Georgism would introduce disincentives. (Also, the tax is pretty darn high, so maybe it'd be worse than the status quo on this metric?)

Maybe you could say the unimproved value of the land is 0 since it was off the market, and the entirety of the value is in improvements. But then in Elonville, Mars, won't there be greedy landlords paying $0 in land taxes? How _exactly_ does the gradual transition where the "title to the improvements become blended with the title to the land" work in practice?

This is more relevant in light of the next point:

3. What is land, tho?

You do say that land includes all of nature's bounty, but in many places throughout the article you do seem to be implicitly assuming we're talking about physical land. (Everyone writing about economics seems to slip into this habit, passing back and forth between the two definitions without mention. It's an understandable mistake and I do it too; this is the second-worst piece of terminology I'm aware of in any field (the first also being from econ and related to this, namely "economic rent").) With some of the graphs and numbers that people use in these discussions, I'm not always sure if we're talking about economic land in general or actual physical land.

But yeah, anyway, you say that oil *isn't* land, but crude oil still underground is land, isn't it? The act of drilling down and pumping it up presumably being an improvement. Same for all other natural resources. Does every natural resource really have someone tasked with assessing its unimproved value and do they do it well? That can't actually be true, because sometimes like with oil we don't even know the land is *there*.

You say planting a tree would somehow gradually transition from being an improvement to being part of the land, but I'm unclear on how that works. Consider the trees in a swath of forest owned by a timber company, regularly chopped down and replanted. I assume they are improvements since we aren't supposed to be able to "make new land" and we wouldn't want to disincentive planting the trees. So is land actually only the *non-renewable* parts of Nature's bounty? I'm unclear on this point, and on how gray areas would be resolved in practice. Gray areas seem to matter a ton, since in the pure Georgist case it's the difference between a 0% tax and a 100% tax.

When someone buys a diamond ring, do they need to keep paying a tax on the unimproved value of the diamond? Same for literally anything else that requires natural resources to create — do we consider the land to have merely transferred ownership, or "used up" and thus no longer taxable? (If the former, again, how do we actually asses this stuff? If there a Harberger tax on *everything* that had (nonrenewable?) natural resources go into it? If it's the latter, I think that noise in the background is tax attorney's salivating?)

4. What about search costs?

(I only ever heard this critique from Bryan Caplan, who has a blog post (https://www.econlib.org/archives/2012/02/a_search-theore.html) and a paper (https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1999105) about it.)

Doesn't it take effort and resources to identify valuable unimproved land? Consider again oil — sure, if there was a global map of all petroleum, an LVT would introduce no disincentives. But doesn't it introduce a disincentive to *find the oil in the first place*? The higher the LVT, the more difficult it would be to recoup one's prospecting costs. This seems to me to apply less to physical land, but Caplan argues it still does at least to some extent, since real estate people have to do research to find out what spots are valuable. In fact, isn't that like the main thing they do?

Or, do we consider recently-discovered petroleum to have a land value of ~$0? I.e., to we consider *the labor put in to identify a land's value* as an improvement, and therefore not subject to LVT? I guess this would be good since then we don't introduce disincentives, but again I am unclear if this will reintroduce the problems of privately owned land (maybe not, since competitors are incentivzed to search for high-value land?), unclear on how you actually draw the line in practice, and very unclear on how the apparent transition from "it's an improvement" to "it's land" is supposed to go. Again, I don't think we can brush these concerns under the rug "we assess things' value now!" because the imposition of a massive LVT would pretty drastically increase the demand for land lawyers.


I think that's all my questions (though I vaguely feel like I'm forgetting something and may have added more in a comment below (why doesn't Substack have an edit button D:)). I really like the idea of Georgism and an LVT, and I hope that some Georgist comes along and gives 100% satsifactory answers to all my questions. If so, I'll go from tentatively supporting some kind of LVT as better than many other kinds of taxes, to being a full on Perfect Tax Georgist.

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Obviously the best way to assess land value is to make it so that you have to specify a price at which you will be willing to sell your land to any taker, but the buyer has to raze any buildings on that land to the ground so they are only getting the unimproved value. /s?

(this actually sounds like a good way to allocate the airwaves. *googles 'Glen Weyl Georgism'* Yup that seems to be one of his proposals)

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fun note to add: george's 'social problems' is always how i recommend people get into george from a social justice angle, he gets more in the weeds on the morality of the tax there. 'progress & poverty' definitely seems more fit for the Astral codex audience, it's a lotta econ. Glen Weyl's "radical markets", "the high cost of free parking," "the railroad and the city" and pikkety's "capital" (when understood that his thesis, in practice, is actually about land values https://www.vox.com/2015/4/1/8320937/this-26-year-old-grad-student-didnt-really-debunk-piketty-but-what-he) all get into more modern takes and evidence that could lead one to the principles george also describes. i love the EVE online example - economic rents can be generated in *so many* ways, but at the heart is the idea of *profiting from exclusion* or lack of competition.

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I have a question about the graph of worldwide extreme poverty. Looking at the overall trend line, it appears that extreme poverty would be wiped out around 2026, and even just looking at the most recent trendline around 2015 it seems like the number in extreme poverty would be about half of what they're projecting for 2030.

The obvious answer on the graph is that they expect extreme poverty in Africa to go up slightly in the near future and then stay completely steady for 10-15 years. That notion seems hard to justify, given the trends in all other places around the world.

Does anyone have more information on why Africa might be an outlier, and how reliable the predictions are? They are even expecting southern Asia (India, Bangladesh, etc.) to have Europe/North America levels of extreme poverty (read, very very low) by 2030, but for Africa to be worse than now?

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> Generally speaking, as you get more people your productivity grows exponentially rather than linearly:

I think you mean "superlinearly" here; it's much more likely that productivity grows something like nlogn than exponentially.

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One thing that bothers me a bit in this review: first, the Land is defined as "all natural materials, forces, and opportunities", and examples are given: "That means that a field or a meadow is "land", as is a mountain. But so are the fish in the sea, the clouds in the sky, veins of gold in the earth's crust, and the oil deep under ground."

However, anywhere else it seems like only actual plots of ground are discussed. This bothers me, though I can't quite articulate why. How much does an oil field worth? A lot - for an oil company. Not very much - for a farmer who uses the land above it as a pasture (for simplicity, let's assume oil company actually needs his plot to work the field). Will he find himself suddenly paying much higher LVT if the oil is discovered? He's clearly not using the land

to the full extent now that it became more valuable, so it seems in this model he must be penalized for that. I feel there must be a lot more complications, if you apply the given definition of land to all natural resources.

Another thing that bother me if the government, which usually owns a lot of land, should pay LVT on it to itself. This would provide the government with initiative to sell all land it owns and not actively uses to private entities. Sounds rational, but to me it looks like a fast way to dismantle national parks system, for one thing (though I guess you can make such places exempt).

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Speaking as a former landlord, as interesting as this may sound in an abstract sense it fails to square with my reality. My reality was profitable, but required a great deal of risk and effort and not just the "improve the property" effort mentioned in the example. I find the conflation of landlords and land speculators.... odd? Disturbing? Unfair? Not sure any of those words precisely fit but gesture I think at the desired frame of reference.

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It seems like there are two major problems I can see with a land value tax.

1) There is a major tragedy of the commons problem. If I own a lake which is naturally stocked with fish, I can choose to either sustainably fish it, or immediately catch all the fish in the lake. If all of the future "natural" value is taxed away, what incentive is there for long term productivity?

2) In urban/suburban areas, the unimproved value of the land is heavily dependent on the people and land improvements surrounding it. Currently if developers try and gentrify a neighborhood there are two powerful competing interests; landowners who want to increase the value of the land, and renters who don't want to be priced out. A land value tax would mean that landowners no longer have any incentive to gentrify. The obvious political equilibrium is that any development which could increase taxes is preemptively banned.

In addition, the unimproved value of land in developed areas is not a well defined concept. For instance if I put a development block of 100 houses in the middle of nowhere then obviously the unimproved value is simply the value of that land as farmland. If instead I want to build a house next to 99 other houses in a development then assessing the natural value is much harder. The mathematically pure (no deadweight loss) method is to still assess it as farmland, but extracting 100% of Manhattan's farmland value has no impact on speculation or rents.

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Alright, I think this is an absolutely fantastic review, but maybe leaves some stuff unexplained - I assume because the book in question left these things unexplained.

So this is coming at Georgist reform from an entirely different direction than I, personally, came across the set of ideas, and I think it is helpful to come at the reforms from a different direction. Namely, Georgist taxes aren't just taxing rent - that's one way of thinking about what is happening, but not the only way.

If you consider property rights, they are, fundamentally, an exclusive right; ownership of land amounts almost entirely to the exclusive right to use that land. I can build something there, but I don't have to; what ownership means is that somebody else -can't- build something there. Theories of value and natural rights property ownership hit a rather hard limit in the case of land, because land is the unconverted value remaining. So Georgist taxes are taxing the fact that property rights are really just excluding anybody else from using this land; the Citizen's Dividend is paid to everybody else because "everybody else" is whose rights have been limited by the assignment of property rights.

Consider land in its natural state; nobody owns anything. Okay, now imagine somebody builds a farm. We'd like them to be able to enjoy the products of their labor, so we assign them the rights to the farm. Property rights go unjustifiably further than this - if a passing surveyor discovers coal a hundred meters under their farm, who owns the coal? The surveyor who discovered it, or the farmer who put no labor into discovering it, and whose labor goes no deeper than the first half meter or so of the soil?

Georgist taxes in this case don't tax the farm, they tax everything else, and in particular the claim to mineral rights that have nothing to do with the farm itself. They tax the right of exclusivity.

And as others observe, the price of exclusivity could get quite burdersome, when, say, you're talking about a single family dwelling in the middle of Manhattan. I would say it's actually kind of an open question what we want to do here; it isn't obvious to me, either that everybody else gets to demolish the home (as the right to the house is, I think, quite justifiable), nor that the homeowner gets to have a house in the middle of downtown - as the right to have the house in that location is not as justifiable, given what everybody else is giving up in exchange for that house to be there - certainly I don't think the hundreds of people who could be housed in a building that could be constructed in that lot should have their own interests ignored. The cost of exclusivity is, in fact, quite burdensome on society for that case.

I'm all for eliminating land rents, which is good and well, but Georgist reforms have a lot more going for them than just doing that.


There's some confusion about why it's important that labor costs come out of production rather than capital; the insistence here is about establishing some clarity in definitions. George wants to define capital in a particular way, as a labor enhancing good or technology. If we wrote an equation, it is something like Productivity = Labor x Capital. The point of the definition is to be able to write something like this equation. Wages aren't part of capital because wages don't multiply the value of labor.

Is this distinction important? It depends on what you're thinking about, and what problems you're facing. Treating money as capital is an abstraction of a process by which money can be converted to capital goods by purchasing them. We can easily construct scenarios in which this abstraction fails horribly; if I sell my farm, take the money with me on a flight, and crash in the desert a thousand miles from anyone else with a suitcase full of that money, I can't buy a farm in the desert and survive on the food and water there. The abstraction can be a useful one, but only in the contexts where it is appropriate.

George is insisting that we separate the abstraction of money-as-capital, from the idea of capital itself; the fact that the wages I'm paying laborers is fungible in a certain sense with capital goods doesn't make that money a capital good.

(Also, the valuation of a company that builds ships is, in an ideal sense, going to vary with the expected returns of that company; the value of a half-completed ship should certainly be priced into the value of the company.)


As for Google versus farmers, I think an important thing to note is that I think Georgist land reform could potentially lower the taxes farmers pay, given that currently they are taxed on the value of the farm, whereas Georgist taxes will be taxing them on the marginal value of the land that farm is on. .5% of the value of a farm could easily exceed 100% of the marginal value of the land, particularly given that the value of land in a Georgist scheme will be a fraction of what it is in the current scheme. Another consideration is that Georgist taxes would ideally tax the "land" of intellectual property, as well. Overall I expect a Georgist tax scheme to favor farmers over Google.

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Doesn't a correctly valued 100% land-tax encourage a silly amount of re- development? Wouldn't we be building things and tearing them down every few years just to ensure that at all times the land is being used in the most efficient (economically valuable) way? (Although I guess we wouldn't actually do so, since no one would build a nontrivial structure in the first place, and so more land would just stay vacant.)

A property tax (on both land and improvements, not necessarily at the same rate) can raise as much revenue but gives a tunable control to balance inventives for redevelopment against recognition of the economic value in keeping existing structures in place (even if they weren't be very best use of the land were we starting from a blank slate, which we will rarely be.)

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Can I just say, I really appreciated the stylistic decision to use "By George" when describing his assertions/claims. I chuckled every time.

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I enjoyed this very much! Currently I'd put this at about #1 or #2 with On The Natural Faculties and both well ahead of Order Without Law. I enjoyed OWL as well but the competition is fierce

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TL,DR: Review good, Georgism makes sense, but "radically more liberal high density zoning" seems simpler, better and easier to implement than a LTV.

Longer version:

This review is great, we can boil Georgism down to "everyone needs land to earn a living, you can't make more land, therefore the price of land (that everyone needs!) will increase too much as landlords receive unearned "positive externalities" from the community developments around them."

I think this is basically right, but modern technology makes one tiny part an issue: you don't necessarily need new **marginal** actual land to earn a living, you need a living/working space, which with low technology (i.e. stone or wood buildings) can be very limited, but with modern skyscrapers (and, key feature, liberal density zoning rules!), it is not. - in the "Up" example, Carl's high rise neighbors could give up trying to build his land and instead put 10 new floors on top of their building (or maybe underground levels!), or subdivide, or whatever other thing you can do to increase density. Almost no place on earth is actually so dense that a few dozen massive skyscrapers wouldn't provide more living/working space than anyone could possibly want (with resulting effects on actual "rent")

It seems to me you CAN create new "living/working space" via density. So the logical opposite counterpart of "Land Value Tax" would be "Living/Working Space Supply Increase", or more commonly called: YIMBY or increased density or more loose zoning. It has advantages over LVT in that the system (zoning) already exists, it just needs to be liberalized/modernized. No taxes change for normal homeowners. Certainly, NIMBY style people will oppose it, but how much do you think they'd opposite getting a huge tax bill for (in their opinion) no good reason? Basically the entire Georgist issue is "community developments increase the value of property without property owners having to do anything" but radically liberalized zoning would only let property owners who *built valuable, high density improvements* on their land reap those value increases. - i.e. what we want - With a far less radical restructuring plan.

With radically less density zoning, when an area gentrifies, the evil slumlords' property value never goes up because his next door neighbor builds a 100 story apartment and absorbs all the demand for new housing. We achieve exactly what we want: landlords who want to reap the community development rents have to improve their property (via density) in order to actually reap it, while slumlords who do nothing do not.

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I just want to add that Leo Tolstoy, probably one of the most influential humans ever, spent his last few days talking to strangers in trains, telling them how Georgism would solve all of Russia's problems.

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"I know of nothing better calculated to make the blood boil than" the goalpost-shifting between saying on the one hand that land is wholly fixed in supply, from which all the wonderful properties of the land value tax derive, and saying on the other hand that long-term improvements become part of the "unimproved value" of the land, thus most of the land's "unimproved" value also derives from improvements, but then immediately pretending that this isn't the case.

"But it will be said: There are improvements which in time become indistinguishable from the land itself! Very well; then the title to the improvements become blended with the title to the land."

The paragraph preceding this gives examples, but immediately dismisses them as "edge cases"; elsewhere, "the amount of land "created" in this way is pretty darn negligible", which is not at all the case, as visible from the very examples the author listed.

Why does this matter? It matters because you get less of what you tax, especially if you tax it 85-100%. This disincentivizes two things: one, never mind improving the land, simple stewardship of it (example given by the author: erosion prevention). Two, provision of transportation. When the author says "Workers priced out of living close by have to spend more time and money commuting longer distances to work", they don't mention that (with the exception of those who walk to work), this takes place on built infrastructure on which service runs: buses, trains, etc.

"An empty lot in the middle of nowhere is worthless, but an otherwise identical empty lot in the middle of New York city is priceless." If I should be able to build a near-instantaneous teleport gate between the two, then people will pay equal money for them; if the transportation I build consumes some time (headways as well as speed) and/or money, they will pay that much less, but people's willingness to pay depends on their access to a potentially quite large (region-sized) labor market.

Henry George may be excused for not realizing the latter point, since in his time a large fraction of people did walk to work, but for a contemporary author explicitly mentioning commuting, this is a major oversight. This is especially strange when they lay out the law of rent and elsewhere think about reducing the cost of housing: building or improving transportation to as-yet-unserved or underserved land is one of the obvious ways to reduce land rents where they are high (in their worked example, improving field C would reduce the rents of fields A and B). Describing without endorsing, this exact process happened in the US during the Cold War; networks of suburban motorways temporarily created a glut of undeveloped land within commuting time limits from preexisting cities, thus land prices fell and people moved to the suburbs; since afterward the rate at which undeveloped land comes into the market (i.e. the rate at which land is supplied) declined, prices moved up once more. Also note that this process happened both with other technologies and in other places; the term "commuter" comes from 19th century railroad suburbs, streetcar suburbs were a thing (contemporary urbanists love them), and similar rail-based suburbs sprang up in pretty much all countries that are competent enough to build railways.

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(1) I have a question regarding the marginal rent of land- in two places above the author characterizes George's view of the margin of production as "the difference between how much you can produce from a particular piece of land (Lot A or B) compared to the *least* productive alternative (Lot C)." -- but given traditional understanding of marginal economics (as well as basic common sense), shouldn't the margin of production be the difference between how much you can produce from a particular piece of land compared to the *most* productive alternative (i.e., if my land has 100 utils, vacant or unappropriated lot C has 60 utils, and vacant or unappropriated lost D has 30 utils, shouldn't the margin of production be 40 rather than 70? -- it seems like the trouble with "the worst land available" as a reference to margin of production is that I can always point to a place in outer space of no reasonable utility as a reference point and say that every margin of production is simply the highest and best use of land relative to 0 utils.

Now, perhaps this is indeed the Georgist view (i.e., the hypothetical maximum utility of the land is just its margin of production, and what you should tax it on), but seems weird to characterize that as a "margin" in that instance. So am I missing something, or is the review mistaken as to the comparative plot being the least instead of the most valuable alternative?

(2) Loved the review - I have a few outstanding concerns about Georgism's emprical tax assessments as well as some frustrations regarding its implications for incumbent landowners (basically, if Amazon builds its new HQ next door to me this forces my taxes up involuntarily through no act I could reasonably control, and while in theory the tangible gain in exchange-value is meant to compensate me for any decrease in use-value (either because I can't afford the new taxes or because I don't want to live in Amazonville) I can see problems with it in practice -- but I kind of suspect that at a very fundamental level, Georgism is basically right about things.

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> Another effect George asserts is that once land is no longer monopolized, labor is no longer forced into one-sided competition, so wages start to go up.

What's the explanation for this? I re-read but still missed it.

I can envision a quasi-Marxist argument that labor and capital are both being exploited by the landlords, and that therefore reducing the power of the landlords should increase the return to labor+capital. But that's a distinct argument from being "forced into one-sided competition".

Is it just the implication that more economic activity would be happening, giving workers more options?

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In some cases it's possible to do a joke to death. But by George, this is not one of those cases.

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George's theories were independently rediscovered by Irish economist/farmer Raymond Crotty, whose supreme court case made it obligatory for Ireland to have a referendum to change their relationship to the EU. As a naive but educated young farmer, Crotty had thought he would invest in capital, only to discover purchasing more land is what the more sensible/experienced farmers did with their money. He wrote the book "When Histories Collide" in part about that.

I think George was write about taxing the unimproved value of land (I would put Georgist taxes right after Pigovian taxes as the two things to be taxed before consumption, much less income). However, I'm not convinced about cycles. It would seem to be a constant factor. Monetary policy seems to explain recent business cycles, while "real" factors can explain older ones. The US was rather weird in its banking system back then.



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"Buy land - they don't make it anymore" is a very old investment-proverb.

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This review is pretty good and really well researched, but I feel it takes a huge dip when he redefines capital, and it doesn't recover until the final part of the first book. Everything else is great, so good work!

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Isn't there a math error right at the top? 200,000 people is ~5% of 3.8 million, not 1%

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By George that was a good review. Thank you. The idea of 'land' seems useful, but (as pointed out by many) confused (or confusing). Radio spectrum as land, is good. Nature's bounty (fish, lumber, oil, minerals) is less good. And even the 'natural worth of land' is confusing. I live on 30 acres of half field half woods. To the lament of our farmer neighbors, we've let the fields turn back into shrubs and trees. This has reduced the value of the land for haying/ farming. Do my land taxes go down? I also get the sense that a land tax forces land owners to 'use' their land for the upmost short term return. This seems to be the wrong incentive for limited resources. (Get the oil out now to stop paying taxes on it.) Am I taxed on all the potential uses for my land? Must I lease my land for cattle, gas fracking, and windmills, because I'm taxed as if I should be doing all those things?

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I may be missing the point here, but is it really the case that we can’t just reduce rent prices by aggressively increasing supply? Sure, land is a finite resource, but we can build vertically thanks to the wonders of the elevator. Also I read somewhere that before deregulation of the airlines, planes used to be much more spacious, but it turns out that people are willing to forgo a lot of comfort by being packed into a metal tin like sardines, in exchange for a drastically cheaper plane ticket that gets them to their destination (I.e. comfort in exchange for location). It seems like many people exhibit the same preference when it comes to rent, and will choose a tiny apartment in the city over a spacious place in the middle of nowhere. But are we really at the limits of resource utilisation here? If you were able to bypass all the NIMBYs and zoning laws and build several giant skyscrapers full of tiny Tokyo-style capsule apartments in an in-demand location (say, central London) what would happen? I imagine there would be a lot of people who would be willing to live in such accommodations - you could always rent a workspace elsewhere if you need it (of course, this is another form of real estate, but it can be used much more flexibly and thus efficiently than renting a bed, and not everyone needs it) and for leisure activities people can now use very portable smartphones and laptops, as well as all the delights of the city. Possessions can be stored elsewhere where it’s cheaper (in lockers where they can be stored tightly) or people can go without them entirely.

I realise this all sounds very much like the “rectangle fetishism” that Scott skewered in his review of Seeing Like A State, but I believe there’s a real demand for such housing, if nothing else because the rent is so damn high that some people *must* be willing to exchange a lot of comfort in order for more disposable income.

I had always assumed that the only reason this wouldn’t work is because we have dumb crony capitalist regulations (which are designed to protect the interests of people who currently own property at the expense of buyers) prevent it from happening. But was my libertarian instinct naive? If we were to build a bunch of places like this, would super-rich investors just buy them and keep them empty, the same way they speculate on other finite resources, like gold or dogecoin or Andy Warhol paintings? And if this is the case, why does anyone ever get to live anywhere? What’s to stop all tenants everywhere being evicted from their property tomorrow if some billionaires realise it’s a good investment?

I’m significantly dumber than the average ACX commenter, so perhaps someone smarter than me can explain why the government (in the socialist version of this scenario) or a private developer (in the libertarian-paradise version) can’t just aggressively build shit until costs come down due to competition? Or can we? I’m confused.

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If you want to show your Georgism with pride, there are some catchy songs: https://www.youtube.com/watch?v=Azc2mcIiZUM

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> Without land value tax you get situations where somebody can anticipate that an empty lot will become valuable in the future, buy it, HODL forever, lobby against future development that would depress their property values, and now you have the Bay Area's housing crisis.

There's something askew about this review when we are expected to know what HODL means without any explanation.

But come on, is this even close to the truth? Are Bay Area house price issues _significantly_ driven by people who are holding land back that could (within current zoning!) develop it more intensively? Because in another world, I thought we were worried about gentrification where that is possible and zoning restrictions at other times? People are get pilloried for tearcing down a laundromat to build a high rise apartment. I'm sure the answer is "_to some degree_ people are just sitting on developable land", but is it to a large degree and is this WHY we have a housing crisis here?

And people who lobby "against future development that would depress their property values?" How does this fit the narrative at all? There's still zoning, and if my neighbour wants to build a slum next to me I might fight it. Is the argument

somehow that 'land value tax' implies 'the political process will relax zoning

restrictions'. If so, please connect the dots. If not, could you explain how the economic pressure to relax zoning restrictions becomes different (or less) under a land value tax?

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Scott might want to think about a word limit for next year's book review contest.

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Thanks for writing this! I’ve often come across references to Georgism and land value tax, and this has been a really helpful explanation.

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I'm sorry, but I really didn't like this review.

Like, as a description of Georgism, it works. As a recap of the book, it works. There's a lot of good lines. But as a review, I think it fails.

One of the things almost any book review has - and that Scott's have very well - is 'what is the argument against this book?' I generally can't tell, when Scott is reviewing a book, whether he agrees with it or not. "The Seven Principles For Making Marriage Work" is my favorite case of a review where he first presents the argument as overwhelming, then says "actually this is nonsense" and refutes it even harder.

What are the actual arguments against Georgeism? The first one that comes to my mind is that it's useless - the value of land in Manhattan is purely from everyone else having land in Manhattan, so if you fix the land tax at the level of 'what that land would be if it wasn't Manhattan', it's negligible, but if you fix it at 'what the land would be if it was a blank lot in the middle of Manhattan,' then if you don't adjust rents in the future you've just massively encouraged everyone in Manhattan found a duplicate of New York elsewhere and move else there, and if you do, you've just significantly reduced the incentive to build in New York, because you're capturing a lot of the benefit of new construction. It also pretty thoroughly discourages the Irvine Company (or anyone else who might want to) from building another city - their profits come from capturing the value of suddenly-more-valuable land, and there's an 85% tax on that.

I don't think this debunks Georgeism. I'm not even convinced that this little argument would stand up under fire. (If I move into giving-fire mode, I can see a *lot* of holes in it.) But in order for this review to be anything more than a summary of the book, it needs to acknowledge that there are real arguments against the book and talk about them, where 'they' are whatever the best arguments are. And I'm sorry, but I don't think it does that.

(Better example than Manhattan: when I google for an empty lot in Las Vegas, I find numbers like $800k as the low end. If you tax every empty acre of desert in Nevada at a sane tax for $800k, you're crazy; if you tax an acre of Las Vegas at the actual value of an empty acre of desert in Nevada, the tax is useless. How do you find your numbers?)

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It seems like most practical LVTs are focused on land. But Georgian 'Land' isnt just land, its any natural resource. What would it look like to tax some other ones?

For example, how would you assess the unimproved value of electromagnetic spectra? The amounts paid for them depend hugely on how theyre auctioned and planned to be used - is this difference strictly an improvement?

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So, I have direct experience (pretty extensively) of property taxation as it actually exists today. We already divide property values into parts (usually land, improvement, and abatement). This is value, not rent, but you could presumably make a decent formula to guess the relationship between rents and value. This is what we effectively do: taking a percentage of of the value. Some places even take a greater percentage of land than improvements, which is at least quasi-Georgist. You could presumably make it fully Georgist by upping the land portion of the tax.

Here's the thing: the values are set by assessors. Here's how it works. Assessor shows up and says, "Lo, I have a degree in real estate and I declare this house is worth $100 in land, $100 in improvement based on comparable properties and trends in various real estate sales." If the taxpayer doesn't like it, they can challenge the assessment in court. The higher property taxes go, the more aggressive people debate valuations in court. And what happens, realistically, is that people mightily resist re-evaluations upward. This leads to long term chronic undervaluation. Which is hugely popular: popular enough to win plebiscites and elections on.

Undervaluation does not have an effective limit. Nor does the distortion of dirt to improvement rent. When you look at places with high land taxes you get huge valuation distortion. Hungary and China both had land taxes and subsequently huge amounts of land was chronically undervalued or even disappeared altogether. In jurisdictions with differential rates, land rents tend to push lower or higher depending not on objective measures but the government in power being pro-landowner or anti-landowner.

So, in summary, land valuation is a difficult process without significant objective standards. Adding another complication is likely to cause further issues. And on top of it all, property taxes are hugely unpopular and I don't think homeowners care if it's on their land or their improvements. Further, it has significant potential for evasion and historically has caused evasion when it gets high. And to add it all up, it's politically unfeasible and hard to maintain popular support for.

Further, the idea that land taxes don't affect prices is a fairy tale. Remember someone who owns and occupies land, or uses it for industry, effectively consumes the rent they produce. Inserting the government to tax it is thus effectively adding in additional rent but to the government. If you effectively increase the costs of land then you raise the prices on land intensive industries. Including food. This threat, of increased food prices, plus hurting homeowners was a criticism of Georgism in its own time. One that Georgists never really addressed to my knowledge. Or rather, they addressed it by insisting it wouldn't because those rents were already priced into food. But empirically this wasn't true: getting rid of land taxes empirically made food cheaper where implemented.

This is because Georgists ignore a simple, inconvenient fact: land's supply is highly inelastic but not as inelastic as they claim. And land use is very elastic. If you raise the price of owning land, less people will own land. This is again something we see in places with punishing land taxes: people simply surrender the land to the government. The idea that you can tax something without raising its price is not empirically the case, model or otherwise. I'm not even sure it's theoretically sound.

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A good effort, but to nitpick a stylistic issue, the anachronism is annoying. When reviewing an old book it would be better to place it in historical context. History is interesting so tell us more about what life was like *back then*. There is some of that, but also too much about what George would think of Bitcoin, JPEG's, and so on. That kind of thing should have been moved to the interludes from the future.

It's not like we're fooled by obvious anachronism, but it's sloppy and suggests that the author might be sloppy in less-obvious places about what George believed versus what the reviewer believes.

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If the first canoe takes 6 months to build, the fish don’t start arriving until the 7th month. And the canoe may continue to exist, and improve fishing, for 20 years, with only tiny amounts of labor to keep it in good repair. And perhaps the number of fish caught may not go up by a perfectly egalitarian 1/3rd, but may cause the number of fish caught to double. Does the canoe maker get no fish for 6 months? If s/h/it isn’t paid out of saved (dried) fish (wealth), they starve to death. Does the canoe maker get fish for 20 years, the length of time the canoe lasts, or only for 6 months, the length of time it took them to build the canoe? Does the canoe maker get a perfectly egalitarian 1/3rd of the increased haul of fish, or do they get all the extra fish that are caught using the canoe? Seems like per George, the ‘wages’ of selling the canoe should be approximately equal to what the canoe is worth to the fishers, which means the canoe maker lives on their own capital of dried fish for 6 months then rents the canoe out for a continuing revenue stream of half the fish, for 20 years. Or some frugal 3rd party, saves up six months of dried fish, and hires the canoe maker to build the canoe, for their opportunity cost (number of fish they would get fishing or digging for those 6 months) and then rents the canoe out for the continuing revenue stream.

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I have to confess this is the first time I was exposed to Georgism and I find it very attractive. I would just like to make sure I understand the central tenet of LVT:

1. Suppose there are two identical houses, one in Pudonk the other in San Francisco. The houses have the same size, amenities and so on. The one in Pudonk can charge yearly rent of $10,000; the one in SF can charge $100,000. It follows then that the LVT for the house in SF is _at least_ $90,000 or more accurately at least $90,000 + LVT in Pudonk?

2. The exact value of LVT depends on the house being the most effective use of land in the given area; if an office building in the neighboring lot in SF can charge $200,000 a year, then my LVT would be higher?

If true, it has some interesting corollaries:

a) LVT cannot decrease rent paid by the tenant to the landlord. If the house in SF is the most effective use of land, the rent stays $100,000 but the landlord will now only capture 10% of the rent. However, if the land could be used more effectively, the landlord will have to increase the rent.

b) The process of establishing the optimal use, i.e. maximum possible rent, is very difficult to do exactly: the rent in the same neighborhood can vary a lot depending on things like proximity to busy roads, views offered from windows, good/bad neighbors and so on. The property taxes in my country are based on price maps that are very broad and very inaccurate, but because the actual tax rate is very low, nobody contests the valuation. Making accurate assessments would be time consuming and expensive and also subjective. I get the point of Harberger taxation mentioned elsewhere in comments, but IMO it stacks the deck against the current owner.

c) It would seem to follow that the rent in office block in Pudonk - that is otherwise completely equivalent to the one San Francisco - is _at most_ $110,000 (that would imply that the correct LVT is still $90,000 + LVT in Pudonk).

Can somebody with better understanding of Georgism and economics confirm or deny these conclusions? Thank you.

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This book review might be the most important thing to happen to Georgism in the last 100 years.

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Good job on the book review. Unfortunately, I’m having a really hard time understanding how this would be meaningfully different that a regular property tax.

It’s easy for a simple residential application, I buy a one-acre unimproved lot in the middle of nowhere that has a Land Value Tax (LVT) of $10/month. I build a house on it and the LVT doesn’t change right? It stays at $10/month because that’s the value of the land, and my structure doesn’t change that, and it doesn’t matter if I put a trailer on it, or build a McMansion with a swimming pool in the backyard or a giant mansion with an indoor pool and private movie theater, the LVT stays at $10/month, right?

But what about Walter? Walter made a lot of money as an artist and buys 30,500 acres in Florida. This land is mostly swamp, has more than its fair share of very unfriendly insects and gets terribly hot in the summertime so the unimproved LVT is $10/month per acre. Walter then drains a few acres and builds a large beautiful amazing amusement park there using his previous art as the theme. It’s an incredible success, everyone want to visit his park.

What would George say? Does his LVT stay at $10/month per acre? That’s the value of the unimproved land. That can’t be right, can it? After all, land next to an incredibly popular amusement park is so valuable that Walter can rent a piece of land the size of an automobile for $20/day. It’s so valuable that he builds a hotel next door and can charge 10X the nearest competitor because his is the only one where you can walk to the park.

I think one easy answer is that the land under the amusement park itself keeps the LVT at $10, but the surrounding unimproved land gets a new higher rate, say 10X or $100/acre/month. That seems unsporting though, after all, Walter has bigger dreams and plans to add more hotels and four other differently themed amusement parks in the surrounding area with interconnected transportation. Walter wants to pay for it with the profits from his first park, but if he has to pay a much higher LVT on that land he can’t do it. If he sells the land, someone who has cash ready will come in and build hotels and restaurants right next door and Walter can’t charge as much for a hotel room or parking and can’t build interconnecting transportation through those other people’s new buildings and his dreams end.

Is this really what George wants? After all, keeping the surrounding land unimproved is just collecting unearned rents. If this is the answer, when does the LVT change, wouldn’t it go up on all the property as soon as the building permit was approved? After all, that was the speculators reasoning for buying up land near where the railway was going to be built. If not when the permit is approved, does it go up as soon as the first island of rides is built? Does it wait to go up until the first customer comes through the gate? Can Walter lock in the low LVT by building a sea of empty shanty towns across his 30,500 acres then tearing down a few to build the amusement park?

Of course, after everything is built in that area including a competing amusement park, doesn’t Walters LVT on his park go up, since the land near a bunch of hotels in a popular vacation area is worth much more than swamp land? I think in practical use an LVT will be indistinguishable from a standard property tax, it will just call itself an increase in the value of the land instead of arbitrarily assigning some portion to the land and some to the structures.

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Maybe they will try this on Mars!

Interesting opportunity for a test.

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I find this review extremely compelling - are there any strong, academic-ish critiques out there of Georgism that I can read to calm down my ideological excitement?

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Brief review-of-the-review:

This is great stuff but... not exactly a review? It reads more like a SSC-style FAQ structured along the lines of the book. There's not much discussion of how the book itself reads or critical treatment of its claims. I'm sympathetic to Georgism but if I weren't I'd probably find this annoying, like someone was trying to convert me to their way of thinking and disguising it as a book review. On the other hand the writing is lots of fun and the argument is very clearly presented, so I liked reading it a lot.

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If the only thing landlords can make money on is the house, won't this get rid of yards and lawns and space between neighbors?

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Ok, question: on the basis of this model, could books count as capital?

They are the product of someone's labour, and taken from nature. It is arguable that their value as books might not be high, but the value of the knowledge within them could be. And in that case, using the knowledge contained within books to generate wealth for oneself would count as a capital use of the books. This would indicate that certain things can have capital value that isn't tied into the value that someone might pay for them - if they were too ignorant to know why a history book was of value, for example.

Second question: the author points out that clothing isn't capital, since it's a necessary thing regardless. What about if the clothing (or anything necessary and not explicitly capital) is leveraged to produce wealth? Say a designer suit that indirectly results in a better impression at a business meeting and an offer of... etc. We can imagine even consumables in this category, since things like makeup or skincare products can enhance one's appearance and generate 'social/cultural capital' which can afford access to real wealth.

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Would Georgism apply on other planets? Or would land on Mars be considered capital? If it is considered capital, that might produce a landlord-dominated society on other planets.

OTOH, it might make sense to treat new planets in the same way we treat intellectual property. The developer would own it for a limited time and then it would become public domain.

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Sorry for the aside, but if...

>Bitcoin isn't wealth, in case you were wondering.

>It's just a (very fancy) financial instrument, a digital

>claim on wealth.

....then what/whose wealth is a newly-minted bitcoin a claim on?

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This is a polemic disguised as a book review. It doesn't even attempt to criticize the argument of the book or put it in context. Honestly I'm a bit annoyed at Scott for publishing it.

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There had better be a matching article that steelmans the arguments against Georgism, or else I fear I am going to be very disappointed.

Similar to the Reactionary FAQ and the Anti-Reactionary FAQ.

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Apologies if I missed this in the review or discussion, but, by George, why would a LVT affect wages or returns to capital? Why would shifting the rents from a landlord to a government make a difference to the Mathlthusian wages trap? Certainly there would be secondary benefits to laborers & capitalists (UBI, reduction/elimination of other taxes).

But my reading of the review was that George claims the LVT would directly increase wages, and I don't see the link. Excepting places like SF with bad development policies currently, why would rents be any lower under LVT than our current system?

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Thanks for the review. I had heard of Georgism, but I didn't know much about Henry George himself.

If you look at Houston or Dallas, it's clear that we can have affordable housing without massive subsidies or land-value taxes. We just have to give up on greenbelts and urban growth boundaries. Housing has become expensive in certain areas because its supply in those areas has been artificially limited by the government. For example, only 18% of the San Francisco Bay area has been developed. The rest is off limits to development because of urban growth boundaries.

Georgism was a lot more relevant back in the old days when wealth was more closely associated with land. That hasn't really been true for a while in the west. If you confiscated all of Jeff Bezos' land holding, I'm sure he'd be annoyed, but he would be able to buy them back by using with the real source of his wealth -- his technology company.

Arguably the price increases in college degrees and medical expenses have hit the middle class a lot harder than the price increases in homes in certain metro areas. After all, moving to a part of the country with lower home prices is always an option -- there's no such workaround to avoid college and medical expenses.

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That is a terrible chart on inequality. All that means is that the stock market has done quite well if you invested at the beginning of the 80s.

A much better inequality measure is income adjusted for transfers. And that has actually gone down since 1967.


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> Where's the line between "improvements" and "ground rent?" In most cases it's pretty straightforward to separately assess the value of a plot from the value of what sits on it (modern property tax assessors do this already),

> https://web.archive.org/web/20201215230813/https://www.investopedia.com/articles/tax/09/calculate-property-tax.asp

That link does not actually support that claim in any way. This is the primary practical obstacle to Neo-Georgism Now, so this is a very important omission.

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Vietnam has LVT already:

100% land is owned by the public, which is represented by the state (henceforth, “the public”, “the people”, “the community”, “The State” are synonyms). Individuals and business can only rent land from the State and must pay annual LVT, i.e: I can “have the right to rent a plot of land” but never own a land. The State calculate LVT consider the below factors:

- Usage purpose (The State predefines for each plot of land), i.e: agricultural land has super low LVT.

- Location advantage, i.e: residental land in dense city has much higher LVT.

- Speculation, i.e: If you only have 1 plot of land for your own living, the LVT is super low, so people like Carl is safe. LVT and selling-tax is higher if you have multiple lands.

- If the community develop the landscape (i.e: from rural to dense city), The State increases the LVT accordingly.

Summary: It’s costly to HODL land, with a caveat: LVT is low, Speculation still ravel. Reasons:

1. Higher tax = more corruptions

2. More detail LVT (different land lot has different tax) = more loopholes

3. Higher LVT = The State has to pay a lot more to take back the land for public construction

4. Taller buildings = same land but a lot more space to rent out

5. Dense construction: If LVT is too high, people will leave no space open, all land will have some buildings on it

6. Shophouse = Owner live in one floor and rent-out the rest, thus only pay minimal LVT

7. Inequality: Megamalls and super apartment complex sit next to mediocre office and next to slum. Which LVT is fair?

8. Timeliness: LVT take a few years to change because it’s hard to determine how much “the community develop the landscape” without market signal because everyone tries to hide the real price of land resell/rental price. It’s super common to fake price on contracts to reduce the tax payable.

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According to Wikipedia:

"Land value taxation is currently implemented throughout Denmark, Estonia, Lithuania, Russia, Singapore, and Taiwan; it has also been applied to smaller extents in subregions of Australia, Mexico (Mexicali), and the United States (e.g., Pennsylvania)."

So are these places indeed enjoying more affordable housing, more efficient use of land, lower rents, more investment and innovation, lower non-land-value taxes, etc.?

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Wonderful review and discussion. I have learned (*updated* in codex-speak?) a lot. Viva LVT & bring on the revolution, by George 😉

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An interesting potential consequence occurs to me. If LVT were working well, and a power-hungry government wanted more tax but was not quite willing to go to war to get more land would be incentivized to expand outward into space to get more "land" / natural resources for its populace...

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Does one of the links give a good explanation of how we can clearly and fairly compute the land value? Ideally something that doesn't require benevolent bureaucrats. Is there for instance some way we can use a market mechanism?

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Probably the best book review I've read on poverty and progress by Henry George. It's thorough and accurately describes his economic theory. It takes a little bit long to get to the important distinctions between land value tax and property tax and how it affects rent on privilege but that is indeed the way that Henry George's book is organized the. He does save his solutions for the last part. If you're not familiar wish henri-georges economic theory and solutions and don't feel like reading a huge book oh, this is good place to start.

This is also a book review so expect some complaining about points of inadequacies in the book Style. Not really relevant to the quality of his theory but probably relevant to why his theory isn't more popular. Personally I like the book but I can see it being off-putting to a lot of people.

One final note. If you think you understand the major economics Theory as well and you're not familiar with Henry George, there are probably several important economic theories that you're missing out on including his. There ain't just capitalism and communism.


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A great review. Even as a pretty committed "Georgist" it took me the best part of two decades to summon up the courage to read P&P as I feared a dry, technical, old-fashioned linguistically, dirge of "Victoriana". When I did get round to giving it a go, it is truly a beautiful book, and could see easily why it would have appealed to so many back then. I've always meant to sit down and pick out key phrases and paragraphs to quote for people: now I don't have to, as I can refer to this review! :) Thanks.

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I'm almost convinced of a 100% LVT so for sure at 25% or so It’s no regrets. Obviously with compensation.

Two things I need help on.

How is the unimproved rent actually calculated?

LVT does a great job at capturing value from government investment and societal network effects. But what happens to private investment such as a development with private roads etc?

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> wages, instead of being drawn from capital, are in reality drawn from the product of the labor for which they are paid.

This is true in the sense that labor is not wealth-constrained by capital, but it is still **liquidity-constrained** by capital which is the key point I think George misses by assuming liquidity is free and all forms of wealth are equally preferred. Labor is still limited by capital because it relies on capital to trade the illiquid fruits of its labor for money. If that liquidity market dries up, labor can no longer function even if it can create wealth without capital.

Workers create the wealth that pay out their wages through the product of their labor. However, not all forms of wealth are equivalent for all parties.

> George points out that as laborers labor, they progressively add value to whatever they're producing. Take the case of a shipwright building ships for an employer – even if the boss can't sell a half-finished ship, it still holds value (for one, it costs less to finish a half-finished ship then no ship at all). And with every stroke of the laborer's work, the employer who owns the shipyard gets an incremental increase in his stock of capital.

The wealth that is present in the fruit of labor may not be exchangable for other valuable goods and services. A shipwright cannot directly sell his contribution towards a half-built ship to the baker in exchange for bread. A shipwright needs to convert the wealth created by his labor into a more liquid form. This is where capital comes in. A capitalist funding the ship company owns the fruit of the workers' labor and in exchange provides them a consistent monthly wage in money (a highly liquid pointer to wealth which can be exchanged for real wealth in the worker's preferred forms: food, clothing, etc). Thus one can conceive of this as a liquidity swap. Workers **discount** their highly illiquid wealth (fruit of labor) for highly liquid money which is much preferred for making payments. Deep-pocketed Capitalists trade highly liquid money for illiquid wealth (ownership of fruit of labor) **at a premium**, thus they make a profit by offering this liquidity service to labor.

Consider the case where capital didn't exist. Each worker would have to make payments directly with the fruits of their labor. This is already implausible in the case of finished goods, but even more impossible in the case of a half-finished ship to which many workers have contributed! Capital doesn't matter only if you assume a theoretically ideal barter economy where transactors are willing to accept payment in any form of wealth. This can never be true in the real world. Liquidity matters.

Thus, we can see how Labor does get constrained by Capital. It **isn't** because capital pays out the wages of labor in wealth-term. It is because capital supplies liquidity for labor's wealth. If Capital stops making that trade, then Labor cannot function even if they want to.

A crew of shipwrights with access to natural resources can still create wealth by building a ship without any access to capital. Yet however much wealth they create, they cannot exchange it for their maintenance without capital providing a liquidity market.

George's focus is on wealth, and assumes exchanging one form of wealth for another is free which is why I think he ignores the critical role of labor in production. I like Georgism a lot, I wonder how much of the policy proposals rest on the assumption that capital is a nice-to-have component of production.

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Overall I have such a problem with the premise that I can't take George or his reviewer here serious. I didn't get far in thr article.

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What are some practical proposals for limiting the exposure of the avg homeowner who's not renting out their home? Otherwise, this seems to be a pretty big source of potential opposition to the LVT?

Also, what do you think common work-arounds would be on the part of landlords? I doubt they'd go quietly if something like this was implemented.

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This is a fantastic post!

But I'm not sure whether this a good _book review_ – I feel like I can't tell because the ideas are so intriguing!

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The mythical LVT cannot exist, because no satisfactory definition of ground rent exists. For example, it isn't even additive: the ground rent of an entire city may differ from the sums of individual lots, as each one has a city around it, yet the whole city doesn't! So for example this would just incentivize new city creation in which a single shell corporation owns the entire city, making the ground rent very low.

Wealth/Property taxes give a real way to fight rent collection, and especially NIMBYism. Property value, unlike ground rent, has a clear definition for example given by an auction. Taking the view from a previous post about city regulations justified to libertarians by treating the city as a corporation which owns the entire city, a highly NIMBY city would have to pay large property taxes as a whole, since they'd have to bid against developers who would relax the restrictions. Of course, if they're willing to do this, there's no problem, and no reason to force them to change.

The key reason for wealth taxes comes from the simple fact that you own very little without the government's local monopoly on coercion. Henry George correctly notices that the landowner does nothing, but in fact maintaining all private property requires effort from the state; I think compensation in proportion seems reasonable. Of course, if you want to bury gold in your backyard and not tell the state, I see nothing wrong with this either- just don't expect the state to help return it if stolen.

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Ok, so I'm trying to play this out with some numbers to see if it makes sense. I actually think rents will go up, but will be a smaller portion of one's income and this will overall be a good thing. That is if the LVT can truly offset all other forms of tax.

Let's say a worker earns $1,500 a year and their overall tax burden is 1/3. So they get to keep $1,000 a year after tax.

I'm not certain what affect the reduced price of land would have. My understanding is that the value of the land would drop by a LOT. A $5,000 property might drop down in value to $2,000 to $3,000 without all that nasty speculation driving up the price.

So there will be some effect where if a landlord tries to jack up rents on me...I will now have a new marginal advantage in terms of buying as an alternative good. Instead of renting, I could choose to buy instead.

But leaving that aside initially, let's say the rent that the do-nothing landlord is able to extract from me is 30% of my income. I'd be paying up to $300 in rent a year.

If the LVT is able to displace my other taxes, then that is a boon to me of $500 a year. Instead of earning $1,500 and paying 1/3 to in taxes, I'd get to keep the entire $1,500.

The reason I'm thinking the LVT could offset more tax than I was paying in rent (perhaps only $150 of my rent was due to the land speculation) is that residential land isn't the only thing that LVT will apply towards, but only citizens will get paid, so all other types of land will pay LVT, but only people collect it.

At this point we might have a strange thing going on. The price of buying property would go down dramatically, but the rent could theoretically go up if I'm still willing to pay 30% of my income in rent. But I'd still be better off.

Before I kept $1,000 after tax and then paid 30% in rent to pay $300, which left me with $700 for me to use throughout the year.

But if I now retain the full $1,500 I earn, and I'd be willing to pay up to 30% for a $450 a year rent. Then I'd have $1,050 left over for me to use. So even with a somewhat higher rent, I would retain an additional $1,050 - $700 = $350 a year. So I'd be $350 a year better off under the Georgist plan even if my rent to income ratio stayed the same.

But then the lower land price come into play. If I can buy that same property whereby I'd pay a mortgage plus LVT of less than $450 a year....then I would select an alternative good of buying instead of renting.

Before at say $5,000 in land value with no LVT and super high speculation on the property, perhaps the cost to buy it would have been $500 a year. And this was in comparison to my prior $300 a year in rent. So I would select renting over buying due to the costs of a loan.

But now that the land is only worth $3,000 with a mortgage plus LVT of only $300 a year. I would not choose to pay $450 in rent to some nasty do nothing landlord when I could just buy a property for $300 a year in total costs. The do-nothing landownership class can't simply extract 30% of my income because they feel like it. The reduced value of the property due to the removal of speculation works out in my favour.

So there would be some marginal cost difference playing out between the value of the housing (not the land) and the competition for rent, etc. which would work out in the favour of the worker.

I don't know what it'd be exactly, but if we say it plays to the middle ground, then rents and property prices would settle down midway between the $450 which is a 'reasonable' 30% of my income and the $300 which I could get by buying a house instead. That demand from so many renters turning into owners would drive up demand a bit, reversing a part of the decline in property prices.

i.e. we'd increase the market size and demand for the house part of the property now that the land value had been removed from the equation, all due to the overall costs of owning land going down and increasing the pool of people who could potentially afford to buy a house.

So perhaps we'd see a new equilibrium for rent/buying around the $375 mark which is the average of $450 and $300. The reduced land values gives the worker more negotiation power as he/she is more likely to be able to buy property instead of renting or their peers might do this. One cannot simply say that 30% of one's income must go to rent.

So the worker could choose to rent a larger property or save more money instead since they have more options. Those savings could go into starting a business or consumption or improving their own wage potential through education or training.

To be fair the whole 'monopoly' aspect of landlords owning the land is in itself a core aspect of what is wrong in the pre-Georgist world. In a free market all players have roughly equal negotiation power and the more one-sided it is, the higher the extraction by violent non-producer landlords is, with the extreme case being slavery or even fully abusive slavery to work people to death seeing them as disposable if there is an abundance of new slaves to be had.

Overall I see this as a positive and it would encourage workers, capital investment, and innovation in the economy. Even though we might end up slightly increasing rents in the process, we'd increase income even more by removing other taxes.

Think of the LVT in other areas too such as in telecommunications where the telcos pay nothing or next to nothing to access the common bandwidth. This could apply to the internet as well and other domains where landlords are using and profiting from things they did not create.

Truly the dead money tied up forever in land which acts as a blackhole sucking in productive energy from workers into non-productive consumption and hoarding by landlords is a highly unfair and inefficient system which tends towards serfdom in the same way our modern banking system tends towards the banks eventually owning everything or the way a marble tends towards the bottom end of a see-saw which has one side all the way up and the other side all the way down.

The worker would go from $700 a year in useful income after tax and rent to a situation where they'd have $1,500 - $0 tax - $375 rent = $1,125 a year. This is a $425 increase for the worker and it would be derived from the common value the community creates. Thereby returning a dividend to each person in the Georgist model while improving conditions for everyone - well everyone except the do-nothing landlord and existing property owners.

Truly this avoids the heap of manure which kills the land and from which nothing grows to a system of spreading it out so that each person might create additional prosperity and velocity of money within the community.

Instead of each dollar going on a trip like this:

Land - Labor - Capital - Wages - Rent - Landlord forever.... a linear process.

We could have a better cycle of money flowing over and over again through the community.

Land - labor - capital - wages- cafe - capital - wages - cobbler - capital - wages - rent - landlord - building repair - capital - wages - etc.

This engenders an enduring cyclical process where money never ends up dead and useless in some do-nothing landlord's pile of cash. They will HAVE to improve the property, perform some labour themselves or the LVT will siphon it away from them over time. Forcibly putting it into the hands of the community again, the ones who generate all of the increased value of the land.

No one has a natural right to steal from the community's creation to hoard it and do nothing with the money except find new ways to steal even more through the creation of a slumlord property empire which makes everything worse for everyone else. That's just theft and has no moral grounds to be tolerated by everyone else who outnumber the landlord.

The main challenge would be....how do you politically enact something which will remove huge amounts of value from existing landowners? They typically have almost 100% pure corruption and control of the ruling classes or are in fact the ruling class themselves where rulers and landlords are the same person. Show me a president, a senator, an MP, or a house member who does not own land or is not behold to donations/bribes from those who do own lots and lots of land?

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Georgism does justify Colonialism, doesn't it? If insufficiently-productive individuals become unable to pay increasing ground taxes as many more more-productive individuals move in next door, and so will have to change their ways or give up their land, then why doesn't the same apply to insufficiently-productive peoples confronted by other, more-productive, peoples?

Nothing the author says on this point gainsays this: (1) "many Native Americans already had a roughly Georgist understanding of land"—that turns out to be a concession, not a response; (2) "it was precisely the colonialists' conception of land as private property that was the mechanism by which the indigenous population was expelled and their lands seized"—true, but all that means that is that the colonialists should have been Georgists, which (given the first point) the indigenous population would have been in no position to object to; (3) "The English first practiced this on their own people"—true, but irrelevant to colonialism; (4) "As a practical matter though, if you want to impose a Georgist policy, that only applies to territory your state has authority over"—Why would it only apply to property relations within states? The Georgist argument will be the same, whether we are talking individual land owners, or collective land owners, just applied from a much larger perspective. And what is so impractical about it?

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I disagree that Bitcoin under the model is not wealth. If anything it’s a truer form of wealth than any money because it’s not an iou it’s a true existing digital good physically produced by the expenditure of human capital through mining

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Dec 15, 2021·edited Jan 24, 2022

My critique in 11 parts. I agree with the conclusion of a land value tax, despite many flaws in George's argument.

1: "Though neither wages nor interest anywhere increase as material progress goes on"

This is very, very, very, falsified by subsequent developments. And even in George's day it was already false. Industrialization creating poverty was an illusion -- it just made poverty more visible by concentrating it in cities next to educated elites who could write about it. >90% of farmers voluntarily went to the cities in a century. If people didn't subjectively consider industrialized city life vastly superior to the old subsistence farming, that mass migration wouldn't have happened.

The book is based on this this gigantic false premise that economic and technological progress INCREASED poverty, when in reality it DECREASED poverty by a lot. 800 million people were lifted out of poverty by China's laissez-faire reforms and technological development over the last few decades. By George, this would be impossible, because the landlords would have taken all the surplus as increased rent.

But it still has some redeeming values which I'll get to later.

2: "where the value of land is highest, civilization exhibits the greatest luxury side by side with the most piteous destitution"

Homeless per 10k population (https://en.wikipedia.org/wiki/List_of_countries_by_homeless_population):

Hong Kong: 2.4

South Korea: 2

Japan: 0.3

Thailand: 0.7

China: 18

Norway: 7

Finland: 8.8

Poland: 8

Hungary: 10

Spain: 6.4

Portugal: 3

Italy: 8.4

Russia: 4

Denmark: 11

Iceland: 10

Ireland: 16

UK: 65

France: 45

Germany: 81.9

Sweden: 36

(the following don't have per 10k stats, so I had to google "homeless population in X" and divide by "population in X"/10000)

Singapore: 1.8

Los Angeles County, CA: 63.7

San Francisco, CA: 91

Jacksonville, FL: 20.8

Oklahoma City: 24.5

Empirically, it seems like rich countries/cities only get high homelessness when they are both (1) very diverse and (2) run by baizuo (a chinese word meaning "white left" https://en.wikipedia.org/wiki/Baizuo). When either of those conditions doesn't hold, a developed country/city doesn't get homelessness over 25/10k. When both of those conditions hold, it usually does. Denmark and Ireland may seem like counterexamples but aren't really. Denmark is a bit less diverse than Sweden, and a bit less woke. Ireland is a lot less diverse than the UK and a bit less woke. Both are a lot less diverse than Jacksonville or OKC.

3: The claim that rents increase enough to gobble up all productivity improvements seems falsified by these charts of San Francisco incomes versus San Francisco rents:



Since 1989, median household income went up by $7500/month, but average rent went up by only $3000/month. Even after adjusting both figures for inflation and taxes, workers would come out way ahead of where they were in 1989.

4: "In fact speculators often keep it out of use, because this forces people to use less valuable land instead, pushing the margin of production down even further, forcing land values up, and now The Rent Is Too Damn High."

This implies speculators sacrificing their individual self interest for good of all speculators, and is therefore dubious. Any individual speculator would make more money renting out his land, because that wouldn't have much of an effect on land values in general. Also, at any point, someone with a more-productive-than-expected use for the land can buy the land from the speculator and put it to use. If the land had instead already put to use by the first person who had any use for it, maybe the transaction costs would be higher because they'd have to tear down something to build the more productive thing.

5: I was put off by the beginning of the review where he beats peculiar definitions to death to (seemingly) rhetorically devalue capital accumulation without doing any empirical work. But when I got down to this, I sorta saw the cat: "Mr. Slumlord puts in as little work as he can get away with and invests as little capital into maintenance as will keep the state off his back. His return is almost entirely rent. And the only reason he can charge rent in the first place is because of the valuable location – value the community produced, not him....The problem with our current system is that when anyone in the community builds improvements, it makes adjoining land more valuable, and then those adjoining landlords jack up the rent. This makes things worse for everybody but the landlords. George's insight is that extra value from my improvement "spills over" from my land and is soaked up by the ground rent of your land."

6: "even though higher earners are responsible for withholding the vast majority of tax money in fraud."

It's not so dramatic. The latest paper showed only a modest difference in the rate of income underreporting between bottom and top income brackets (like 7% vs 20%), and its methodology was based on audits which are basically incapable of detecting cash that never enters a bank or buys something huge, so it's probably understating underreporting on the low end where people get cash from tips/wages/drugs and directly spend it on petty purchases which will never show up in audits. https://www.nber.org/system/files/working_papers/w28542/w28542.pdf

7: The total land value of US land is estimated to be 23 trillion (https://www.usatoday.com/story/money/2019/05/08/the-most-and-least-valuable-states/39442329/), and a normal rent-to-value ratio is 8%/year, so LVT would raise 1.84 trillion if land values didn't immediately crash. Total taxes collected by the US last year were almost double that, 3.32 trillion. So clearly the story is not quite as extreme as landlords gobbling up all the surplus value creation everywhere. The state's monopoly on violence can do that too. In a sense you have two landlords extracting rent: your regular landlord, and the state. On average the latter is extracting almost twice as much rent. Both of their claims arise from the land you happen to reside on.

8. "Land in Times Square will still be a lot more valuable than land in Podunk, Saskatchewan, but both will approach the same price as the LVT rate gets closer to 100%. "

If this is true, then what incentive does the person who owns less-productive land in Manhattan have to sell it to someone who will put the land to a more-productive use?

9. I like everything about UBI, except: If people don't have to first demonstrate the ability to produce something of value before they reproduce, then after a few centuries dysgenics collapses the system, unless there's some AI/biotech eschaton. Biotech solution is iffy due to political/cultural opposition to it and difficulties of scaling.

10. "The absolute size of the human population is still growing, but this is just due to inertia; the human population will peak somewhere between 9 and 10 billion in the 2060's, and then decline from there."

It's still kind of an open question whether subsaharan Africa will ever have not-above-replacement fertility. Their IQs are probably not yet high enough to develop their economy enough to have a complete demographic transition. If we are betting even money on when Earth's population will stop growing, I'll take the over 2065. If we are betting even money on when sub-Saharan Africa will have not-above-replacement fertility, I'll take over 2200. Maybe their IQs rise as long as they're still in a Malthusian condition, so that they'll eventually reach a threshold IQ to industrialize. Seems unlikely for any intervention by foreign biotech to have enough scale to make much difference.

11. George's take on the Irish potato famine seems basically correct except he doesn't seem to note that the rich countries were much more industrialized than India, China, and Ireland, and that is what enabled them to support a higher population density.

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It seems that we need a better word than "justly" in sentences like the following.

> If you're ploughing a field and I lend you a tractor which makes you ten times as productive, I can justly claim more compensation for that than if I lend you a mule that only makes you twice as productive.

More compensation can be claimed by the lender, because the borrower is willing pay more, because the tractor has more value to them. It is not a matter of "justice".

Perhaps the meaning would be better conveyed by flipping the framing from "the lender can justly claim more compensation" to "the borrower is willing to pay more".

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