The Georgist assumption isn't that land in NYC (or wherever) is inherently valuable. However, I think we'd all agree that a plot of land in NYC is valuable - maybe you think it shouldn't be, but I think we'd both agree that it is. The value might not be inherent to the land. Much of the value of land in NYC is because of what others have built in NYC.

Georgism encourages land owners to invest in the land in valuable places (like NYC) because they will be taxed the same whether they improve the land or not. If they have a vacant lot, they pay $X in taxes. If they have that same lot with an office building on it, they pay $X in taxes.

The current system allows land owners to profit off the improvements others create around their land without making any improvements. Many people sit on unimproved property in major cities like NYC because they pay almost nothing in taxes on unimproved property.

Let's say that you own a vacant lot in a part of a city that's seeing revitalization. People are putting up office buildings, biotech lab space, etc. In the current system, you think "if I just wait another 20 years, I'll have the only unimproved land in the area and it'll be worth 10-100x more!" You pay near-zero property taxes and look to profit off what everyone else is creating around your property. People creating housing, office space, lab space, etc. are all creating value around you and you're looking to leech off that value. Every resident, worker, artist, community organizer, etc. that ends up in your area is creating value near your property and you get to leech off that value they're working hard to create.

In a Georgist system, the taxes on your vacant lot would increase and that would encourage you to put the lot to use or sell it to someone who would. In effect, a Georgist system taxes you on the value that everyone is creating around you rather than letting you leech off that value.

> The assumption here seems to me that land in NYC/wherever is inherently valuable, which doesn’t seem true to me. Especially in a remote working world increasingly detached from physical spaces.

Going back to this point, from a market-based perspective, we can both agree that land in NYC is valuable - that people are willing to pay more for land in NYC. You might think they're foolish to pay for it, but they are paying for it. The vast majority of the most successful companies are all locating themselves in the most expensive cities in the world. Most people disagree with your assessment of the value of land in NYC.

Cities provide access to lots of opportunities. Yes, remote work detached from physical spaces might offer that. One can debate the value of remote work for the next decade. However, right now, land in NYC is definitely valuable. Most people and companies still perceive a lot of value there - even if you don't. Therefore, a vacant lot in NYC is squatting on a lot of value

> then move to cheaper land as soon as possible/when their current land becomes more valuable?

Ah, but this is where markets work. If the land becomes more valuable because it is more valuable to you, then you wouldn't want to move. If the land gets assessed at a higher value, but it isn't delivering that value to you or anyone else, demand will go down and then the valuation goes down.

I think what's hard for you wrapping your head around this is that to you the land in NYC isn't valuable. Would you pay to rent an apartment in NYC? I think the answer is "no" based on how you've talked about it. You probably think people renting apartments in NYC are wasting their money. However, most people don't think that way. If they did, everyone would leave NYC and rents would go down. Maybe you find no value in location. That's not true for most people.

You might be correct about the future: maybe all work will become remote and to take it a step further let's say that all friendships, dating, education, and community move to remote/metaverse. NYC no longer has any value beyond things like access to a good harbor.

But in the world we live in today, NYC is highly valued. You might not value it highly, but it is highly valued. There are many highly valued things that I see no reason to be valued highly - but I acknowledge that they are highly valued even if I don't personally value them. In the world we live in today, people can squat on vacant lots and leech off what others are building around them.

Maybe location will have zero value in the future. I don't want to put words in your mouth, but that seems to be where your thought process is going: NYC doesn't seem to have any value for you and in a remote-working world, physical space wouldn't have any value (beyond things like shelter and such). If that's the case, then all land would have equal value and pay equal Georgist taxes.

That's not the world we live in today. Even if you think people are foolish for valuing NYC highly, I think you can agree that they are valuing NYC highly. Even if you think companies are wasting money on offices in NYC, I think you can agree that they are paying lots of money for those NYC offices. That's the reality on the ground. Likewise, the reality on the ground is that there are people squatting on land that would provide real value to people if it were improved, but they're hoping to pay near-zero taxes and just squat on the land realizing a profit for zero work on their part - leeching off the work of those around them.

To flip this around on you: why do you live where you live? Why do you not move to the middle of nowhere 100 miles from anyone else? Even for those who don't like cities and might want to move to rural areas, they often still put value on place/location to an extent. You want to be proximal enough to a supermarket. Most people don't want a 4-hour round-trip to get food. Many people want to be within community rather than just being lonely - that could just mean being proximal to people that can come over and watch sports with you at your home (which they won't drive 2-hours to get to) or close enough that you can join a gym or do recreational sports with others. And you might answer that you can buy workout equipment for your house and chat with people online while watching sports together or that you'll just order food to be delivered (though if more people decided to move to inconvenient locations, free delivery to rural areas would probably need to cease as it's basically subsidized today).

But I'm guessing that you still value place/location as most people do. You might be more flexible and cost might sway you more, but I doubt that you're truly agnostic to place/location. If you live in the suburbs, there's almost assuredly a cheaper town you could have moved to and didn't move to. As such, you found more value based on place/location. Even in rural areas, there are cheaper places you can move to that people decide not to move to.

The authors seem not to understand the topic unfortunately and have to use long prose as they are trying to wrap their head around it.

The core problem and idea for solution is actually quite simple. Let me condense the topic into a tweet or two.

---

Problem: You have a naturally occuring resource which is scarce and which nobody created. How do you allocate it to humans?

Solution: Georgist simply say you can use an auction granting you possession for some amount of time instead of giving you time unlimited rights just because you were first to ask to use it.

---

This is not a theory as it is applied in many systems such as DNS allocation or electromagnetic spectrum allocation. Georgists point out that similar allocation problem is for "land" (think location) and the same auction mechanism can be applied.

Land was considered abundant in the past, especially as new continents were being discovered. Therefore nobody though about allocation, same as nobody considers allocation of air. If air got severely polluted (say by radioactivity) and only small fraction remained usable for humanity, you can be assured that the same allocation problem would exist for air.

After discovering all continents on Earth land ceased to be abundant and now requires a proper allocation mechanism. Otherwise landlord monopolies will continue piling up profits because of their luck in winning the infinitely durable possession rights allocated years, decades and centuries ago in badly structured auction.

Either we start inhabiting new planets or we solve problem of allocation of important scarce resources.

What's funny - you solve this allocation problem and many societal problems disappear as if by magic. Somehow this suggests that land allocation is a major root cause of society.

That's why Georgists dwell on it so much. You should start solving problems from the most serious ones with high impact.

However, you are demonstrating that Georgist "efficient land use" is not particularly desirable. (Moreover, "efficient" land use is rarely that important.)

Georgism does push towards a monoculture and a particularly horrible one at that.

For example, Georgism punishes someone who puts some open space between buildings, even though open-space is clearly a good thing.

As I wrote previous, Georgists confuse having an equation that they can "optimize" with having a useful idea on how to allocate resources in the real world.

Yes, Georgism lets you do some calculations, but that doesn't imply that doing those calculations is worthwhile. (This is a problem with economics as a field.)

And, no, the "witticisms" don't make your case. They actually argue that Georgists are dangerous fools.

I love George as much as anyone, but valuing land independently from what is on it is very tricky. Yes, yes, i know there are a bunch of suggestions for how to do this, but none of them seem to work well easily in practice.

I just can't wait for the full consequences of automated statistics-based decision-making to develop into realtime embedded robotics, giving rise to the $100 trillion company, evaporating hundreds of millions of jobs, burning down the world as it is, but at least silencing these squeaky, visionless voices: fiat lucrum, et pereat mundus.

[1] https://en.wikipedia.org/wiki/Georgism#:~:text=Georgism%20is....

[2] https://en.wikipedia.org/wiki/High-net-worth_individual

[3] https://en.wikipedia.org/wiki/Lord%E2%80%93bondsman_dialecti...

Labor is energy, Capital is accumulation of energy. Land is any natural opportunity.

Domains, patents or spectrums are portions of namespace, string space, idea space, frequency band - some kind of space, in other words land.

> Objection, your honor. Assumes facts not in evidence.

Many Georgism advocates seem to have this idea that Georgism is this magic formula that is going to fix everything, and the only alternative is catastrophe. Even by those standards, though, this statement seems rather extreme. Can you defend it, rather than simply assert it?

I don't want to defend anything. It's up to people to decide if they want to burn everything to the ground after exhausting all the economic policities with nothing much to show for it. Real estate keeps getting bigger problem than ever, birth rates plummeting. Continuing the trend will result in a collapse by one of 1. depopulation 2. war 3. revolution or similar event. Since real estate is such a big part of it, georgism - the antidote for misbehaving real estate - seems like the next tool to reach for.

Anyways - everybody who spends a bit of time trying to understand it realizes that it is logically the obvious solution, but is politically infeasible.

You can't. No one person can. That's why centralized economic planning doesn't work. (I'm not trying to suggest that Georgism is centralized planning, or that Georgism doesn't appreciate the value and necessity of price signaling.) And private ownership doesn't necessarily lead to the most efficient allocation. But the point is that private ownership is a stable regime. There are an infinite number of regimes that would offer better allocation, but we haven't yet seemed to find one that is stable, or that we can make stable. (A big part of the problem, I suspect, is cultural, so I don't mean to suggest that Georgist systems are inherently unworkable, just evidently unworkable in recent American history. I think our social and political cultures play a big part in what make land value taxation seem unfair.)

That said, if the public believes land isn't being put to good use it can purchase the land at market price.[1] That still leaves accidental and speculation profits in private hands, but theoretically it puts a ceiling on inefficient allocation. Unfortunately, in some ways (particularly politically) eminent domain powers are at their nader in the U.S. Which is a big part of the reason why we can't accomplish things like California Highspeed Rail. I think that drives home the point that Georgist taxation is less workable today than it ever has been in recent history.

[1] That's required by law in some countries, like the U.S. In some other countries it's not technically required by law but it's often the case that the government does pay market price, simply because to do otherwise would seem unfair and lead to political backlash.

The root of the problem here is that the house is worth peanuts compared to the land, so the homeowner has nothing to gain from bargaining with the developer. We end up destroying something of value (housing) in the name of speculative land investment, which is a shame

What this does is make the Ricardo/Georgist of land more relevant in the current times than it was for agricultural land hundreds of years ago. The difference between good and bad land is amplified, not reduced.

Check out this map of the US, that switches from pixels proportional to acres to pixels proportional to real estate value. Georgism applies most extremely to these areas that metastasize:

https://twitter.com/bufordsharkley/status/138799739507868467...

It's also worth pointing out that the primary "critique" of Piketty's analysis of wealth inequality, with wealth increasing towards capital owners, by Matthew Ronglie, was two fold 1) depreciation wasn't properly analyzed, and 2) most of the wealth transfer went to capital in the form of real estate rather than other forms of capital. And the part of real estate that doesn't depreciate is the land, not the structure. So I view Ronglie not as a refutation of Piketty, but an addition that points the way to the real problem with capital: land.

For George, land was not capital, it had to be separated out because it behave differently than a set of tools. And for George, land doesn't refer just to the dirt on which we build structures, it also applies to things like patents and other monopolies that the HN crowd understands to sap wealth from society.

Georgism is a very unintuitive understanding of political economy, but I think that the HN crowd is far more likely to find it a natue thing to understand, since our "capital" in the form of computers are cheap and plentiful, most of us live in places where real estate demonstrates George's insights dramatically (the Bay Area), and we also encounter other forms of economics land like patents/IPv4 addresses/domain names.

First problem: This is a recurring process but the land is only "unimproved" at the time of the first auction. At which point no one was interested in the land, there being nothing and noone there, so the auction price is effectively zero. After that first auction you can't say how much of the market price in any later auction is due to the land itself and how much is due to improvements.

Second problem: In order to auction something off you have to own it first, but this is unowned land. No one has the right to sell it—or to prevent anyone else from using it. Land only becomes property after it has been improved. This is also the point where it first acquires economic value.

Third problem: You can't just go auctioning off already-improved land separate from the improvements. The improvements and the land are a single, unified good and in the vast majority of cases cannot be separated without incurring expense akin to rebuilding the improvements from scratch.

Fourth problem: LVT is valued mainly for being a tax on "unearned" external benefits property owners receive from the community, but the "unimproved" value of the property is a poor proxy for net external benefit received by property owners. On the one hand, the value of the improvements also depends on the community; if you build a family home or a restaurant or a warehouse the value of that building is going to depend on the demand for specific kinds of goods in that area and not just the cost to build a similar building. On the other hand, the so-called "unimproved" value of the land is readily influenced by the actions of the property owner, for good or ill. LVT punishes property owners who contribute to the surrounding community by taxing them on any increase in the value of their property which follows from their own contribution to the public good, and rewards property owners who contribute to lowering property values in their own neighborhood.

If you think about it this makes perfect sense: why is a small lot in a city (say central Paris) worth millions while a 10ha estate in the Australian outback worth a few thousand? Because of the community that throughout the generations built the city into a place with value where people want to live. It is therefore to the community that this economic value belongs.

Beyond the moral dimension of this proposal, there is also a surprising economic depth: this rent/"tax" would discourage unproductive use of land, as speculators cannot afford to sit in a property, wait for its value to go up, and collect the income from the hard work of the community around it.

I'll leave you with some quotes:

The tax upon land values is, therefore, the most just and equal of all taxes. It falls only upon those who receive from society a peculiar and valuable benefit, and upon them in proportion to the benefit they receive. It is the takingby the community, for the use of the community, of that value which is thecreation of the community. It is the application of the common property to common uses. When all rent is taken by taxation for the needs of thecommunity, then will the equality ordained by Nature be attained. No citizen will have an advantage over any other citizen save as is given by his industry, skill, and intelligence; and each will obtain what he fairly earns. Then, but not till then, will labor get its full reward, and capital its natural return.

—Henry George

Landlords grow rich in their sleep without working, risking or economizing. The increase in the value of land, arising as it does from the efforts of an entire community, should belong to the community and not to the individual who might hold title.

—John Stuart Mill

The underlying problem is the whole structure of our economy which has become more oriented at increasing rents than increasing productivity and real economic growth that would be widely shared in our society... but a tax on land rents would actually address some of the underlying problems. This is an idea that Henry George had more than 100 years ago but the analysis that I have done says it would actually go one step beyond Henry George. Henry George argued for a land tax because it was non-distortionary but this analysis says that a land tax actually improves the productivity of the economy because you encourage people to invest in productive capital rather than into rent generating wealth and the result of that shift in the composition of savings toward more productive investment leads to a more productive economy and leads to a more equal society.

—Milton Friedman (and believe me, I don't often quote Milton Friedman!)

California is a great example: HSR battles and Prop 13 revenue dilemmas are things that land value taxes are directly intended to resolve in favor of the public wealth. But both of these phenomena have strong public support propping them up, directly and indirectly. Prop 13 was passed precisely because the public was concerned about the threat of people being priced out of their homes, and that sentiment is at least as strong today as it was back then. Land value taxes would systematize homeowners' worst fears, and they won't be placated by arguments or even evidence that shows that they're better off on average.

I'm tempted to say that people are just irrational or that the public often wants contradictory things, but that would be lazy--true but lazy. In any event, my point is that resolving these things requires more than simply engineering a system that works better on paper. Incentives have to be aligned not just in dollars, but also in votes; not just at the outset, but also on an ongoing basis. Georgist land value taxation schemes are fundamentally predicated on consistent, long-term application. Once exceptions are made it crumbles because not only do perceptions of unfairness increase, the utility of the regime declines. This is true of alot of things, even traditional land taxation, but it's especially true of land value taxes.

[1] Or at least I'll concede that point. It's not obvious to me if and how prospective public works projects would figure into land values under a Georgist system, especially in the rural areas where HSR battles seem to be the worst. (AFAIK, the more urban areas in and around Fresno were acquired and bulldozed rather quickly.) Particularly with land value taxation, the devil is in the details.