I still don't understand how Georgism makes any sense in a digital world. The biggest companies in the world require irrelevantly small amounts of land to operate. A person can make millions in a 10x10 box with a computer.
Georgism is pretty great, consistently incentivizing people to utilize their land. However, I wonder how much it would change with non-land-based productivity, ie people or AI making money through the internet.
"Georgism is concerned with the distribution of economic rent caused by land ownership, natural monopolies, pollution rights, and control of the commons, including title of ownership for natural resources and other contrived privileges (e.g. intellectual property)" [1]. From a Georgist standpoint today's land is data. Do you have $30 million or more to be considered an ultra-high-net-worth individual [2]? If yes, congratulations, we are indeed enemies. If not, don't kid yourself, you are just as much hoi polloi as a homeless person. Do you even own a factory or you just embody bonded consciousness as a hobby [3]?
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.
Georgism just makes more and more sense the more you think about it. The idea that people should be allowed to profit off unimproved land is so clearly immoral, and that’s not to say anything for the efficiency Georgism brings and the amount it would help lower rental costs.
I think Georgism has a calculation problem, and furthermore I don't believe one can model the supply of land as a perfect vertical supply curve.
I don't think that it is possible to fairly assess the value of a location separately from the permanent improvements to the land. And I don't like systems that produce scenarios wherein a hostile party could potentially make adversarial plays to force a disadvantageous sale onto a cooperating person and profit from it.
I'm not entirely sure that the problem George was trying to tackle is even fixable. A human as an economic entity is a bundle of connections that are sometimes dependent upon distance, and sometimes dependent upon time, and other times dependent on information. These threads tangle in a way that cannot be easily unraveled. And frankly, I'm not convinced that land value is even the most significant keystone factor in modern economies any more. The new land rush seems to be in intellectual property. Having already perfected the extraction of rents from the biological necessities of breathing, drinking, eating, and sleeping, the rentiers have climbed higher on the hierarchy of needs by establishing privileged positions in education, social connections, and entertainment.
One issue with georgism is that it significantly penalizes Urbanization and productivity that goes with it. People are incentivized to spread out and live on less costly land and take a hit to their income or less lucrative jobs.
You would have Urban workers paying most of their income and taxes, and remote white collar workers paying essentially zero taxes.
The wealthiest people in America aren't big landholders though. Georgism does nothing to reduce inequality. In fact, it looks like the people pushing Georgism today (wealthy tech bros) are hoping to avoid paying any kind of income or capital gains, and soak people who own land.
Yep, that's exactly the kind of possible and believable explanation (not perfect of course, but a generalisation) that I think would be useful to examine and prove/disprove.
(separately: perhaps Georgism would require some upgrades for today's digital economy where land isn't necessarily required for production)
That's one of the arguments behind Georgism. If someone is not able to own enough land in order to provide for themselves then working for someone else isn't actually a free exchange.
Yeah, true. But if Georgism was in place I would think you would have less people owning prime property but living 2000 miles away and completely unaware what is happening on the land.
Yeah, that seems like opposite of Georgism. You don't have to look very far to find examples of land being worth much more than what's built on it, that's the case in much of the US.
I remember reading an article about how a large proportion of tech venture capital ultimately makes its way into the pockets of Silicon Valley landlords.
Georgism posits as a general principle that a lot of money is captured as land rent.
A fundamental idea of Georgism is that the land belongs to everybody, so rather than owning land, one essentially rents it from the people. More desirable land is rented at a higher rate. If the land you are renting could be making someone else millions with a higher productivity use, then you need to pay for the privilege of not using it for that higher productivity use.
While I don't disagree with this, I don't think that Georgism can justify a large enough payment to have the effects that people expect of UBI. The value of land (meaning all natural resources in their natural state) is ultimately pretty low compared to all the other value in the world. Per wikipedia, all US land is worth less than two times GDP.
Georgism is the idea that, although the improvements built on land can be owned by a private person, land itself cannot, being a part of the natural world which is by right the common property of all humankind. By this idea, anyone claiming exclusive use of a piece of land owes to the community a rent equal to the value of the unimproved land. This idea extends to all that is (or ought to be) the commons: natural resources, pollution, the EM spectrum, etc.
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!)
This is a typical effort to obfuscate land’s role in the economy and the goal of Georgism overall. The goal is not to redistribute and create financial equality. The goal is to create economic justice: to give each person as much of what they themselves produce plus or minus what it takes to ensure a reasonable living standard for everyone. There are meaningful conversations to be had in the “plus or minus” part of that, but Georgism is primarily concerned with how to eliminate a substantial violation of the first part which is hidden in plain sight.
That’s all Georgism is. When I agree to pay $3000/mo for a crappy studio to be close to a particular park/subway station/employer/school, some large portion of my rent should go to fund the things that enticed me to move there.
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