Candidate: ducati998 – Henry George Land Tax [again]

Right from the start, you get the feeling that Ducati doesn’t really know what he’s arguing against. In response to the assertion that land is not the product of labour:

True. However without ‘labour’ land produces nothing. Even the fruit trees that may already exist, require the fruit to be picked.

I’m confused as to what point Ducati is trying to make here.  Bear in mind that if you substitute the word ‘capital’ for ‘land’, then you have a stock Marxist argument against interest.  Is Ducati a marginalist (as he later tries to assert) or not?  More to the point, it is equally valid to say that without land to work on/in, labour produces nothing.  The fact that labour and land cannot produce independently of the other has no relevance, at least not one that Ducati appears able to elucidate.  Moving on…

The rationale offered for private property in land starts out as stock Faux-Lib fare:  Mix your labour…<yawn>…no, I don’t know the meaning of the word ‘Proviso’…<yawn>… [this stuff’s been done to death]

…and then this little gem:

As land is more plentiful than labour, land that you had, and continued to mix your labour with, became ‘property’.

Now this is novel, and implies that as soon as labour is more plentiful than land then homesteading no longer becomes the way to appropriate land.  Note this, as he contradicts himself on this point pretty soon.

First though, a word on ‘Argumentation Ethics’.  Now I’m not a big fan, it has to be said.  One thing about it though, bugs me more than anything else, and that’s the often made claim that it

eliminate[s] conflict.

Now the pedant in me thinks the name should be a bit of a giveaway here, but for those of you who haven’t worked it out, I’ll give you a heads up.  If you are having to justify something by argumentation, then you are already in conflict! It’s too late to avoid it, or eliminate it.  You may be able to resolve it, but the elimination ship has sailed.  Theories of property rights can never avoid conflict, because conflict comes about due to incompatible desires (typically, more than one person wanting to use the same object or space simulataneously), which is not a thing that any theory can control.  We want what we want, the only question is whether we can (or even should) get it.

From here on, Ducati becomes more and more incoherent, exemplified most often by quoting some of Miller’s post, then waffling about nothing in particular.  For example, in response to the idea that once all land is owned, all latecomers are automatic trespassers, Ducati acknowledges the ‘reductio ad absurdum’, but then simply restates the property theory that has just been shown to be absurd, thus contradicting the earlier point of the relative abundance of land/labour, and then adds an additional error in claiming:

I will only mix my labour with land if I own the wealth produced.

Certainly, one of the privileges of land ownership is the opportunity to labour on your own terms, but that’s kind of the point.  Once all the land is owned, newcomers cannot enjoy these same freedoms claimed by the current owners.  You now have a group of psuedo-slaves, who *must* labour under someone else’s terms or else die.  Note that this state of affairs doesn’t require that all land is occupied, but merely owned, which, when you have the property bar set ridiculously low as AnCaps do (Punch a tree, own it forever), will occur sooner rather than later – and that’s assuming that all land is equal…

Then there’s the frankly nonsensical response to Adam Smith’s observation that societal progress increases land values:

Adam Smith is simply incorrect. The value imputed to land flows backwards from the valuation made by consumers through the purchase [exchange value] of consumer products. Thus the value of land depends on its productivity. High marginal productivity will earn a higher return than lower marginally productive land.

It’s pretty impressive to say that someone is wrong and then explain it by saying nothing that actually disagrees with what you said was wrong.  That’s a special kind of fail.  Why do improvements in societal circumstances increase rents? Because they increase productivity, either by improving industry or directly satisfying the wants of the people.  These are not opposing concepts!

This nonsense goes on:

  • Repeatedly making the point that rent cannot rise above total production when absolutely nobody claimed that it could.
  • Making the same point even when it has no bearing on the section being supposedly rebutted
  • Suggesting that growth rates are all simply a function of capital.

to name a few.  The most ludicrous part of all, though, is Ducati’s discussion of monopoly:

Our old friend Adam Smith again. Monopolies are, and can only ever be, government granted privilege.

Ahhh….the delicious irony.  Of course that is entirely true, it’s just that Faux-libs have a blind-spot when it comes to their notion of property in land.  They just can’t bring themselves to actually see it for what it is:  The establishment of mini-states that grant monopoly privileges over their territory.  If you are going to have eternal ownership of a part of the earth, then it must either be granted by a state or you must become a state, with all that that entails.  If you think you’re going to ‘eliminate conflict’ with the dispossessed by the Righteousness of your Argumentation Ethics, then you need professional help.

Ducati, oblivious to the irony just invoked then goes on a merry and somewhat verbose discussion of monopoly including some graphs about marginal cost which is just silly when discussing land (as it doesn’t even *have* a marginal cost – you can’t make more of it!).  Even more bizarrely, this is a discussion that is repeated, apparently verbatim, near the end for no apparent reason as soon as the word ‘war’ is mentioned.

To be honest, at this point I start getting bored.  It’s just the same old same old, and lots of it too.

“When you impose costs on man-made objects, you see a reduction in supply. The supply of land, on the other hand, is fixed.”

Yes it is. But so what? To be productive land must be mixed with labour and capital to make it productive. You raise taxes on land, you reduce its productivity, which lowers the creation of wealth, lowering the living standards of everyone.

Simply not true.  The productive powers of land do not change because a tax has been levied on it.  The profit maximising strategy remains unchanged.  Thus taxing ground rent cannot impinge on production.

A tax on ground rent will capitalise the tax, pushing the liability of the tax onto the original owner, later owners escaping any liability of the tax.

This is a classic case of looking through the wrong end of the telescope.  The capitalised value of land as it stands is the expected benefit of rent avoided/available.  That benefit is pushed onto the current owner (who didn’t create the value), later owners pay it in advance.

Rent is a ‘cost’ of production. Any producer, our entrepreneur, believes, and speculates upon creating production that he can then sell to consumers, or if producing capital goods to the lower producer. Thus ‘rent’ is simply part of his economic calculation.

It is a cost to the land-user, yes, but it is irrelevant to the user who gets paid.  Land value tax does not and cannot increase the total amount of rent paid by the user (hence why marginal costs remain unchanged).

I won’t go on with the multitude of further places where Ducati tries to assert that LVT affects production.  He just says the same thing over and over.  The rest is traditional Austrian monetary theory which, being myopically unable to consider land, overestimates monetary effects in the business cycle.  That’s not to say that it’s not a useful topic, it’s just not going to be properly understood while people treat land as just another kind of capital.

The more nonsense I see written trying to debunk LVT, the more I find myself agreeing with Robin Smith, that the problem is mostly a moral one.  As long as you see claiming a piece of the earth as your own forever as acceptable, you can never understand the economics.  The cult of the landlord is strong, but at some point we need to realise that we simply must stop robbing each other and excusing ourselves if we actually want to see the world we claim we do.  Otherwise our hypocrisy will condemn us to irrelevance.

And now for the moped!

This one's a non-runner...

H/T to Team Benzina

PS – One factual point raised was whether housing costs were included in the CPI or not.  It’s probably worth pointing out at this point that the British CPI excludes housing costs, so if the original article was aimed at a British audience (which is a possibility), then that would explain the discrepancy.