GeoLib
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@John Day – Grow food? By all means – if you have land…. have you seen the stats on the concentration of land ownership?
@Rapier – you said “If MMT is right than all human history is wrong. The long history of human ‘austerity’ simply a mistake of not ‘printing’ enough money.”
This is not what MMT says. MMT says austerity is is mistake if there is labour available to generate wealth. Ancient history in particular is punctuated with regular debt cancellations.
MMT tells us that what we thought was a bug is in fact a feature, one we can take advantage of even if the overall system is flawed. It tells us that post 1971 public debt for states with their own currencies is not an issue, that the level of unemployment is thus a policy decision – astonishing but worth serious debate….
What does the AE think of MMT? MMT forced me to climb down from my hard money high horse. Fiscal stimulus directed at employment seems logical…
“George’s words show us that we could do much better than we do, but we don’t want to.”
I must return to being a troll – sorry 🙂
What does this sentence mean? It’s the kind of thing you might say about the New Testament – “why can’t we all learn to get along and share?” – not a work of political economy.
This is a policy thing. Why shouldn’t it be?
Look how near we came last time:
The Bullet – Geophilos
Sorry, I can’t get the embed code to work so it’s still off screen
TheTrivium4TW: “Georgist ideas, at least as elucidated in these threads DO NOT ADDRESS THE ROOT CAUSE”
George put labour at the top of his system, arguing that only work creates wealth. This is clearly true. But we are obsessed with money, not work, and think money is the root cause.T-Bear you said: “Might it be nothing but an opinion that the Greek finance minister’s position is anything like Geo-whatever says it is?”
I was waiting for that question. Varoufakis, from what I’ve seen, has never declared himself to be a Georgist (there are good reasons for not dropping the G word) yet he’s been interviewed online by the Henry George School of Social Science on several occasions, and his language – as I’ve demonstrated – is rentier focussed – he doesn’t attack the capitalist as you might expect of a “marxist”.“My-oh-my, another bright glittery thing. A thing that solves ALL problems.”
This is simply one of the things anyone studying land reform/LVT has to get over. Dive in and read Fred Harrison’s “The Silver Bullet” (haha) – or watch his 2 videos that accompany the book:
You’ll find it on his Geophilos channel. There’s not much to see – it’s a listener.
Every video on Geophilos is worth watching – Harrison has travelled widely to demonstrate that the whole world – and history can be viewed through a Georgist lens.
His accusation that our governments, aware that there is a better tax system yet unwilling to implement it have committed treason, is devastating cf The Treason Trilogy:
https://www.youtube.com/playlist?list=PLPH9HmStti0TUGokTQGJD4_cQ3uEgO3SsThanks for featuring this Ilargi – especially for re-printing the whole Gaffney piece – he’s a good writer isn’t he.
One thing I should have tried to get across more is George’s contention -it gets more relevant by the day- that failure to reform in this way must lead to a crisis. Fred Harrison is very concerned about this:
Fred Harrison: Optimal Policies for Avoiding World War III
Georgist podcasts:
https://www.mixcloud.com/RenegadeEconomists/@Arnold
LVT would be an annual charge on the unimproved value of the land you own. Those without income could defer payment.
LVT is meant to replace income tax, sales tax, all other taxes in fact.
If you don’t own land – you don’t pay tax.
Look out for these names – Mason Gaffney, Fred Harrison (esp his Youtube channel called Geophilos), Fred Foldvary and defnitely Michael Hudson, who I gather Varoufakis knows well.One quote I feel Varoufakis understands, comes from Book X Ch 4 of Progress and Poverty:
“What has destroyed every previous civilization has been the tendency to the unequal distribution of wealth and power. This same tendency, operating with increasing force, is observable in our civilization to-day, showing itself in every progressive community, and with greater intensity the more progressive the community. Wages and interest tend constantly to fall, rent to rise, the rich to become very much richer, the poor to become more helpless and hopeless, and the middle class to be swept away.
I have traced this tendency to its cause. I have shown by what simple means this cause may be removed. I now wish to point out how, if this is not done, progress must turn to decadence, and modern civilization decline to barbarism, as have all previous civilizations.”
@Nassim
There is a difference between LVT and property tax – LVT explicitly exempts buildings. Varoufakis – in the interviews he’s done for the Henry George School of social science – never touches on LVT so I don’t know exactly what kind of Georgist he is, but I find his focus on the rentier – as opposed to the capitalist – to be very enouraging: the rentier, unlike the capitalist, doesn’t have a leg to stand on.
And LVT means nothing without the abolition of other taxes.@Arnold
I should perhaps have written more about LVT but I decided not to as that’s already been done in many places on the web.Ilargi, you asked me a while ago to write about Henry George’s ideas and why the powers that be might go for them (no apologies for over-quoting Mason Gaffney):
Greece to return classical masterpiece
————————————————
In 1879 Henry George published Progress and Poverty. The book was an international sensation, at the time outsold only by the Bible. It remains economics’ No. 1 best seller.
Mason Gaffney continues:“George came out of a raw, naive new colony, California, as a scrappy marginal journalist. Yet his ideas exploded through the sophisticated metropolitan world as though into a vacuum. His book sales were in the millions. Seven short years after publishing Progress and Poverty in remote California he nearly took over as Mayor of New York City, the financial and intellectual capital of the nation. Three more years and he was a major influence in sophisticated Britain. In 1889, incredibly, he became “adviser and field-general in land reform strategy” to the Radical wing of the Liberal Party in Britain. It adopted a land-tax plank after 1891 (The “famous Newcastle Programme”), and came to carry George’s (muted) policies forward under successive Liberal Governments of Campbell-Bannerman, Asquith, and Lloyd George.“
The book, you see, explained poverty. It answered why progress does not and cannot eradicate poverty. Disconcertingly for many, it also provided the solution – the Single Tax on land value aka Land Value Taxation (LVT).
“The “single tax” is so simple, so fundamental, and so easy to carry into effect that I have no doubt that it will be about the last land reform the world will ever get. People in this world are not often logical.” – Clarence Darrow
The land reform/single tax movement in Britain was strong enough to bend the Liberal govt to its will having delivered it a landslide in 1906. By 1910 there was a constitutional crisis over LVT.
Gaffney argues that Henry George was deliberately written out of economics because he was too dangerous to the rentier state, the feudal core of capitalism. Maybe, and WW1 killed a generation of land reformers – this perhaps explains the absence of collective memory.The very language of George’s economics – classical economics – was changed – neoclassical economics deletes the concept of land – we talk of real estate because we can’t understand that land itself is priced. We can’t see that real estate booms and busts are actually land value booms and busts and thus can never stray into the territory where the rentier makes so much money. Land is just another form of capital – a costly intellectual regression.
Greek Finance Minister Varoufakis meets Schäuble in Berlin Thu 5 Feb:
“Our govt will stop at nothing to combat not only corruption tax evasion tax immunity, inefficiency and waste but also a whole political economy underpinning the ethos and the conventions of crippling rent seeking.”The rentier is an obscure, quaint character but he is the key character for Varoufakis.
Progress and Poverty is all about the rentier and Varoufakis is graciously returning the book to us.In a democratic setting, playing a Georgist card can be a powerful move. Neither Right nor Left can criticise a Georgist position because Georgist reform gives them both what they want.
George, as Mason Gaffney writes
“had a way of taking two problems and composing them into one solution. He took two polar philosophies, collectivism and individualism, and synthesized a plan to combine the better features, and discard the worse features, of each.”“Thus, George would cut the Gordian knot of modern dilemma-bound economics by raising demand, raising supply, raising incentives, improving equity, freeing up the market, supporting government, fostering capital formation, and paying public debts, all in one simple stroke. It’s quite a stroke, enough to leave one breathless.“
“George’s proposal lets us lower taxes on labour without raising taxes on capital. Indeed, it lets us lower taxes on both labour and capital at once, and without lowering public revenues.“
“Ultimately, Georgist policy saves the cost of civil disturbances and insurrections, and/or the cost of putting them down.”
Indus56 – Why do so few people post?
I’m listening to Michael Ruppert’s final podcast right now as it happens. The narrative of collapse is exhausted and is now simply circling, re-quoting itself, harming itself.
Sorry to be harsh.
PS Henry George Henry George Henry George Henry George Henry George Henry George Henry George Henry George Henry George Henry George Henry George Henry George Henry George Henry George Henry George Henry George Henry George Henry George“Oh, the sweet promise of reforms.”
Please give it a chance – Georgism and the Single tax is not just “a” reform, it is “the” reform. Once the concept of the unearned increment is understood it becomes clear.
The single tax is a philosophical revolution, uniting the free market with the commonwealth.
What says ae ref the new technologies being developed by the frackers?
I heard that new ceramic proppants are going to double the lifetime of many wells. That means something.Whilst I find the AE meta analysis undismissable, it doesn’t factor in innovation – perhaps one of the reasons why previous doomside predictions proved to be hasty.
The AE doesn’t factor in reform either – if we could see a repeat of the sudden and spectacular rise to prominence of Henry George’s ideas, if we saw a mass movement demanding the Single Tax, I’d say there would be reasons to be cheerful.
I’m kinda asking the AE to change tack a little and push the Single Tax. The single Tax appears to fall into a very unusual category of ideas – capable of extreme enantiodromia. We all accept the notion of viral memes – well, The Single Tax, sitting in inexplicable anonymity even in the alt-econosphere (I don’t accept that this is my filter bubble’s fault) comes well equipped. It has a back story that includes Churchill and Tolstoy, and the idea itself – once fully understood – is such a brilliant one… but the fact is very few people do appear to understand it. I’ve heard several politicians speak about it and they don’t get (r avoid) the depth of the change it can make. Michael Hudson, I now grasp, has been banging on about this issue all along – but he talks too fast for people to understand. I didn’t get it until recently.
“Ultimately, Georgist policy saves the cost of civil disturbances and insurrections, and/or the cost of putting them down. ” – Mason Gaffney
More from Mason Gaffney:
“Henry George as reconciler and problem-solver”
Let us itemize the several constructive reconciliations in George’s reform proposal. This will explain its wide potential appeal, hence its ongoing threat to embedded rent-takers with a stake in unearned wealth. It will explain why they had neo-classical economists working so hard to put this genie back in the bottle.1. George reconciled common land rights with private tenure, free markets, and modern capitalism. He would compensate those dispossessed and made landless by the spread and strengthening of what is now called “European” land tenure, whose benefits he took as given and obvious. He would also compensate those driven out of business by the triumph of economies of scale, whose power he acknowledged and even overestimated. He proposed doing so through the tax system, by focusing taxes on the economic rent of land. This would compensate the dispossessed in three ways.
a. Those who got the upper hand by securing land tenures would support public services, so wages and commerce and capital formation could go untaxed.
b. To pay the taxes, landowners would have to use the land by hiring workers (or selling to owner-operators and owner-residents). This would raise demand for labor; labor spending would raise demand for final products.
c. To pay the workers, landowners would have to produce and sell goods, raising supply and precluding inflation. Needed capital would come to their aid by virtue of its being untaxed.
Thus, George would cut the Gordian knot of modern dilemma-bound economics by raising demand, raising supply, raising incentives, improving equity, freeing up the market, supporting government, fostering capital formation, and paying public debts, all in one simple stroke. It’s quite a stroke, enough to leave one breathless.
In practice, landowners faced with high land taxes often choose another, even better, course than hiring more workers: they sell the land to the workers, creating an economy and society of small entrepreneurs. This writer has documented a strong relationship between high property tax rates, deconcentration of farmland, and intensity of land use (Gaffney, 1992).
2. George’s proposal lets us lower taxes on labor without raising taxes on capital. Indeed, it lets us lower taxes on both labor and capital at once, and without lowering public revenues.
3. Georgist tax policy reconciles equity and efficiency. Taxing land is progressive because the ownership of land is so highly concentrated among the most wealthy, and because the tax may not be shifted. It is efficient because it is neutral among rival land-use options: the tax is fixed, regardless of land use. This is one favorable point on which many modern economists actually agree, although they keep struggling against it.
George showed that a tax can be progressive and pro-incentive at the same time. Think of it! An army of neo-classicalists preach dourly we must sacrifice equity and social justice on the altar of “efficiency.” They need that thought to stifle the demand for social justice that runs like a thread through The Bible, The Koran, and other great religious works. George cut that Gordian knot, and so he had to be put down.
The only shifting of a land tax is negative. By negative shifting I mean that the supply-side effects of taxing land will raise supplies of goods and services, and raise the demand for labor, thus raising the bargaining power of median people in the marketplace, both as consumers and workers. This effect makes the tax doubly progressive: it undercuts the holdout power and bargaining power of landowners vis-a-vis workers, and also vis-a-vis new investors in real capital. This effect also makes the land tax doubly efficient.
4. A state, provincial, or local government can finance generous public services without driving away business or population. The formula is simple: tax land, which cannot migrate, instead of capital and people, which can. By eliminating the destructive “Wedge Effect,” the land tax lets us support schools and parks and libraries and water purification and police and fire protection, etc., as generously as you please, without suppressing or distorting useful work, and without taxing investors in real capital.
5. Georgist tax policy contains urban sprawl, and its heavy associated costs, without overriding market decisions or consumer preferences, simply by making the market work better. Land values are the product of demand for location; they are marked by continuity in space. That shows quite simply that people demand compact settlement and centrality. A well-oiled land market will give it to them.
6. Georgist tax policy makes jobs without inflation, and without deficits. “Fiscal stimulus,” in the shallow modern usage, is a euphemism for running deficits. George’s proposed land tax might be called, rather, “true fiscal stimulus.” It stimulates demand for labor by promoting hiring; it precludes inflation as the labor produces goods to match the new demand. It precludes deficits because it raises revenue. That is its peculiar reconciliatory genius: it stimulates private work and investing in the very process of raising revenue. It is the only tax of any serious revenue potential that does not bear down on and suppress production and exchange. As I said, George takes two problems and composes them into one solution.
7. George’s land tax lets a polity attract people and capital en masse, without diluting its resource base. This is by virtue of synergy, the ultimate rationale for Chamber-of-Commerce boosterism. Urban economists like William Alonso have illustrated the power of such synergy by showing that bigger cities have more land value per head than smaller ones. (Land value is the resource base of a city.) Urbanists like Jane Jacobs and Holly Whyte have written on the intimate details of how this works on the streets. Julian Simon (The Ultimate Resource) philosophizes on the power of creative thought generated when people associate freely and closely in large numbers. Henry George made the same points in 1879.
8. Georgist policies let us conserve ecology and environment while also making jobs, by abating sprawl. It is a matter of focusing human activity on the good lands, thus meeting demands there and relieving pressure to invade lands now wild that are marginal for human needs. Urban sprawl is the kind of sprawl most publicized, but there is analogous sprawl in agriculture, forestry, mining, recreation, and other land uses and industries.
9. Georgist policies let us strengthen public revenues while in the same process promoting economy in government.
Anti-governmentalists often identify any tax policy with public extravagance. Georgist tax policy, on the contrary, saves public funds in many ways. By making jobs it lowers welfare costs, unemployment compensation, doles, aid to families with dependent children, and all that. It lowers jail and police costs, and all the enormous private expenditures, precautions, and deprivations now taken to guard against theft and other crime. Idle hands are not just wasted, they steal and destroy.
Ultimately, Georgist policy saves the cost of civil disturbances and insurrections, and/or the cost of putting them down. In 1992 large parts of Los Angeles were torched, for the second time in a generation, pretty much as foreboded by Henry George in Progress and Poverty. Forestalling such colossal waste and barbarism is much more than merely a “free lunch.”
George’s program would abort other, less obvious wastes in government. It obviates much of the huge public cost now incurred to reach, develop, and safeguard lands that should be left in their natural submarginal condition. Today, people occupy flood plains and require levees, flood control dams, and periodic rescue and recovery spending. Others scatter their homes through highly flammable steep brushlands calling for expensive fire-fighting equipment and personnel, and raising everyone’s fire insurance premiums. Others build on fault lines; still others in the deserts, calling for expensive water imports. Generically, people now scatter their homes and industries over hundreds of square miles in the “exurbs,” or urban sprawl areas, imposing huge public costs for linking the scattered pieces with the center, and with each other.
This wasteful, extravagant territorial overexpansion results from two pressures working together. One force is that of land speculators manipulating politics seeking public funds to upgrade their low-grade lands so they may peddle them at higher prices. The other force is that of landless people seeking land for homes, and jobs, and public funds for “make-work” projects.
Both these forces wither away when we tax land value and downtax wages and capital. This moves good land into full use, meeting the demand for land by using land that is good by Nature, without high development costs. It also makes legitimate jobs, abating the pressure for “make-work” spending. Above all, it takes the private gain out of upvaluing marginal land at public cost. Such lands, if upvalued by public spending, will then have to pay for their own development through higher taxes.
Those nine compelling features of George’s program should be enough to persuade one that it had the potentiality of becoming very popular. Its premise, however, was socializing land rents through taxation. Its very strengths were its undoing, then, by evoking a powerful, intransigent, wealthy counterforce.
The Georgist perspective is slightly different, and crucially, points to a clear solution.
Speculation in (farm)land is due to the fact that its rental value is untaxed.
Farmland is not used in the best way because farmers are taxed for investing and hiring.
Frank de Jong explains it very well
Exposito – thanks for engaging.
The single tax has a long, fascinating history going back to Adam Smith, JS Mill, Ricardo and specifically Henry George. The idea’s high water point was perhaps 1909 when Lloyd George and Churchill attempted to introduce it in the UK – the landowners in the house of Lords had to flout the UK’s constitution to block it.
I have been following AE for several years now. I also follow just about every other idea for fixing our system – libertarianism/Austrian economics, monetary reform, zeitgeist and all of the establishment policies (socialist/keynesian etc etc).
I agree with some, I disagree with others but the single tax DOES appear to be some kind of silver bullet – the bloodless revolution we all dream of. And I am as cynical as the next man.
Take some time on the issue and see if you agree with me. There’s a nice collection of videos here:
https://www.progress.org/videos/“No doubt Noah (if he existed) was accused of doomerism too…”
Noah could not stop the rain. We, on the other hand, have an answer – a bureaucratic adjustment (the single tax). Can one justify maintaining a doomerist stance given this?
“What Kills The Economy Kills The Planet Kills Us”
The single tax could fix the economy and the environment. It could end poverty. Changing our tax system is nothing more than an administrative task. Do you understand the single tax?I think Fred Harrison has the best overall perspective in terms of causes and solutions.
We need more discussion of Georgism.
Fred Harrison: Optimal Policies for Avoiding World War III
Calling Ron Paul a fossil reveals a lack of knowledge of his life story, his ideas and his campaigns. It reveals a lack of passion … for passion. Reminds me of when Matt Tiabbi -during the campaign- very rudely dismissed Paul for looking old … not a good way to sell out as so many other journalists and commentators did at that time … they all found something to hang thier rejection of Paul on and blot out the fact that they agreed with him on 90% of everything.
Ron Paul was the west’s only chance for a transition leader – he would have campaigned to bring the crisis forward in our best interest – his experience as a doctor should not be overlooked in the context. I know the AE doesn’t believe in politicians but Ron Paul is the AE, the zerohedge etc etc of mainstream politics. He really did get very near to pulling it off. I hold him on the highest regard.
