12 ms·

I'm not entirely surprised. In Florence, and probably in lots of other places too, wealth was amassed in land holdings and gold (florins being the currency).

I'm not entirely surprised. In Florence, and probably in lots of other places too, wealth was amassed in land holdings and gold (florins being the currency). Land holdings over a 700 year horizon seems like a far better stability bet than equities, since the land itself has intrinsic value even if the occasional war or natural disaster gets rid of whatever is happening on it. Back in the 1400's, the merchant class absolutely made a great living - upper class even. But the old blue bloods (many families of which even went broke, in terms of liquidity) and nobility had land. They used that land to build business and bring in rents, and build business relationships with other upper class families, but even as the businesses faded the land remained. I mentioned some of the old Florentine nobility going broke - many of them preferred hardship to selling their land holdings. Some of them would eventually marry off a daughter to a family that desired the blue blood relationship and some land would go as dowry, thus restoring the fortune in that family (through the wealth of the inlaws). One good example is Lisa Gherardini's marriage into the del Giocondo family - she was of an old nobility fallen on harder times, while the Giocondo family were new money merchants. Some land and a few florins went with her, the Gherardini family were restored a bit and the Giocondo family remained wealthy for a long time. I'm not a historian, but I've taken a bit of an interest in Florentine history as an adult, so take this for what it's worth. A real historian would probably know better.

throwaway_xx9 10y ago
Bali is a similar case. A bunch of rice farmers with vast ancestral lands, some families owning multiple square miles. And when a new town or school is built nearby, they suddenly own 1,000 rental apartments. Dad goes from rice farming to collecting rents full-time.
brador 10y ago
Seems land taxation + basic income would be a great combo to spread wealth around.
- SmellTheGlove 10y ago
  I happen to think that if you want to maximize human potential across the board, you need to take away the threats to existence at the individual level - meaning a place to live, food, healthcare, education. If your basic needs are met, theoretically, you're free to explore and innovate (or sit on your ass, but I think the propensity for that is overblown). That's not just to help poor people either, that could boost your middle class output as well - use me for an example, I'm educated, relatively advanced in my career for my age, but I'd probably be doing something different if I didn't have to worry about student loans to repay and a roof over my family's head. Maybe that something different would be more impactful, maybe it wouldn't, but it'd be different. I digress. I really hope to see UBI attempted somewhere to see if it works. We do already tax land in most (all?) of the developed world. I honestly have no idea of the tax structure on land in 15th century Florence, but I'm inclined to check that out after work today. Of course, goals vary across humans. Advancing the whole at the relative expense of another makes the people who are already ahead a bit nervous. That's not wrong, either, it's just human nature. Advance the baseline far enough and it begins to matter less.
  - huherto 10y ago
    AFAIK, we have tax on property. We tax the land plus the value added to the land by building on it. IMH, we shouldn't tax the construction since that is disincentive for economic activity. But the land? Some land just becomes valuable because it is near other valuable properties.
    - aaron-santos 10y ago
      Georgism gets a lot of support on HN, but how exactly would the unimproved value of land be determined? Similar to the appraisal system we have in place for houses, or something different?
      - huherto 10y ago
        It is definitely an interesting problem. Perhaps a function based on the travel distance from where the rest of the people are living or working ? Sort of like page rank.
- huherto 10y ago
  I am sort of reaching that conclusion myself too. We are better and better on manufacturing. I don't know how much efficiency is left to extract. And human labor is becoming less and less valuable as we are better on automating. Real Estate(housing and commercial), education and health are still very expensive. A tax on land would reduce real estate costs and help pay for basic income. But politically will be really, really hard to do.
- onetimeusename 10y ago
  It makes more sense to try to grow the GDP and tax income instead. Taxing land in order to specifically target people with inherited land holdings has all sorts of unintended (or maybe intended) consequences because these people often do not have sufficient liquid holdings to pay the taxes. They end up having to sell off land in parcels which is an arduous and incredibly inefficient way for a government to raise revenues to 'spread wealth' and land in these cases often isn't easily parceled. Should a family sell their estate, the farmland that produces revenue that sustains the estate, or the useless swamp to cover the taxes? This isn't the sort of situation governments should be encouraging. If you have no mercy for that family, consider people whose parents buy a small plot of land that unexpectedly becomes very valuable and then the children are forced to sell the house on the death of their parents. Or the same family who finds their tax rate going up but their income staying the same because their land is suddenly in a trendy area. Taxing income to me seems like the most fair way to raise revenue because it targets liquid means.
  - coryrc 10y ago
    I fail to see why, if they aren't using the land productively, they shouldn't sell to someone who will. I don't understand why I should feel bad for the family whose small plot of land becomes very valuable so they make lots of money. How terrible!
  - chongli 10y ago
    The only thing worse than a wealthy person sitting on a vast horde of cash is a land-rich person sitting on vast tracts of highly desirable land. If somebody owned several acres in the heart of Manhattan and chose to leave them in the form of undeveloped, fallow fields, why should we not charge them high taxes in order to force them to either develop the land or sell it off to somebody who will? Land is one of the rare cases where the needs of the many trump the rights of the few.
    - onetimeusename 10y ago
      So what if we apply that rule to poor and middle income people? Are you suddenly interested in taxing those people to get them out so that someone with more cash can do something better with their land? What about people with just enough land to have an unsustainable tax rate but not enough land for it to be immediately useful for development? People with older homes in cities fall into this category frequently. How much revenue is this worth for the government after land is sold and properties destroyed to make way for new versus if they had just raised tax on income? This assumes there is even a willing buyer.
- jandrese 10y ago
  "Land taxation" is called property tax and it already exists everywhere. For most people it is the largest tax bill they pay, it pays for schools and roads and local government.
  - DasIch 10y ago
    Property tax is common, land value taxes muss less so. Although arguably they're much better in many ways (assuming regulation isn't otherwise broken in regards to zoning for example).
eldavido 10y ago
Read Piketty's Capital; there's a great discussion about how wealth has been held across several capitalist countries for the past 200-300 years. What's striking is that the value of agricultural land in the US around 1700-1800 was, if memory served, something like 50% of aggregate US wealth, whereas today it's <1%, with the dominant portion being residential real estate and business equity (which includes commercial RE, I think). According to the book, US wealth is about 50/50 between those two categories. Which is all to say, land hasn't been that great of a bet growth-wise for the past 100 or so years in the US. I don't know how one would've fared over 700 years of Italian history, though. More broadly, I think the biggest determinant of wealth is one's attitude toward generation of income. In a capitalist economy, long-term wealth is generated by the acquisition, improvement, and operation of assets; it's the same deal whether you're a business owner/founder, investment banker doing leveraged buyouts, landlord, miner, whatever. Get assets (build/buy), work on them, then use them for income or sell them to buy other/more assets. Very different attitude toward income than "Get a job". I wonder how correlated attitude is with wealth?
- ori_b 10y ago
  I'm curious how much of the agricultural land then is the residential land today.
bksjdf 10y ago
Its just much easier to maintain your wealth and expand it if you have a lot to begin with.

throwaway_xx9 10y ago

Bali is a similar case. A bunch of rice farmers with vast ancestral lands, some families owning multiple square miles. And when a new town or school is built nearby, they suddenly own 1,000 rental apartments. Dad goes from rice farming to collecting rents full-time.

brador 10y ago

Seems land taxation + basic income would be a great combo to spread wealth around.

SmellTheGlove 10y ago
I happen to think that if you want to maximize human potential across the board, you need to take away the threats to existence at the individual level - meaning a place to live, food, healthcare, education. If your basic needs are met, theoretically, you're free to explore and innovate (or sit on your ass, but I think the propensity for that is overblown). That's not just to help poor people either, that could boost your middle class output as well - use me for an example, I'm educated, relatively advanced in my career for my age, but I'd probably be doing something different if I didn't have to worry about student loans to repay and a roof over my family's head. Maybe that something different would be more impactful, maybe it wouldn't, but it'd be different. I digress. I really hope to see UBI attempted somewhere to see if it works. We do already tax land in most (all?) of the developed world. I honestly have no idea of the tax structure on land in 15th century Florence, but I'm inclined to check that out after work today. Of course, goals vary across humans. Advancing the whole at the relative expense of another makes the people who are already ahead a bit nervous. That's not wrong, either, it's just human nature. Advance the baseline far enough and it begins to matter less.
- huherto 10y ago
  AFAIK, we have tax on property. We tax the land plus the value added to the land by building on it. IMH, we shouldn't tax the construction since that is disincentive for economic activity. But the land? Some land just becomes valuable because it is near other valuable properties.
  - aaron-santos 10y ago
    Georgism gets a lot of support on HN, but how exactly would the unimproved value of land be determined? Similar to the appraisal system we have in place for houses, or something different?
    - huherto 10y ago
      It is definitely an interesting problem. Perhaps a function based on the travel distance from where the rest of the people are living or working ? Sort of like page rank.
huherto 10y ago
I am sort of reaching that conclusion myself too. We are better and better on manufacturing. I don't know how much efficiency is left to extract. And human labor is becoming less and less valuable as we are better on automating. Real Estate(housing and commercial), education and health are still very expensive. A tax on land would reduce real estate costs and help pay for basic income. But politically will be really, really hard to do.
onetimeusename 10y ago
It makes more sense to try to grow the GDP and tax income instead. Taxing land in order to specifically target people with inherited land holdings has all sorts of unintended (or maybe intended) consequences because these people often do not have sufficient liquid holdings to pay the taxes. They end up having to sell off land in parcels which is an arduous and incredibly inefficient way for a government to raise revenues to 'spread wealth' and land in these cases often isn't easily parceled. Should a family sell their estate, the farmland that produces revenue that sustains the estate, or the useless swamp to cover the taxes? This isn't the sort of situation governments should be encouraging. If you have no mercy for that family, consider people whose parents buy a small plot of land that unexpectedly becomes very valuable and then the children are forced to sell the house on the death of their parents. Or the same family who finds their tax rate going up but their income staying the same because their land is suddenly in a trendy area. Taxing income to me seems like the most fair way to raise revenue because it targets liquid means.
- coryrc 10y ago
  I fail to see why, if they aren't using the land productively, they shouldn't sell to someone who will. I don't understand why I should feel bad for the family whose small plot of land becomes very valuable so they make lots of money. How terrible!
- chongli 10y ago
  The only thing worse than a wealthy person sitting on a vast horde of cash is a land-rich person sitting on vast tracts of highly desirable land. If somebody owned several acres in the heart of Manhattan and chose to leave them in the form of undeveloped, fallow fields, why should we not charge them high taxes in order to force them to either develop the land or sell it off to somebody who will? Land is one of the rare cases where the needs of the many trump the rights of the few.
  - onetimeusename 10y ago
    So what if we apply that rule to poor and middle income people? Are you suddenly interested in taxing those people to get them out so that someone with more cash can do something better with their land? What about people with just enough land to have an unsustainable tax rate but not enough land for it to be immediately useful for development? People with older homes in cities fall into this category frequently. How much revenue is this worth for the government after land is sold and properties destroyed to make way for new versus if they had just raised tax on income? This assumes there is even a willing buyer.
jandrese 10y ago
"Land taxation" is called property tax and it already exists everywhere. For most people it is the largest tax bill they pay, it pays for schools and roads and local government.
- DasIch 10y ago
  Property tax is common, land value taxes muss less so. Although arguably they're much better in many ways (assuming regulation isn't otherwise broken in regards to zoning for example).

eldavido 10y ago

Read Piketty's Capital; there's a great discussion about how wealth has been held across several capitalist countries for the past 200-300 years. What's striking is that the value of agricultural land in the US around 1700-1800 was, if memory served, something like 50% of aggregate US wealth, whereas today it's <1%, with the dominant portion being residential real estate and business equity (which includes commercial RE, I think). According to the book, US wealth is about 50/50 between those two categories. Which is all to say, land hasn't been that great of a bet growth-wise for the past 100 or so years in the US. I don't know how one would've fared over 700 years of Italian history, though. More broadly, I think the biggest determinant of wealth is one's attitude toward generation of income. In a capitalist economy, long-term wealth is generated by the acquisition, improvement, and operation of assets; it's the same deal whether you're a business owner/founder, investment banker doing leveraged buyouts, landlord, miner, whatever. Get assets (build/buy), work on them, then use them for income or sell them to buy other/more assets. Very different attitude toward income than "Get a job". I wonder how correlated attitude is with wealth?

ori_b 10y ago
I'm curious how much of the agricultural land then is the residential land today.

bksjdf 10y ago

Its just much easier to maintain your wealth and expand it if you have a lot to begin with.