4 ms·

One might then be wrong, if we are a bit more strict about separating land, labor and capital as the three elements of production... I think this a chronic str

One might then be wrong, if we are a bit more strict about separating land, labor and capital as the three elements of production... I think this a chronic strawman tactic ( present company cheerfully exempted ) - misclassify land as capital, then complain about capitalism.

bigmanwalter 10y ago
I can permanently exchange capital for land, therefore land is capital. If slavery were legal, then labor would be capital too.
- eru 10y ago
  You can exchange labour for land or capital as well: go work for money, then buy a house.. Your second point is sort-of true. That's why when Britain freed the slaves they bought them free.
- ArkyBeagle 10y ago
  Land and capital are not interchangeable as factors of production. Next: let's please not confuse accounting and economics :)
  - bigmanwalter 10y ago
    Of course they are. I can exchange half my land for capital and now I have both.
    - eru 10y ago
      You are talking past each other. And your argument is weird: using the market you can exchange all kinds of things for each other. What's the difference between exchanging land for capital vs labour for capital in that argument?
pyrale 10y ago
So you only complain about capitalism when it's applied to an asset class you don't personally own ?
- eru 10y ago
  Sorry, I don't understand? Making a clear distinction between capital (which we can produce more of) and land (which is fixed in supply for as long as we stay on earth) is just good economics. See also Henry George's Progress and Poverty (https://en.wikipedia.org/wiki/Progress_and_Poverty https://en.wikipedia.org/wiki/Progress_and_Poverty), the book that essentially kicked off the Progressive Era in 19th century America.
  - pyrale 10y ago
    It is a legitimate distinction at macro level, because the dynamics for these two asset classes are different. Otherwise, not necessarily.
- ArkyBeagle 10y ago
  No; so far as I know all of economics ( eru covered Henry George ) considers land, capital and labor as three independent elements of production. "Independent" in the sense of orthogonal, as if they were x,y and z planes in a coordinate system. One of the things that's interesting about this - if you can substitute capital for it, it's not really land. "Land" also means something abstract, in a manner similar to the ellipsoid used in GPS calculations in aviation. Its a "where", less a "what". But then again, we tend to conflate rents and profits, which creates a lot of confusion.
  - pyrale 10y ago
    Could it be that these people you think of as conflating capital and "land" simply don't accept the definition you take for granted ? In Marx's definition, for instance, capital is defined by currency, and by the liquidity of one's assets. Therefore, considering land as capital would make sense. Microeconomics analysis is another realm where separating land and capital does not necessarily make sense : because of the liquidity effect described above, it may be useless to distinguish land and capital when you have no macro concern. My point here is that the definition of capital, and the classification of land related to capital is intimately related to the analysis you're making, and, therefore, to the position you're defending. As a consequence, what you understand as a person building a strawman is related not to that person building that strawman, but to that person's analysis being in conflict with semantics you take for granted. And ironically, when you try to establish a distinction that makes no sense in that person's logical framework, they may think that you're trying to drown the matter. In fact, they may even be right, in the context of the analysis of social capital, because you're in fact struggling to establish your capital as more legitimate than theirs. This kind of problematic is why it is so important for the one of us which build products for our clients, to take the time to understand their domain, their vocabulary and the context limits to this vocabulary.

bigmanwalter 10y ago

I can permanently exchange capital for land, therefore land is capital. If slavery were legal, then labor would be capital too.

eru 10y ago
You can exchange labour for land or capital as well: go work for money, then buy a house.. Your second point is sort-of true. That's why when Britain freed the slaves they bought them free.
ArkyBeagle 10y ago
Land and capital are not interchangeable as factors of production. Next: let's please not confuse accounting and economics :)
- bigmanwalter 10y ago
  Of course they are. I can exchange half my land for capital and now I have both.
  - eru 10y ago
    You are talking past each other. And your argument is weird: using the market you can exchange all kinds of things for each other. What's the difference between exchanging land for capital vs labour for capital in that argument?

pyrale 10y ago

So you only complain about capitalism when it's applied to an asset class you don't personally own ?

eru 10y ago
Sorry, I don't understand? Making a clear distinction between capital (which we can produce more of) and land (which is fixed in supply for as long as we stay on earth) is just good economics. See also Henry George's Progress and Poverty (https://en.wikipedia.org/wiki/Progress_and_Poverty https://en.wikipedia.org/wiki/Progress_and_Poverty), the book that essentially kicked off the Progressive Era in 19th century America.
- pyrale 10y ago
  It is a legitimate distinction at macro level, because the dynamics for these two asset classes are different. Otherwise, not necessarily.
ArkyBeagle 10y ago
No; so far as I know all of economics ( eru covered Henry George ) considers land, capital and labor as three independent elements of production. "Independent" in the sense of orthogonal, as if they were x,y and z planes in a coordinate system. One of the things that's interesting about this - if you can substitute capital for it, it's not really land. "Land" also means something abstract, in a manner similar to the ellipsoid used in GPS calculations in aviation. Its a "where", less a "what". But then again, we tend to conflate rents and profits, which creates a lot of confusion.
- pyrale 10y ago
  Could it be that these people you think of as conflating capital and "land" simply don't accept the definition you take for granted ? In Marx's definition, for instance, capital is defined by currency, and by the liquidity of one's assets. Therefore, considering land as capital would make sense. Microeconomics analysis is another realm where separating land and capital does not necessarily make sense : because of the liquidity effect described above, it may be useless to distinguish land and capital when you have no macro concern. My point here is that the definition of capital, and the classification of land related to capital is intimately related to the analysis you're making, and, therefore, to the position you're defending. As a consequence, what you understand as a person building a strawman is related not to that person building that strawman, but to that person's analysis being in conflict with semantics you take for granted. And ironically, when you try to establish a distinction that makes no sense in that person's logical framework, they may think that you're trying to drown the matter. In fact, they may even be right, in the context of the analysis of social capital, because you're in fact struggling to establish your capital as more legitimate than theirs. This kind of problematic is why it is so important for the one of us which build products for our clients, to take the time to understand their domain, their vocabulary and the context limits to this vocabulary.