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Elimination of rent-seeking and all sibling offenses. Someone can buy a property in a growing region and then sit on it and do nothing while it gains value. Th

by Taek 10y ago

Elimination of rent-seeking and all sibling offenses. Someone can buy a property in a growing region and then sit on it and do nothing while it gains value. The fact that it is doing nothing may even drive the price up more, because it reduces supply in that region by not making itself available. The owner is allowed to refuse to sell at any price, which again means they can make money just by sitting on their scarce asset. Same for corporate stock really. And for things like gold and bitcoin. A better system imo would require active bidding on scarce resources. If you are not generating wealth with your resource, someone can take it from you by outbidding the amount of taxes you are paying for it. This forces people to apply their capital and makes it harder to just sit on scarce resources and accumulate wealth.

Mattasher 10y ago
If you are operating in a market that hasn't been too distorted by taxes and regulations, there are strong economic incentives to use all resources. Vacant properties are a straight liability, better to rent them out. If the owner is sitting on an unused property waiting for appreciation, they are taking on risk. If everyone already magically knew the future price would be much higher, then current prices would already converge to that amount (discounted to NPV) and the owner could sell now or later.
- Taek 10y ago
  What if that resource is your home? You get rich for essentially just living. Of course there are ethical questions in play now.
RestlessMind 10y ago
> A better system imo would require active bidding on scarce resources. If you are not generating wealth with your resource, someone can take it from you by outbidding the amount of taxes you are paying for it. But its easy to game this system by generating token wealth. For example, if you make it mandatory to keep your houses non-empty, then all you need to do is register a token business and rent your house to that business for a token amount. All you stand to lose is a few hundred dollars of registration fees etc. In some cases, its hard to even know how to generate wealth from the assets (gold, rare paintings...). How will you force people to ensure that they generate wealth from gold, so that its price won't skyrocket during inflationary times? Finally, wealth generation is relative. How can you measure wealth generated in non-monetary terms? Sure, you can "develop" your one acre plot by building more apartments there, but what about the wealth lost by losing a great scenic view of the bay? Why should everything be measured in terms of money?
- notahacker 10y ago
  I think you're completely missing the OP's point, which is a hypothetical scenario in which all scarce resources like land are effectively leased from the government to the highest bidder, in which case you can keep your houses as empty or full as you like (or bay views as pretty as you like), but if someone is willing to pay the government higher annual fees for the use of the land (or oil, or spectrum) then they get the use of it instead of you. This system comes with its own problems (no incentive to invest in developing a resource if someone can slightly outbid you for its use after you've invested all that cash in improving its potential yields in the long term) but ease of evasion though fake companies and difficulty of establishing how much a resource should yield aren't amongst them.
  - Taek 10y ago
    Yes exactly. I'd rather the entity doing the leading not be the government, but I do not know what other entity could. For purely digital resources you could use a blockchain. But digital resources tend not to be scarce.

by Taek 10y ago

Mattasher 10y ago

If you are operating in a market that hasn't been too distorted by taxes and regulations, there are strong economic incentives to use all resources. Vacant properties are a straight liability, better to rent them out. If the owner is sitting on an unused property waiting for appreciation, they are taking on risk. If everyone already magically knew the future price would be much higher, then current prices would already converge to that amount (discounted to NPV) and the owner could sell now or later.

Taek 10y ago
What if that resource is your home? You get rich for essentially just living. Of course there are ethical questions in play now.

RestlessMind 10y ago

> A better system imo would require active bidding on scarce resources. If you are not generating wealth with your resource, someone can take it from you by outbidding the amount of taxes you are paying for it. But its easy to game this system by generating token wealth. For example, if you make it mandatory to keep your houses non-empty, then all you need to do is register a token business and rent your house to that business for a token amount. All you stand to lose is a few hundred dollars of registration fees etc. In some cases, its hard to even know how to generate wealth from the assets (gold, rare paintings...). How will you force people to ensure that they generate wealth from gold, so that its price won't skyrocket during inflationary times? Finally, wealth generation is relative. How can you measure wealth generated in non-monetary terms? Sure, you can "develop" your one acre plot by building more apartments there, but what about the wealth lost by losing a great scenic view of the bay? Why should everything be measured in terms of money?

notahacker 10y ago
I think you're completely missing the OP's point, which is a hypothetical scenario in which all scarce resources like land are effectively leased from the government to the highest bidder, in which case you can keep your houses as empty or full as you like (or bay views as pretty as you like), but if someone is willing to pay the government higher annual fees for the use of the land (or oil, or spectrum) then they get the use of it instead of you. This system comes with its own problems (no incentive to invest in developing a resource if someone can slightly outbid you for its use after you've invested all that cash in improving its potential yields in the long term) but ease of evasion though fake companies and difficulty of establishing how much a resource should yield aren't amongst them.
- Taek 10y ago
  Yes exactly. I'd rather the entity doing the leading not be the government, but I do not know what other entity could. For purely digital resources you could use a blockchain. But digital resources tend not to be scarce.