4 ms·

Almost every resource is limited. That doesn't mean they are public goods.

harimau777 7y ago
Alternately: Since natural resources are not created by people, there's no reason why a given person should have the right to profit from it to the exclusion of others. They didn't do anything to create the resource, it was there already.
- wahern 7y ago
  > there's no reason why a given person should have the right to profit from it to the exclusion of others. The social value of private ownership isn't in permitting owners to profit, it's in aligning incentives so that a resource is put to the most productive use. Very often those willing to pay the most money are the ones with the most productive use, and so long as there's a private owner his interests are usually to sell to the highest bidder. More importantly, a private owner can't be corrupted into selling to lower bidders, whereas bureaucratic owners (public or private) can be.[1] I [very briefly] researched Georgist taxation systems in the U.S. when taking a seminar on land use regulation. My tentative conclusion was that they weren't very effective because the bureaucratic systems for appraisal were very quickly corrupted--not to benefit individual politicians, but to satisfy the electorate, who often find such taxation schemes unfair. [1] A private owner with multiple interests might be willing to sell one interest to a lower bidder in exchange for a higher bid for some other interest, though.
  - harimau777 7y ago
    How do you determine what the most productive use is and whether a natural resource is being put to it? If one person owns so much useful land that they don't even have to work and another person works hard but does not own any useful land then I don't think that's a productive use of the land. I agree with you that Georgism isn't perfect. However, I haven't seen a better solution.
    - wahern 7y ago
      > How do you determine what the most productive use is and whether a natural resource is being put to it? You can't. No one person can. That's why centralized economic planning doesn't work. (I'm not trying to suggest that Georgism is centralized planning, or that Georgism doesn't appreciate the value and necessity of price signaling.) And private ownership doesn't necessarily lead to the most efficient allocation. But the point is that private ownership is a stable regime. There are an infinite number of regimes that would offer better allocation, but we haven't yet seemed to find one that is stable, or that we can make stable. (A big part of the problem, I suspect, is cultural, so I don't mean to suggest that Georgist systems are inherently unworkable, just evidently unworkable in recent American history. I think our social and political cultures play a big part in what make land value taxation seem unfair.) That said, if the public believes land isn't being put to good use it can purchase the land at market price.[1] That still leaves accidental and speculation profits in private hands, but theoretically it puts a ceiling on inefficient allocation. Unfortunately, in some ways (particularly politically) eminent domain powers are at their nader in the U.S. Which is a big part of the reason why we can't accomplish things like California Highspeed Rail. I think that drives home the point that Georgist taxation is less workable today than it ever has been in recent history. [1] That's required by law in some countries, like the U.S. In some other countries it's not technically required by law but it's often the case that the government does pay market price, simply because to do otherwise would seem unfair and lead to political backlash.
      - harimau777 7y ago
        That's fair. I suppose partially I'm coming from the perspective of: why should I care if a system is stable if it benefits the rich at my expense. As I see it the idea of liberal democracy is to create a system that works for everyone so that everyone is incentivized to make it stable. As long as that's not the case, then it seems reasonable to be willing to trade some stability for more equality.
      - crdoconnor 7y ago
        >Unfortunately, in some ways (particularly politically) eminent domain powers are at their nader in the U.S. Which is a big part of the reason why we can't accomplish things like California Highspeed Rail. I think that drives home the point that Georgist taxation is less workable today than it ever has been in recent history. HSR would be easier with a land value tax - there would be a negative incentive to hoard land, so land acquisition costs would be minimised.
- kortilla 7y ago
  Well all resources are made from natural resources, so you’re suggesting that people can’t own anything.
  - harimau777 7y ago
    No, what I'm suggesting is that the making of a resource is where someone adds value. So profit that comes solely from owning a natural resource isn't earned; however, profit that comes from the labor of extracting the resource or from making something with the resource is.
    - nybble41 7y ago
      "Making something with the resource" must include having the foresight to preserve it from others who would have consumed it for a less valuable use. The "unimproved value" is what it would have been worth if left unclaimed—not the market value of the land in the actual situation where it was claimed and preserved. The difference between those two prices is earned value even if it doesn't take the form of formal "improvements" built on the land. However, under that definition there essentially is no such thing as "unimproved value"—unclaimed and unpreserved land would quickly become unusable for any purpose—and the proper LVT assessment in the vast majority of cases would be zero, or else so low as to not be worth collecting.
papito 7y ago
You can lease land and airwave frequencies. You cannot lease coal, for example. You have to buy and use it, and then it's gone forever. Additionally, we don't know how much coal there is to still be discovered - we know very well how much land there is.
- chii 7y ago
  If you over-farm a piece of land, it loses fertility, until it becomes un-arable. If LVT is implemented, then there would be incentive to over-extract from the land anything that is valuable and can be avoided from taxation (such as fertility, or minerals, or anything else that rises from the land). I dont think this can be sustainable - because without clear, exclusive ownership that lasts indefinitely, why would anyone value the land at all?
  - dodobirdlord 7y ago
    > I dont think this can be sustainable - because without clear, exclusive ownership that lasts indefinitely, why would anyone value the land at all? For the same reason that people already rent property they don't own. There are all sorts of value-generating activities that require exclusive right to some land.
  - eru 7y ago
    Why? We already have property taxes. They just also tax the stuff on top of the land. Do you see property taxes leading to over-extraction?
blazespin 7y ago
actually, in some places resources are public goods and are auctioned off regardless of land ownership. eg: https://www.bcplacer.com/basic_rules.htm https://www.bcplacer.com/basic_rules.htm yeah, basically you can go prospecting on anyone's private land (some caveats)

Alternately: Since natural resources are not created by people, there's no reason why a given person should have the right to profit from it to the exclusion of others. They didn't do anything to create the resource, it was there already.

wahern 7y ago
> there's no reason why a given person should have the right to profit from it to the exclusion of others. The social value of private ownership isn't in permitting owners to profit, it's in aligning incentives so that a resource is put to the most productive use. Very often those willing to pay the most money are the ones with the most productive use, and so long as there's a private owner his interests are usually to sell to the highest bidder. More importantly, a private owner can't be corrupted into selling to lower bidders, whereas bureaucratic owners (public or private) can be.[1] I [very briefly] researched Georgist taxation systems in the U.S. when taking a seminar on land use regulation. My tentative conclusion was that they weren't very effective because the bureaucratic systems for appraisal were very quickly corrupted--not to benefit individual politicians, but to satisfy the electorate, who often find such taxation schemes unfair. [1] A private owner with multiple interests might be willing to sell one interest to a lower bidder in exchange for a higher bid for some other interest, though.
- harimau777 7y ago
  How do you determine what the most productive use is and whether a natural resource is being put to it? If one person owns so much useful land that they don't even have to work and another person works hard but does not own any useful land then I don't think that's a productive use of the land. I agree with you that Georgism isn't perfect. However, I haven't seen a better solution.
  - wahern 7y ago
    > How do you determine what the most productive use is and whether a natural resource is being put to it? You can't. No one person can. That's why centralized economic planning doesn't work. (I'm not trying to suggest that Georgism is centralized planning, or that Georgism doesn't appreciate the value and necessity of price signaling.) And private ownership doesn't necessarily lead to the most efficient allocation. But the point is that private ownership is a stable regime. There are an infinite number of regimes that would offer better allocation, but we haven't yet seemed to find one that is stable, or that we can make stable. (A big part of the problem, I suspect, is cultural, so I don't mean to suggest that Georgist systems are inherently unworkable, just evidently unworkable in recent American history. I think our social and political cultures play a big part in what make land value taxation seem unfair.) That said, if the public believes land isn't being put to good use it can purchase the land at market price.[1] That still leaves accidental and speculation profits in private hands, but theoretically it puts a ceiling on inefficient allocation. Unfortunately, in some ways (particularly politically) eminent domain powers are at their nader in the U.S. Which is a big part of the reason why we can't accomplish things like California Highspeed Rail. I think that drives home the point that Georgist taxation is less workable today than it ever has been in recent history. [1] That's required by law in some countries, like the U.S. In some other countries it's not technically required by law but it's often the case that the government does pay market price, simply because to do otherwise would seem unfair and lead to political backlash.
    - harimau777 7y ago
      That's fair. I suppose partially I'm coming from the perspective of: why should I care if a system is stable if it benefits the rich at my expense. As I see it the idea of liberal democracy is to create a system that works for everyone so that everyone is incentivized to make it stable. As long as that's not the case, then it seems reasonable to be willing to trade some stability for more equality.
    - crdoconnor 7y ago
      >Unfortunately, in some ways (particularly politically) eminent domain powers are at their nader in the U.S. Which is a big part of the reason why we can't accomplish things like California Highspeed Rail. I think that drives home the point that Georgist taxation is less workable today than it ever has been in recent history. HSR would be easier with a land value tax - there would be a negative incentive to hoard land, so land acquisition costs would be minimised.
kortilla 7y ago
Well all resources are made from natural resources, so you’re suggesting that people can’t own anything.
- harimau777 7y ago
  No, what I'm suggesting is that the making of a resource is where someone adds value. So profit that comes solely from owning a natural resource isn't earned; however, profit that comes from the labor of extracting the resource or from making something with the resource is.
  - nybble41 7y ago
    "Making something with the resource" must include having the foresight to preserve it from others who would have consumed it for a less valuable use. The "unimproved value" is what it would have been worth if left unclaimed—not the market value of the land in the actual situation where it was claimed and preserved. The difference between those two prices is earned value even if it doesn't take the form of formal "improvements" built on the land. However, under that definition there essentially is no such thing as "unimproved value"—unclaimed and unpreserved land would quickly become unusable for any purpose—and the proper LVT assessment in the vast majority of cases would be zero, or else so low as to not be worth collecting.

papito 7y ago

You can lease land and airwave frequencies. You cannot lease coal, for example. You have to buy and use it, and then it's gone forever. Additionally, we don't know how much coal there is to still be discovered - we know very well how much land there is.

chii 7y ago
If you over-farm a piece of land, it loses fertility, until it becomes un-arable. If LVT is implemented, then there would be incentive to over-extract from the land anything that is valuable and can be avoided from taxation (such as fertility, or minerals, or anything else that rises from the land). I dont think this can be sustainable - because without clear, exclusive ownership that lasts indefinitely, why would anyone value the land at all?
- dodobirdlord 7y ago
  > I dont think this can be sustainable - because without clear, exclusive ownership that lasts indefinitely, why would anyone value the land at all? For the same reason that people already rent property they don't own. There are all sorts of value-generating activities that require exclusive right to some land.
- eru 7y ago
  Why? We already have property taxes. They just also tax the stuff on top of the land. Do you see property taxes leading to over-extraction?

blazespin 7y ago

actually, in some places resources are public goods and are auctioned off regardless of land ownership. eg: https://www.bcplacer.com/basic_rules.htm https://www.bcplacer.com/basic_rules.htm yeah, basically you can go prospecting on anyone's private land (some caveats)