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Words drift a bit over time. Smith isn't talking about landlords in exactly the sense of, say, someone who rents out an apartment. He's talking about people who

by roenxi 3y ago

Words drift a bit over time. Smith isn't talking about landlords in exactly the sense of, say, someone who rents out an apartment. He's talking about people who own land and extract economic rent (ie, do nothing, breath through their mouth & get money; land isn't going anywhere). So he'd probably be on board with the idea of setting up systems that get rid of the unearned part of rent, but even if the class of people he is talking about were gone there would still be people who own houses/apartments and rent them out to others. They'd be making a bit less profit since they'd earn whatever the market thinks administration is worth plus some sort of premium for tying up a lot of capital in a house.

jamilton 3y ago
How could the government systematically get rid of the "unearned part of rent", and why do you think doing so would only slightly lower profit?
- roenxi 3y ago
  1) Land tax. See Georgism [0]. Would be a great direction for society to go in. 2) Well, you can make something like 5% buying bonds. So if renting a house is making less than that people will sell the house then go buy bonds which are lower risk. The logic of alternative opportunities suggests the rate of profit for renting out a house won't change much. I'd expect that profits would drop by a bit and then the supply of rentals would adjust if a bunch of landlords want to leave the market. But IMO most renters aren't in a position to buy houses so I don't think the supply would be able to contract by much. So I think the net effect is profits would drop a bit and then life continues. Doesn't matter if I'm wrong on that point though. Whatever happens it'd still be an improvement. [0] https://en.wikipedia.org/wiki/Georgism https://en.wikipedia.org/wiki/Georgism
- HDThoreaun 3y ago
  LVT baby
bugglebeetle 3y ago
No, this is just ahistorical revisionism. Smith opposed pretty much all forms of economic rents because they’re a parasitic drag on the productive use of both labor and capital. He would be on board with none of what you describe. Go read the Wealth of Nations, chapter 11.
- roenxi 3y ago
  In the section you referenced [0] he explains himself reasonably clearly. He isn't talking about the entire class of duties that a modern apartment or housing landlord has. He is talking about the part that requires no planning, ongoing investment, work or even attention. Some aspects of being a landlord are economic rent and should go away, but other parts are ownership and maintenance of capital and shouldn't. I'd suggest that while Smith was against economic rents he'd have no particular issue with a capitalist renting out their capital - even if that capital is a house. Note that Chapter 11 is rent of land not of capital. [0] https://www.marxists.org/reference/archive/smith-adam/works/wealth-of-nations/book01/ch11c-3.htm https://www.marxists.org/reference/archive/smith-adam/works/... - hehe, marxists.
  - bugglebeetle 3y ago
    Adam Smith is consistent in his opposition to rent seeking as a behavior, as embodied in his disdain for landlords and other “unproductive classes” throughout the Wealth of Nations. He was a moral philosopher above all concerned with how systems and incentives guide human behavior toward positive or destructive ends. You haven’t provided any evidence to the contrary, only tried to invent some special, imaginary form of his philosophy with carve outs that suit your beliefs.
    - roenxi 3y ago
      Yeah, but the words mean something a little different to Smith - he's writing in the context of 1700s Scotland. As you note, he is talking about unproductive classes. That is different from the modern tenant-landlord relation where there is an unproductive aspect and a productive aspect. He wouldn't have changed his position at all on the unproductive part, but if we got rid of that he'd have been OK with what was left. > You haven’t provided any evidence to the contrary Neither have you. You've provided huge amounts of evidence that Smith doesn't like rents from land. I'm with Smith on that, rents from land are a moral and economic problem. The issue your argument has is modern rental landlords aren't just doing that - they are also maintaining and renting out a significant amount of capital. That aspect of their role isn't going away; it would be silly to demand that everyone owns the house that they live in. The word has drifted. We aren't talking about aristocrats who own vast tracks of farmland that they're leaching off. At the start of the chapter he lays it out with "In adjusting the terms of the lease, the landlord endeavours to leave [the tenant] no greater share of the produce than what is sufficient to keep up the stock from which he furnishes the seed, pays the labour, and purchases and maintains the cattle and other instruments of husbandry, together with the ordinary profits of farming stock in the neighbourhood.". That isn't what modern landlords are doing.

by roenxi 3y ago

jamilton 3y ago

How could the government systematically get rid of the "unearned part of rent", and why do you think doing so would only slightly lower profit?

roenxi 3y ago
1) Land tax. See Georgism [0]. Would be a great direction for society to go in. 2) Well, you can make something like 5% buying bonds. So if renting a house is making less than that people will sell the house then go buy bonds which are lower risk. The logic of alternative opportunities suggests the rate of profit for renting out a house won't change much. I'd expect that profits would drop by a bit and then the supply of rentals would adjust if a bunch of landlords want to leave the market. But IMO most renters aren't in a position to buy houses so I don't think the supply would be able to contract by much. So I think the net effect is profits would drop a bit and then life continues. Doesn't matter if I'm wrong on that point though. Whatever happens it'd still be an improvement. [0] https://en.wikipedia.org/wiki/Georgism https://en.wikipedia.org/wiki/Georgism
HDThoreaun 3y ago
LVT baby

bugglebeetle 3y ago

No, this is just ahistorical revisionism. Smith opposed pretty much all forms of economic rents because they’re a parasitic drag on the productive use of both labor and capital. He would be on board with none of what you describe. Go read the Wealth of Nations, chapter 11.

roenxi 3y ago
In the section you referenced [0] he explains himself reasonably clearly. He isn't talking about the entire class of duties that a modern apartment or housing landlord has. He is talking about the part that requires no planning, ongoing investment, work or even attention. Some aspects of being a landlord are economic rent and should go away, but other parts are ownership and maintenance of capital and shouldn't. I'd suggest that while Smith was against economic rents he'd have no particular issue with a capitalist renting out their capital - even if that capital is a house. Note that Chapter 11 is rent of land not of capital. [0] https://www.marxists.org/reference/archive/smith-adam/works/wealth-of-nations/book01/ch11c-3.htm https://www.marxists.org/reference/archive/smith-adam/works/... - hehe, marxists.
- bugglebeetle 3y ago
  Adam Smith is consistent in his opposition to rent seeking as a behavior, as embodied in his disdain for landlords and other “unproductive classes” throughout the Wealth of Nations. He was a moral philosopher above all concerned with how systems and incentives guide human behavior toward positive or destructive ends. You haven’t provided any evidence to the contrary, only tried to invent some special, imaginary form of his philosophy with carve outs that suit your beliefs.
  - roenxi 3y ago
    Yeah, but the words mean something a little different to Smith - he's writing in the context of 1700s Scotland. As you note, he is talking about unproductive classes. That is different from the modern tenant-landlord relation where there is an unproductive aspect and a productive aspect. He wouldn't have changed his position at all on the unproductive part, but if we got rid of that he'd have been OK with what was left. > You haven’t provided any evidence to the contrary Neither have you. You've provided huge amounts of evidence that Smith doesn't like rents from land. I'm with Smith on that, rents from land are a moral and economic problem. The issue your argument has is modern rental landlords aren't just doing that - they are also maintaining and renting out a significant amount of capital. That aspect of their role isn't going away; it would be silly to demand that everyone owns the house that they live in. The word has drifted. We aren't talking about aristocrats who own vast tracks of farmland that they're leaching off. At the start of the chapter he lays it out with "In adjusting the terms of the lease, the landlord endeavours to leave [the tenant] no greater share of the produce than what is sufficient to keep up the stock from which he furnishes the seed, pays the labour, and purchases and maintains the cattle and other instruments of husbandry, together with the ordinary profits of farming stock in the neighbourhood.". That isn't what modern landlords are doing.