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You should read P&P! It's a really incredible book, and I think you may be surprised the elegance with which it still "handles" a modern economy. I think Georg
by estearum 1mo ago
You should read P&P! It's a really incredible book, and I think you may be surprised the elegance with which it still "handles" a modern economy.
I think George's view on state-sponsored charity/welfare is more nuanced than that. It's a bit analogous to the prior argument. It's not that charity is bad, it's that in the absence of LVT, it will never be sufficient to solve the problem because a large portion of the intervention will get eaten by land rents. Basically that land rents rise to an equilibrium of "there's some poverty", no matter how much money you dump into the demand side.
Here's evidence of exactly that dynamic with a similar intervention of minimum wage increases: https://www.sciencedirect.com/science/article/abs/pii/S0094119021001030 https://www.sciencedirect.com/science/article/abs/pii/S00941...
Temporary reduction in evictions, then rents rise to equilibriate back at "there are some evictions." There is some set point of eviction rate that landlords as a whole are comfortable with, and they will set their prices to whatever is needed to achieve that rate.
He also seemed to believe that LVT itself would achieve the most aspirational visions of charity/welfare, so maybe (hopefully!) it would be unnecessary, but I don't remember him taking aim at charity/welfare as a concept.
IMO the right way to think about LVT is this:
Without LVT, virtually no other interventions can achieve shared prosperity. Minimum wage, UBI, public housing, rent controls, even just the advancement of technology itself... they all either equilibriate into higher land rents, OR they require controls on land rents that create catastrophically inefficient use of resources anyway.