Georgism

Article

Georgism is a recurring concept in the Astral Codex Ten archive, appearing 18 times across 18 issues between April 16, 2021 and November 25, 2024. The archive places it in contexts such as ""an entire economic school of thought known variously as Georgism or Geoism""; “Further reading: on Georgism:”; “He’s a pretty serious Georgist and posts regularly in the Georgism subreddit”. It most often appears alongside Lars Doucet, Progress and Poverty, Australia.

Metadata

Category: Concepts
Mention count: 18
Issue count: 18
First seen: April 16, 2021
Last seen: November 25, 2024

Appears In

- Lars Doucet (13 shared issues)
- Progress and Poverty (6 shared issues)
- Australia (5 shared issues)
- Scott (5 shared issues)
- Will Jarvis (5 shared issues)
- Fortress Of Doors (4 shared issues)
- Germany (4 shared issues)
- Henry George (4 shared issues)
- Henry George Theorem (4 shared issues)
- LVT (4 shared issues)
- Metaculus (4 shared issues)
- New York (4 shared issues)

External Links

Source Context

Recovered passages from the original issue text. When the raw archive preserved outbound links inside the source passage, they are listed directly under the quote.

Your Book Review: Progress And Poverty

April 16, 2021 · Original source

This is a golden opportunity to shamelessly over-use the catchy phrase "By George!" If I had to summarize the book in a single sentence I would put it this way: Poverty and wealth disparity appear to be perversely linked with progress, The Rent is Too Damn High, and it's all because of land. The Book as a Book Progress and Poverty is quite readable compared to other 19th-century economic tomes, but has a tendency to repeat itself. This isn't without purpose – George goes to great pains not to be misunderstood; rather than expecting his readers to tease out the meaning of dense prose and spending the next century arguing with each other about what he "really meant", he goes on for pages and pages beating a single concept to absolute death, just to be sure. As a 19th century treatise of Political Economy, the book doesn't match what a modern reader might expect from a book on Economics because it's not packed to the gills with charts, graphs, tables, and statistics (though it does provide a good number of citations and figures). Nevertheless his argument was compelling enough to spawn an entire economic school of thought known variously as Georgism or Geoism that persists to this day. Nowadays Georgism gets slapped with the "heterodox" label, but it's still relevant enough to get the likes of Paul Krugman and Milton Friedman to grudgingly agree to key points, and Friedrich Hayek is alleged to have been inspired by it to pursue economics in the first place. Marx, on the other hand, wasn't a fan, seeing it as a last-ditch attempt "to save capitalist domination and indeed to establish it afresh on an even wider basis than its present one... [George] also has the repulsive presumption and arrogance which is displayed by all panacea-mongers without exception." I guess you can't please everyone. George spends the first few books of Volume I establishing terms and methodically tearing apart the prevailing economic theories of his day before presenting his own alternative theories about how the "three factors of production" – land, labor, and capital – relate to each other in the "laws of distribution." He then explains why the existing system causes poverty to advance alongside progress, and why we see industrial depressions. Then, he identifies the root cause of the problem (land ownership and speculative rent) and presents his solution (the Land Value Tax) in Volume II. He spends the entire second volume explaining why it is moral and just, how it should be applied, and why it will solve all of our problems. For the sake of the reader's attention span, I'll just cover the chapters that constitute the core of George's philosophy. For sections I gloss over, I'll include a brief summary of the main point followed by a jump link to an appendix at the end of the article for those who want more detail. All block quotes are from Progress & Poverty unless otherwise marked. Special thanks to my friend Adam Perry for helping me edit this piece, as well as to Nate Blair and blogger BlueRepublik (who have actual degrees in this sort of thing) for fact checking and answering my technical questions in the vain pursuit of not embarrassing myself. Alright, let's dive in. 0. The Problem George opens by observing an unkept promise made by Industrialists: it was expected, that labor-saving inventions would lighten the toil and improve the condition of the laborer. Industrialization should have freed humankind from drudgery and want. And yet George instead sees: complaints of industrial depression; of labor condemned to involuntary idleness; of capital massed and wasting; of pecuniary distress among business men; of want and suffering and anxiety among the working class If we finally have the necessary material conditions and technology for utopia, why this suffering, waste, and inefficiency? And what's the deal with industrial depressions? How can there be periods where laborers desperately want to work but can't find employment at the very same time capital sits around in useless piles, begging to be put to productive use? Contra popular explanations at the time, George argues it "can hardly be accounted for by local causes" such as military expenditures, tariffs, type of government, dense vs. sparse populations, or paper money vs. hard currency. This is because he sees the same basic problem everywhere no matter how different the countries themselves are. Behind all of these troubles George says there must lie a common cause. Pulling no punches, the man lays the blame at the feet of progress itself: that poverty and all its concomitants show themselves in communities just as they develop into the conditions toward which material progress tends - proves that the social difficulties existing wherever a certain stage of progress has been reached, do not arise from local circumstances, but are, in some way or another, engendered by progress itself This is a pretty bold claim: namely, that the resilience of poverty, oppression, and inequality in the face of advancing economic development is not some embarrassing accident we'll eventually get around to fixing, it's an inescapable consequence of our socioeconomic system. A Brief Interlude from the Future It's been over 140 years since he wrote the book, so let's hop in my time machine and see how much of George's complaint is still relevant. Back then, the United States was still in the throes of the Long Depression, which according to the shortest estimate lasted from 1873 to 1879. Below is a graph (source) of the boom-bust business cycle going back to the 1870's - clearly, recessions were much more frequent and severe in George's time than they are today. The late 1800's were wracked with so many panics and crises in quick succession that some historians count the Long Depression as lasting for a full 23 years from 1873 to 1896! After the Great Depression in the 1930's, we see a sharp decrease in the duration and frequency of recessions. They're still with us now (and the one we're currently in is the worst since the Great Depression), but you'd still rather be living in 2021 than 1879. So, have we solved the problem? Is George's complaint obsolete? I mean, this graph of GDP per capita from Stephen Pinker's Enlightenment Now makes it look like in many ways things are getting better: And heck, extreme poverty has been going down everywhere: But this can't be the entire picture, or nobody would be complaining about poverty and inequality. Here - this graph (source), shows that as consumer goods have gotten cheaper in the United States, health care, higher education, child care, etc., have skyrocketed in price, which Scott examined in great detail in Considerations on Cost Disease. And what about Inequality? In the USA it seems to have reverted to levels not seen since the Great Depression, and even when it was at its lowest in 1978, the top 0.1% (not even the top 1%!) still enjoyed a massively disproportionate share of Wealth (source): And of course, The Rent Is Too Damn High: (source): (source): Although 2021 seems better than 1879 in absolute material terms, George's complaint still rings true: healthcare and higher education are increasingly unaffordable, inequality is as bad as it ever was, and The Rent Is Too Damn High. And even if all of these measures had improved as well, we still have to contend with a fundamental complaint: how can human civilization have piled up an amount of wealth best described as absolutely banana pants insane, and yetstill have poverty, oppression and cyclical recessions? Yes, greed, evil, and human nature will always be with us, but isn't it weird that we haven't eliminated these economic problems the same way we've eliminated Smallpox, Scurvy, and having to write your scathing polemics about Thomas Jefferson by candlelight with a goose feather? Giving the mic back to George, he closes the chapter with this haunting quote, first written 142 years ago: If there is less deep poverty in San Fran Francisco than in New York, is it not because San Francisco is yet behind new York in all that both cities are striving for? When San Francisco reaches the point where New York now is, who can doubt that there will also be ragged and barefooted children on her streets? I'll just leave this here: Number of Homeless Children in U.S. At All-Time High; California Among Worst States. I. Wages and Capital George insists sloppy terminology leads to sloppy thinking. Naturally, he spends an entire chapter beating words to death to correct this. The Meaning of the Terms Let's start with Wealth. The common usage, both then and now, is "anything with an exchange value." George doesn't like how this mixes dissimilar things. By George, what is wealth? Wealth is produced when Nature's bounty is touched by human labor resulting in a tangible product that is the object of human desire. Labor is required, but the amount and type doesn't matter - George offers the example of simply picking a berry off a bush as an act that transforms nature's gifts into human wealth. Note particularly that human desire is an important requirement of wealth; it doesn't matter how much work someone put into something, if it doesn't gratify human needs or desires in some way, it's not wealth. Speaking of human desire, let's talk about Value. Where does a thing's value come from? The prevailing theory of the day was the Labor Theory of Value which originated with Adam Smith and David Ricardo, which says that Labor is the source of value. The early formulations were a bit ambiguous, here's Smith in Wealth of Nations for instance: The value of any commodity ... is equal to the quantity of labor which it enables him to purchase or command. Labor, therefore, is the real measure of the exchangeable value of all commodities. So... is a thing's value how much labor it takes to make the thing, or how much labor someone's willing to exchange for the thing? Nowadays Labor Theory of Value is most commonly associated with Marx. Marx picks a lane and says the value of something is tied to the amount of "socially necessary labor" required to produce it. George goes the other way: It is never the amount of labor that has been exerted in bringing a thing into being that determines its value, but always the amount of labor that will be rendered in exchange for it. - Henry George, The Science of Political Economy, p. 253 In other words, "a thing's value is whatever someone is willing to pay for it." This is in line with the so-called marginal revolution (the movement, not the blog) and modern theories of value. Labor Labor is the exertion of human beings. It's possible to labor to no avail (try punching a concrete wall), but typically humans labor towards an end, such as gaining wealth. But whether or not we accomplish anything with our efforts, George calls them labor. Labor isn't just making things, by the way – it's also moving or exchanging them. Production Production is labor applied "to the production of wealth." You know, productively. This is all human exertion that isn't punching a concrete wall and rewards you for your efforts with something that fits the definition of wealth. Said wealth is the "product of labor." Wages whatever is received as the result or reward of exertion is "wages." No distinction here is made between blue-collar work and white-collar work – whether one is called "hourly pay" and the other is called "annual salary," George calls them both "wages." It doesn't matter whether you receive them from your boss, from customers, or from nature. If you do work and get something from it, you have received "wages." With those basics under our belt, let's circle back to Wealth: What are some examples of wealth? By George, Gold is wealth. Teddy bears are wealth. Tesla roadsters and candy canes and young adult vampire romance novels are wealth. The same goes for fish you've caught, deer you've hunted, and cool looking rocks you've picked up on your morning walk. The value of these things may differ, but as long as they're tangible, originate in nature, someone ever did a lick of work to make or acquire them, and a human being somewhere desires them for any reason, they're wealth. It gets a little clearer when we ask what isn't wealth. And by George, Money isn't wealth. Articles of gold are wealth because they're tangible things that have been dug up, crafted, and fulfill certain human desires. But paper currency, digital currencies, and other things that aren't inherently valuable but merely represent value are not wealth (outside of putting their physical articles in coin collections or making paper airplanes, and so forth). Now don't get the man wrong, these things are certainly valuable. They're just not wealth. They are certificates that represent claims on wealth. For any computer programmers in the audience, money is a pointer to wealth. Likewise Stocks and Bonds and other financial instruments are not wealth. These are also just claims on wealth. A creditor's title to Debt isn't wealth, either, it's just a claim on the debtor's (typically future) wealth. And, writing as he was not long after the Civil War, George points out that Slaves are not wealth either but, represent "merely the power of one class to appropriate the earnings of another class." Wealth, thus defined, is the terminal "ground truth" bits of the economy, and all the financial layers on top are fancy IOUs that just encode various claims on it. George offers a thought experiment to test if something is wealth: if you produce a pile of gold, fish, or Lego bricks, you've clearly increased the amount of wealth in the world. But if you produce a giant pile of IOUs that just records who owns what and who owes what to whom, it doesn't matter how many of them you pile up or how long the chains of ownership get, you still haven't increased the amount of real wealth in the world. Again, this isn't saying the IOUs aren't valuable, they are. But they're only valuable because they ultimately point to real wealth. If you magically transported everyone over to a hypothetical Earth 2, carrying over all of Earth 1's money and financial instruments but none of Earth 1's tangible wealth, the value of all those IOUs would instantly evaporate. Now what about digital goods? Leaving things like Bitcoin aside for the moment, let's consider the case of a digital image file: By George, this is wealth. Digital though it may be, it's physically encoded on a storage device somewhere, and is thus tangible (it's not a pure abstract concept flitting about in Platonic heaven) and has its origins in nature. Human exertion built the computer that encodes it, and clicking the button that saves it to disk or displays it on your screen is labor. Finally, it directly satisfies human desires (mine, at the very least). It's value may be negligible, but it's wealth. By contrast, the digital bit sitting in some database that says I own a particular eBook or mp3 is just a digital IOU – a claim on the wealth that are the physical bits on my local storage device or remote server that digitally encodes the files. The fact that digital files don't seem particularly physical, and that they can be trivially and endlessly copied, doesn't mean that Henry George, magically transported to today, wouldn't regard them as wealth. Okay, so is there anything else that's not wealth? By George, Bitcoin isn't wealth, in case you were wondering. It's just a (very fancy) financial instrument, a digital claim on wealth. And that goes for most crypto assets – a token on some blockchain that says I own a painting by Banksy is just another IOU, regardless of the technical sophistication of its distributed trustless ledger. What about intellectual property? Copyrights, patents, and trademarks are all different forms of Monopoly – the exclusive, government-granted legal right to do a particular thing (publish a certain book, manufacture a certain product, use a certain name in business, etc). The exclusive right to do or produce a thing, valuable as it may be, is not the thing itself. By George, Monopoly is not wealth. But there is something big that is wealth – the C-word. Capital. By George, Capital is "wealth devoted to procuring more wealth", and it's the next thing he insists everyone is hopelessly confused about. He quotes Adam Smith, agreeing with him thus far: That part of a man's stock which he expects to afford him revenue is called his capital. ...and also gives us a short etymology lesson on the origin of the term: The word capital, as philologists trace it, comes down to us from a time when wealth was estimated in cattle, and a man's income depended upon the number of head he could keep for their increase. ("Per capita" being the Latin for "by head") By George, all capital is wealth, but not all wealth is capital. George notes capital is often described as being "stored up labor", and endorses this view – but what it really means, is capital is stored up production. It's not literally the labor that's stored up but the wealth generated by it, set aside and then dedicated to the purpose of getting more wealth. George insists that it is the owner's intention that transforms wealth into capital. If you buy an old factory to throw parties in for your hipster friends, it's just wealth. But the minute you decide to put it to work to make something useful (or start charging your hipster friends a cover charge at the door), it becomes capital. George therefore further insists that a laborer's daily bread and the clothes on their back do not count as capital, because a person has to eat and wear clothes whether they work or not. The laborer's tools (and arguably their steel-toed work boots) can however be counted as capital, because their purpose is to assist the laborer in getting more wealth by working for wages, and the laborer wouldn't acquire, use, and maintain those things otherwise. George has more exclusions: We must exclude from the category of capital everything that may be included either as land or labor. Human exertion (labor) by itself can never be capital. The products of human labor become capital when they are stored up and set to the purpose of getting more wealth. To muddle this distinction defeats the point of having separate terms for those things at all, and prevents us from reasoning meaningfully about how they relate to one another. Labor is not capital, and neither is labor by itself wealth, it produces wealth – and if it ain't wealth, it ain't capital. And that brings us to land. Land, land, land. By George, land is not wealth. And it's definitely not capital. The unique specialness of land is George's entire schtick and the very core of his philosophy. The term land embraces, in short, all natural materials, forces, and opportunities That means that a field or a meadow is "land", as is a mountain. But so are the fish in the sea, the clouds in the sky, veins of gold in the earth's crust, and the oil deep under ground. These things aren't yet wealth – not until human beings both a) desire them and b) touch them with labor. So... land is not wealth. But... how come? I mean, look: land is tangible, it "comes from nature", humans are always productively applying their labor to it, and it certainly seems capable of gratifying human desires. George sees this reasoning as understandable, but insists it's the root mistake that leads other political economists astray – because for George, land just is nature itself. Come again? Land is the ultimate source of all wealth, but it's most useful to think of it as a generator, acompletely separate entity from the wealth that human labor and desire draws from it. Players of Magic: the Gathering and Settlers of Catan should already have a solid grasp of this distinction: In modern times, George would grant electromagnetic spectrum and orbital real estate for satellites the same status of "land" that already applies to farmland and terrestrial real estate. We don't even need to speculate about whether he'd attach this status to sunlight because he straight-up predicted solar power: Even the lack of rain which makes some parts of the globe useless to man, may, if invention ever succeeds in directly utilizing the power of the sun's rays, be found to be especially advantageous for certain parts of production. (That's from Protection or Free Trade, footnote 19) The important thing to grasp about land is that it comes before everything humans do or make, and is itself a thing no human can make. Okay, smarty-pants, what about the Netherlands? They've been making land for centuries! Well, land in the Georgist sense doesn't refer simply to "dry land", but also the sea bed, the oceans, and the skies above. The "new land" in the Netherlands counts as an improvement to land that already existed. The seabed was always there, but by filling it in so you can walk around on it, now it's more useful to us (George has a lot to say about improvements to land, which we'll get to later). Okay, what is land not? nothing that is freely supplied by nature can be properly classed as capital By George, land is not wealth. And since it's not wealth, it's not capital. Okay, we get it. Land is very special to Mr. George and we must never put it in the same category as wealth, labor, capital, wages, production, money, or anything else. Why exactly is this so damn important? Well, by George, if you treat land the same way you would a bar of pig iron, an hour of work, or a dollar bill, before you know it you'll get poverty paradoxically advancing alongside progress, inexplicable bouts of industrial depression, literal genocides and holocausts (he's dead serious about this), and The Rent Being Too Damn High. With terminology now firmly established, George moves on to the relationship between wages and capital. 3-for-1 special on Wages, Capital, and Labor I'm condensing three chapters here because they all deal with the same basic thing. The question George wants to answer is: Why, in spite of increase in productive power, do wages tend to a minimum which will give but a bare living? The conventional wisdom of George's time is that wages are governed by a fixed ratio between the number of laborers and the amount of capital devoted to their employment, because "the increase in the number of laborers tends naturally to follow and overtake any increase in capital." So it doesn't matter how much capital you throw at employing workers, it'll just attract even more workers splitting it up, so although wages might temporarily wiggle a bit in the long term they'll always settle back to a "natural" minimum. (As we'll see in the next section, this argument stems from Malthusianism). George spends some time methodically poking holes in the theory (it's predictions don't line up with the facts he observes), and then sets out to prove his replacement theory (emphases mine): wages, instead of being drawn from capital, are in reality drawn from the product of the labor for which they are paid. He pulls a G.K. Chesterton to make his point: During the time [the laborer] is earning the wages he is advancing capital to his employer, but at no time, unless wages are paid before work is done, is the employer advancing capital to him. He starts by identifying the source of confusion: Because wages are generally paid in money, and in many of the operations of production are paid before the product is fully completed, or can be utilized, it is inferred that wages are drawn from pre-existing capital I mean, the old theory seems sensible: the employer has capital and uses it to pay wages. But however you slice it, capital's investment gets paid back by production when it takes its cut, so does it even make a difference to talk about where wages are "drawn" from? Value goes out, value comes in, isn't it all a wash? By George, it isn't: in the old theory, because capital "must come first", it follows that "industry is limited by capital - that capital must be accumulated before labor is employed", which leads to a reductio ad absurdum – We are told that capital is stored-up or accumulated labor – "that part of wealth which is saved to assist future production." If we substitute for the word "capital" this definition of the word, the proposition carries its own refutation, for that labor cannot be employed until the results of labor are saved becomes too absurd for discussion. George anticipates the following rejoinder – Well, when we say 'labor is paid out of capital' we don't mean it as an absolute statement for all stages of human development (or else we have a chicken-and-the-egg problem and civilization could never have begun), we just mean it applies to, say, every civilization that's left the stone age. George will have none of it and spends three entire chapters relentlessly beating to death the idea that wages are drawn from capital instead of from production. He starts with the simple case where wages are paid in the form of direct, concrete wealth, then moves on to the more complex case where people are paid in money and other instruments. Laboring for wages: Imagine a fishing village where nobody cooperates – each person digs their own bait and catches their own fish. Then they discover labor specialization and realize they can catch more fish together if one specializes in digging and the other in catching. So the digger digs, the catcher catches, and they share the fish. The digger really contributes as much to the catch as the one who physically pulls the fish off the hook even though the digger never directly "caught" a fish, and the fish he gets for his work is directly paid out of his contribution to the total production. Later, our fisherfolk invent canoes, and one stays home making and repairing canoes. This increases the haul of the digger and catcher, and the canoe-er gets paid out of her contribution to the increased production. And so it goes as society continues to advance. The work the specialist puts in causes more fish to be caught, and that person's wages is drawn from the growing pile of fish. As George puts it: "Earning is making." George gives another example: If I take a piece of leather and work it up into a pair of shoes, the shoes are my wages – the reward of my exertion. Surely they are not drawn from capital – either my capital or any one else's capital – but are brought into existence by the labor of which they become the wages; and in obtaining this pair of shoes as the wages of my labor, capital is not even momentarily lessened one iota... As my labor goes on, value is steadily added, until, when my labor results in the finished shoes, I have my capital plus the difference in value between the material and the shoes. And another: If I hire a man to gather eggs, to pick berries, or to make shoes, paying him from the eggs, the berries, or the shoes that his labor secures, there can be no question that the source of the wages is the labor for which they are paid. George goes on to say it doesn't matter if you're paid in money or directly in wealth, because the money is a direct claim on the underlying wealth. It also doesn't matter if you get paid on commission. Imagine a whaling ship where each crewman gets paid a share out of whatever the ship catches. When the ship sails back into port with a hold full of whale oil and bone, the crew gets paid in money, the owner simultaneously adds to his capital oil and bone. The crew's money directly represents their share of the concrete wealth that is the oil and bone. The owner's capital hasn't decreased, and the workers drew their wages directly from the production. So let's get to the point, Mr. George – wages aren't drawn from capital but instead from production. Great, let's grant that – so what? George hammers away at this because thinking wages are drawn from capital leads to a false conclusion, namely that "labor cannot exert its productive power unless supplied by capital with maintenance." "Maintenance?" Well, workers need food and clothing and they get paid by their employers, so you could imagine capital as a limiting factor on labor. But by George, food and clothing isn't capital, it's just wealth, as we said before. And with regard to wages, the point is that the employer always gets "paid" first, because the second the laborer produces value, the employer's capital increases: As in the exchange of labor for wages the employer always gets the capital created by the labor before he pays out capital in the wages, at what point is his capital lessened even temporarily? Okay, but what if I'm just a terrible businessman and I pay somebody $500 an hour to smash Ming vases, then sell the fragments as aggregate to a construction crew for a few pennies a pound, all at a tremendous loss? Surely then the laborer's wages must be drawn from my capital, because there's not enough productive value generated by the labor to draw them from! George says okay, sure, but only because I'm an idiot and will soon be out of business: Yet, unless the new value created by the labor is less than the wages paid, which can be only an exceptional case, the capital which he had before in money he now has in goods – it has been changed in form, but not lessened. Fair enough, Mr. George, but what if I'm building some enormously expensive multi-decade project, like a dam or a nuclear power plant or a cathedral? The kind of thing we call a "capital-intensive" project? What do you have to say to that? George points out that as laborers labor, they progressively add value to whatever they're producing. Take the case of a shipwright building ships for an employer – even if the boss can't sell a half-finished ship, it still holds value (for one, it costs less to finish a half-finished ship then no ship at all). And with every stroke of the laborer's work, the employer who owns the shipyard gets an incremental increase in his stock of capital. It is not the last blow, any more than the first blow, that creates the value of the finished product – the creation of value is continuous, it immediately results from the exertion of labor. A pedant would point out that the "last hit" that finishes the product which makes it ready for market adds disproportionate value, but George's point is just to establish that value is continuously created, and doesn't magically come into being allat once right at the end. George further points out that if you look at things like agriculture you'll see the market directly acknowledging his theory: As a plowed field will bring more than an unplowed field, or a field that has been sown more than one merely plowed... It is tangible in the case of orchards and vineyards which, though not yet in bearing, bring prices proportionate to their age. George freely admits that capital can be required for certain kinds of work, but he disagrees with what its purpose is. It's not a pool that wages get paid out of. He goes on for another chapter on "The Maintenance of Laborers Not Drawn From Capital" but I think we can safely skip it and move on. TL:DR – George hammers to absolute death the idea that Laborers derive their own maintenance (food/shelter/clothing/etc) from their wages, with George insisting it is drawn from production and... you guessed it, not from capital. At least some of George's ideas will not seem so radical to modern readers (especially those already critical of capitalism or neoclassical economics), but it's important to understand that at the time almost everything he was saying was considered deeply radical and shocking. Capital was the fundamental driving force of the economy and labor was utterly dependent on it, and the Malthusian theory of overpopulation was the accepted explanation for why wages were low and workers were starving. Political Cartoon literally demonizing Henry George – Puck magazine Oct. 20, 1886 The Real Functions of Capital Okay, Mr. George. You've spent three whole chapters beating me over the head with what the functions of capital aren't. So what are the functions of capital? Capital "increases the power of labor to produce wealth." How? By enabling labor to apply itself more effectively (power tools go brrrr)

(Modified from source, CC BY 2.0, author: Philip Taylor) The problem with our current system is that when anyone in the community builds improvements, it makes adjoining land more valuable, and then those adjoining landlords jack up the rent. This makes things worse for everybody but the landlords. George's insight is that extra value from my improvement "spills over" from my land and is soaked up by the ground rent of your land. So under a land value tax, we can correct for the perverse economic incentives, distortions, and oppressions that come from land rent, without having to actually take your land from you. We may safely leave them the shell, if we take the kernel. It is not necessary to confiscate land — only to confiscate rent. You also are 100% the owner of the improvements on your land, which won't be taxed. This is why Georgism doesn't mean people have the right to barge into your house in the middle of the night even though land is "held in common." Your house is still private property, but the value of the land it sits on is common property. What if I plant some nice trees, and invest in some landscaping to stop erosion? Where's the line between "improvements" and "ground rent?" In most cases it's pretty straightforward to separately assess the value of a plot from the value of what sits on it (modern property tax assessors do this already), but George grants that in some edge cases with the passage of time at least some improvements will be subsumed into the land value and that's okay: But it will be said: There are improvements which in time become indistinguishable from the land itself! Very well; then the title to the improvements become blended with the title to the land; the individual right is lost in the common right. It is the greater that swallows up the less, not the less that swallows up the greater. Okay, ground rent bad. How much should we tax it? By George, One Hundred Percent. Take the rent the tenant has to pay each month, calculate the portion attributable to the value of the unimproved land itself, and send it to the taxing agency. Effects of the Remedy Wow! 100% tax rate on ground rent! Can we really do that? In practice Georgists often talk about rates closer to 85+% given real-world limitations in assessment, but the point is to hit it as hard as you possibly can. Get close enough and you still have good effects. Won't land taxes jack up land prices? No, actually - in fact it will do the opposite, because such a tax is laser-calibrated to eliminate speculation, which makes up the bulk of inflated land values, and thus rent. Tax land for the full ground rent and you make real estate more affordable, not less. Won't it enable an all-powerful centralized nanny state? Quite the opposite – land value assessment is a fundamentally bottom-up, localized task, so it naturally empowers local municipalities at the expense of distant central authorities. Also, income taxes, wealth taxes, investment taxes, etc, require an ever-vigilant centralized bureaucracy peeking into every aspect of an individual's life to catch tax evaders, who have every incentive to hide their assets or even just flee. Perversely, the IRS currently audits the poor at the same rate as the top 1%, even though higher earners are responsible for withholding the vast majority of tax money in fraud. Land can't move or hide, and nowadays we have tools like GIS to make it even easier to assess. Under land value tax, nobody needs to pry into your personal life or impose burdensome accounting rules on your small business that actually entrench the power of giant corporations (who have entire departments devoted to serving up the Double Irish with a Dutch Sandwich). A Brief Interlude From the Future Today land value tax is widely considered to be the only tax that doesn't suffer from Deadweight Loss. Deadweight Loss is the lost economic activity or value caused by some policy. It's often summarized by the phrase "If you want less of something, tax it." Look at this chart, for example: (source, CC BY-SA 2.5, author: SilverStar) The place where the demand curve (red) and supply curve (blue) meet is the equilibrium point that the market naturally tends towards. But if we impose a price control lower than what the market will bear, the yellow area of the curve shows economic activity that can't happen. If you put price controls on gasoline, for instance, you'll get shortages because there's more demand than supply, and supply can't profitably rise to meet the extra bit of demand that's willing to pay a little more. But here's how things look with a land value tax, notice that the supply curve is vertical – that's weird, what does that mean? (source, CC BY-SA 3.0, author: Explodicle) A vertical supply curve means no matter what the price of land is, the same amount will always be supplied. This is because you can't make land – the supply is effectively fixed. Remember, the Netherlands doesn't count because the sea bed is land, and filling it in is just an improvement to land that already existed. And even if we granted "The Netherlands occasionally makes land" for the sake of argument, the amount of land "created" in this way is pretty darn negligible in the grand scheme of the economy, and almost exclusively the domain of governments or state-owned actors. The supply of land being fixed has some really interesting properties. By contrast, consider oil, the supply of which is not fixed. If we tax oil, some of the more marginal wells will be too expensive to operate and make a profit, so producers shut those down and the supply of oil decreases. Deadweight loss comes from a producer's ability to change the amount of product they supply in response to price signals. You'll notice the above graph of land tax has no deadweight loss at all! Since nobody produces land, it's the one thing you can tax without getting less of it. This drives out speculators entirely. Speculators can no longer distort rents by bidding up the price of land and holding it out of use, and can no longer compete with those who actually intend to use the land. This restores the proper balance of land, labor, and capital. Now if you work harder, or invest more capital, you can actually expect to see an increasing return without it all being gobbled up by ever-increasing rent. If you think about it this way, land value tax has negative deadweight loss, because it eliminates the speculative distortion that is the unearned privilege of landownership. Okay, but won't the landlords just pass the land tax on to their tenants? By George, no. Rent is a price, and price is governed by supply and demand. Supply of land is fixed, so land value tax has no effect on supply. What about demand? Except in cases where it causes the economy to boom (a good thing), land value tax won't increase land value – what it always does, however, is reduce the demand for land by speculators. If it costs nothing to hold on to land, of course I'm going to want to grab some and HODL. If the rent I could hope to gain is taxed away, I won't bother. Consider the case of oil again, where a tax reduces the supply. Reduced supply, given unchanged demand, causes a rise in price. And you'll find the increase in price tracks very closely with the amount of tax. Land value tax is just about the only kind of tax that can't be passed off to someone else. For more on deadweight loss and the land value tax, see Welfare Economics of the Land Value Tax by BlueRepublik. So does this mean there can never be profitable landlords ever again? Of course not – they just have to earn their living honestly like everyone else. Remember, we don't tax the improvements, just the "ground rent." So Ms. Nguyen still gets paid for all her honest work and judicious investments, but Mr. Slumlord doesn't make a dime until he gets off his lazy butt and does something productive. This is really important, because aside from speculation, the principal cause of land value increase is the productivity of your neighbors. An empty lot in the middle of nowhere is worthless, but an otherwise identical empty lot in the middle of New York city is priceless. As they say in real estate - "location, location, location." The reason location is valuable is because of the activity and contributions of the community, and yet the landlord claims the right to seize it all as rent. Modern economists have some interesting things to say about George's ideas, too. In 1977 Joseph Stiglitz demonstrated that land rents have a tendency to almost perfectly equal the value of investment in public goods. He called this the Henry George Theorem. Milton Friedman famously called land value tax the "Least Worst" tax. But one of my all-time favorite endorsements will always be that one time the economist Ramin Shokrizade unwittingly re-derived land value tax from first principles to (successfully!) fix recessions in EVE Online. Okay, so we tax all the ground rent. It will remove the speculative component of the rent (because there will no longer be any incentive to jack the prices up artificially), but it won't drive the price down to zero. That's because 100% LVT is only achievable on a frictionless plane populated by spherical cows; here in the real world you'll be left with a small sliver of land value. And of course regardless of the LVT rate, houses and buildings will still have a price. And that's fine. Land in Times Square will still be a lot more valuable than land in Podunk, Saskatchewan, but both will approach the same price as the LVT rate gets closer to 100%. This encourages people to actually make use of valuable land rather than holding it out of use, blighting the urban core and forcing development to sprawl out for miles in every direction, leading to worse transportation and more pollution. But... doesn't this mean that if people aren't putting land to productive use, they'll eventually be pressured to sell it off to someone who will? George sees this as a good thing. Without land value tax you get situations where somebody can anticipate that an empty lot will become valuable in the future, buy it, HODL forever, lobby against future development that would depress their property values, and now you have the Bay Area's housing crisis. Or buy an apartment block, do the absolute minimum the tenants will tolerate without killing you, constantly jack up the rent as the city grows, and you get slums. As BlueRepublik observes in No, Georgism is Still Sane: If you look at the commercial blight in New York City (http://www.vacantnewyork.com/) 90%+ is from landlords refusing to lease out to small businesses, waiting for a larger bank or big business to pay a higher rent bill. This causes property values of nearby businesses to drop, equity value to drop, and businesses to move out from the city center, increasing urban sprawl and urban blight. It’s a massive drain on personal wealth, and is very highly linked with poverty and higher crime rates. It’s also not a great model for having a stable social fabric. In a fit of performance art, a Georgist by the name of Fay Lewis once famously bought an empty lot and stuck a big sign on it to demonstrate the principle in action: Okay, but isn't building too much stuff bad for the environment? Won't this encourage over-development? By George, no. What's bad for the environment is sprawl, which the current system encourages and which the land tax would directly attack. If you want dense, walkable cities that don't depend on cars to get around, you should eliminate land speculation. A stronger objection to land value tax is when it's not some shifty speculator or a genocidal English landlord who suffers the brunt of it, but, say, this guy: The premise of Pixar's movie Up is that Carl Fredricksen, a lovably grumpy pensioner, is the last holdout standing in the way of developers bulldozing the rest of his neighborhood in the name of Progress™. He refuses to sell because he can't bear to part with the house which for him is tied up with all the cherished memories of his departed wife. This isn't just sentimental fiction, this is something that really does happen. Isn't Georgism just going to price the poor Carl Fredricksens out of their homes so that someone with a more """productive""" use can have it instead? There's several good response to this. For starters, if you're worried about kindly old people losing their homes, that's a thing that's happening already, and most of the time it's because The Rent Is Too Damn High, and our existing system is net worse on this score. We are currently facing an unprecedented crisis of evictions in tandem with the COVID pandemic, and it's not like things were peachy before. And even though homelessness seems to be declining in the US overall, it's getting worse in the most prosperous cities, exactly as George predicted. Okay, maybe it's better for renters, but what about people who own their homes, like Carl? Isn't it unfair to stick them with land taxes that might kick them out? What if they're retired? Remember, let's not confuse land tax with land confiscation, Here's George (emphases mine): I do not propose either to purchase or to confiscate private property in land. The first would be unjust; the second, needless. Let the individuals who now hold it still retain, if they want to, possession of what they are pleased to call their land. Let them continue to call it their land. let them buy and sell, and bequeath and devise it. We may safely leave them the shell, if we take the kernel. It is not necessary to confiscate land; it is only necessary to confiscate rent. Okay, but you have to admit that even if the state isn't confiscating everybody's land, if you can't pay your land taxes you have no choice but to sell your land, right? Isn't this morally unjust to the Carl Fredricksens of the world? First, it's not a given that Mr. Fredricksen will be worse off on net: he already pays income and sales taxes, capital gains on any investments, as well as property tax which taxes both land value and the value of his house. As speculators leave the real estate market the land tax that replaces his property tax drop will drop, and his house is an improvement that goes entirely untaxed. Also, if the speculators holding onto all the most valuable real estate in the downtown districts are forced to give it up, there won't be as much competition for land and so there's a good chance developers won't be interested in trying to buy up land in a bedroom community in the first place. BlueRepublik further points out that LVT can be used to fund a Universal Basic Income, which should soften the blow considerably: Keep in mind also that the Georgist Land Value Tax is pair with a "Citizen's Dividend" or what we see as UBI, so that it's not the government claiming land rent, rather the land rent is taxed and split up equally for all men. But as a matter of political practicality, in the rare event that after all that Mr. Fredricksen still somehow finds himself in the hole after LVT is applied, Nate Blair suggests a deferment option to grandfather the Carls of the world through the transition: The LVT gets assessed annually for everyone, but owner occupiers (businesses and homeowners) can apply to defer the sum of those payments until they sell or transfer the land. Government can charge a nominal interest. A final point of modern application of land value taxes is to level the playing field between different areas by eliminating "cost of living" discrepancies that arise entirely from speculative rent. This is pretty relevant given the "location pay" debate going on in Silicon Valley right now in response to increased remote work as a direct consequence of the COVID pandemic. Back to George. Great, we've taxed ground rent at 100% and eliminated speculation and all other manner of social ills. Now what do we do with the money? Lots of things! For one, you can get rid of some other taxes. Back in George's day it was even argued that a 100% land value tax on ground rents should be the only tax – the "Single Tax," replacing all other tariffs, duties, and other taxes (keep in mind this was in the late 1800's and Federal income tax wasn't introduced until the 16th amendment in 1913). Remember, all these other taxes have deadweight loss. Income tax is a tax on labor, and so taxing it means we really do get less productive labor. The portion of property tax that targets improvements punishes you for investing in improvements, and sales tax is just straight up regressive, hitting the poor harder than the rich. There's some argument today about whether the "Single Tax" would be enough to fund the modern US budget, with some Georgists saying it would be sufficient and others saying we would still need some other taxes but could at least significantly offset what we already have. But by George, another thing we could do is just give all the money back to the people, as BlueRepublik mentioned above. This could be used as a straightforward Universal Basic Income – what George calls a Citizen's Dividend, or what Andrew Yang calls the Freedom Dividend. It could also be used for the funding of public goods. George doesn't see this as an act of charity on the state's behalf – the value of the land has its origin in the productive labors of the entire community, so it's a simple act of justice to give the returns to those who actually produced the value, which is society at large. Another effect George asserts is that once land is no longer monopolized, labor is no longer forced into one-sided competition, so wages start to go up. Even better, laborers now have far more opportunity to go into business for themselves, which spurs innovation and investment. So to sum up, if we tax the ever loving hell out of ground rent, George says we'll see the following benefits: Make housing much more affordable

Inline links: source, Philip Taylor, property tax assessors do this already, audits the poor at the same rate as the top 1%, GIS, Double Irish with a Dutch Sandwich, Deadweight Loss, https://substackcdn.com/image/fetch/$s_!MSUe!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F9e01d1dd-61fa-4c1b-8f90-6669f2c20d81_632x632.png, source, SilverStar, https://substackcdn.com/image/fetch/$s_!WZ7g!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F730bd7b8-6dbf-4e23-a799-91187ec8b9ed_520x520.png, source, Welfare Economics of the Land Value Tax, Henry George Theorem, to (successfully!) fix recessions in EVE Online, https://substackcdn.com/image/fetch/$s_!ZKi0!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F4fd890f3-35ce-415d-a461-2e507eff4ed9_680x709.png, No, Georgism is Still Sane, http://www.vacantnewyork.com/, https://substackcdn.com/image/fetch/$s_!gVc9!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F0eccd663-f37b-44b6-ba75-469069befa34_1863x1268.jpeg, https://substackcdn.com/image/fetch/$s_!mVYl!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F80f4b70f-b472-47b0-b46d-e74b3190ddfd_536x554.png, https://substackcdn.com/image/fetch/$s_!G2qa!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fa948c9cc-5271-4b71-8c74-de55e126f16a_640x360.png, really does happen, crisis of evictions, getting worse in the most prosperous cities, "location pay" debate going on in Silicon Valley, Citizen's Dividend, the Freedom Dividend

George sees this as a good thing. Without land value tax you get situations where somebody can anticipate that an empty lot will become valuable in the future, buy it, HODL forever, lobby against future development that would depress their property values, and now you have the Bay Area's housing crisis. Or buy an apartment block, do the absolute minimum the tenants will tolerate without killing you, constantly jack up the rent as the city grows, and you get slums. As BlueRepublik observes in No, Georgism is Still Sane: If you look at the commercial blight in New York City (http://www.vacantnewyork.com/) 90%+ is from landlords refusing to lease out to small businesses, waiting for a larger bank or big business to pay a higher rent bill. This causes property values of nearby businesses to drop, equity value to drop, and businesses to move out from the city center, increasing urban sprawl and urban blight. It’s a massive drain on personal wealth, and is very highly linked with poverty and higher crime rates. It’s also not a great model for having a stable social fabric. In a fit of performance art, a Georgist by the name of Fay Lewis once famously bought an empty lot and stuck a big sign on it to demonstrate the principle in action: Okay, but isn't building too much stuff bad for the environment? Won't this encourage over-development? By George, no. What's bad for the environment is sprawl, which the current system encourages and which the land tax would directly attack. If you want dense, walkable cities that don't depend on cars to get around, you should eliminate land speculation. A stronger objection to land value tax is when it's not some shifty speculator or a genocidal English landlord who suffers the brunt of it, but, say, this guy: The premise of Pixar's movie Up is that Carl Fredricksen, a lovably grumpy pensioner, is the last holdout standing in the way of developers bulldozing the rest of his neighborhood in the name of Progress™. He refuses to sell because he can't bear to part with the house which for him is tied up with all the cherished memories of his departed wife. This isn't just sentimental fiction, this is something that really does happen. Isn't Georgism just going to price the poor Carl Fredricksens out of their homes so that someone with a more """productive""" use can have it instead? There's several good response to this. For starters, if you're worried about kindly old people losing their homes, that's a thing that's happening already, and most of the time it's because The Rent Is Too Damn High, and our existing system is net worse on this score. We are currently facing an unprecedented crisis of evictions in tandem with the COVID pandemic, and it's not like things were peachy before. And even though homelessness seems to be declining in the US overall, it's getting worse in the most prosperous cities, exactly as George predicted. Okay, maybe it's better for renters, but what about people who own their homes, like Carl? Isn't it unfair to stick them with land taxes that might kick them out? What if they're retired? Remember, let's not confuse land tax with land confiscation, Here's George (emphases mine): I do not propose either to purchase or to confiscate private property in land. The first would be unjust; the second, needless. Let the individuals who now hold it still retain, if they want to, possession of what they are pleased to call their land. Let them continue to call it their land. let them buy and sell, and bequeath and devise it. We may safely leave them the shell, if we take the kernel. It is not necessary to confiscate land; it is only necessary to confiscate rent. Okay, but you have to admit that even if the state isn't confiscating everybody's land, if you can't pay your land taxes you have no choice but to sell your land, right? Isn't this morally unjust to the Carl Fredricksens of the world? First, it's not a given that Mr. Fredricksen will be worse off on net: he already pays income and sales taxes, capital gains on any investments, as well as property tax which taxes both land value and the value of his house. As speculators leave the real estate market the land tax that replaces his property tax drop will drop, and his house is an improvement that goes entirely untaxed. Also, if the speculators holding onto all the most valuable real estate in the downtown districts are forced to give it up, there won't be as much competition for land and so there's a good chance developers won't be interested in trying to buy up land in a bedroom community in the first place. BlueRepublik further points out that LVT can be used to fund a Universal Basic Income, which should soften the blow considerably: Keep in mind also that the Georgist Land Value Tax is pair with a "Citizen's Dividend" or what we see as UBI, so that it's not the government claiming land rent, rather the land rent is taxed and split up equally for all men. But as a matter of political practicality, in the rare event that after all that Mr. Fredricksen still somehow finds himself in the hole after LVT is applied, Nate Blair suggests a deferment option to grandfather the Carls of the world through the transition: The LVT gets assessed annually for everyone, but owner occupiers (businesses and homeowners) can apply to defer the sum of those payments until they sell or transfer the land. Government can charge a nominal interest. A final point of modern application of land value taxes is to level the playing field between different areas by eliminating "cost of living" discrepancies that arise entirely from speculative rent. This is pretty relevant given the "location pay" debate going on in Silicon Valley right now in response to increased remote work as a direct consequence of the COVID pandemic. Back to George. Great, we've taxed ground rent at 100% and eliminated speculation and all other manner of social ills. Now what do we do with the money? Lots of things! For one, you can get rid of some other taxes. Back in George's day it was even argued that a 100% land value tax on ground rents should be the only tax – the "Single Tax," replacing all other tariffs, duties, and other taxes (keep in mind this was in the late 1800's and Federal income tax wasn't introduced until the 16th amendment in 1913). Remember, all these other taxes have deadweight loss. Income tax is a tax on labor, and so taxing it means we really do get less productive labor. The portion of property tax that targets improvements punishes you for investing in improvements, and sales tax is just straight up regressive, hitting the poor harder than the rich. There's some argument today about whether the "Single Tax" would be enough to fund the modern US budget, with some Georgists saying it would be sufficient and others saying we would still need some other taxes but could at least significantly offset what we already have. But by George, another thing we could do is just give all the money back to the people, as BlueRepublik mentioned above. This could be used as a straightforward Universal Basic Income – what George calls a Citizen's Dividend, or what Andrew Yang calls the Freedom Dividend. It could also be used for the funding of public goods. George doesn't see this as an act of charity on the state's behalf – the value of the land has its origin in the productive labors of the entire community, so it's a simple act of justice to give the returns to those who actually produced the value, which is society at large. Another effect George asserts is that once land is no longer monopolized, labor is no longer forced into one-sided competition, so wages start to go up. Even better, laborers now have far more opportunity to go into business for themselves, which spurs innovation and investment. So to sum up, if we tax the ever loving hell out of ground rent, George says we'll see the following benefits: Make housing much more affordable

Inline links: No, Georgism is Still Sane, http://www.vacantnewyork.com/, https://substackcdn.com/image/fetch/$s_!gVc9!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F0eccd663-f37b-44b6-ba75-469069befa34_1863x1268.jpeg, https://substackcdn.com/image/fetch/$s_!mVYl!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F80f4b70f-b472-47b0-b46d-e74b3190ddfd_536x554.png, https://substackcdn.com/image/fetch/$s_!G2qa!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fa948c9cc-5271-4b71-8c74-de55e126f16a_640x360.png, really does happen, crisis of evictions, getting worse in the most prosperous cities, "location pay" debate going on in Silicon Valley, Citizen's Dividend, the Freedom Dividend

Book Review Contest: Winners

July 10, 2021 · Original source

Lars is a Norwegian-Texan game designer, and you can read his game design blog here. He's a pretty serious Georgist and posts regularly in the Georgism subreddit.

Inline links: here, Georgism subreddit

November 08, 2021 · Original source

Why move to this city instead of one of the many existing cities which are not in deserts and, you know, actually exist? Lore’s pitch is that Telosa (working name) will be inclusive and sustainable by following a Georgist model: all the land will be held in a community-owned trust, and all profits will go to social services.

Inline links: Telosa

I like Georgism as much as anyone else, but I’m not sure a new city in the desert is the right place to try it. Land in the desert is already really cheap. You’d have to really succeed at building a pretty big and desirable city before landlords started capturing a lot of value.

Also, model cities are a weird match for Georgism, because a big part of Georgism is that landowners don’t deserve credit for their land becoming valuable; the land is valuable because it’s in a big desirable city. But in model cities, the landowner (usually the model city founder) is responsible for the city being big and desirable. Usually the founder would keep the land and use the rent to recoup their investment in making the city.

Does Georgism Work? Part 1: Is Land Really A Big Deal?

December 09, 2021 · Original source

[Lars Doucet won this year’s Book Review Contest with his review of Henry George’s Progress and Poverty. Since then, he’s been researching Georgism in more depth, and wants to follow up with what he’s learned. I’ll be posting three of his Georgism essays here this week, and you can read his other work at Fortress Of Doors]

Inline links: Book Review Contest, Progress and Poverty, Fortress Of Doors

Hi, my name's Lars Doucet (not Scott Alexander) and this is a guest post in an ongoing series that assesses the empirical basis for the economic philosophy of Georgism.

Inline links: Georgism

Part 0 - Book Review: Progress & Poverty Part I - Is Land Really a Big Deal? ?? (You are here) Part II - Can Land Value Tax be Passed on to Tenants? Part III - Can Unimproved Land Value be Accurately Assessed Separately from Buildings?

Inline links: Part 0 - Book Review: Progress & Poverty, Part II - Can Land Value Tax be Passed on to Tenants?, Part III - Can Unimproved Land Value be Accurately Assessed Separately from Buildings?

Does Georgism Work? Part 2: Can Landlords Pass Land Value Tax on to Tenants?

December 10, 2021 · Original source

[Lars Doucet won this year’s Book Review Contest with his review of Henry George’s Progress and Poverty. Since then, he’s been researching Georgism in more depth, and wants to follow up with what he’s learned. I’ll be posting three of his Georgism essays here this week, and you can read his other work at Fortress Of Doors]

Inline links: Book Review Contest, Progress and Poverty, Fortress Of Doors

Hi, my name's Lars Doucet (not Scott Alexander), and this is a guest post in an ongoing series that assesses the empirical basis for the economic philosophy of Georgism.

Inline links: Georgism

Part 0 - Book Review: Progress & Poverty Part I - Is Land Really a Big Deal? Part II - Can Land Value Tax be passed on to Tenants? ?? (You are here) Part III - Can Unimproved Land Value be Accurately Assessed Separately from Buildings?

Inline links: Part 0 - Book Review: Progress & Poverty, Part I - Is Land Really a Big Deal?

Does Georgism Work, Part 3: Can Unimproved Land Value be Accurately Assessed Separately From Buildings?

December 11, 2021 · Original source

[Lars Doucet won this year’s Book Review Contest with his review of Henry George’s Progress and Poverty. Since then, he’s been researching Georgism in more depth, and wants to follow up with what he’s learned. I’ll be posting three of his Georgism essays here this week, and you can read his other work at Fortress Of Doors]

Inline links: Book Review Contest, Progress and Poverty, Fortress Of Doors

Hi, my name's Lars Doucet (not Scott Alexander), and this is a guest post in an ongoing series that assesses the empirical basis for the economic philosophy of Georgism.

Inline links: Georgism

Part 0 - Book Review: Progress & Poverty Part I - Is Land Really a Big Deal? Part II - Can Land Value Tax be passed on to Tenants? Part III - Can Unimproved Land Value be Accurately Assessed Separately from Buildings? ?? (You are here)

Inline links: Part 0 - Book Review: Progress & Poverty, Part I - Is Land Really a Big Deal?, Part II - Can Land Value Tax be passed on to Tenants?

Open Thread 202

December 13, 2021 · Original source

2: Thanks again to Lars for his recent Georgism posts. He wants me to add that he found the Hagman citation he was looking for, and it is “a giant anti-Georgist diatribe written as an authorial self-insert fan fiction, IN SPACE, confidently expounding upon how an LVT experiment failed on the planet Mars”.

Inline links: he found the Hagman citation he was looking for

3: And several readers commented that they had been “georgepilled” - they ought to know that the historically accurate term is “seen the cat”. Somebody even made a mock Gadsen flag about it:

Inline links: “seen the cat”, even made

ACX Grants Results

December 28, 2021 · Original source

Will Jarvis and Lars Doucet, $55,000, to create an automated land value assessment model for two Pennsylvania counties. You all know Lars as the guy who keeps writing guest posts here about Georgism. Now he wants to take it to the next level and start building tools for the Georgist future. This program would act as proof of concept that counties can assess land value relatively easily and accurately. I was on the fence about funding it because they can create a beautiful program with 100% success and then counties can just continue to not be Georgist for the same reasons as usual. I'm going ahead with it because I trust Lars who believes this is the best way forward, and because it seems like the sort of thing that could eventually grow into a Georgist think tank at some point in the future. They’re interested in talking to anyone who has experience in mass appraisal, Georgist or not, as well as applied data scientists and machine learning researchers. Fill out this form here if that’s you. You can follow their progress at https://gameofrent.com/

Inline links: guest posts here about Georgism, this form here, https://gameofrent.com/

Mantic Monday: Ukraine Cube Manifold

February 14, 2022 · Original source

Not actually in order This is a semi-randomly selected sample of Manifold markets, but let’s go through them one by one. The Ukraine market is the biggest on Manifold. It’s also deeply out of step with every other prediction market and the top non-prediction-market authorities - who are all giving numbers in the 50s and 60s. I don’t understand how this is so low - yes, play money < real money, but mostly because play money doesn’t get enough people betting. Here lots of people are betting - it’s the biggest market on the site, and since you only start with $1000 either twenty people have bet everything or more people have bet a fraction - but it’s still wrong. I tried to spend some play money to correct it and it snapped back to just as wrong as it was before. I have no explanation. Midnight The Stray Cat is the second biggest market on Manifold, just after Ukraine. I guess the Internet really liking cats shouldn’t be a surprise at this point. In case you need to do research first I’m told this is the cat in question: Props to Manifold for a bunch of markets like the third one on there, where they eat their own dog food by using their market to predict how their business decisions are going to go. ACX Bot has copy-pasted all of my predictions from 2022. At some point they should be able to compare their results with Zvi (ie a single very smart person), with the contest many of you entered (ie an average of formless crowdsourced predictions), and Metaculus (ie a non-monetary forecasting tournament). I’m looking forward to it! Most of you already know Lars Doucet, who’s written some great ACX posts on Georgism. I don’t know what possessed him to make a Joe Rogan Georgism interviewee market, unless he’s gunning for the position. Valinor is a group house on my street, with ~a dozen people living in and around it. We’ve been talking about fixing the backyard for a while. Now we can bet about whether it will happen. Having a number for this actually affects some of my decisions a little. Connor is hijacking the prediction market to make a poll, which is pretty cute. Dwayne Johnson does not have a 15% chance of winning the election. Manifold is suffering from the usual play money problem, where if you only start out with $1000 in play money, nobody wants to lock it up for three years to make a 15% profit. Vivek’s market, “Will I believe that 13177 is a prime number”, is pretty unusual. I’m interpreting it as a test/demonstration of prediction markets’ information-gathering ability. If you don’t know something and it’s hard to Google, you can make a prediction market about whether you’ll believe it in the future, and people who are able to figure out the answer will bet on it. Based on the 97% YES rate, I’m guessing 13177 is in fact a prime number. What else can you do this with? TANSTAAFL’s “Will I Be Convinced That Justin Trudeau Is Not Fidel Castro’s Son?” market is maybe pushing the limit of this methodology. Anyway, there are lots of me-too prediction markets but this is something genuinely new under the sun. Maybe it will be awesome itself, but I’m also hoping it helps bigger players realize how much more is possible. This Week In Metaculus A few new questions on intelligence enhancement, eg: The question explicitly allows embryo selection, but says it must raise IQ ten points and be available for <25% median income to count. Trivial improvements to existing embryo selection will top out around 9 points, so this seems to be predicting something more interesting, maybe iterated embryo selection at the very least. I’m probably slightly bearish on this one; I believe if it existed someone would find a way to get it, but I think the regulatory climate might be able to prevent the relevant research indefinitely. Improving adult IQ is really hard. This is a bold thing to speculate about! Atmospheric CO2 was 300ish for most of pre-industrial history, 400ish now, and rising. This question predicts 600 in 2100, which sounds like what happens if global warming gets a bit worse but eventually stabilizes. I’m less sure. I think if we make it to 2100, we’ll have so much technology that atmospheric CO2 can be whatever we want it to be. But maybe we’ll want it to stay where it is; once there’s been a lot of global warming and people have moved / shifted lifestyles, it could be equally disruptive to cool the planet back down. Right now it’s 5%, the official government prediction is 10% by 2030, but this market says 17.6%. But look at that probability distribution! It’s a lot of people saying 10%ish, plus a very long tail of very big numbers. I think people are disagreeing about how exponential this change is going to be. Shorts Metaculus is holding an essay contest for people who want to use their AI-related prediction markets to argue the future of AI. $6500 available in prizes.

Inline links: predictions from 2022, ACX posts on Georgism, Will I Be Convinced That Justin Trudeau Is Not Fidel Castro’s Son?, https://substackcdn.com/image/fetch/$s_!V2bV!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fca419ec2-7b91-44cd-80b0-2aad1baa4c2f_766x166.png, The question, https://substackcdn.com/image/fetch/$s_!Ah6n!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F1ff4f28d-1901-45f2-85bc-8f1c2120ecd1_770x187.png, https://substackcdn.com/image/fetch/$s_!zSK8!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F80e3383c-6f68-412a-ac90-ca63236bdb10_769x167.png, This, https://substackcdn.com/image/fetch/$s_!frCz!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F976d1b66-daee-43d1-948a-500e77ac5a2f_764x164.png, this market, holding an essay contest

Highlights From The Comments On Billionaire Replaceability

September 22, 2022 · Original source

As mentioned above, Georgism is my favorite example of this. We give trillions of dollars to random sheiks because oil happened to be discovered under their ancestral lands. The size of this mistake is unbounded; if oil happened to be 10x more necessary than today, and you couldn’t get it from shale or sands or whatever, maybe Saudi Arabia would capture the majority of value in the world (though of course realistically it would get invaded long before then). I don’t want to invade Saudi Arabia to solve this problem, but if you do happen to have a government thinking about these kinds of questions beforehand, I do think they would come to some solution other than “whoever’s land the oil is discovered on gets to keep a big chunk of the surplus forever”. I do think if we had to do everything over again, we would come up with a better solution for landownership than modern landlordism. This isn’t because capitalism is bad, it’s because these are difficult edge cases where assumptions like “people produce goods” don’t hold, and some of the things we have to buy and sell are abstract or unquantifiable.

I’m claiming that a sort of Platonic perfect liberalism that taxed externalities and implemented a Georgist LVT and all those things would also have some institution in place to make sure that Amazon could make profits off of its own good decisions and hard work, but not collect rent off the concept of being a retail giant. I don’t know what that institution would be, in much the same way I probably couldn’t personally have invented Georgism and LVTs, but I think it would exist. In the absence of that institution, I have a vague feeling that probably Amazon makes too much money, and that taking away some of their money is a kind of ugly hack but not totally absurd.

Open Thread 243

September 26, 2022 · Original source

1: Many of you enjoyed Lars Doucet’s book review on Georgism and subsequent followup posts; he also won an ACX Grant to further investigate. Now he’s turning his Georgist work into a book, Land Is A Big Deal, due out October 15:

Inline links: book review on Georgism, subsequent, followup, posts, ACX Grant, Land Is A Big Deal

Links For October

October 12, 2022 · Original source

3: Harsimony on Less Wrong: Georgism . . . In Space! “Extending the Georgist paradigm into space neatly solves problems with sharing resources and ensures that colonization proceeds at an appropriate pace.”

Inline links: Georgism . . . In Space!

Open Thread 262

February 06, 2023 · Original source

5: ACX Grants update: You may remember Lars Doucet from his guest posts on Georgism. Last year, he and Will Jarvis received an ACX Grant to work on land value assessment technology that might make land value taxes more tractable and appealing. They’re happy to announce that this has turned into a startup, ValueBase, which raised $1.6 million in seed funding. Congratulations to Lars, Will, and the ValueBase team for what I think is the second ACX Grants project to become a $1 million + company.

Inline links: guest posts, received an ACX Grant, ValueBase, raised $1.6 million in seed funding

Links For January 2024

January 18, 2024 · Original source

14: Lars Doucet (previous ACX guest blogger about Georgism) writes about adjusting to his son’s brain death. “The correct adjective for the tragedy I'm experiencing is not ‘unimaginable’ but unfathomable. I can imagine it just fine because it's happening to me, and you can imagine it too now because I'm describing it to you. And because we can imagine it, we can turn and face it, and, with God's grace, we can lift up our cross and bear it, somehow. But what none of us can do is to measure – to fathom – the depth of it.” Don’t read this unless you have nerves of steel.

Inline links: writes about adjusting to his son’s brain death

ACX Grants Results 2024

February 10, 2024 · Original source

Joseph Caissie, $100,000, to advocate for Georgism. This is a followup to last year’s grant to Lars Doucet and Will Jarvis, who were able to build a land value assessment startup that got funding from Sam Altman and went on to influence local and state government policy. Lars and Will have asked me to help fund the next step in their plan: giving Joseph (currently the State Assessor of Alaska) enough money to quit his job and join the neo-Georgist project full-time.

Inline links: a land value assessment startup, got funding from Sam Altman

Links For February 2024

February 29, 2024 · Original source

25: Interview with ACX Grantee Will Jarvis on Georgism and his company ValueBase.

Inline links: Interview with ACX Grantee Will Jarvis on Georgism and his company ValueBase

Open Thread 349

September 30, 2024 · Original source

2: Late addition to Meetups Everywhere: Moscow on October 6, see link for more. Other meetups coming up this week include Philadelphia, Austin, Istanbul, Canberra, Budapest, and Warsaw. 3: If you haven’t already, vote for the winner of this year’s book review contest - voting closes Sunday, October 6. 4: And if you’re an ACX veteran, you might remember the winner of the very first book review contest - Lars Doucet’s review of Progress And Poverty, the book on Georgism. Since then, Lars has gone on to start a Georgism-inspired land valuation company, Valuebase, which has gotten investment from Sam Altman, Nat Friedman, and others. Now they’re recruiting paid interns, including: Technical interns: Ideal candidates have experience in programming, data science, machine learning, or AI, and are eager to work on real-world problems that scale across millions of properties.

Inline links: Meetups Everywhere, vote for the winner of this year’s book review contest, Lars Doucet’s review of, Valuebase

Open Thread 357

November 25, 2024 · Original source

2: RIP Nikolas Doucet, son of Lars Doucet, ACX guest blogger on Georgism.

Inline links: RIP Nikolas Doucet

Astral Codex Ten

Table of Contents

Atlas

Georgism

Georgism

Article

Metadata

Appears In

External Links

Source Context

Backlinks

Astral Codex Ten

Table of Contents

Atlas

Georgism

Georgism

Article

Metadata

Appears In

Related Pages

External Links

Source Context

Backlinks