Astral Codex Ten

Paul Krugman

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Paul Krugman

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Paul Krugman is a recurring person in the Astral Codex Ten archive, appearing 7 times across 7 issues between April 16, 2021 and January 16, 2026. The archive places it in contexts such as ""likes of Paul Krugman and Milton Friedman to grudgingly agree to key points""; “like Paul Krugman, fall here?”; “Paul Krugman’s infamous prediction about the Internet”. It most often appears alongside California, San Francisco, United States.

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  • Category: People
  • Mention count: 7
  • Issue count: 7
  • First seen: April 16, 2021
  • Last seen: January 16, 2026

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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)
Inline links: Political Economy, Economics, Georgism or Geoism, Paul Krugman, Milton Friedman, Friedrich Hayek, wasn't a fan, Nate Blair, BlueRepublik, Long Depression, source, https://substackcdn.com/image/fetch/$s_!L1cp!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F46a9ea6a-75a2-48cf-b2a5-368a5d450f4e_700x508.png, https://substackcdn.com/image/fetch/$s_!PHaw!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F4575c4fc-b789-4177-9c22-6bd6040ea5ba_726x512.png, extreme poverty has been going down everywhere, https://substackcdn.com/image/fetch/$s_!nnef!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F1115a295-9275-428a-8434-9572119c596d_3000x2100.png, source, Considerations on Cost Disease, https://substackcdn.com/image/fetch/$s_!UAJH!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F89ecab7d-431a-47c8-bcce-f5726db1a770_1600x1490.png, source, https://substackcdn.com/image/fetch/$s_!ndzi!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fbe29b221-a8f8-419d-8569-da46285e32ac_802x568.png, source, https://substackcdn.com/image/fetch/$s_!eyAX!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Ff9b8eea9-8bd6-4c81-8dd7-93f192a542f7_980x713.png, source, https://substackcdn.com/image/fetch/$s_!80d0!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F1452e66e-c8f4-4174-92f7-31829f8cbd39_958x696.png, absolutely banana pants insane, Number of Homeless Children in U.S. At All-Time High; California Among Worst States, Labor Theory of Value, marginal revolution, blog, https://substackcdn.com/image/fetch/$s_!szbX!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F02e3f9db-5fe4-4a1b-bd19-5a13bac84aa1_500x500.png, https://substackcdn.com/image/fetch/$s_!cDFG!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F28ef979e-83da-4d1b-8d81-5f08fd6103a5_516x600.png, https://substackcdn.com/image/fetch/$s_!PVE6!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F68f4f7f0-2016-4fe9-9996-879a3c92db74_516x600.png, Protection or Free Trade, https://substackcdn.com/image/fetch/$s_!aeD5!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F348d4d74-8c98-42e6-b5f7-7bd79b30a816_960x611.png
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June 22, 2021 · Original source
Partly because of my superficial reading and partly because of my poor understanding of macroeconomics, I don’t have a good sense of where exactly everyone’s views diverge. If we have 3.5% inflation but employment numbers look good, is this a victory for Cowen and Summers? For Yglesias and Powell? Do both of them secretly agree on everything and they’re just looking at it from different angles? Where do other people whose opinions I’m told I should care about, like Paul Krugman, fall here?
Links For June
June 23, 2021 · Original source
11: Claim: Paul Krugman’s infamous prediction about the Internet having the same scale of effect as the fax machine was right in the context it was made:
Does Georgism Work? Part 1: Is Land Really A Big Deal?
December 09, 2021 · Original source
In real life you can't accurately assess land value separately from improvements, so even if LVT would work in theory, it doesn't work in practice Today we'll start with point 1, and subsequent articles posted in the next two days will address points 2 and 3. I'll probably write further articles on the subject, but I make no presumptions about whether I'll have worn out my welcome on Astral Codex Ten by then. If you haven't read the Book Review yet, I've posted a brief recap of the relevant concepts below. Otherwise, feel free to skip directly to the subsequent section. 0. A Brief Recap Georgism is a school of political economy that is really upset about, among other things, the Rent Being Too Damn High. It seeks to liberate labor and capital alike from those who gatekeep access to scarce "non-produced assets," such as land and natural resources, while still affirming the virtues of hard work and free enterprise. George uses the term "Land" to mean not just regular land, but everything that is external to human beings and the things they produce–nature itself, really. Georgism's chief insight is to move economic thinking from a two-factor model (Labor and Capital) to a three-factor model (Land, Labor, and Capital). It's chief (but not only) policy prescription is the Land Value Tax (LVT), which taxes real estate at as close to 100% of its "land rent" as possible (the amount of rent due to the land alone apart from "improvements" such as buildings). In actual practice, most Georgists seem to think 85% is a reasonable figure to target. Let's carefully unpack what those terms means. "Land value" refers to the full market value of a property, excluding all of its improvements, such as buildings. This is the portion of a property's value arising solely from its location and natural attributes (agricultural fertility, endowment of stuff like water, minerals, etc.). "Land rent" (AKA "ground rent") refers to the recurring rental income a property is capable of generating from the market because of its land value. It is Land Rent which Land Value Tax is intended to capture. You can think of it as a Location or Site Value Tax if that's more helpful. It's not a tax on the full market purchase price of a property, nor is it a fixed amount of tax per acre of land, but rather a tax proportional to the market value of the land alone (or better yet, the land rent). When assessed correctly, as LVT approaches 100% the market selling price of the land itself will approach zero. Don't let the "100%" confuse you, either. If a piece of land costs $10,000 to buy, and is leased for $500/year, then an LVT that captures 100% of the land rent is $500/year, which works out to a 5% annual tax of the land value. LVT should not be confused with a property tax. Property taxes consider land plus improvements (typically buildings). An LVT considers land value alone. Georgists assert that if we sufficiently tax land in this manner, we'll not only end the housing crisis but also fix a bunch of misaligned incentives that cause poverty to persist alongside economic progress, while raising a bunch of revenue that can lower or even eliminate other less efficient taxes, such as sales and income taxes. This is because virtually all economists agree that LVT has zero "deadweight loss"–a fancy word for a drag on the economy that makes certain activities no longer profitable. Other taxes with no deadweight loss include Pigouvian taxes on bad things, like congestion and pollution. But won't landlords just raise the rent to make up for the LVT, passing the burden of the tax on to the tenants? Georgists say no, because land is special in that it is scarce and nobody can make any more of it. Indeed, LVT is a rare form of taxation that actually boosts the economy, because it discourages rent-seeking and speculation. Some Georgists even go so far as to say that LVT can raise enough revenue to replace all other less efficient taxes, becoming the so-called "Single Tax," but this is not a universally held position among modern Georgists. To be clear, proponents of the "Single Tax" believe that LVT is sufficient for all public purposes and that no other taxes (such as income tax, capital taxes, and tariffs) are necessary for revenue generation, although they still might support carbon taxes or "sin taxes" on things they want to discourage. Georgism doesn't begin and end with the LVT, however, and the movement isn't solely concerned with real estate and tax revenue. Henry George was an early proponent of what we now call "Universal Basic Income," or as he called it, the "Citizen's Dividend" (funded by LVT, naturally). But even if you threw every penny of LVT revenue into the sea, the anti-sprawl effects of the policy are appealing enough by themselves to earn the endorsement of YIMBY's and urbanists like Strong Towns. If you take Georgism to its natural conclusions, you might start to question government-enforced monopolies over other kinds of "Land," such as electromagnetic spectrum, water and mineral rights, and orbital real estate for satellites, not to mention the deadweight loss created by intellectual property gatekeepers over, say, research papers. And if you have my day job as an analyst for the video games industry, one day you'll find yourself applying the observed 30-year history of housing crises in MMO's to virtual real estate sales in leading blockchain games. Some people come to Georgism because of their aversion to income and capital taxes, some want to use LVT to fund generous social programs, some are motivated by the beneficial environmental effects, and some just think the Rent is Too Damn High. No matter where you come from on the political compass, there's probably a way to mix up a club soda and Georgism that's right for you. 1. Is Land Really a Big Deal? Paul Krugman speaks for many mainstream economists when he admits that Georgist analysis is sound, but he insists that it's a moot point because land just isn't important anymore in the modern economy: Believe it or not, urban economics models actually do suggest that Georgist taxation would be the right approach at least to finance city growth. But I would just say: I don't think you can raise nearly enough money to run a modern welfare state by taxing land. It's just not a big enough thing. By George, if land just isn't a big deal, then LVT can't raise much money, the problems of speculative landownership are vastly overstated, and you can stop reading this article. The main tension between Georgists on the one hand, and Marxists and Neoclassicals on the other, is that the latter two significantly downplay land, centering the whole discussion instead on labor and capital. For Georgists, land is the key to understanding the whole economy. Krugman's main complaint is that LVT can't raise enough money, which is a response to the "Single Tax" movement in particular. In George's time, it was popular to advocate for a 100% Land Value Tax and the elimination of all other taxes. Keep in mind that in George's time, there was no federal income tax, and state and federal spending was much lower, so whether LVT could raise enough money wasn't nearly as controversial as it is today. But even if it turns out that a modern-day "Single Tax" isn't enough to cover the federal budget, Krugman misses the point. The purpose of LVT is not just to raise revenue, but to end speculation, rent-seeking, unaffordable housing, and wasteful, environmentally damaging sprawl. LVT is worth doing for those good effects alone. The revenue it generates doesn't need to fund literally every penny of government spending to still be a win, which is why Georgist economist Terrence Dwyer calls LVT "better than neutral." Liberal Krugman and conservative Milton Friedman both seem to agree that LVT has no deadweight loss, which means LVT, unlike income and capital taxes, doesn't create a drag on productivity. This means that if we can raise enough money from LVT, we can reduce at least some inefficient taxes, such as those on labor, while keeping government spending the same. Not only could this be popular politically, it would also boost the economy. Those are the claims Georgists make, at least. Let's see if they're true. Here are a few testable hypotheses that capture different aspects of land being a "really big deal": Most of the value of urban real estate is land
Inline links: the Book Review, political economy, Pigouvian, YIMBY's, Strong Towns, research papers, housing crises in MMO's, leading blockchain games, Paul Krugman, Milton Friedman, deadweight loss
Does Georgism Work? Part 2: Can Landlords Pass Land Value Tax on to Tenants?
December 10, 2021 · Original source
I've just read thirteen other papers that provide plenty of empirical evidence from multiple case studies all over the world, culminating in the Danish study. We can further add to that all the long-standing theoretical arguments in LVT's favor, as well as all the prominent economists from competing and outright hostile schools such as Milton Friedman, Friedrich Hayek, Marx & Engels, and Paul Krugman who have either advocated for some form of LVT themselves or openly acknowledged it as the "least bad" tax.
Inline links: Milton Friedman, Friedrich Hayek, Marx & Engels, Paul Krugman
Notes From The Progress Studies Conference
October 24, 2024 · Original source
My theory is that it all came from the same wellspring. Silicon Valley gathered all the pro-tech people together in one place, a lot of them became rich, and some of them spent their wealth reflecting on the nature of technological advance. This created a critical mass of people who were all talking to each other and motivated to see things that other people were missing. This isn’t the whole story: non-Silicon-Valley economists like Paul Krugman and Larry Summers helped build the foundational narrative. But it’s the story that makes the most sense for “why now”.
The Dilbert Afterlife
January 16, 2026 · Original source
There’s a passage in the intro to one of Adams books where he says that, given how he’s going to blow your mind and totally puncture everything you previously believed, perhaps the work is unsuitable for people above fifty-five, whose brains are comparatively sclerotic and might shatter at the strain. This is how I feel about post-2016 politics. Young people were mostly able to weather the damage. As for older people, I have seen public intellectual after public intellectual who I previously respected have their brains turn to puddles of partisan-flavored mush. Jordan Peterson, Ken White, Curtis Yarvin, Paul Krugman, Elon Musk, the Weinsteins, [various people close enough to me that it would be impolite to name them here]. Once, these people were lions of insightful debate. Where now are the horse and the rider? Where is the horn that was blowing?