Astral Codex Ten

Times Square

14 min read

Times Square

Article

Times Square is a recurring place in the Astral Codex Ten archive, appearing 2 times across 2 issues between February 03, 2021 and April 16, 2021. The archive places it in contexts such as “the time the aliens created one million lions in the center of Times Square”; “Land in Times Square will still be a lot more valuable than land in Podunk, Saskatchewan”. It most often appears alongside New York, “The Rent Is Too Damn High!”, 16th amendment.

Metadata

  • Category: Places
  • Mention count: 2
  • Issue count: 2
  • First seen: February 03, 2021
  • Last seen: April 16, 2021

Appears In

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.

Ontology Of Psychiatric Conditions: Dynamical Systems
February 03, 2021 · Original source
8. Almost any intervention can help or hurt a little, or sometimes both at once, often in completely unpredictable ways. For example, the time the aliens created one million lions in the center of Times Square was more of a test of the Materialization Ray than something they really expected to help, but this destroyed the city of New York, which hurt America’s bargaining position, which caused them to cave in to the demands of Arab countries, which convinced the Arab countries to resume sending oil a little sooner.
Your Book Review: Progress And Poverty
April 16, 2021 · Original source
(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, 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