Fun Online Polls: Violent Deaths & Market Forces

Seeing as the football World Cup in South Africa is now underway, I shall close last week's Fun Online Poll, "How many violent deaths will be directly linked to the football World Cup in South Africa?". Your predictions were as follows:

0 - 5%
1 - 10 - 24%
11 - 100 - 41%
More than 100 - 28%
Other - 2%

FWIW, I predicted '1 - 10', but seeing as South Africa is the second most violent country on earth, with over 20,000 murders per year, we'd expect about 2,000 murders this month, the question is, how many will be linked to the World Cup?

On the one hand, whichever country you live in, if your fellow nationals meet a violent death in your own country it's not usually newsworthy, but if one of your fellow nationals is murdered abroad it gets much more coverage; on the other hand, the world's MSM will no doubt be at pains to show what great progress The Rainbow Nation has made in the past two decades.

Hmm. We shall see.

If you spot any stories, please leave a comment or send me an email.
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So let's return to 'market forces'. As a small-government free market liberal, I am thoroughly in favour of the concept that scarce resources are best rationed by allowing the markets (that's all of us, by the way) to determine supply and demand of any particular items of goods or services; the clearing price will always be set to produce an optimal outcome. Or to put it another way "The best form of rationing is price rationing".

1. This works absolutely fine for most things, but unfortunately, the most fundamental and important good (or human right) of all - access to land* is not subject to these market forces, as land 'ownership' is dictated mainly by non-market considerations; i.e. by historical accident or political influence; and is created and protected by 'the State' and by custom or tradition.

2. If you are a non-landowner, then you are very much subject to market forces - a house or business premises come up for sale or rent; you compete with others; and whoever bids the highest price wins. But what you are bidding for is effectively a monopoly right (or membership of a cartel); the fact that there is a 'free market' in monopoly rights does not stop the underlying subject matter being a monopoly right.

3. As long as you are on the outside looking in, you are indifferent as to interest rates or Council Tax/Business Rates (all things being equal, a higher interest rate or higher Council Tax/Business Rates merely depresses the purchase price or rent) or how much new development there is (you get what you pay for, whether new build or ancient; and all things being equal, the more properties there are on offer, the lower the price you have to pay).

4. The big problem is that the minute people 'get on the property ladder', they will do their best to insulate themselves from market forces and pull up the ladder behind them. Property owners will always clamour for lower interest rates; for less new construction; for lower Council Tax/Business Rates; and tenants will always clamour for 'better' tenant protection or rent caps.

5. One of the supposedly killer arguments against Land Value Tax is that it would subject everybody to the same market forces. In economic terms, everybody would be a tenant of his 'own' land (but would still own the buildings thereon outright, of course), so market forces would encourage him to make the optimum use of his location, or, in the case of residential land, to generate at least as much income as anybody else who would like to live in the area**. So to a large extent it is an entirely voluntary tax - if you want to pay less, then just move somewhere smaller or cheaper.

6. I see this as an argument in favour: those who deliberately restrict supply (i.e. NIMBYs) would pay additional tax to reflect the artificial scarcity value; if the government is under political pressure to depress interest rates, then land rental values would rise and the tax would capture the bulk of that rise. Businesses who raise barriers to entry would see the bulk of their super profits disappear in extra tax, and so on.

So that's this week's Fun Online Poll: are 'market forces' A Bad Thing or A Good Thing? Or are they only A Good Thing as long as they don't apply to landowners and homeowners?

Vote here or use the widget in the sidebar.

* Until they work out how to privatise fresh air.

** But nobody would be a tax slave, debt slave or welfare junkie of course, because once other taxes have been phased out, the proceeds of the tax (apart from a small fraction required to pay for the core functions of the state - about five per cent of GDP) would then be divvied up and redistributed as a Citizen's Income, so a median household in a median house would be neither net taxpayer nor net recipient, so you get the good bits of a capitalist economy with the safety net of a welfare state.