Over at HPC, Shipbuilder explained the logic behind LVT thusly:
... ownership of land needs to be enforced by the state, so clearly it is in no way natural. This is the entire crux of your argument and it falls flat on its face. Think of two scenarios involving a plot of land and group of people - in one, the group agree to split the land up and use it amongst themselves. In another, one or two people stick a fence around the land, claim ownership and tell the rest they want to be paid for it. Which is more likely to involve jackboots and armies?
Your argument involves nothing more substantial than repeating that I'm a communist and wrong - you haven't presented any counter logic and you haven't answered any of my other points on the free market. As I've stated, my point on the moral basis ownership of property is widely acknowledged - [faux] libertarians and others extend it to land, whereas others such as socialists, anarchists and Georgists, don't, they claim land must be treated separately. It's all there in the writings of Adam Smith, John Locke, Murray Rothbard, Henry George and so on, so your 'property is theft' jibe is simply weak.
I'm sure you can do better than simply repeating the same hollow appeals to authority and jibes about communism. And just to clear things up, the definition of communism involves abolition of all forms of private property. My view is that private ownership of property is defined by producing something, or paying the producer a price for it. Just to clear up any confusion that may be perpetuated in any further posts.
Uncle Tom then does the usual Home-Owner-Ist/Faux Libertarian trick of mixing lies with facts and then drawing the wrong conclusion anyway:
Let's start with the first sentence:
"ownership of property is established by producing something, or paying the producer"
How do you work that out? Ownership of land entails being the legally recognised custodian - no payment or production is demanded. If you own a gold coin, it also makes nothing and pays nothing, but it belongs to you...
To which I responded:
1. What do gold coins have to do with it? Somebody produces the gold coin and you obtain ownership by paying the producer. That fits in entirely with Shipbuilder's position. Gold is not land. Neither are cars, paintings or lawn mowers. Land values are the only values which arise purely as a result of actions of 'the community". Gold coins, cars etc do not appear out of thin air or at the stroke of a bureaucrat's pen.
2. "Ownership of land entails being the legally recognised custodian...", in other words, it requires the force of the state to back it up, which is also what Shipbuilder said at comment 15.
3. "... no payment or production is demanded." Agreed, under current rules on most countries, the government demands very little in payment in return from the current owner (apart from Domestic Rates, Business Rates, Council Tax and their equivalents in other countries). And land is not produced, it merely requires somebody to stick a fence round it and to have the force of government on his side.
4. But the point is, thanks to their state protected, heavily subsidised and lightly taxed privilege, the current owner of land can demand payments from others who wish to occupy it, which might be quite modest in the case of forests or grouse moors in Scotland, all the way up to £500 per square foot per year on Bond Street in London.
To sum up, the Land Value Taxers say it is perfectly reasonable for the current owner or occupant of any bit of land to pay the government for the value of what he is getting in terms of legal protection, backed up with force of the state. Similarly, it is quite unreasonable for the government to demand a proportion of people's earned income or profits (i.e. where individuals are creating value with their own efforts), so income tax, VAT etc should be abolished.
Sunday, 17 July 2011
Killer Arguments Against LVT, Not (143)
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11 comments:
Yep - I get all that. LVT has some powerful logic behind it I'd say.
Is this site any good?
http://www.landvaluetax.org/
AKH, it's all very tricky. As far as I can see, there are excellent arguments in favour of LVT and excellent equal-and-opposite arguments against VAT, income tax etc.
I didn't use to be so rabid about it though, what really got me going was all these people who invent flakier and flakier arguments against LVT, which all melt away if you actually think about them for a minute, or which apply in spades to VAT, income tax etc. (e.g. "If LVT is nationalisation of land, then VAT and income tax are nationalisation of teh whole economy. What's worse?"
Landvaluetax.org is my mate Henry Laws' site, we agree on most things,but I concentrate on how LVT would work on a dull bureaucratic level and he does the more 'inspirational' stuff without worrying about how it would work in real life.
"Land values are the only values which arise purely as a result of actions of 'the community"
Nonsense. Everything only has 'value' as a result of the community. If I am the only inhabitant of a desert island, and I catch more fish than I can eat, then the surplus has no value. I can't exchange it for other goods because there is no other person to exchange it with.
All values are due to there being other people around who you can trade with. The more people there are, the greater the range of things that can be traded and the larger the values achievable.
Land is no different really to any other natural resource. The only difference being that it isn't quite as fungible as most. A lump of coal is a lump of coal, a steel bar is a steel bar. Whereas with land there are different types of soils, landscapes, coasts, rivers etc etc.
But the principle remains. My ownership of steel ingot X is total. You cannot have it. You can have one pretty much identical, but you cannot have my one. And land is the same. You cannot have my semi-detached house, but you can have one pretty similar if you want.
There is no special case for land ownership vs ownership of all other natural resources, its just a matter of where they lie on a spectrum of fungibility.
Thanks Mark - I'll keep an eye on the inspirational stuff too, although your material isn't in the least bit dull.
Word verification seems to have gone French - monspot.
S, you keep thinking up examples which exactly illustrate my point:
"Everything only has 'value' as a result of the community. If I am the only inhabitant of a desert island, and I catch more fish than I can eat, then the surplus has no value. I can't exchange it for other goods because there is no other person to exchange it with... There is no special case for land ownership vs ownership of all other natural resources, its just a matter of where they lie on a spectrum of fungibility."
Land IS a 'natural resource'. By and large you'd only catch enough fish (a natural resource) to feed yourself. But having appointed yourself King of this island with sole fishing rights, imagine that other people come to your island, you can then charge them rent for the right to live on an island with plenty of fish and/or for their fishing licence.
It all goes back to the simple fact that the only thing driving land values is "people who can be excluded from land or natural resources and who can be forced to pay for them".
Conversely, cars or televisions or hair cuts or life saving operations have value, but they only have value because individuals apply their own skills in providing them. Car manufacturers do not make a living by erecting a fence round some pre-existing cars and then enlisting the government or the army to defend their title.
"But the principle remains. My ownership of steel ingot X is total. You cannot have it. You can have one pretty much identical, but you cannot have my one. And land is the same. You cannot have my semi-detached house, but you can have one pretty similar if you want."
Why would anybody want your particular steel ingot? Unless you own all the mines and all the factories in the world, there is nothing you can do to stop other people making identical ones in a reasonably competitive world market and other people applying their skills and labour to generate cars or TVs or hair cuts or life saving operations and then exchanging their output for a steel ingot.
Conversely, you know perfectly well that land ownership is a cartel-monopoly situation. Land ONLY has value because others can be excluded from it (with the force of the state to back that up) and because free markets cannot simply generate more land, however hard people work - and the harder people work, the higher are land values. Non landowners are constantly running to stand still.
It does not require the force or intervention of government to make cars, TVs or cut hair, the value of a car or TV tends to fall over time - and you cannot increase their value by parking them in an 'up and coming area'. A hair dresser or surgeon gets old and feeble and loses his earnings capacity.
The landowner merely has to sit back and allow the community to do its best and watches the value of his land increase.
AKH, ta.
Everything only has value because others can be excluding from having/possessing it. If I cannot enforce ownership of my car what use is it to me, or anyone else? If I park it outside my house and someone can remove it with impunity, it has little value. I'm not talking about the police catching the thief and returning my goods (chance would be fine thing nowadays), but the basic concept of ownership. In the absence of a society/community the only thing that says 'That car is mine' is the strength of my arm in enforcing my claim to ownership, and/or the security measures I take to physically protect it. There is no ownership of anything beyond those parameters. In modern society we have socialised the strong arm in the form of courts and police to enforce rights of ownership. But the principle remains.
Your right to own your house, your car, your TV, your very freedom to not be enslaved by marauding war lords, is down to society having socialised violence to back up your rights of ownership of stuff and your own physical integrity.
Whether the society backs your right to own an ingot of steel, a gold coin, or an acre of land is irrelevant. Without society you would be forced to fight daily anyone who wished to take those things off you.
The idea that land is somehow uniquely guaranteed by the existence of society is nonsense.
S: "Everything only has value because others can be excluding from having/possessing it. If I cannot enforce ownership of my car what use is it to me, or anyone else?"
We have covered cars a dozen times, and I do wonder sometimes whether you don't understand or simply don't want to - to recap briefly.
1. A car has to be manufactured, individuals have to invest their own skills, time and money into making it. If demand increases, the price does not go up - all that happens is that more cars are made.
2. They exchange the car for the equivalent value of somebody else's output.
3. A car depreciates over time. Its value does not depend on where it is parked. I cannot increase the value of a car by buying on in Newcastle and parking it in Sandbanks, Poole, Dorset.
4. A car is not created 'by the community', title is not created by fencing off a pre-existing car and getting the force of the government on my side.
5. Possession of a car is largely a physical thing. A car with good security, locks etc is worth more than one which can be easily stolen. If your car gets nicked, there is little that the police can do to recover it.
6. And yes, there are areas where the police is quite good at recovering stolen cars and deterring car crime - land values in these areas are higher.
7. As a matter of fact, car owners/users pay full whack £55 billion a year in taxes on depreciating assets worth £350 billion - what they are really paying for is the right to use UK roads. If you take your car abroad, its value is unchanged (barring the LHD RHD debacle) and you pay a commensurate amount of tax elsewhere.
8. If taxes were levied on land and buildings at the same rate as taxes on cars, that'd be enough to replace all other taxes.
"The idea that land is somehow uniquely guaranteed by the existence of society is nonsense."
Try telling that to an olive grower in the West Bank when the Israeli Defence Force marches in, turfs him out and builds a new Jewish settlement. If he sees them coming, he can flee and take his goats, car, TV, steel ingots, whatever, with him. It is now up to the Israelis to decide who 'owns' the land.
Look, I'm not the one being obtuse. I'm not talking about the in and outs of how cars are made, whether they appreciate or depreciate in value etc etc (though all those things you say about cars could be said to be true of property - it is only the artificial restrictions on supply that prevent property depreciating in value over time)
I am talking about the concept of 'ownership' of anything - be that a TV, a car or a house. In the absence of a system of law, courts, police etc there is nothing to stop you depriving an 'owner' of his goods and/or house if you are strong enough to do so, and can overcome his security. It is only because society exists as it does that you have the force of everyone behind you to allow you to say 'I own this. It is mine. You cannot have it. The law will back up my claim with violence if necessary'.
Without that collective force behind you, provided by society, you cannot own anything, land, cars, gold, whatever, beyond what you can defend by your own efforts, 24/7.
Its that simple.
Ownership of land is EXACTLY the same in this way, as ownership of anything. If you can't admit as much there's no point even continuing to reason with you.
Sobers, you are wasting everybody's time here, your and mine.
Until something has been created, nobody can own it.
You are waffling on endlessly about 'ownership' of the finished product while resolutely failing to address how these things come into existence in the first place.
Cars = have value = get made by individuals. If they had no value to customers, they would not get made in the first place.
Land = has value = only has value because the land owner has the full force of the state on his side. Land values are not created by any individual. Land is not manufactured.
Can you not see a significant difference between the two?
That's a simple and direct question, by the way. Can you or can you not see the difference between a few yards of bare earth (which are worth pennies in Africa and hundreds of millions in town centres) and a new car rolling off the production line which is worth much the same wherever it is in the world?
As ever, you fail resolutely to address "a hair cut". A man expends his labour on cutting my hair, I pay him for this. How the fuck does 'the state' protect 'ownership' of my haircut? I think you'll find it's a bit difficult for even the most determined mugger to steal a hair cut.
Simultaneously, you are defending the right of the state to tax people's incomes as much as it likes. Do people not own their own time?
Simple questions, answer them.
"Terms" again folks
Private Ownership of land is not required to produce wealth. Never has been, never will be.
Private Possession is. One can possess secure rights to land and produce as much wealth with as much certainty as with Private Ownership.
Private Ownership just means you can collect the increase in its location value on top for free.
You would all save a lot of time to read this:
http://www.henrygeorge.org/pchp31.htm
WHEN WE CONFUSE the accidental with the essential, the result is a delusion. It is a delusion that land must be private property to be used effectively. It is a further delusion that making land common property -- as it once was in the past -- would destroy civilization and reduce us to barbarism. Lawmakers have done their best to expand this delusion, while economists have generally consented to it.
The anti LVT folks are budding economist evidently?
RS, agreed. The right to exclusive possession/occupation of where you live or work is absolutely vital to more or less anything in a modern economy.
But as we have established many a time, there is no harm done (and a lot of good) if everybody reimburses 'the community' for the value of his personal rights.
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