Monday, 10 November 2014

Killer Arguments Against LVT, Not (347)

Derek left the following rebuttal to the idiotic Faux Lib statement that replacing taxes on income with taxes on land values would lead to "the tragedy of the commons":

Whenever a Royal Libertarian brings up "The Tragedy of the Commons" it's worth mentioning that the author, Garrett Hardin, was talking about an unmanaged commons, i.e. a free-for-all, and that while not a Georgist himself because of his position on overpopulation, he did say:

"I have known... of Henry George's work for a long time and always thought it a shame that he could not have been born two centuries earlier and laid out the ground rules for the development of the New World."

To put it in context, the radio spectrum (for example) is just there for free, nobody created it. But if everybody were allowed to broadcast what they like on whatever frequency they like, it would be worthless.

Society in general (i.e. the government) therefore allocates broadcasting rights to individual businesses and hounds pirate broadcasters - without this consensus and enforcement, radio spectrum would have little or no value to anybody whatsoever, all you'd hear is acoustic soup.

So far so good. But this creates windfall gains for the lucky people who are allocated frequency at all other potential broadcasters' expense.

So to even things up, it is only just and equitable for people who want to be allocated broadcasting rights to pay for them, that money goes into the pot to pay for stuff which benefits everybody (or would do in an ideal world).

Land is no different. It's just there, for free, but without society in general agreeing that we are all collectively better off (some more than others) if individuals are granted exclusive rights to occupy bits of it, land would have little or no value. That's what creates the value, or that is a precondition for plots in favourable locations having value (some land has no value either way).

And the justification for society in general imposing an equal and opposite user charge or occupation fee is exactly the same.

So the LVT-free world which the Faux Libs dream of is exactly the opposite - everybody is trying to grab as much land as possible, even if that is to the detriment of society as a whole. Which is "The Tragedy of Commons" in a nutshell.