Friday, 6 April 2018

In the interest of balance...

Bayard posted here in response to something Simon McKenna had posted on Facebook. Simon McKenna responded on Facebook:

"... I must say the fact that Mark fails to understand my assertion that fiscal economics aside, private rent extraction is morally wrong, quite disturbing (although it is quite common!). Just add that I totally agree that everyone will benefit from 100% LVT. That was not the point I was making, so your presentation of your rebuttal is misleading. I am not advocating "class war" by reminding people that the privatisation of land is wrong:

A) We have to understand that economics is inherently ethical. Poverty isn't a merely fiscal (therefore acceptable) side effect of an economic system that need not cause poverty. Poverty is a moral evil. Ask anyone who suffers from it, or go observe some. Even if you just think about it, most poverty is unjust. It isn't caused by the poor because they fail to work, it is caused by the system which heaps benefits on unearned wealth and penalises work.

B) As a member of a political party, you should understand that politics is about morality as much as economics is about morality. Take the recent arguments advanced by the Conservatives that "Britain must pay it's debts". This is an erroneous argument economically, which relies on an incorrect moral analogue to the household budget. It ignores the fact that countries have to be in debt because that is how money is created. https://www.bankofengland.co.uk/-/media/boe/files/quarterly-bulletin/2014/money-creation-in-the-modern-economy.pdf

However, people supported it because the moral force of the argument compliments economic illiteracy - one must pay one's debts, therefore we must pay our debts. Likewise, people support notions of a "deregulated free market" because they think people should be free to trade (even though all markets are created and restricted by rules), people still support Marxism because they think it is wrong that one class should rule another (despite the evidence of the terrible economic and moral consequences of Marxism). All of these arguments are factually problematic but have been unbelievably successful because have enormous ethical appeal. Consider Churchill's speeches in support of LVT - he makes the moral argument - it is wrong that one should profit despite not working. It is not class war, it is simple morality.

My original point was to remind people that the private collection of rent is not only extremely economically counterproductive for everyone, it is morally wrong, since no one created the land on which we must all dwell, no one can claim to have the right to the product thereby generated."

86 comments:

jack ketch said...

, since no one created the land on which we must all dwell,

*LOUD Brian Blessed type voice from out of the clouds* "REALLY? YA THINK, MORTAL?

Robin Smith said...

The problem with morals is they depend on and are limited by, the world view of the one claiming morality. Nature has no morals. She just is. And humanity created the idea of right and wrong, much the same way as all similar religious sub sets. Morals are just ideological views created by limited and probably fearful minds.

This is clear to see in black and white above when a bold claim is made about how things would be better with 100% LVT. Yet there's no evidence for this historically for starters. More importantly, has anyone analysed what nature would do with 100% LVT. I'm not talking about how your morals would deal with it. I'm talking about how nature would, if inserted into an undivided whole world system way bigger than the limited moralist world view permits?

Look to history and see how morals spring into life as religions move from inception stage to cooption by the mass of people eventually to be informed and 'protected' by them. Democracy and science are now at this stage of life sadly, and no one can see the danger thanks to moralism.

So, have a pause and think carefully about this: is the reason LVT is the most failing economic idea in history and the reason things are as they are, BECAUSE, for some latent reason we have yet to consider the possibility nature is protecting the world from it? That is, is it possible it could be a terrible mistake despite in its limited economic sense its a perfect hypothesis?

Is anyone here willing to consider this possibility. Not to agree with me. Just to spend a short moment considering its a possibility?

I wonder... That would be authentic science

Ben Jamin' said...

@RS

People were not always paid for their labour, or the goods others took.

We dealt relatively quickly with the morals of who owns capital because that gave an obvious economic benefit.

The morals of who owns the return to labour was a bit less obvious. Nevertheless, we got there eventually, and everywhere slavery and serfdom was ended, got an economic benefit from a better allocation of resources.

The return to land is much less obvious. It was, after all, seamlessly conflated into capital without an eyebrow raised. Ask the man on the street what they think, and you'll hear similar arguments about land ownership as you would have heard 300 years ago regarding the ownership of slaves.

I don't think there's any mystery here. You are judging others by your own standards of knowledge. But, you've thought these issues through, whereas 99.999% of the population haven't.

And because you have no credentials ie in a position of authority, people don't want you telling them what to think.

Those not in a position of authority must join together as a force multiplier for their views to be heard. This has been the great failing of LVT advocates. Too many lone wolves.

Standing for the YPP in an election was the most constructive thing you or I have done.

Mark Wadsworth said...

JK, why would God have a posh English accent but use American slang?

jack ketch said...

JK, why would God have a posh English accent but use American slang?

She just does.

Lola said...

Land rents are not 'morally' wrong. What may be considered as morally wrong is choosing to raise taxes from other places in the wealth creation process in a settled society/economy.

That is land rents only occur when more than one person wants to occupy the same piece of land and generally that only happens in settled societies. I agree that all land is the 'gift of God' but it's only by homesteading it and then combining homesteads and creating an economy does it gain economic value. And then as all profits return to rents the least worst way of raising tax revenue is to tax location premiums. You can extend this argument by also saying that in a commonwealth redistribution of land rents back to the citizenry as a basic income can be argued for as it is the efforts of everyone that create that location value.

I flatly disagree with MMTers that tax creates money. You do not need a
state to have money.

As regards economic systems that create poverty we need to look at this the other way about. What economic systems create the most wealth for the most people? And we know what that is, it's freedom and markets. This arrangement is the one which does not prevent anyone from pursuing their own enlightened self interest. Every other way of trying to organise an economy rests on coercion.

Once you look on LVT as a user charge and if that generates surpluses that can be redistributed so well and good, all other arguments fall away. Especially moral arguments.

I also disagree that poverty is morally wrong, not in the least as you have to agree on what poverty actually is and how it is measured. OTH I am incensed that people are poorer due the privatisation of land location user charges.

Robin Smith said...

@Ben

My point is to ask if anyone is willing to stop believing while thinking about this.

This is not impossible. We're just conditioned by our culture that it is:

"DO NOT QUESTION GOD", else be dammed to hell was how Christians used to protect society from serious scrutiny. Today its similar with democracy and the mainstream scientific world view. Its forbidden to question them socially much like climate change doctrine.

How might one think about it then, free from all ideological informants?

For the LVT fan, by taking the theory out of its limited economic bubble and placing it into a bigger space containing the rest of the world. And then, seeing how it fares. It can take a few days continuously challenging it to start to see the bigger picture.

This requires depth psychology so most will discount it as pointless mumbo jumbo. Well there you go again, God protecting itself from proper scrutiny.

In corporate ideology which I'm dealing with now, we talk about 'innovation' and 'team work'. When I point out what a dangerous fantasy all these programs are to our shareholders I become most unpopular with my direct peers not the administration interestingly. Because by shining a light on the fakery means any friend becomes caught up in the same revelation, and they're all over leveraged on mortgage. So debt is excellent at protection a belief system from serious scrutiny. I call this hidden informant, collective homoeostasis.

On standing in elections - that taught me these things, by showing how all beliefs, once one becomes attached to them, are root cause of our suffering. But there's nothing inherently wrong with beliefs if we recognise them for what they are - just ideas, and remain free from attachment(conversion).

Give it a stab. Call if you want and I'll come over and tell you more.

Robin Smith said...

@Lola

Agreed on poverty and defining terms.

DBC Reed said...

I wouldn't have thought many people think buying into an inflated land market is a moral act: the ordinary person has to do it because otherwise s/he has nowhere to live and is passing up on a state guaranteed untaxed profit. Not much choice.Plus there is blanket coverage of the so-called property market including, auctions of houses, on daytime television.

Sobers said...

If collecting rents is morally wrong, why is it OK for the State to collect LVT? Merely doing a morally wrong thing in a collective way rather than a private way does not make it suddenly OK.

I have sympathy for the 'no one made the land so no one individual should benefit from that fact' argument, unfortunately land exists, humans exist, and have to live somewhere, and grow our food somewhere, and do all the other things we want to do somewhere. Thus we have to interact with the land to exist. And it seems to me that it is better to have the mass of individuals all collecting their own little private rents, than to give that power to one collective body, the State, the one body that has proved over time to be far more capable of using its power for evil, and to oppress the people.

Private ownership of land and the ability to charge private rents for it has proved over time to be the best amalgam of economic efficiency and individual freedom from State oppression.

Lola said...

Sobers. Quite. LVT stands on two counts. One, it is the least worst tax operationally and economically (i.e. it is efficient) and two it is the least 'immoral' tax, or perhaps by the nature of what is does, it is moral as it reduces economic rents from location premia to near zero. But is still 'rent'.

Robin Smith said...

@DBC

There is plenty of "choice".

By helping people 'escape' by exempting them with 'no choice' is another signal of homoeostasis.

Robin Smith said...

@Sobers, agreed on the neurosis of do as I say, not as I do. My proposal is that both ways are a problem, and there might be a better alternative if only we find the strength to look at it.

Robin Smith said...

@Lola

Are you able to look at the notion of rent as just an idea created by men. It not being extant? And that morals are informing you to a belief it's real

Lola said...

RS. Once you have private property - in all senses including land - you have uses charges. We call those user charges rent. A fee for you to use something I have at a rate that is set by opportunity cost and your and competing demand.

The question is is that in a settled society how much of that 'rent' have you earned and how much has come to you by the effort of everyone.

James Higham said...

"economics is inherently ethical"

A most interesting statement indeed.

Robin Smith said...

@Lola

I hear you. And with all due respect you are still begging the question: that *anything* can be owned. This idea is a human construct coming from morals. Nature has no concept of them.

There is the deeper case that humans are part of nature too, so morals are part of nature also, and I'd be happy to go there if you like. But then man can no longer be master of the universe, so your call fella.

Lola said...

RS Define morality,

Lola said...

JH. Economics cannot be inherently ethical. You can have have 'ethical economics'. For example, socialism, an economic and political philosophy cannot be ethical as it relies on force and coercion. Does anyone consider force and coercion (if not used to counter someone else's force and coercion) ethical? OTH capitalism does not rely on force and coercion. Capitalism is therefore more ethical than socialism.
:-)

jack ketch said...

OTH capitalism does not rely on force and coercion

Not sure how you arrive at that, I would argue there is just as much force and coercion in Capitalism....just its more subtle and not as overt.

Lola said...

JK. Nope. Capitalism is based on voluntary exchange. No-one has to join in in all of it. If you want to live your way, you can - as long as you do not expect someone else to pay for it.

jack ketch said...

Capitalism is based on voluntary exchange.

Perhaps in its most base and primitive form although 'voluntary' is a very rubber term and even the most primitive forms of capitalism are still beholden to Market Forces. If no one wants to exchange food for your cheap tin trays and glass walking sticks you are going to starve....voluntarily of course.

Lola said...

JK. Nope. You are engaging in sophistry. Market forces are not 'forces'. They are simply the variability of supply and demand - no coercion there. The only requirement on you is to produce something that someone else wants or to offer your labour to serve someone for wages. Both entirely voluntary. And save the malign interference of government and bureaucrats there is always some thing you can do - capitalism hates a vacuum. And, as long as you don't cost anybody else anything you can even withdraw from it all and make yourself self-sufficient. Nobody cares what you do. It's all down to you.

Robin Smith said...

@Lola

Morality = another idea

Robin Smith said...

@Lola, JK

You boys are rushing ahead again with your beliefs. Why not define capitalism. And then test if you both agree on that definitio. Maybe don't bother. Its just an idea one can become attached to. Once attached to an idea, it will be informing your thought, and you won't even realisevit.

Robin Smith said...

Typo apology. Phone in web app. Not a great interface

Lola said...

RS, Good question, to which there is no pat answer. Which is rather where Marx fell down.

Robin Smith said...

@ Lola

Now Marxism is a belief of beliefs right? And look at the suffering that caused when whole masses of peoples attached themselves to it. On its own though as just an idea, its harmless.

Sticks and stones etc.

Ben Jamin' said...

@ Sobers

"If collecting rents is morally wrong...."

It isn't. Not compensating people for losses we cause them is. Its why we pay wages and why we should pay the LVT. That's it is collected, spent/redistributed on our behalf by the state is an entirely separate issue.

Ben Jamin' said...

@ RS

As I said, the reason why LVT hasn't gained traction is because people haven't really thought things through. Not helped by LVTers/Georgist who say things that are misleading, confusing and often wrong. And certainly not helped when they are told they are suffering from some psychological deficiency i.e in denial.

There's no deep mystery here, just a problem that needs to be chipped away at by the usual methods ie inquiry,education and debate.

Bayard said...

As the author of the piece Simon is attempting to rebut, I have to say that he has missed my point completely. I wasn't trying to prove that rent wasn't morally wrong (even though I agree with Lola that it isn't), I was trying to show that the argument that rent is morally wrong isn't a killer argument for LVT, regardless of whether that argument is correct or not.

However Simon makes one good point, which is a sort of killer argument against KLNs. This is that an argument doesn't have to be correct or true to be a killer argument, in the sense that it is seen as definitive by a large number of people and points to the enduring popular appeal of Marxism as an example. It is a sad fact of human nature that, unless you are preaching to the converted, you have an audience of which 99% aren't really listening. They know you are wrong and they aren't going to waste their time listening to you trying to put your case.

Lola said...

Not only is collecting rent not morally wrong neither is collecting economic rent. It is just more equitable that economic rents are collected and spent by government for the common wealth.

Ben Jamin' said...

@ Lola

Of course collecting rent isn't immoral. Neither is having someone work for you. Or going into a shop and taking something you want.

What is immoral, thus economically damaging, is not paying what we owe. Either as a landlord to those they exclude, an employer to his staff or a customer to a shopkeeper.

paulc156 said...

L. "The only requirement on you is to produce something that someone else wants or to offer your labour to serve someone for wages"...so no coercion then?
Not persuaded. It only sounds 'plausible' in the 'theoretical' idealised example of perfect competition and perfect knowledge. In other words ...contrived and unrealistic nonsense.

Bayard said...

P156, In the real world, we are a species that are too many for the planet on which we live. We have evolved as hunter-gatherers. There is not enough space for us all to live as hunter-gatherers, thus the coercion of which you speak is the coercion of the need to avoid the natural result of overpopulation, which is population reduction by starvation. That we have developed a system which someone has called "capitalism" to do this, does not make that system an instrument of coercion in itself. There is no system that does not involve coercion because the only system that doesn't, the hunter-gatherer-subsistence farmer lifestyle is no longer viable.

Lola said...

P156. Under capitalism you always have the choice. You do not have to make something somebody else wants. You do not have to offer your labour to someone else. You are entirely at liberty to go and live in the wilderness and find out how to survive. OTH if you want to enjoy all the treats - dentistry say- of capitalism then you will need to join in in some way. But there is and can be no coercion to do so. And because capitalism is unique in not using coercion it is the only moral system we have yet discovered of organising societies.

Robin Smith said...

@Ben

Ah yes, the illusion (a psychic factor) where the virtuous who know all, say the thickies need more education.

This is a curious claim, given the most well educated resist the idea of LVT the most strongly.

Absolutely not, is this a problem of thinking things through more. People have thought it through and can see clearly they do not want it, or, they know it even more certainly by intuition.

This is the big denial factor for Georgists. Because it means their days are done if accepted.

My view on this predicament is to do with evolution(either psychological or genetic). Given there's more wealth produced in the whole world today, per capita, there's no longer a shortage of anything at all.(remembering that all wealth is exchangeable). So why do all people, especially the most productive, still act as if there is?

Answer: we still 'believe'. In ideologies which protect our tribe from shortages.

Now that might not be psychological. And if not, it must be genetic. Or a combination. Which is it?

Robin Smith said...

@ All

This is curious. All of us start our case form points of uncertainty and without agreeing on what we mean by terms we use such as morality.

I've also asked in clear terms if any of us are ready to consider the possibility that LVT is inherently unnatural, and natural forces are rightly protecting the world from its adoption. Not to agree on this, just to think about it.

3 times I've asked. And deafening silence. Is that a religious response or a psychological denial?

Lola said...

RS LVT is rent. People like to think that they own 'freeholds' - the 'my home is my castle' meme. And that is a good thing. Property rights are fundamental to a free society. So they resent rent - and so they should (which BTW is why governments hate LVT - it's an in your face tax.)

The delusion is two fold. One that other taxes are not land taxes, they are as all taxes are a more or less inefficient tax on land rents/location premia. And two, that we have a choice not to pay tax.


Robin Smith said...

@Lola

I still here yer fella.Good economic world view. Trouble is, thats all you can say about it. Its just another idea. There's nothing in nature that supports it. And certainly nature, if man is part of it, does not want it for some reason. I'm asking you folks if you'd be willing to look unto that? You don't have to. But if you did, kudos. And authenticity. Typos probably lol sos apols.

Roy Langston said...

Those who claim capitalism is a purely voluntary system are objectively incorrect. Capitalism is always inherently coercive. It requires private ownership of land, which can only be effected by inflicting violent, aggressive, forcible physical coercion on all who would otherwise be at liberty to use it. It is not an accident that the emergence of capitalism in Britain awaited the Enclosures, which stripped working people of their liberty right to use land to sustain themselves and made their rights to liberty into the private property of landowners. That was the key event that forced the landless to offer their labor to land- or capital-owning employers on whatever terms they could obtain, or starve to death. It is that power forcibly to deprive people of their liberty to feed themselves and their families using what nature provided that enables employers to exploit workers under capitalism. It deprives the workers of options, forcing them to negotiate with employers from an artificially weakened bargaining position. Imagine if someone owned the earth's atmosphere, and charged you rent for air to breathe. Do you think you could bargain with employers for fair wages, given that being unable to pay the air rent for a few minutes would kill you?

So from now on, if you ever claim that capitalism is a purely voluntary system, you will be lying to rationalize evil and justify injustice. Your choice.

Lola said...

RL. Nope. Capitalism does not 'require' private ownership of land at all. In fact even today in the UK citizens do not own land. They have freeholds - a sort of perpetual free lease. And on the contrary it is the defence of one's freehold from people who would take it from you is the very reason for the state, or rather the consensus on which the state is built. The violence comes after land ownership is privatised or perhaps de-nationalised - i.e. the monopoly of the Crown to all land rents is broken.

You can certainly argue that the Enclosures took away rights to use Common Land. OTH the Enclosures also lead to massively increased productivity and less people ultimately starving to death on subsistence farms.

Land is only one of three factors of production. It's the other two labour and capital (saved labour) that are really 'capitalism'. Land location rents are economic rents and that's why LVT works.

Lola said...

RS. That's a bit of an obtuse comment. Put it this way. No one likes to pay tax. They especially don't like taxes that they can see. E.G. PAYE is not seen by employees as a tax on them. They look at net pay.

Lola said...

RL Enclosures and the Feudal system certainly set out to enslave people. But once the Feudal system broke down following the black death (?) and labour could offer itself to the highest bidder the whole being locked in went out of the window. See, capitalism again - competition being one of the key components of it.

Lola said...

RL et al. BTW I have long held and said so on here that IMHO we are in a new Feudal era. This time we are enslaved not be coercion but by debt and taxes. I often liken the current ruling classes as the latest version of the Medieval RC Church.

One of the ways to break out of this, is to introduce LVT. It's in your face nature will severely limit the amount wealth that governments could extract. Personally I would also limit government borrowing to fund defence and infrastructure projects only.

Mark Wadsworth said...

Rl, "capitalism" is not inherently coercive, why would it be?

Go back to hunter-gatherers, there was no legal coercion, but fact is, if you didn't do your fair share of hunting and gathering, you would starve to death. I don't think it's too much to ask that under "capitalism" everybody does their fair share of providing goods and services to exchange for other people's goods and services of higher value.

You seem to be railing against "feudalism" which is a whole different topic and has nothing to do with "capitalism", "feudalism" can exist with or without industrialisation. All it needs is force and the threat of violence without actually adding to the sum total of goods and services for other people. In fact, it reduces it, because people are wasting time and effort on violence. And that is clearly a very bad thing.

See also "slavery", which is akin to "feudalism".

paulc156 said...

L. Contra your rebuttal to RL, capitalism is underpinned by private ownership of property. As Locke points out in his, 'natural law’, that man is entitled to life, liberty and 'estate’. Labour exchange (wages for work) is an extension of this. Ostensibly if there is no coercion it is capitalism but in reality (rather than idealised, theoretical fantasy) coercion is all too common.
A wealth of academic research now shows that people on the margins of the global economy routinely choose to submit themselves to all kinds of exploitation because it represents their least worst option. Furthermore it is the absence of property which underpins such coercion. Without property wage earners have always been vulnerable to coercion and capital has always thrived on such insecurity. Unpalatable and inconvenient as it may be.
One can still argue that on aggregate more wealth is created as a result of capitalism but to ascribe lofty notions to the creed is akin to putting lipstick on a pig.

Robin Smith said...

@Lola

You may be right, its obtuse. Nevertheless, is it untrue?

Anything else we say about it is just a prejudicial view.

So being obtuse is still at least a fact.

Lola said...

P156 of course capitalism is underpinned by private property, but property is not only land. Somewhere above I have said that secure private property rights are fundamental to capitalism. It is perfectly possible to own lots of property and not own any land.

Of course at the margins people chose the least worst option. That's how they stop dying - moving from subsistence on their own land to working for someone else. And that's how we develop.

And as long as there are competing employers there can be no coercion. Unlike under monopoly employment under socialism.

Lola said...

RS "Anything else we say about it is just a prejudicial view. " Why?

Bayard said...

P156, OK, give me an example of a non-coercive economic system that isn't hunter-gatherer/subsistence farming.

Lola said...

And another thing:-
"....even though all markets are created and restricted by rules..."
No. Markets are governed by contracts. Each party agreeing to perform one side or the other. The fish monger offers me a nice piece of cod at £x / lb and that it is fit to eat. I accept his offer and hand over my £xs', the consideration. He then wraps up the tasty fish and hands it to me to take away. No 'rules' at all.

Bayard said...

"Capitalism is always inherently coercive. It requires private ownership of land,.."

How do you then explain the existence of capitalism in Hong Kong where all land was owned by the state?

Robin Smith said...

@ Lola

Thanks for helping reinforce my point "Why?" lol

We hold ideas which are precious to us. And we 'believe' these are objective material facts.

What is a belief - an idea masquerading as a fact.

But they are just ideas. Or more precisely, objective facts... of your psyche.

The danger with ideas is 'hyper-normalisation - we start to believe they are axiomatic material facts, much like the 99% think money is wealth, or tax and welfare are necessary.

Why is this dangerous? Once we become possessed by an idea in this way, we will unconsciously forbid it from scrutiny.

We believe our thought is self booting, but its actually now being 'informed' by our ideology.

Anyone who makes way with any scrutiny will be seen as a heretic and moderated as a troll or rude person. And the possessed will adopt powers of impunity to uphold the idea, in the name of the idea.

It's what the proto-christians used to call being possessed by a daemon.

Robin Smith said...

This is amusing - still no one has defined, and agreed on the definition of, 'capitalism'.

Yet there are reams and reams of debate(etymology = conflict)on it.

Clearly work of the devil. Are you all Christians or something, left and right?

Lola said...

RS. There is no such thing as 'capitalism'. It is not an 'ism' as it is not a unified philosophy like socialism say. We use the word as a proxy for a whole set of qualities and conditions founded on liberty and personal responsibility. Marx invented the word as a single word to cover his definition, which happens to be flawed. If you think about it the USSR was 'capitalist' - it had to be to produce stuff, but pretty well all the 'capital' was owned by the state.

You can go on splitting hairs and using sophistry for as long as you like but it does not advance the argument.

Mark Wadsworth said...

L, thank you and agreed.

Bayard said...

L, agreed. "Capitalism" is just the name for the system you end up with if the state does not impose another system in its place.

Lola said...

MW. The thing is that capitalism is massively simple. It's exchanges and labour and reserved labour producing stuff and property rights and the rule of law. But the mechanism by which this is achieved is massively complex, delicate and subtle. It is beyond understanding by the average mind - there is just too much stuff going on. But that does not mean it does not work. This is what a lot of people - mostly those that gravitate to state bureaucracies cannot handle. They always think that they can make 'markets work better'. An utterly risible ambition. (They can 'create a market' where none exists - auctioning landing slots say).

Why cannot people just relax and enjoy it?

Robin Smith said...

B&L&M

Is it fair to say: a capitalist enterprise is an arm of the state to the extent of its monopoly?

That is, its all relative, and not in the least bit complex. Not to mention a silly idea to label the unity of society in any way, with divisive fabricated ideologies, left or right.

Thoughts?

Simon McKenna said...

It is interesting to see how my mention of morality is (a) controversial and (b) returns us to talk of first principles ("what is capitalism?", etc). I could rebuke a few things here and there (such as the absurd suggestion that I said "rent is wrong"! And I am restraining myself from pointing out the errors of @Banyards overpopulation thesis and hunter-gatherer history - this I assume no one has refuted because everyone sees how completely wrong it is!), but instead I will ask you all to consider one thing. It is very simple and it will prove my original point so that everyone will be able to agree I was right - economics is inherently ethical.

We all of us advocate things in this discussion - some advocate ideas, others methods of analysis, alternative histories, and more. However, we all advocate these things because we think they have merit. In other words, we think they are in some way good, or oppose things (such as misconceptions) because we think they are bad. Even those who take the view there are no values, only facts, do so in the name of a good ("objectivity").

This shows that all our concerns about economics are inherently ethical. Otherwise we would not be concerned about changing them, in fact we would not care about them at all.

Bayard said...

"And I am restraining myself from pointing out the errors of @Banyards overpopulation thesis and hunter-gatherer history - this I assume no one has refuted because everyone sees how completely wrong it is!"

I'm not convinced. Do refute if you like.

Mark Wadsworth said...

B, your point about technology and specialisation enabling larger and denser populations is incontrovertibly true. Not sure it's central though

Simon McKenna said...



@Banyard said "We have evolved as hunter-gatherers. There is not enough space for us all to live as hunter-gatherers, thus the coercion of which you speak is the coercion of the need to avoid the natural result of overpopulation, which is population reduction by starvation. That we have developed a system which someone has called "capitalism" to do this"

It is not cenral but FYI:

The neolithic revolution was the discovery of the division of labour or cooperation https://en.wikipedia.org/wiki/Neolithic_Revolution. It was not capitalist or based on diminishing resrouces.

The overpopulation thesis is simply counterfactual http://www.henrygeorge.org/stillwrong.htm

I notice no one is able to overturn my assertion "We all of us advocate things in this discussion - some advocate ideas, others methods of analysis, alternative histories, and more. However, we all advocate these things because we think they have merit. In other words, we think they are in some way good, or oppose things (such as misconceptions) because we think they are bad. Even those who take the view there are no values, only facts, do so in the name of a good ("objectivity").

This shows that all our concerns about economics are inherently ethical. Otherwise we would not be concerned about changing them, in fact we would not care about them at all."

Robin Smith said...
This comment has been removed by the author.
DBC Reed said...

@SMcK
It may be that a large number of people want an ethical debate about whether right-wing governments should stay in power by bribing the electorate with house price inflation,( the way the same right-wingers accused socialists in the 6o's of bribing the workers with wage inflation)but there is no way such a debate is ever going to take place under the present "democratic" arrangements whereby there is a built-in majority for homeownerism and totally antagonistic cultural infrastructure .Everybody is aware that making young couples spend £800 a month to rent a house in deepest Northants where there aren't any jobs is not ethical: it is, in fact, state organised economic torture.This is not forgetting the Henry George kicker that, after paying rents, these poor sods cannot afford to buy goods and services as produced by honest capitalists,who do exist .(Choke /splutter.)
If an open debate on the morality of LVT, meeting free will criteria, is only theoretically possible, there is obviously an internal contradiction in the terms.
If there is any hope it is among the unethical proles: the Tories are running out of cheap houses and land to bribe them with with.

paulc156 said...

L. USSR 'state' capitalisthe not Marxist or socialist. Agreed.
B. HK like Singapore has state owning most of the land. Not clear how highly authoritarian states like the aforementioned can be anything other than highly coercive.
As for examples of systems that might be less coercive I'd say one where democracy extends into the economy rather than stop at the ballot box. ie: worker's jointly owning and managing the company. Mondragon is a halfway house in this vein.

Simon McKenna said...

@DBC I see what you are getting at. However the discussion is taking place here and elsewhere (even in the Daily Telegraph!) Even homeowners can see that "homeownsership" is more like a right than a priveledge, and one they would like their children to be able to afford as much as they were. Indeed, I maintian that even those the angry mobs you mention will be motivated by percieved injustice, and even (hypothetically) if we may not agree with their ideas of justice (which may be things like "right to buy 2") they would likewise be guided by a (perhpas unsatisfactory) sense of what is good and fair. Therefore the debate is inherently ethical. The fact that we can be unsatisfied by ethical ideas, shows addtionally that there are higher and lower degrees of justice and morality which we can attain, and to which we can aim.

Bayard said...

"The neolithic revolution was the discovery of the division of labour or cooperation https://en.wikipedia.org/wiki/Neolithic_Revolution. It was not capitalist or based on diminishing resrouces."

I didn't say it was. I made no claims as to how and when the system known as "capitalism" evolved, simply that it did so somewhere between when we were all hunter-gatherers and now.

"The overpopulation thesis is simply counterfactual http://www.henrygeorge.org/stillwrong.htm"

You have completely misunderstood my comment. I did not say that the Earth is overpopulated, nor did I say that it will be at some time in the future. What I said was that, if we all wanted to live as hunter-gatherers or subsistence farmers, then we would find there is not enough land to support the population.

"Therefore the debate is inherently ethical."

Yes, that I would agree with: no system is going to work well if it is run in an unethical manner. The substitute for ethics is coercion and, as the saying goes, "one volunteer is worth ten pressed men".

"B. HK like Singapore has state owning most of the land. Not clear how highly authoritarian states like the aforementioned can be anything other than highly coercive."

My question was "If capitalism cannot exist without private ownership of land, as you assert, how come you get capitalism in Hong Kong, where all the land was (and, maybe, still is) owned by the state?" Nothing about coercion in there.

As to the question of coercion, I was really looking for an example of an economic/political system, however, yes, I have long been a supporter of the idea of shareholder-workers: there are always those who are going to try to take advantage and the best people to stop them are their colleagues, regardless of where in the organisation those people are.

AFAICS it all boils down to a question of trust. Leaving aside the terminally piss-taking amongst us aside, in general people don't have to be coerced into doing things if they have trust that what they are doing, whether it is obeying rules and laws, working hard or paying taxes is ultimately to their own benefit and that of their peers and not solely to the benefit to someone or a class of people who have no connection with or regard for them. This is regardless of the economic or political system under which the population in question lives.

Bayard said...

"Everybody is aware that making young couples spend £800 a month to rent a house in deepest Northants where there aren't any jobs is not ethical"

If it costs £800/month for a young couple to live in deepest Northants where there aren't any jobs, then that is the market rate for that property. That may not be ethical, but what is the alternative? There is no "natural" figure for rents. Landlords would like them to be as high as possible and tenants as low as possible, preferably zero. The only real alternative, outside a Damascene conversion of the landlord class into philanthropists prepared to rent at below the market rate, is for rents to be controlled by state mandate, i.e. a significantly higher level of coercion than we have under the present system. As can be seen with social housing, when you fix rents at a level below the market level, all that happens is that you replace rationing by price with rationing by queue and, at the same time, encourage the formation of a black market.

In any case, the rent is only £800/month because people are prepared to pay £800/month. If everyone said, "nah, £800/month is too much for a house where there are no jobs", then the house would sit empty for a while and then the rent asked would come down. In this matter, we are all Stakhanovites.

paulc156 said...

B. You misquoted me.
"If capitalism cannot exist without private ownership of land, as you assert..."

Can you point out where I said that?
What I meant and stated to Lola (I think?!) was the following:
"capitalism is underpinned by private ownership of property". A point he agreed with.
I went on to say it is the absence of property which renders those on the margins vulnerable to coercion.
"it is the absence of property which underpins such coercion"

Lola said...

P156. Nope.'Democracy' already extends into the economy. That's what capitalism does/is. You get two votes. Your political vote and your economic vote. The former happens every five years. The latter happens every second of every day as us 'consumers' decide whether or not to transact something.

Capitalism is magic. It's great. We all win.

Lola said...

Bayard. Yes, trust is one of the qualities fundamental to capitalism. And by and large we all 'trust' various people and outfits we engage with. I 'trust' my butcher to sell me good meat. He has to earn my trust and he does that because it's in his self interest to do so. No coercion to buy from him. I can go to his competitor if he lets me down.

OTH government - being a coercive monopoly - is fundamentally untrustworthy. (If you don't believe me then look at the unremitting failures of the Financial Catastrophe Authority - why has it not been shut as opposed to having its remit and budget and powers expanded?). IMHO anyone that trusts any part of government needs his or her bumps felt.

paulc156 said...

"The latter happens every second of every day as us 'consumers' decide whether or not to transact something."

Economic democracy decided by the amount of property you possess is not what I had in mind. Magic is for fairytales. That's largely what you have described.

You can wax lyrical about a theoretical nirvana but it really has never been as you describe it. Of course you will argue that's only because the 'guvmint' gets too busy but you don't have much evidence to back that up. Just an idea.
We've never had anything remotely like perfect competition in the economy except in this or that sector and we have heaps of monopsony, monopoly and heaps of the state and always have. That and the perfect knowledge assumed in classical economics to apply to your 'consumers' is enough to persuade me the description you give is a bit hyperbolic ;)

paulc156 said...

Any chance of putting my response to Bayard in? It's a specific response to a question asked by Bayard.

Lola said...

P156. Nope. Never said that economic democracy is decided by the amount of 'property' one has. What I did say that we are able and do exercise our economic vote every second of every day by deciding whether or not to make some transaction - buy or not buy a tube of Polo's say.

This is not at all theoretical. It is a practical reality. It is going on all around us all the time.

No such things as perfect competition and I have never said there is. The world is imperfect. The job of the market through the price mechanism is to try and move us ever closer to perfection.

Indeed, we have always had too much government - except arguably between about 1750 and 1914. And mostly it is too much government that enables monopsony and monopoly by way of governments innate susceptibility to cronyism. And when we didn't have that too much government the explosion in the wealth and opportunity for the common man was spectacular. Incomes rose and prices fell.

paulc156 said...

L ...I know you didn't say "economic democracy is decided by the amount of 'property' one has", but I did, becuase it's patently true. :)

..."And when we didn't have that too much government the explosion in the wealth and opportunity for the common man was spectacular. Incomes rose and prices fell."

You mean like the post WW2 'golden era'? oops that was accompanied by big gov.


Bayard said...

"Can you point out where I said that?"

No, I can't, because it wasn't you! Apologies, with 76 comments, I lost track of who said what. It was Roy Langston to whom the question was directed (my post of 15:05 on the 9th), but you answered for him and I got confused.

However, I would say that the examples of HK and Singapore show that capitalism can exist without private ownership of property, all it requires is secure tenure, which is something different. The effect of 100% LVT would be to convert freeholds into leaseholds where a ground rent is paid for the land and the bricks and mortar are held privately. Such leaseholds used to be fairly common up to the early C20th. Indeed a fair chunk of the housing in a town near me was owned in this way.
Another interesting example in this area is the Snailbeach lead mines. Here the miners were smallholders as well as miners. The owners of the mines hated this, as the miners could go on strike and not be starved back to work, if the owners didn't pay them enough. However this didn't stop the mines being some of the richest and most profitable in the country.

Lola said...

P156. Still 'nope'.
No, it is not patently true. You are confusing (I think) land ownership with economic democracy. On here we all agree that landownership has been over-rewarded owing to policy failure by governments and successful lobbying by special interest groups. That latter bears out my remark about Big Gov / Cronyism.

It is however true that in matters of consumption ex land we have an astonishing level of economic democracy with the stuff we can refuse to buy.

Post WW2 boom led directly to the 70's bust for precisely the reasons I have stated. Too much government spending money and inflating the currency to pay for the welfare state (which is where we squandered our share of the Marshall Plan - the MP also being a Bad Thing). It looked like we'd never had it so good until the bills came in the 70's and it all went tits up.

paulc156 said...

L ...and the 1870's bust/depression was caused by? contrived L, contrived.
and of course 'economic democracy' can't be reduced to 'buying stuff or not buying stuff'. It's about decision-making power not just shopping at Sainsburys or Tescos.

Lola said...

P156

And still nope. The 1870's Long Depression is largely a myth. https://wiki.mises.org/wiki/Long_Depression Commentators have confused falling prices with 'depression'. Capitalism is all about doing more for less every day. Prices will always fall, and the magic bit, as income rise as people become more productive.

And again, nope. That 'not buying (or buying) stuff is exactly that 'decision making power'. Every action is a choice, a trade off. I am here at work today because I want to earn some money. The trade off is that I could be equally happy in my shed hitting bits of metal. We all make these trade off's every day.

Bayard said...

"Every action is a choice, a trade off. I am here at work today because I want to earn some money. The trade off is that I could be equally happy in my shed hitting bits of metal."

That is the privilege of the self-employed. Today's irony is to see the Left calling for the self-employed to become employees, so that the rascally bosses can be forced to pay them holiday pay, sick pay and pay twice towards their pensions, all of which will not be coming out of the employee's wages, of course, but the company's profits. So, in order to impoverish the employer, sorry, make them "pay their fair share", the worker is to be stripped of a large part of their freedom of choice.

Lola said...

B. It's largely why I am self employed. And that attitude of mind is entirely incompatible with the bureaucratic state. We are annoyance. We aren't 'tidy'.

paulc156 said...

Mises.org? ...
Made me smile. So they started with a theory and went back over historic events and refashioned them so as to make them conform to that theory. The golden era led to something bad (the 70's) so state expansions don't work... whilst the depression of 1870's which came with relatively light touch government wasn't really so bad. So proving small gov's are really the best.
Sounds a bit like the middle ages debate over the heliocentric heresy.

Lola said...

P156. So, my points proved again, again.

DBC Reed said...

My bete noire, Larry Elliott has come good with a brilliant-ish Guardian piece "People want basic things and a politics to provide them" (Guardian Journal 12.iv..18)in which he remarks "The record shows that the managed capitalism of the cold war delivered better results than the unmanaged capitalism since". Broadly speaking his line here comes across as an argument for mixed economies "The country that has done best in the post-cold war era -China- has done so with a version of the old middle way. Strong growth has meant a stupendous fall in poverty rates over the past four decades but movements of capital have been carefully regulated , trade barriers have remained higher than in the US or Europe and the state has maintained ownership of large chunks of industry. China has become more market friendly but only up to a point."
We should be arguing for LVT without regard for the peculiar sensitivities of purists of any persuasion: the more heterodox a party's politically programme, the better, evidently.