Wednesday, 9 September 2015

Land, they ain’t making it anymore…or are they?

What is Land? This causes lots of misunderstand and fertile ground for KLNs.

Traditionally LVTers speak about land being that minus buildings and other physical improvements. “A-haa!”, say the faux-libertarians, “what about search and discovery? If you tax unimproved land you’ll tax those too. Got you and Geogism is therefore rubbish!”

To which we say no, Land in economics means everything that is not produced by human effort which search and discovery is. True but is this the only definition?

Consider, I lose an unmarked wallet stuffed with cash. To whom does its value now belong? Finders keepers losers weepers?

The trouble with this definition of property rights is one of fairness, thus of efficiency. Say word got out that a lost wallet of unknown origin is somewhere under the sand on a beach. Loads of people are going to use more energy collectively in a disorganised free for all, than one person searching methodically.

So, it would be best for everyone to pay one person for their time (and perhaps expertise) in searching for it and then divvy up the wallets value afterwards. Or even better hold an auction and the highest bidder gets the search rights, the proceeds of which are divvied up.

Point is that the ownerless wallet, for fairness and efficiency purposes should be considered common property i.e Land.

Any Capital that no longer has established property rights, like decaying rubbish can be considered Land. And that, like lost wallets, they certainly are making more of.

So perhaps a clearer definition of Land is, all without provenance.


Bayard said...

BJ, I think you are making things too complicated. Land is the part of the map that isn't sea.

"Land in economics means everything that is not produced by human effort which search and discovery is."

I also think that, so long as you are not talking to an economist, you shouldn't use economist's jargon. There are too many words in that jargon that mean something completely different from what is in the OED.

The problem most people face when trying to explain LVT is that their explainee thinks that land = farmland, not Faux Libs splitting hairs about "discovering" land (which is a meaningless term anyway, since nearly every bit of land was already known about by someone before it was "discovered". What it usually means is "nicking it from the people who were using it before you got there").

Ben Jamin' said...

@ B

I agree. However, if you give people an inch, it only confuses the fuck out of them when you have qualify and admit, well no it's not quite as simple as that, after.

Best to get these things, especially what we exactly mean by Land, done first as it saves one hell of a lot of grieve after.

In fact, I'd say that because the Classical Economists, including George, didn't pay enough attention to how the possibility of the word land would be misunderstood, misrepresented, distorted and plain lied about, we are in the mess we are in.

They were too fair minded.

All this stuff about Land being finite or inelastic in supply can be proven wrong. Yet most LVTers repeat it.

If I wanted to write anti-land tax stuff it would be one hell of a lot better than other people could manage. And if I can do it, so can some faux-Lib if they really put their twisted intellect into it.

When I say Land is all that without provenance, I think that is as clear and precise as it gets. Only Capital and ourselves have ownership.

Just talking about location, rather than land, does save alot misunderstanding though.

Random said...

Why does this not apply to Capital?

Ben Jamin' said...

@ Rand,

explain what you mean or I'll have to assume you're setting a trap so you can get onto the subject of MMT.

This comments section is an MMT free zone. Any violations will be deleted.

Mark Wadsworth said...

I don't get this nonsense with 'search and discovery'.

With oil, the searching and discovering is useful work and whoever owns the land should pay that person, whether by amount of work done or by results or whatever. Seeing as in my view, the oil under the ground or the sea belongs to the government or the whole community, it is the government or the whole community who pays the oil prospectors.

And then the government can pay people to extract the oil, do an auction for a fixed price per barrel, the extraction company gets paid for its work done plus profit margin and the government keeps the rest (difference between oil price and extraction costs).

For sure, there will always be a bit of corruption and so on going on, depending on how well the auctions are organised, but it would still be far better than now, and at least everything is on the table.

Not difficult, is it?

Mike W said...

Yep, I have a problem getting folks to treat LVT seriously.MMT more so! I would not entertain the argument above.
LVT is about how the Democratic STATE raises tax and what is the most effective (least bad)tax to have.A new topic entirely to my lefty friends.
More generally, ownership and taxation is it resolvable? Worse, whose ancestors killed and plundered circa; 1066, and have a 'moral' claim to never pay tax through their 1,000 year land ownership would be best left out - in the first throw of outlining what counts as a rational, efficient tax system.

More important is that I am not pure and simple 'single taxer' in the Henry George form in the short to medium term and can take on, for example, modern charges on Mobile band width, airport landing rights etc, even blocks of coastal territory (still land). But adding these ideas and possibilities onto LVT is not complicated. Trying to reach a definition of 'land' that satisfies everything(conjured by the childish haters of any form of state) in advance - not in my attempts to get folks to think about LVT and come here.

Mark Wadsworth said...

Mike, radio spectrum and airport landing slots are also "land" for these purposes. They only have value because a) they are in limited supply and b) the government can decide (initially) who gets them.

But as you say, coming up with a precise definition of "land" is tricky, so why bother? We know what it is when we see it.

Mooring slot for a boat on a popular London canal? Land. Oil under the ground? Land. Vanity number plates? Land.Taxi driver permits? Only land if the local council restricts the number of them.

Sanjay Mittal said...

This is off topic and I may be teaching grandmothers to suck eggs, but Private Eye has produced a map showing land owed by offshore companies:

Lola said...

The thing that confuses me is the politics. We have the labour party. And we have the land party - the Tories. Where is the capital party? you would think that labour and capital parties would ally against the rent seeker land, aka Tory party.

mombers said...

The search and discovery argument is really moot. There is no search and discovery cost when it comes to urban land, we already know where the most valuable stuff is, it doesn't take a genius to figure out that you can make a killing building a £100k house and selling it for the prevailing local £500k.
And as you point out, search and discovery is already quite heavily taxed

ThomasBHall said...

I always say LVT is land or location value tax. Makes it easier to explain and avoids what is land. After all, a hole in the ground in central London would still have value...

Mike W said...

I agree, Lola above,

To express it another way. We have the two heroes of production: Labour and real entrepreneurs. And yet these groups are played of by the Tory rent seekers (Banks, Land owners, political class of useless second sons) who tell/fool/bribe entrepreneurs their interests are aligned against Labour.

A lot to do with (a): how the Liberal party collapsed before WW1, leaving much reform undone; ie LVT. And(b) the wide spread belief amongst the intellectual left circa 1870-1970, that the basic capital v labour analysis was the only game in town for reform.
To paraphrase MW we all know the solution to that as well.

Lola said...

How about this for an LVT rationale:

"...Government should, after all, capture the value that government creates where this is possible...

From here:

Rather makes sense that. Replace 'government' with 'The State', or 'everyone' and hey presto.

Mark Wadsworth said...

SM thanks we saw it.

L yes perhaps it is as simple as that.

Mike W said...

Yep, seems fine.I try to explain to both left and right its about getting the 'mixed' bit in the mixed state right.Once you think about LVT your on your way in getting this.