Talking to fellow contributor Brian Micklethwait last night, we somehow got on the subject of the recent property and debt market bubble, and what a total mess things were. And Brian pointed out that some market bubbles, like the infamous Dutch tulip bubble of the 17th Century, were based on almost a totally ridiculous notion, delivering nothing of value, whereas at least the tech bubble of the 1990s, for all of the associated craziness and subsequent pain of the crash, did at least propel a lot of useful innovation in the internet and associated world, just as the railway boom of the 1840s in the UK helped drive forward development of the railways, even though the industry had its fair share of crooks and incompetents. And for that matter, even the tulip bubble, as the Wikipedia entry I linked to suggests, did perhaps help to drive development of what is still a huge horticultural industry in the Low Countries.
The trouble with bubbles is that they pop. But it is too easy to forget, in our current fit of puritan disgust for speculative frenzy, that much, if not all of the energy that can drive prices for things higher is reflective of often dynamic and highly beneficial changes in the long run. I still believe that in a few years’ time, unless we have reverted to statism completely, that the long boom of the 1990s and most of the ‘Noughties will be seen as a generally good thing, even though part of it was driven by unwisely cheap money set by central banks – state institutions – rather than genuine economic rationale.
I doubt much good came from this bubble. But I think we also need to recognise that all economies would, to some degree, bubble, even the idealised Dungeons and Dragons gold pieces economy. I don’t quite buy the argument that there’d be no bubbles without central banks; though i do buy the argument that central bank credit makes matters far worse in general.
Bubbles are as you say speculation. Every free market economy will have speculation. It’s human nature. Somebody has a new idea; it seems like a good idea; other people copy them; a rush of new businesses is set up; the market becomes oversaturated; some or many of the businesses fail and go into liquidation; the bubble has collapsed. After it has collapsed the economy shrinks a bit while the resources of those companies are liquidated and redeployed. There’s nothing you can do about it. The availability of easy credit fuels excess investment in those speculations; if there were less credit less could be borrowed and malinvested. But there’d still be the speculation to a degree.
You can’t ban speculation without halting progress. Nobody knows what’ll be a success until they’ve sucked it and seen. The economy bubbles at all scales, fractally; every small business that is started is a tiny bubble of one.
We must learn to live with, and love, our bubbles. No wise owls are wise enough to prevent them, because none have prophetic powers. No regulator can prevent bubbling. No admonition to the markets to “be responsible” can have any meaningful effect. There can never be a perfect ramping growth without spurts and collapses.
Speculate- then accumulate, or liquidate. That’s capitalism, folks.
Nobody’s complaining about the tech bubble – that was silly people losing their own money to cunning people, and some good did come of it. You could say the same for the Channel Tunnel – people and banks lost money, but society as a whole is probably better off as there is now more cross-channel competition.
You cannot put the housing bubble/credit bubble in the same context, ten years on, we are the same people in the same houses, just that some have huge debts and others have loads of cash in the bank (and I’m not complaining on that front, personally).
Low interest rates and easy credit, are, all things being equal, a good thing, provided the money goes into the mainstream economy (or at least building NEW buildings) and not futile property speculation on pre-existing assets.
Click link below for twenty-one word summary of how to fix this.
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…and the LVT will solve this how, Mark?
</wearily>
So how do you decide which bubbles are good and should be allowed to run their course, and which are bad; who makes and implements the decision; and what do you do about the “bad” ones?
On balance, I’ll live with periodic bubbles rather than the alternative – death is the ultimate in stability.
Of course, if we did not have state monopoly money and fractional banking, interest rates would be set by the supply and demand of capital, so this issue would hopefully be far less of a problem anyway, as Ian B says.
By judging what is and what is not a “good” or “bad” bubble – these things are shades of grey, not black or white – I tend to ask myself whether a period of speculative excitement has generated beneficial new technologies, sources of wealth and ideas, etc. Arguably, even the much-criticised market in credit derivatives has driven forward some financial innovations that are pretty useful.
If you believe that you can have an economy based on high finance, 125% mortgages, no savings, less and less manufacturing, and more and more state spending, I suppose you may be able to look back nostalgically at the New Labour boom.
Ian B, remember that total property values consist of three elements
a) Bricks and mortar
b) True location value
c) Bubble element
Click link below for handy chart showing house prices adjusted for earnings growth since 1952 – the bubbles are easy to spot. LVT would of course not apply to bricks and mortar, which is a privately owned productive and useful asset (in most cases). It would apply to the location value (being a handy replacement for Council Tax, Stamp Duty, Inheritance tax and so on) and also the bubble element.
A 5% LVT on the bubble element would act like a much higher interest rate thereon and stifle bubbles at birth and hence would keep house prices low and stable hence cheap credit would be diverted in productive economy, even if that’s dotcom shares or a Channel Tunnel.
There is such a concept as ‘sin taxes’, like taxes on alcohol, tobacco, gambling etc, which are taxed simply because these are perceived to be Bad Things. From where I am sitting, the property price bubble was A Very Bad Thing and far more economically damaging than e.g. smoking, drinking or gambling, so what’s wrong with having a tax on them?
Agreed on all but one of those points M. It does not matter a damn that Britain does not do much manufacturing.
It is objectively better for people to be able to buy manufactured goods from places where a comparative advantage exists rather than be forced by tariff, diktat or subsidy to purchased things from domestic producers which may be either more expensive or inferior (or both) to foreign produced things. Services are no less ‘real’ than making things.
Mark, it’s the price of the property in general that bubbles. There are various reasons, but the one we need to look at here is that cheap credit can only be spent on those things for which credit is used. Since few people can afford to buy houses with cash, mortgages become a kind of parallel currency; think of it as another legal tender called “property pounds”. The banks can’t make money unless they lend out property pounds, so they run the metaphorical printing presses and do everything they can to lend more and more of them out. The property pound inflates (relative to the “general pound”) and thus property prices, which are the only thing property pounds can be spent on, inflate too.
An LVT isn’t going to fix that. The price of the “improvements” (in Georgist terminology) is inflating along with the “land value”. It’s basically a problem of inflation restricted to specific areas of the market. For the homebuyer, an LVT of some thousands of pounds would just be another goddamned tax to pay the government. They’d still have to borrow money to buy their house. Council tax is currently, basically, a form of LVT in that sense, and it did nothing to stop the property bubble, because it doesn’t act as an “interest rate”. It’s just something you have to pay wherever you live- as would be LVT.
Perhaps I shoud have been more clear. If Britain did not have some of the highest business tax rates in the developed world, the country may have a ‘comparative advantage’ for many kinds of industrial and commercial activity, including manufacturing.
I don’t really see how one can usefully disentangle the value of the land on which a property sits – the locational aspect – from the physical aspects that make up some of the value of the house.
As Ian B says, council taxes are similar in some ways to LVT, and I cannot really see that they have exerted any sort of counter-inflationary impact at all. For that matter, what about stamp duty, which is a tax on land transactions? Can we really say that this tax has had any sort of dampening effect? We cannot.
The basic cause of the land price bubble in the UK was cheap money + restrictions in supply caused by the planning laws. As for whether property should be taxed as sinful, I find it incredible that a generally pro-liberty person such as you, Mark, should even contemplate the idea. The idea of using tax to punish activities deemed, rightly or wrongly, to be sinful is atrocious.
LVT and the whole Henry Georgist economic fixation with land is a dead-end for economics. We have been over this debate before and re-reading the thread, it strikes me that the case for LVT is shot through with holes.
Ian B, ‘property pounds’ is a good analogy.
Council Tax is a weird mixture of poll tax and jealousy surcharge and bears little relation to location values – either relative property values or changes over time. The amount raised in Council Tax is merely a balancing figure between what a council spends and how much money it gets from central government (between 50% and 80%, depending on council).
Yes, of course people hate paying tax, especially LVT, that is the whole point!! No first time buyer is going to pay fancy prices to ‘jump on the ladder’ because he knows that he will have to pay £1,000s in ‘property bubble tax’ as well.
So without a bubble, the LVT would average out at about 1% of total property values (as at today’s prices) i.e. much the same as council tax (plus notional Stamp Duty or Inheritance Tax or whatever other property or wealth related taxes you want to get rid of).
The value of ‘improvements’ does not inflate. It increases streadily in line with material and construction/labour costs, which are all provided by a free-ish competitive market. The price of bricks or kitchen fittings has not quadrupled over the last ten years, neither have wages in the construction sector.
As to disentangling, nobody knows the exact figure, but it is easy to approximate, and however rough the calculation is, it would be a damn sight more accurate than Council Tax.
I never said “property” was sinful. I am all in favour of people owning stuff. I don’t even think that smoking or drinking is sinful either. I am saying that property bubbles are bad and easily prevented.
As to liberalising planning laws (which is a splendid idea, of course), in this country, forget it, you get howled down and somebody says “You just want to concrete over the South East” or something. We are ruled by NIMBYs.
The tech bubble was very important, and useful.
Most companies are highly conservative, for good and ill. Although the market would eventually drive companies to take advantage of the increased efficiency and opportunities the introduction of Internet technologies brings, this could normally be expected to take many years. Companies that were successful despite not embracing the Internet, and that did poorly despite doing so, would at least partially mask bottom-line analysis. Further delay would come from managers that were fat and happy, or thought the Internet was just a fad like CB radio, or who just didn’t want to invest in something they didn’t really understand. They would come up with plenty of plausible reasons why the Internet wasn’t needed in their company, or not yet, or “we’ve got a pilot project in our Outer Mongolian branch office”.
And the stockmarket decided this wasn’t good enough, and spoke to the management class with one voice:
And that’s how the bubble happened. It wasn’t irrational, neither on a micro scale nor on a macro one. It was the best, possibly the only realistic way of making a major shift in how established companies did business happen urgently.
I don’t know much about the railway boom, but I suspect it was a bit similar. Tulips sound different, but I still wonder if the mass-production of tulips required the introduction of new farming techniques that massively increased yields in horticultural crops.
That is a bit disengenous, Mark. You wrote: “There is such a concept as ‘sin taxes’, like taxes on alcohol, tobacco, gambling etc, which are taxed simply because these are perceived to be Bad Things. From where I am sitting, the property price bubble (emphasis mine) was A Very Bad Thing and far more economically damaging than e.g. smoking, drinking or gambling, so what’s wrong with having a tax on them?”
Given your choice of words, my response was fair. If you want to play semantics, please don’t. I haven’t the patience.
And the points about the failure of various taxes to halt the property boom stands. They haven’t worked. Given the realities of the political world, it is also naive, to be polite about it, to imagine LVT working without being so oppressive as to provoke far more outraged responses than you get from the likes of me.
Well the prospect of that tax clearly did not stop the bubble from developing; it may have marginally helped to burst it, but that is scant consolation.
And LVT would have to be set by assessors at certain intervals and necessarily cannot be up to speed with the prices fetched in a constantly-changing market, and would involve the sort of injustices we discussed in the thread of a few weeks ago, such as what happens if a person is under pressure to sell a retirement home because the value of his land suddenly goes up and he cannot pay the tax. (And no, exempting such folk from LVT until their death is no answer because the burden will fall on someone else, which seems entirely arbitrary.)
To curb asset price bubbles, we need to focus on the price of credit and the supply of land for certain uses where bubbles are most likely to occur. After all, Mark, you favour scrapping other taxes, which might also have an inflationary effect.
1. The analogy with ‘sin taxes’ still holds. An LVT on bubbles is not intended to raise any tax, and if it did its job it wouldn’t, so that’s a win-win. It merely has to be there as a threat. And without the bubble, the ‘cash poor, asset rich’ pensioner has nothing to worry about.
2. You think rolling it up and making the heirs pay it is unfair. Well maybe, but it is a lot fairer than Inheritance Tax that catches ALL values, not just land. As an aside, IHT as it stands is a despicable tax with no economic merit that raises vanishingly little for all the distress it causes. Paying off unpaid LVT is no different to paying off unpaid gas or electricity bills of the deceased.
3. There is a land planning guru at the IEA (I think) who reckons that towns in the USA with liberal (or no) planning laws hardly had price bubbles, sure in many cases this would be just as good. But you try selling that to a nation of NIMBYs.
4. It is not your job or mine or the politicians to focus on the price of credit. That is best agreed on a case by case basis between each lender and each borrower in the light of all the circumstances.
5. As an aside, there are more or less no existing taxes in the UK that would have done anything to curb the boom, I do not understand this point at all. There was not even the vaguest threat because Labour (and the Tories in the 1980s) revelled in the house price bubble because it created the illusion of wealth and economic growth.
6. This whole ‘assessing’ is a red herring. HMLR has all the data it needs to calculate relative price increases and bubbles. Better roughly right than precisely wrong.
What? You favour taxes that don’t raise any revenue? WTF?
I am in favour of abolishing IHT, period. There is no desire on my part to pick and choose which bits of human activity are somehow better or worse from an economic point of view.
There is a land planning guru at the IEA (I think) who
Try selling LVT to most people, either British or otherwise. All those people who might see their tax bills soar because of a LVT valuation adjustment are just going to be outraged. Get real, Mark.
It is a fairly obvious and easy point. Stamp duty, for example, is applied to transactions on properties above a certain level. It is a tax that might – so the argument goes – deter some marginal buyers from buying, and hence deflate or prevent a bubble. It did not work, hence my argument as to why the failure of stamp duty to work might also suggest LVT will not work either.
Anyway, I do not want this thread to degrade into yet another slugfest over this Henry Georgian idea.
OK, but don’t forget that
a) SDLT is also a tax that deters marginal sellers from selling, so is sort of self-cancelling, in the same way as Capital Gains Tax.
b) It’s a Georgist idea with which Milton Friedman agreed(Link), and if it’s good enough for him it’s good enough for me. The intellectual superiority of Friedman over Georgists is underlined by the fact that he also had, for example, strong views on the futility of The War On Drugs which I share.
Wikipedia has a pretty good thumbnail sketch of the tulip ‘mania’.
That combined with “loosening of the monetary policy” together provide the most rational description of what happened.
So here we are 370 years later and we have a government that seems determined to set records for ‘managing’ the market in cooperation with the, er, economic community (rent seekers) and has ‘loosened monetary policy’ into scientific notation territory. What could possibly go wrong?
I dunno: if the idea is to tax transactions, then other things being equal – and they never are, of course – then fewer transactions will occur, surely. And if that is the outcome, then surely rises in valuations will be less than otherwise, since the market cannot move so fast.
As for Friedman, I suspect he saw LVT as a least-worst tax, rather than one to be embraced for any supposed asset-allocation efficiency argument. And as I said in a previous post, treating land values as something apart from the rise in other values – such as rises in the value of skills, say – is unworkable and bound to involve all manner of arbitrary distinctions. The problem, is suspect, is that LVT supporters are aiming for the “perfect tax”. It does not exist.
All bubbles arise as a result of government intervention. The housing bubble at present is an obvious example, but even the infamous tulip bulb episode. If you google it, you’ll see that it came about because the Dutch government passed an edict which transformed all futures contracts into call options: i.e. there was no downside to buying them, and no-one in their right mind shorting them.
Virginia Postrel had a post last month(Link) about an article she’d written for The Atlantic on bubble psychology. She concludes that they may be inevitable.
Well, maybe your own boat is shot through with holes. But the LVT boat is still intact, as far as I see. Let’s look at some of your wisdom, just in this thread.
So you proclaim ignorance as an argument against LVT? Interesting. Among the not-so-ignorant are property speculators/real estate investors, who must separate land value from improvement value if they are to be successful in determining which sites will go up in value. Also, all businesses need to be able to assess land value to determine if the business is even covering the rental value of the land, after expenses. If not, they need to sell or engage in another business more suitable to a site with that amount of rental value.
Similar and identical in their effects are two very different things. Council tax taxes both land and improvement value, so there are opposite forces at play as the LVT part of council tax is anti-property price inflationary and the improvement tax part is property price inflationary. Plus, council tax is an attempt to raise revenue by arbitrarily fixing rates to reach a revenue target. LVT, OTOH, is an attempt to collect up to 100% of the economic rental value of land. Prices of both the land and improvement market will react differently given the different bases that are to be taxed.
Wrong, wrong, wrong! Stamp duty acts to prevent property transactions. Econ 101: if you tax a certain transaction, you get less of those transactions. Sooo… if you tax a transaction of property, then you’ll get less property transacted on the market; and with less property on the market, prices will go up.
In fact, you contradicted yourself in the same sentence, saying that the Georgist argument would result in marginal buyers being deterred from buying houses because of stamp tax and then claiming this would lead to a deflation/prevention of the property bubble. Marginal buyers would only be deterred from buying if the stamp tax raised prices out of their price range (which is true). But by your “understanding” of the argument, the higher property prices deterring these potential marginal home buyers would make property prices lower. Up is not down in my world. The failure of stamp duty is that it raises property prices, while the LVT will decrease property prices, so your argument equating the price effects of stamp duty and LVT is the real failure.
An appeal to emotion is no way to win an argument. I’m not interested in the outrage of other people when I argue for LVT; I’m interested in the truth. And very few people would be outraged over soaring taxes in an LVT world because only the few who actually owned way more land than they were actually managing to put to good use would see their tax bills soar. As an aside, I don’t see a problem if one person or a small cabal owned all of the land in NYC or London. If they were actually putting the land into good use (whatever that may be), they would be able to pay the LVT with no problem. It would only be the vacant landowners, the landowners of derelict buildings, and the landowners running low-end businesses in the heart of town (i.e. parking lot operators) that would see a huge tax bill relative to their previous taxes and income.
If 95% of the people were outraged about soaring tax bills, then it is because vested interests and useful intellectuals such as yourself would be misrepresenting how much they were paying in LVT compared to all the tax costs, explicit and implicit, imposed on them in a non-LVT world.
Actually, it is a perfect tax, in theory, and in practice is the best we have. If by perfection you mean 100% of the land is assessed at 100% of the economic rental of land with 100% accuracy, then no, perfection can never exist. I’m not sure if you’re a proponent of the flat tax, but that tax is not even perfect in theory, let alone practice. Even if you’re an anarchist, a perfect array of all ex post market prices is not achievable. I might pay $10,000 for a car, but after consuming the car’s services, I might have felt that it was really only worth $9,500 and therefore overpaid by $500, or it was worth $10,500 to me, meaning that the seller was underpaid $500. But my view of the market is also my view of the LVT, which is that it is perfect ex ante but not perfect ex post, yet it is the best way to structure human institutions despite its imperfections.
Ah, the injustice of paying market value! Most likely, any LVT regime is going to make yearly assessments or renew assessments at time of transfer. What if a landlord, after the expiration of the 1-year lease agreement, decided to jack up the rent by 50% because of higher demand for his apartments, regardless of ability to pay of his tenants? Surely, this would be considered allowable in your world, since I don’t believe you are an advocate of rent control. Why is this any different than the assessor jacking up LVT assessments by 50% if a 50% increase is economically justified? It isn’t, if you don’t let cognitive dissonance get in the way.
As for injustice, why is it an injustice to charge the man market value for his land, but it is not an injustice for that man to charge market value to everyone else? After all, if the market value of his property goes up significantly because of a private or public improvement, he is then in the position of making others pay significantly more than before and taking the benefit for himself (without even lifting a finger). The LVT is true justice, because it makes everyone, even the property owner, pay the full market value. The LVT prevents the owner from either making unearned gains from selling his property or from enjoying higher benefits/services at the same, lower rent charge.
“Inflation is always and everywhere a monetary phenomenon.” — Milton Friedman
I point this out not as a argument for LVT, but as a point against your economic understanding. Taxes only redirect money, so can only redirect prices. Money that would have been spent on goods and services by the private sector will instead be spent on goods and services by the public sector, with prices for goods and services that would have been bought in the private sector falling and goods and services purchased in the public sector rising, ceterus paribus. Cutting taxes will just reverse the situation. A general price increase is only possible if the amount of money in the economy increases faster than the supply of goods.
Ah, another thread about economics hijacked by LVT enthusiasts. Frankly, I’m getting a little tired of it (as I’m a little tired of every banking thread being hijacked by Paul Marks railing against the fractional reserve system).
LVT suffers from the insurmountable flaw of insisting that there is somehow a knowable “market value” of land, incorporating such things as scenic views, nearby economic developments, etc. Nonsense. Such values are in constant flux and inherently unknowable. A “value” for the land would indeed be established, but it would be the arbitrary judgment of some tax assessor; its relationship to a true “market value” would be accidental (and temporary) at best. Another LVT defect is its implicit assumption that to the extent there is some measurable value to scenic vistas, etc., that value somehow belongs to all of society and is legimately subject to a special tax. Also nonsense. Scenic vista don’t magically spring into being; they have been in existence for a very long time, and were purchased (along with the land) from the previous owner (and will likewise be conveyed to the next one). You have no legitimate claim on it.
The only truly sensible post on this thread is Ian B’s initial one, and I (for one) would like to leave the LVT flight of fantasy and return to the original topic. Economics is nothing but applied human psychology. Humans are herd creatures and subject to occasional bouts of irrationality and excess; speculative bubbles are nothing but the tangible expression of such bouts. No society which is even remotely free can eliminate them, not through regulation, or government intervention, or even targeted taxes (such as LVT, capital gains, or stamp taxes). The occasional bubble is far preferable to the dead hand of government.
Laird, I totally agree. I have tried to avoid being sucked into repeating all the various arguments against LVT but Mark W. is at least civil so I have decided to try and drum some sense into these guys one more time. But they are tiresome and as you say, the case for LVT is essentially collectivism in drag. These guys basically think land is special, and hence deserving of some sort of special impost from the state. They are chasing the holy grail of the “perfect tax”. It is a vain hope.
Logan writes:
Yes. If one is ignorant about X, then I usually regard it as pretty stupid to impose a tax based on something where the data is constantly in flux, as in a market.
This remark also rests merely on an assertion:
Huh? I am not in the business of trying to “structure human institutions” in a way that meets some goal of perfection. If you want to raise revenue, then I want it done in a way that is as least onerous as possible. For reasons given over and over, LVT would impose all kinds of unjust bills on people.
LVT is a tax, not a price achieved between two consenting adults. LVT advocates believe the state is entitled to seize a portion of the value of such transactions, and I argue that is wrong. I favour a very low tax regime that does not make a special deal out of the issue of land value as opposed to other things.
Well obviously. If you read my earlier comments and those of others, that point is made several times over.
I must have my head up my ass.
All this time I thought that real property value was determined by two factors: what the owner wants for it, and what the buyer is willing to offer.
And I thought that taxation had a purpose: to raise money for those things that a government might legitimately do, in the least-disruptive and least-harmful manner possible.
And, if a person cannot own the land underneath his feet, then he is dependent upon the kindness of others for a place to so much as sit or stand, never mind a vine and fig tree he can sit under.
(Is it bad, that just writing that has the Firefly theme stuck in my head?)
Laird offers the most profound thing I’ve seen here in weeks:
“Sheep have two speeds: graze and stampede.” Lt. Col. David Grossman.
If you read between the lines of the LVT argument it is clear that some people feel very passionately that all people have an equal claim to a share of the resources in the world on which we temporarily find ourselves. Sometimes the theory gets beyond me, but the intent of the argument makes me hopeful.
It seems that some people are horrified at proposals which attempt to more equally share the resources between everybody. Why? Those who argue so strongly against LVT, do so with myopic economic theory to justify the starvation of billions.
Awake writes:
So lots of people feel they are entitled to use the instruments of coercive force to grab others’ legitimately-held property because they want “their share” of this – and this makes you hopeful, does it? This is nothing more than argument for thieving. Bugger off.
The only instruments of coercive force I would suggest are debate and intelligence…. your tone with me sounds like your mind is closed to this possibility.
Is something legitimately held because thats the way we do it and thats what it says in the books… or because it is truly legitimate? Can something we once thought legitimate be seen as a inherently flawed? Slavery for example.
Property can be legitimately held/improved/sold etc, but what about the land? Who can ‘legitimately’ claim rights to that? Build what you like on it but pay a fair rent for the land…. what upsets you so much with that?
The suggestion that privately owned land is the economic foolishness on which all poverty stands is something we need to examine with open minds and warm hearts.
Please. But in hard, unlovely reality, any talk of more “fair” shares ends up with taxes, confiscations, and the rest, as you must be surely be aware. If you want to persuade me to give some of my wealth to whoever, do so. No-one is preventing that.
No. It is entirely possible to show that a piece of property is legitimately owned in the eyes of the law and also by reference to ideas about self-ownership, acts of human creativity and enhancements of the materials of nature, etc. What the Georgists/socialists deny is that private ownership is legitimate at all unless it meets a strictly egalitarian criterion; ie, never.
A false distinction. Land can also be improved by man. Farmland can be improved via things such as drainage, use of fertilisers, new crops, machinery, all requiring entrepreneurship, risk-taking, etc. Ask any farmer or developer who has done this and lost or made money. Or what about land reclamation, etc.
the LVT/Georgists think land is “just out there”, that it can and should not be owned by man in any meaningful sense, but is merely held by humans on a sort of lease from the collective. But we did not “create” our own bodies or civilisation either: does this mean that the fruits of our mental and physical labours are also common property, the fruits of which must be shared out equally? Fuck no.
regarding confiscation; the confiscation has already occurred, hence the prevalent global poverty, requesting a correction should be seen as a worthy proposal not a call to arms.
Who is suggesting that the fruits of our mental and physical labours should be shared out as common? Not me or the Georgists. Just a fair rent for the land you claim. Everything else is yours…. Except everything goes back to dust, it’s all on a short term lease. (apart from the love you feel, that is yours forever) ;•]
…another thought: surely a reasonable person would happily give up some of the excess unused wealth which they have acquired due to faulty economics/politics to help those in poverty to attain some level of dignity in life. No?
Are those who want to hold on to excess wealth while others starve or lack suitable shelter, reasonable or unreasonable?
If the structural framework of classical economics creates poverty as an unintended consequence of it’s fabrication, surely we would want to modify that framework to allow all people to prosper.
We have been over this hoary old argument before that because, say, thousands of years ago, a bunch of tribesmen grabbed some land, that every bit of property that ever got bought or sold hundreds of years later is tainted, and that the owners of that property can be justly forced to hand over whatever is deemed to be a “fair” share. But that is a nonsense on practical grounds.
I am all in favour of as wide as distribution of property as possible; which is one reason why I favour tax cuts on savings, for example, so that people can accumulate as much wealth as possible.
Define “excess wealth”.
Oh, and a cursory reading of history ought toshow that the mass confiscations of private land in places such as Soviet Russia, north Korea, Zimbabwe, etc, have led to mass starvation and misery. Fact.
I am not interested in a cursory reading of history…. Confiscation by the few to the detriment of the many is what we currently have. I much prefer those who argue for sharing and common wealth. Try this regarding Zimbabwe: http://uk.youtube.com/RenegadeEconomist
what are you afraid of losing?
what are you afraid of losing?—EVERYTHING
Why should land be any different from any other property? You make no attempt to explain that.
A ‘fair rent’ to who? Why should I not own the land I have? Your remarks are all so utterly unqualified they could mean almost anything.
I have no ‘excess’ wealth in my view, but if you think you do, feel free to give it away to others, I for one would never stop you disposing of your several property as you wish.
Ah, such as the use of violence to take without prior consent? That sort of thing? Like, say, rent seeking by manipulating the political process?
Common wealth is no wealth at all. It is a collectivist delusion. Moreover if you want to ‘share’ in my several property, I am happy to oblige, if you can offer me something I want in return.
I am not interested in a cursory reading of history….
Then you should be. The history of what happens when wealth is seized from X and transferred to Y is not encouraging.
Oh, as for the starving millions, their best hope is for as much free market activity as possible.
Anyway, you are either a troll or a doofus, and I have lost patience with this thread, which seems to have been hijacked by the LVT maniacs.
I understand why some are happy with the status quo of the collectivist delusion which we currently enjoy, because we get acquire lots while others have very little. The current collectivist tax system sucks wealth from the many to the few – A few get to rig the system for the benefit of the few – I see the clarity of thought behind that. It’s full of fear and greed but don’t let that get in the way of a good argument.
Anyway I thought this was about bubbles. I’m agnostic but I do rather enjoy the renegade economist on bubbles. http://www.renegadeeconomist.com/
I have seem to have to say this every few days:
All lending (“investment”) should be from real savings (income people choose not to consume). Not smoke and mirrors credit expansion.
Can there be credit bubbles without a Central Bank – yes, where there is fractional reserve banking. But it is limited and only exists till they go bankrupt (then the malinvestments are liquidated).
Whether fractional reserve banking is fraud is another debate – but once the collapse comes prices and wages must be allowed to ajust (or the suffering will be made even worse than it must be).
How many times do I have to type the above?