Craig Spencer wrote:
>
> > The right to exclude other's from nature's benefits is a government
> > granted right and it has economic value. Land titles are government
> > created legal rights to the exclusive use of natural resources. Land and
> > natural resources are prior to human employment and use and to economic
> > production.
>
> Land and "natural resources' are prior to human employment but they have
> no human value prior to human employment. All value is a consequence of
> production; nature by itself has no benefits.
Production gives produce which can be exchanged for non-produce, which
is not produced but has value. This is called land in economic terms and
the produce exchanged for the use of it is called rent. Natural supply,
human demand.
> by one individual is or would be destroyed by the actions of another
> then the producer has an inherent right to prevent the destruction. In
> origin this right is prior to government.
producers have rights to their production, and to what they exchange for
it. The do not have the right to exclude others from natural resources
without payment of compensation.
>
> If you were right that "land titles are government created rights" then
> Proudon ("property is theft") would be right. But Proudon is wrong.
Property is land is differennt from property in production. Land is not
produced, produce is. Property rights in land differ from property
rights in produce.
>
> The right to "exclusive use of natural resources" derives from the fact
> that sometimes (tho not always) the enjoyment by one individual of what
> he has produced requires such exclusive use. Land titles etc. are not
> primary; they are derivative of and originate in production. In this
> way they are not arbitrary and they are not creations of government.
Land rights/titles to not derive from production they derive from
government. Tresspass is a government created crime. a lot of
libertarians seem to want the government to establish new property
rights in natural resources and one does not get the impression these
would be given away, rather than they would be sold. So they seem to
want the government to get one off revenue from the state creation of
property right in natural resources which were previously commons.
Commons is unregulated and non-interventionist in the most individualist
fashion. It seems that the main difference between me and libertarians
is that I favour regular value charging on perpetual property rights in
natural resources, to avoid the creation of unstable high price rent
ratio assets, and to fund government/proprietary communities, and
libertarians favour the creation of perpetual property rights in natural
resources, for one off revenue, without any concern for nature of the
assets created or opportunities for public revenue.
>
> > ... In order to use the price mechanism to ration the limited supply
> > of natural resources efficiently, normally it requires government to
> > establish exclusive rights in natural resources, which are government
> > created property rights.
>
> Yes, the market requires property. But as I have argued above property
> is not arbitrary but originates naturally prior to government.
"the market" requires "property"? meaning that a civilised capitalist
community of individuals requires property rights in land. Property in
land is exceptionally beneficial for human habitation and use, but it is
still government intervention, granting rights to use force to exclude
others from natural resources. One cannot pretend that the tresspasser
initiates force against the land holder, the land holder threatens state
initiation of force against individuals freedom of movement over 'his'
land. Placing improvements on land does not give the right to exclude
others from placing their improvements there. Rights to land must be
equal, or unequal by governent intervention. Pure libertarianism or
individualism based solely on the non-initiation of force criterion
would mean natural resources would be unmanaged commons.
>
> > The economic value these exclusive rights confer on their holders is
> > called economic rent or ground rent. Holders of these exclusive rights
> > generally also engage in economic production, so that the value of their
> > economic production consists of two parts: 1. the value added by the use
> > of the natural resource and 2. the additional value added by the use of
> > labour, capital and risk-bearing.
>
> I would describe this differently. Producers generally also make use of
> resources and their right to the enjoyment of their production thereby
> excludes others from the use of those resources. When those resources
> can be better employed otherwise then other people will be willing to
> pay the producer more than the value of his product to stop, vacate
> and allow the better use. When this happens the original productive
> activity may derive some extra value from the ingenuity of others. But
> in no case do natural resources by themselves have value. All value
> derives from (someone's) production.
so firm A uses input B to produce output C, so firm A's right to its
produce C implies its right to exclude firm D from input B? Land is an
input to the production process, not an output. Individuals have rights
to their output, but not to exclusive benefit from natural inputs
without compensation. The fact that firm A can sell its exclusive rights
to input B to firm D if firm D can use it more efficiently means that
input B can be used more efficiently than otherwise but does not justify
firm A's claim on input B. Value of land, and land rent, comes from
human demand (offer to exchange production for), of the inelastic supply
of land.
>
> > The suppliers of labour, capital and risk-bearing should keep the
> > full wages, interest and profit they earn by their supply,
>
> In that we are in agreement.
that's good
>
> > the government can take the economic rent of the natural resources
> > for public revenue.
>
> But I do not agree that this is legitimate. Even if I granted (which
> I do not) that there was an unproduced economic rent there is no
> reason to accept the legitimacy of its expropriation by government.
you deny that economic rent of natural resources exists at all?
>
> > The fact of adding some value to the production process, and employing
> > natural resources to add the balance of value, does not create a
> > property right, either legally or morally, to the balance of the value
> > added.
>
> I have explained above why I think this is wrong.
So you deny that there is no legal or moral right of individuals to
value that they have not added, or that there is any value added other
than by individuals? I think you deny the latter and the former.
> Nature supples an inelastic natural resource, human communities
> > are the demand only.
>
> The fallacy in this idea is dealt with in detail the a book by Julian
> Simon (sorry I can't provide the title right now). Humans both
> produce and consume all values.
When human desire meets scarcity in natural resources, economic rents
arise, which go to holders of natural resource holders. The holder does
not produce value he accepts it for the use of the rights he holds. All
demand is human, some supply is natural.
>
> > Thus the human community is the source of ground rent.
>
> The ingenuity of other specific persons creates better uses for
> resources than those of their present users. Other than these
> parties the rest of the "human community" are at best just
> customers or at worst envious thieves.
The improvement, employment and use of natural resources is part of the
production proces and the profits and interest and wages arising from
this activity should go to the human factors of production in unfettered
markets. To rent a natural resource and use it exceptionally well to
produce an economic profit is great, and the economic profit should go
to whoever can acheive such feats.
> > The governments of human communities have sovereignty over the natural
> > resources in a defined geographic area,
>
> That may be a fact. But so is the fact that a thief possesses his
> loot. This confers no moral legitimacy.
forgive me for being so tied to the real world.
>
> > and their policies for the allocation of natural resources, and
> > for human interaction generally in their community, determine the
> > demand for natural resources and therefore the rent. The more
> > hospitible are public policies to human production and welfare, the
> > greater the demand
>
> There is truth in this. In the same way that you are better off if
> a mugger does not beat you. But that does not make it legitimate
> for the mugger to take your money.
do you disagree that rent-maximising public policies are maximally
beneficial and make land most hospitable for human habitation and use?
>
> > Public expenditures, if they add value in net terms,
>
> There is truth to this also. In the same way that you may derive
> some "benefit" if a crook gives you some of his loot. But that
> doesn't make crime legitimate either.
>
If you consent to live in a jurisdiction, having many to choose from,
taxation, in effect, becomes voluntary. The relationship between the
sovereign and the resident becomes in effect contractual. I want to see
the decentralisation and commercialisation of government, to make it, in
effect, a voluntary relationship.
> The *one* legitimate thing that government might do is to prevent crime
> by others (which entails enforcing rights to property that are prior to
> government) and thereby prevent the loss of value consequent to crime.
> This would be a valuable service for which compensation would be
> justified. But it does not justify expropriation of anything (including
> all "land rents").
'compensation justified' meaning taxation justified? please explain.
>
> > Government could theoretically make its jurisdiction a wasteland and
> > all its land sub-marginal, by adopting policies to make land
> > inhospitable to labour and capital, no ground rent would arise
> > because the demand for land would be less than the supply at a
> > price of zero.
>
> If I understand you correctly you are arguing that the ability to
> destroy something is a moral justification for expropriating it!
My assumption is that the world is divided into sovereign jurisdictions.
This is a fact but is it right? If it is a morally acceptable state of
affairs, then my argument holds.
>
> > ... Regular value taxation of the unimproved capital values (Land
> > Value Tax) can then occur based on the inferred unimproved capital
> > value of all titles. This levies only the economic rent and does
> > not tax improvements at all.
>
> Even if this could be done that does not morally justify doing it.
justification of it is a separate argument, previously made.
>
> > land titles, whether taxed or not, are government intervention. Like
> > fiat money, land titles confer rights of economic value based on
> > government decree.
>
> Not necessarily so. This presumes that ownership of land is an
> arbitrary fiat based on force. As I have explained above, when
> property is properly understood, this is not the case.
You have hit the nail on the head. I think property in land is based on
edict, you on some sort of natural right in production.
>
> > The tax is not passed on to the users of land, has no economic
> > deadweight, and does not distort economic activity.
>
> Nonsense.
If the supply of land is inelastic, then a tax on its value will cause
no economic deadweight, and the tax will not be passed on to users. What
is not pased on to users cannot change the quantities of goods and
services they either produce or consume.
In fact my analysis of the aggregate rent of land, aggregate land value,
land value tax revenue, the risk premium on the land asset and how these
ralate to the macro-economy (including analysis of the capital stock,
capital accumulation, depreciation, technological progress, labour force
growth and the interest rate) indicates that if the consumption
maximising ('golden rule' ) level of capital is accumulated, then land
value tax delivers a net economic benefit equal to nearly the entire
rent of land! Thus Land Value Tax actually improves the allocation of
resources rather than imposing an economic deadweight. Also
microeconomic analysis of the holding, renting and use of land indicates
that a Land Value Tax would reduce the vacancy rate of land, and reduce
the transaction costs of land allocation (users of land would be more
likely to hold the land they wish to use rather than rent it from a
third party, saving transaction costs). For details of this analysis
email me and I can send my work as an attachment.
>
> > People voluntarily pay the rent of land because of the advantages
> > the exclusive use of land offers them,
>
> There is no justification for payment to the government rather than
> to the people who created the value and are the legitimate property
> holders.
of course there is not. government should only levy what is the economic
rent of land, not the return to human value adding.
>
> > the governemnt simply collects this revenue via a regular
> > value charge on the titles it issues. People voluntarily choose to hold
> > land based on a contract of sorts between the government, which issues
> > and protects the titles, and title holders,
>
> If the government were to protect property and charge a fee for
> providing a sort of title insurance service then that would be
> legitimate. But the value of this service should be set by competition
> with competing title insurance companies. If it were it would not be
> expropriation of all ground rents!
the services government provides is the exclusive rights to land, not
police services to enforce this per see. For the granting of exclusive
rights to land government can charge rent or land value tax, equal to or
based on the economic value of the exclusive rights granted. The
enforcement is a different issue.
>
> > I fully agree that that private sector and private individuals can do
> > almost all that the government does now without taxation or government
> > involvement. Including police, courts, jails and security. However,
> > economic public goods are quite a delema without the insights provided
> > by analysis of land rent and the geographic distribution of their
> > benefits. This would have to include national defence, foreign
> > relations, many core governent services, conservation and environmental
> > public goods, local access roads and footpaths and streetlights, suburb
> > security, public health (meaning contagious disease control, not heart
> > operations), statistics, and many more. Analysis of land rent and public
> > goods leads me to believe that large scale competing and co-operating
> > proprietary communities can provide/procure almost all public goods
> > efficiently, because most public good benefits are excludable over the
> > area of a suburb or community, thus allowing suppliers to charge
> > communities if communities are prepared to pay.
>
> These comments lead me to think that we are not as far apart as it may
> seem. In particular, I agree that "large scale competing and
> co-operating
> proprietary communities can provide/procure almost all public goods".
>
> > And the benefits of publc goods become capitalised into the immobile
> > factor of production, i.e. land, which communities can use as a fund
> > for public goods, without taxing human production.
>
> But I do not agree that expropriating land rents does not tax human
> production and I would not condone it. However, I would not object to
> communities being organized on this basis provided they were genuinely
> proprietary. That is, if the organizers bought the land rather than
> seized it and if community members voluntarily agreed in advance to pay
> all land rents to the proprietors. Then we would see how such Georgist
> communities faired in economic and social competition with purely
> capitalist ones. But I would not tolerate forcing everyone into
> Georgist communities (not that I would actually have anything to say
> about it!).
Well give us freedom for form proprietary communities and look after
ourselves and we will see that the tax/revenue base rapidly moves from
mobile factors of production to the immobile one!
Georgism should not be forced from the top, it should involve each
community being granted fiscal sovereignty.
>
> > A federal government may still be needed, but its citizens and taxpayers
> > and voters would be communities rather than individuals.
>
> That is an intriguing idea!
>
> CCS
Fiscal and taxation policy must be decentralised, it is only taxation of
financial activity tht requires such centralisation as we have now.
Taxation of value added, sales, land, improvements, excise taxes etc.
can be operated no less efficiently at the local community level.
Individuals should be granted financial sovereignty in a global
financial market, and communities should be granted fiscal and policy
sovereignty for their own affairs.
David Hillary
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