Re: anti-Georgist rant

From: Mark Monson (m_monson_at_ztech.com)
Date: 06/26/04 

Date: Sat, 26 Jun 2004 12:13:48 -0400

"sinister" <sinister@nospam.invalid> wrote in message
news:5A9Dc.1069$x9.473@nwrddc02.gnilink.net...
> From a weblog comment section:
>
> http://www.j-bradford-delong.net/movable_type/2004_archives/001054.html
>
>
>
> I am a great admirer of Ricardo. That doesn't mean he was right about land
> rent (or about the Labor Theory of Value) for that matter. It wasn't his
> fault--he came before the marginalists. I am guessing that you haven't read
> economic theory from the last, oh, 100 years.
>
> Piet Eicholz did some interesting work measuring property values in central
> Amtredam going bank 200 years. His finding--on an inflation adjusted basis,
> land prices have basically not changed over that period of time. The
> reason--when land gets too expensive in one area (unless it is a truly
> unique place), people move to another so as to economize on land prices.
>
> So what about Boston? Yes, I have already noted that land is inelastically
> supplied there--but the best empirical evidence we have shows that it is
> land use regulation, rather than physical scarcity, that has made it
> inelastic. Similarly in California, regulation makes it difficult to build
> new housing (and Prop 13 is capitalized into land prices).

Rent is not a function of land's overall inelastic supply. Imagine a universe like
ours except that the Earth is a flat expanse that goes on forever with the same
climate, rainfall, soil, etc. throughout. Rent would still arise because people
find advantage to living close to each other. Locations nearer population centers
would offer greater commercial advantage and therefore command greater rent.
Ricardo's theory of rent states this as "the rent of land is determined by its
advantage over free land." It has nothing to do with the total quantity of land.

MM

Relevant Pages

  • Re: Murray Rothbard on Georgist fallacies
    ... The "Single Tax" on Ground Rent ... the idea that "society" owns the land ... taxation has upon production and exchange. ...
    (sci.econ)
  • Re: CPI a fraud?
    ... >>> Are you claiming that land rent does not affect the cost of housing ... >> The land is depreciated right along with the house. ... > rises in land prices will lead to rises in housing rent. ...
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  • Re: Land, Labour and Capital Taxation....
    ... > certainly will effect production. ... This tax is ... The problem is that market prices are driven by more than economic rent. ... theory is the best land is settled first. ...
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  • Re: AMI Free Monetary Seminars in Seceral Cities
    ... Concurrent tax reform of location rent taxation, ... destroys selling price of land, the financial cornerstone of the Debt Web. ... Govnmt should pay the banks for this service, ... redistribution and set the economy free again. ...
    (sci.econ)
  • Re: Income from a tax on land.
    ... One can use the principle of equal rights to use natural resources ... >> clearly relevant to current discussions of land rent. ... >Because the community doesn't own the land either. ...
    (sci.econ)