Re: von Mises Institute on Henry George

From: RueTheDay (ruetheday_at_outgun.com)
Date: 08/21/04 

Date: Fri, 20 Aug 2004 22:42:07 -0400

"Grinch" <oldnasty@mindspring.com> wrote in message
news:024di0d4m0bu0ct7qi201hvoh4f4lc00ja@4ax.com...
> On Fri, 20 Aug 2004 18:43:04 -0400, "RueTheDay" <ruetheday@outgun.com>
> wrote:
>
> >"Grinch" <oldnasty@mindspring.com> wrote in message
> >news:ivnci01dilfil0h718kce82p0tgmmv3u3e@4ax.com...
> >> On Fri, 20 Aug 2004 16:20:06 -0400, "RueTheDay" <ruetheday@outgun.com>
> >> wrote:
> >>
> >> >1. Incidence of taxation - Do you dispute the fact that a tax placed
upon
> >> >something with a perfectly inelastic supply will fall wholly on the
> >supplier
> >> >and that there will be no decrease in output as a result of that tax?
Do
> >> >you believe that any professional economist would dispute that
statement?
> >> >
> >> >2. Externalities - Do you dispute the fact that increases in land
values
> >are
> >> >almost entirely due to positive externalities (e.g., government
> >investment
> >> >in infrastructure, the actions of surrounding landowners and
> >businessmen)?
> >>
> >> But this is so 1840s-rent analysis. It's like throwing out challenging
> >> questions based on the logic of the aether.
> >
> >I see you completely ignored my first point.
>
> Because its a red herring as to George and for that anything
> meaningful in real world tax policy.

Hardly. It's the key issue. The more inelastic the object of taxation, the
smaller the deadweight loss as a result of the tax.

>
> Elasticity and taxes? I hate to break this to you, but that ain't
> George -- it long predates George, and post-dates him, and side-dates
> him. Why you imagine there's anything new or insightful or **not
> already totally recognized** in that by the whole dang world of econ
> and taxation professionals, I dunno.

Well, one can say that the idea was first formalized by the Physiocrats
(though, in practice, it had been used for thousands of years before them)
and had also been recognized in varying degrees by Smith, Ricardo, and
especially, JS Mill, but so what? Henry George was the first to take the
idea to its logical conclusion. In any event, I am a little bothered by the
name "Georgism", which is why I prefer Geoism or Geolibertarianism. The
focus should be on the ideas, not the man.

> Nonetheless, they haven't all become Georgists!
>
> So maybe there's stuff there they appreciate that maybe you don't
> fully yet? Maybe you should ask why -- other than for conspiracy
> theory reasons -- they haven't?

Vested interest?

> >Your response to my second
> >point is just complete nonsense. Externalities are anything but "1840's
> >rent analysis".
>
> Well, your "externalities"-and land value is definitely pre-1870s. If
> you read the post-1870s stuff you might draw a little different
> opinion about where land value comes from....

Do you even know the definition of "externality"? It's any cost incurred or
benefit received by someone not a party to a transaction. If I own a piece
of land and the local government builds a road alongside it and my land
value doubles overnight, that is a positive externality. It would have been
such in 1840, it's the case today, and it will be the case 100 years from
now.

> >They need not involve rents at all. It is pretty clear
> >that you have no idea what you're talking about.
> >
> >> How about this. You learn the post-Ricardian analysis of rent that
> >> came in say around the 1870s. Just get within 130 years of where we
> >> are! Learn something!
> >>
> >> Then when you understand just why *logic dictates* that land rent as a
> >> share of national income *should fall* over time, maybe the data that
> >> Schultz mentions which shows *it does* won't get you into such a state
> >> of denial -- "His statement about the facts is wrong because I can't
> >> make out the data!" ;-)
> >>
> >> When conventional theory and observational data *agree* that's good!
> >>
> >> Maybe then you'll say "Logic and facts fit each other, and I can see
> >> now how simple logic can explain a marked fall in land rents over
> >> time" -- and then we will be able to have a conversation.
> >>
> >> For you will have removed yourself from the ranks of those who analyze
> >> along the lines of:
> >> "The aether is *there*, the logic of classical analysis is
> >> irresistible, those Nobel physicists are *wrong*, and all that data
> >> about the speed of light ... it's so damn confusing and messy who can
> >> say what it means?"
> >
> >You REALLY should stick to chasing ambulances. Your knowledge of
economics
> >is incredibly shallow. If you want to continue this conversation, please
> >reply to my two points above about the incidence of taxation and
> >externalities. Your continual dodging is getting tiresome.
>
> ~sigh~ ... Well, I'll give you a clue about the "Unearned Decrement"
> to landlords that very logically reduces land rent as a portion of
> national income over historical time.
>
> Take a look at the definition and necessary conditions that are
> specified to "Ricardian rent" by Ricardo and later (correctly) by
> George -- to drive the "unearned increment" process, which George
> *emphasized* worked to the landlord's gain due to the actions of "the
> community" etc., both as the base of his economic analysis and the
> moral justification of his policy prescripton, its root in *justice*.
>
> Then look at which condition might very plausibly be different in the
> real world -- even so as to cleanly reverse the process, and set the
> process of an "unearned decrement" in motion.
>
> Said possibility of a different condition being never mentioned by
> George, as his intellectual models up through Mill never really
> considered it -- although it was well known to economists by the time
> he was selling his book. Hence Blaug's comment, "30 years out of date
> the day it was published".
>
> And as the "unearned decrement" unquestionably is imposed on landlords
> by "the community" -- people, the government, other landowners, and
> business people most definitely -- by the very same process that an
> "unearned increment" would be ... I dunno ... maybe as a matter of
> the same sort of *justice* the community should impose a tax upon
> itself to fund a compensating transfer to landlords?
>
> Just an idea. ;-)

So are you going to tell us what this "condition George wasn't aware of
unlike other economists of his time" is? I mean, you really have me on the
edge of my seat and all.

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