Re: von Mises Institute on Henry George

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

Date: Sat, 21 Aug 2004 08:19:11 -0400

"Grinch" <oldnasty@mindspring.com> wrote in message
news:cfqdi0l647q1eak4h79lmabemae06hp78g@4ax.com...
> On Fri, 20 Aug 2004 17:21:39 -0400, "RueTheDay" <ruetheday@outgun.com>
> wrote:
>
> >"Grinch" <oldnasty@mindspring.com> wrote in message
> >news:c6mci0p1beu2qlnd2dln4dltec2f37c42i@4ax.com...
>
> > You are having enough trouble grasping basic economics.
> >If this were rocket science, you'd probably be arguing that gravity was a
> >function of volume rather than mass or some other nonsense.
>
> Maybe so!
>
> OTOH, in economics I know that the market price system serves the
> function of allocating items effeciently to the parties across the
> market to whom they are most valuable -- not merely of spurring new
> production, which seems to be the only function some Georgiststs think
> of for it.

And is there some reason why only positive prices can serve that function?

> >> When determining market price, it's not the total existent supply of
> >> anything that is reflected in its price as determined by the
> >> supply-demand diagram -- it is the amount of supply that is brought
> >> **to the market and marketed** by sellers.
> >
> >Land is not "brought to the market" by sellers;
>
> So who puts up the for "sale or lease sign" in the real estate office,
> and puts the signature on the contract to pay the 6%, and so on?
>
> Who solicit bids to push them up to market level, haggles over the
> price, decides to hold out for more, picks the winning one, if any?
>
> The land itself? I didn't know inanimate objects were up to all that!

If someone were ever to invent that hypothetical machine that bottles up all
of the air and then sell air to individuals, Grinch would be on here arguing
that the machine was just and that the owners of the machine were providing
the valuable service of bringing the air to market.

> >it simply exists.
>
> Well, hey, *that's what I said*!
>
> The land is just an inanimate object that exists there -- so it's the
> seller who has to go through all the trouble and expense involved in
> *bringing it to market* and discovering its full market price.
>
> You said I was wrong, now you say I was right, make up your mind!

The seller is superfluous.

> *Someone* has to do all that marketing work on the selling side to
> generate market prices -- if not the sellers, who?

The buyers competing for the land to put it to productive use.

> > Shoot the seller, and the land will still be there.
>
> And unless another seller appears for it, it will be *off the market*,
> which will affect the market price and allocation of land compared to
> if the seller wasn't shot and it stayed on the market, eh?

How do you figure?

> > Shoot all of the employees of a
> >car company and no cars will be produced.
>
> And the ones that *were* produced and are still sitting in inventory
> won't get sold either, right? Which will change the market price and
> allocation compared to if they were. Eh?

And once those cars are sold, where will more cars come from?

OTOH, you don't have that problem with land.

> >
> >> And that amount is *most definitely* affected by the profit motive
> >> that exists for doing so.
> >>
> >> If there is no profit motive, so the supply line goes straight up from
> >> the origin, well then .... ;-(
> >
> >I've already proven you wrong on this.
>
> Bah! ha! ha!
>
> You proposed a line with a horizontal slope for a situation when price
> was fixed at one point! $0.
>
> And then you corrected me by saying while I dumbasssedly said quantity
> produced would be zero, as seen where the demand line crosses the
> vertical axis right above zero, because that's where supply is with $0
> price, REALLY, with *correctly derived* lines, the quantity produced
> would be seen where the demand line crosses the Y axis, which is the
> vertical axis, immediately above zero, for a quantity produced of
> zero!!
>
> Boy, do I ever sit corrected! LMAO ;-)
>
> And with this boneheadedness you claim you have *proven wrong* the
> notion that a *profit motive* increases the efforts of sellers to work
> to generate true maximum market prices.
>
> Gee whiz!! ;-)

No, you made the claim that a tax on the seller changes the slope of the
supply curve rather than shifting it. You were flat out wrong. Now you're
just running like a scared child.

> >> If you want to see "hoarding" of land, just set the incentive for
> >> bringing it to market to $0 (or negative). Duh.
> >
> >That would be true if not for the fact that for each parcel of land that
you
> >hoard you will have to pay a tax on its rental value. How convenient of
you
> >to leave out half of the equation.
>
> What rental value??
>
> With a 100% tax on rent, as you specified in your other post, what
> dummy is going to do *any* work to generate information about the
> rental value of his land, when he gets no rent on it so any effort is
> a loss.

<sigh> Now I know what Roy means when he refers to people who refuse to
understand. The individual will pay rent because he needs the land to
produce. He will pay an amount such that the productive activity that he
uses the land for will generate a return greater than the rent of the land.

> And with no potential lessors doing anything to generate rental
> values, what are your rental values going to be?

They will be determined by the market, based upon the negative pricing
scheme of the land tax, according to the productivity of the land.

> How convenient of you to leave reality out of your equation. ;-)
>
> Hey, would *you* put a whole lot of work into selling something for no
> less than a best price worth exactly $0 to you, when it took you a
> bunch of effort to find that price?

You seem to think that land has no productive use apart from speculation and
that the only effort that can be applied to land is figuring out how much to
sell it for.

> >> >Rothbard should have stuck with playwriting.
> >> >His, "Mozart Was a Red" piece was very entertaining.
> >>
> >> Yeah, it is something when people get just full of themselves and go
> >> on and on as if they know so much more than they do, eh?
> >
> >Are you talking about yourself?
>
> Nope!
>
> Innanimate objects find the highest market prices for themselves all
> by themselves. ;-) Bwah!
>
> Deep profound lesson of the day: The price system functions to
> allocate goods among users. If you pound the price system with a
> sledgehammer into a very different shape, the *allocation* will change
> even if the quantity of goods allocated does not. And in this case
> the change will not be for the better.

Negative prices can allocate in much the same was as positive prices. In
the case of land, they allocate even better.

Relevant Pages

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