Re: Email to Roy L about East Germany

From: Quirk (quirk_at_syntac.net)
Date: 11/11/04 

Date: 11 Nov 2004 06:44:27 -0800

royls@telus.net wrote in message news:<41927ebb.16861609@news.telus.net>...

> Sorry, the email address is just a decoy.

Yeah, mine too. Well it didn't start off that way, quirk@syntac.net
used to go to me long time ago. But I let the domain lapse and frankly
don't miss the spam one bit. In anycase, I would love to have your
email address, in confidence of cource, mine is my initials at trick
dot ca
 
> >A while ago you mentioned that Economic Rents in the Former East German
> >Federal States have climbed to over 20% of GDP.

> >I am astonished. Where do you get your figures from?
>
> 20% is a typical _land_ rent fraction for an urbanized,
> industrialized, densely settled country.

Really? From the geoliberal faq I thought it was in the neighbourhood
of 10-14% in the US? In anycase, I would love a source for the figures
as I have had no luck finding out economic rent statistics.

> Total economic rents could
> easily be much higher, especially given the size of government as a
> fraction of the eastern German economy, and its intrusiveness.

I am particularly interested in the rent legacy of the Treuhand, the
trust that privatized the assets of East Germany during reunification.
A horror show of coruption and patronage, and ofcourse deeply unfair
to the cash-poor East Germans who are now paying rents on the land
values they created to abseentee rent collectors.

Do you have any insight/information about this?

> The typical return to capital investment is low in eastern Germany,
> which is why the government believes it must go to such extraordinary
> and costly lengths to attract it. Subtract the returns to capital and
> labor from production, and the remainder is rent (of course, much of
> the non-land rent takes the form of taxes).

Where would I find numbers for the returns to capital, diferentiated
by the three kinds of Capital? I am not familiar with the sources for
these numbers and so far have come up with very little that is usable.

> I suspect it would be very difficult to make a direct measurement of
> rent in eastern Germany, as so many rent prices are controlled,
> subsidized, etc. and the official economic statistics are geared to
> hiding rents in other payments.

I'm not aware of any unusual rent controls here, I will look into it,
however many people have non-expiring old leases which function as a
sort of a personal rent control, and vacancy rates are quite high,
I've heard that we have 100,000 empty apartments here in Berlin.
However, since many building where purchased for next to nothing from
the Treuhand, the landlords have little interest in investing in these
building, I guess they prefer to wait on making their money from
reselling, and oddly seem to prefer to let them sit empty than to
reduce rents.

They also have "apartment money" (Wohngeld) here, where the government
will pay a portion of your rent if it mathematicly too high for your
income, but yet within dwelling allowances (25 square meters per
person or there abouts).

So you have a funny situation of the government selling building to
absentee landlords who charge excessive rents which the government
then pays them.

Privatization at its best. Privatize the profit, socialize the cost.

> >Basically, as I see it, the East German economy suffers from three things
> >that are easily corrected.
> >
> >Problem Solution
> >------- --------
> >Economic Rent Increase Land Value Taxation, decrease
> > consumption taxation.
>
> It is important to understand that there are two quite different kinds
> of problems with economic rents. The first is the creation of
> artificial rents through measures such as trade monopolies, business
> subsidies, etc. The economy of eastern Germany certainly has far too
> many of those, and IMO it would not be such an easy thing to correct
> them. Too many people rely on them for their livelihoods. You can't
> get rid of them until you allow people other alternatives.

Wouldn't leveraging higher land value taxation and the using that
money to reduce consumption taxes and marginal rates of taxation on
social welfare recipients help?

> >Shrinking/Aging Liberalize Immigration Controls
> >Populations
>
> IMO the widespread problem of stagnant or declining (and in any case
> aging) populations in the industrialized countries is directly
> connected to the systematic robbery of working people through taxation
> of both their earned incomes and their consumption.

I'm not so sure Roy. For instance in the third world, where the whole
world is rent collecting like leaches on an open wound, birth rates
are quite high.

As a new parent, I can assure you that the future tax burdens my child
will face were not among my considerations, nor have I heard it raised
by other new parents.

While I agree, in principal that taxation should be moved from income
and consumtion to rents, I don't think that it has any exceptional
impact on birth rates.

>From what I understand, birth rates correspond best with two things:

1- Life expectancy rates, meaning that communities that live longer
will have less children. Nature is smart huh?

2- Education Rates (especialy for Women), meaning that communities
with more education will have less children.

Given the economic situation in the World it seems natural that until
we have a more equitable global balance of wealth, liberalized
(completely emlinated, imho) immigration policies are the answer.

Immigration controls are problemeatic for other reasons too:
http://noii.trick.ca

> >BTW, are there other places where you contribute writing/analysis
> >besides USENET?
>
> I have been on some email lists in the past, but not any more.
> Moderator censorship on email lists -- extending, in some cases, even
> to alteration of the content of what I wrote -- was just too
> tendentious.

Well if you ever want to start your own, let me know. I can set one up
for you.

> > >Do you have your own website?
>
> No. I probably should, I know, but for professional reasons I prefer
> to remain anonymous for now. Some of my clients would not like what I
> am saying here.

Likewise if you want a website, let me know, you can remain anonymous
if you like.

Regards,
Dmytri Kleiner
Venture Communist.

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