Re: The monopolization of the air and Georgism

From: Igor (jjweatherby_at_houston.rr.com)
Date: 01/23/05 

Date: Sun, 23 Jan 2005 01:12:19 GMT

Robert Vienneau wrote:
> In article <Ce_Gd.26175$Ta2.11055@fe2.texas.rr.com>, Igor
> <jjweatherby@houston.rr.com> wrote:
>
>
>>royls@telus.net wrote:
>>
>>>On Thu, 13 Jan 2005 21:59:07 GMT, Igor <jjweatherby@houston.rr.com>
>>>wrote:
>
>
>>>>royls@telus.net wrote:
>
>
>>>>>Land is a canonical example of monopoly in classical economics,
>
>
>>Give me a citation. One quotation... I bet you can not find one. I
>>have read Ricardo, Smith, some of George, and even Marx not once have I
>>seen an apriori assumption that land ownership is a monopoly. Put up or
>>shut up. Cite one classical work.
>
>
> As for "apriori" (sic), I don't think that word means what you think
> it means.
>
> "Landed property presupposes that certain persons enjoy the
> monopoly of disposing of particular portions of the globe as
> exclusive spheres of their private will to the exclusion of
> all others. Once this is given, it is a question of developing
> the economic value of this monopoly, i.e. valorizing it, on
> the basis of capitalist production... In the section on
> 'Primitive Accumulation' (Volume 1, Part 8) we saw how this mode
> of production presupposes on the one hand that the direct
> producers are freed from the position of a mere appendage of the
> soil (in the form of bondsmen, serf, slaves, etc.) and on the
> other hand the expropriation of the mass of people from the
> land. To that exent, the monopoly of landed property is a
> historical precondition for the capitalist mode of production
> and remains its permanent foundation... But the form in which
> the capitalist mode of production finds landed property at
> its beginnings does not correspond to this mode. The form
> that does correspond to it is only created by itself, with the
> subjection of agriculture to capital; and in this way feudal
> landed property, clan property, or small peasant property...
> is transformed into the economic form corresponding to this
> mode of production, however diverse the legal forms of this
> may be... [T]he capitalist mode of production... on the
> one hand... detaches landed property property completely from
> the relations of lordship and servitude, while on the other
> hand it completely separates the land as a condition of
> labour from landed property and the landlord, for whom
> moreover this land represents nothing but a certain monetary
> tax that his monopoly permits him to extract from the
> industrialist capitalist, the farmer."
> -- K. Marx, _Capital_, Vol. 3, Part 6, Ch. 37.
>

The problem here is Marx uses monopoly wrong. He is refering to
collusion of oligolopist NOT A MONOPOLY. He says monopoly but what he
meant was collusion by oligopolist. Marx makes the same mistake Roy
makes. He says a CLASS of people having ownership makes a monopoly. This
is as silly as saying farmers have a monopoly over food but they control
the food supply. For a monopoly to exist landowners or farmers would
have to collude. A group of people having ownership does not make a
monopoly. The farmers are class of people who own all the means of
production for farming does not mean they are a monopolist. The
individual farmer or the individual land owner HAS LITTLE TO NO POWER TO
SET PRICE. Marx is not using the terms as a modern economist would. Nor
is using the term as other classical economist would.

> Did the classical economists assume that land was inelastic in
> supply? Here's the opinion of one economist:
>

Who cares that is not the point. The point is that Roy assumed that land
tax have no effect on MARKET RENT. This can only occur if the supply of
land is perfectly inelastic. To reproduce George's analysis in modern
understanding of taxation you must assume perfectly inelastic supply.
George, to my knowledge, makes no mention of elasticity. I am not sure
of the exact dates but I believe he may have written before the marginal
ist revolution took hold. So elasticity would have been somewhat of a
foreign concept.

> "Likewise in classical economics, land in the sense of nature's
> endowment of inorganic resources is taken to be an *exogeneous*
> factor of production, relatively fixed in supply. By contrast,
> in the pre-1850 classical view, labour population is in the
> long run a factor readily reproducible, being in effect expandable
> at the cost of subsistence wages, the needed fodder.
>
> In the language of a post-classical generation of economists,
> land supply is a *vertical ss* schedule in a plot of (land
> supplied v. factor rent). By contrast, labour supply is a
> *horizontal s's'* schedule in a plot of (population v.
> real wage rate)."
> -- Paul A. Samuelson, "Land". _The Elgar Companion to Classical
> Economics_. 1998.
>

I would need to read the context Samuelson is stating here. My guess is
he refering to a certain set of models. Sameulson and others would
realize that the supply of land would not be perfectly inelastic at all
price ranges. This would imply that if the land were being given away
free as many people would part with land if land sold for 10 billion
dollars. This is an impossibility. Land or ANY other good will not be
perfectly inelastic over all price ranges.

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