Re: Economic Rent in Terms of Risk Free Interest Rate

ruetheday@xxxxxxxxxx wrote:

What is the strongest presentation of the >Georgist position and its refutation? 


The most straightforward presentation is:

1. Land rent arises from the activities of the surrounding community
rather than the landowner and therefore represents an externality.
2. The supply of land is perfectly price inelastic because it exists in
a fixed quantity and cannot be created.
3. Because of number 2 above, a tax on land rent will fall wholly on
the land owner and will also impose no deadweight loss on the economy;
additionally, it will correct the externality in 1 above by returning
the rent to the community that created it.

There is no logically consistent refutation of any of this that I am
aware of.



I've posed two, neither of which is very good. They're both
too complex, and weak. They both equivocate soundly
the fundamentals.

1) Land rent is sufficiently normative as to be irreplaceable.
This more goes to the cost of replacing it than its
pure-ethics effects. It's a political, rather than ethical/
economic arugment.

This is one argument, the most compelling one used to
justify slavery in the Antebellum South. I specifically
use the plight of former slaves to argue that the effect
was, for one hundred years after ( or more; we
still fight with it ), devastating. Another means of
opression was readily available.

Nobody reasonable can defend slavery, but the cure
was terrible. Rent is even more widespread, there's
no reason to beleive it won't be even worse.

2) Land rent plays a positive role in the overall
economy, despite its apparent violation of rights.
The violation isn't absolute anyway; land use is
still fungible. Removing land rent would irreparably
harm the capital store ( rent is currently badged as
a capital gain ) of the world, and possibly cause
severe deflation.

A severe enough deflation could cause the end
of the present increase in standard of living.
This could cause a Dark Ages.

The other criticisms I've read question the
blatantly Puritan assumption that labor is
a more morally correct font of value.

This is a good assumption, but not a great one.
It shows even more wear as machine automation
begins to make real inroads in replacing humans.

--
Les Cargill
.

Relevant Pages

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