Re: 'Waterhole' and land rents

Dan in Philly <djr8@xxxxxxx> wrote:

In a different thread (Relative Appropiration of Land Rents/georgist crank)
we got:

But undeveloped land can certainly
_yield_ rent, investment or no investment. Consider the guy who just
waits at the waterhole, and charges thirsty travelers for a drink of
what nature provided for free.

Whether the income from the investment justifies
the investment is a matter of speculation. If the
income from the investment exceeds the
investment, there is actual income to the "owner" of
the land in terms of a monetary flow that can be
taxed.

I'm familiar with stuff about land rent (and land tax). But here's a puzzle.

Suppose the waterhole was not obvious; in fact, there's nothing but desert
land everywhere. But a clever person (or maybe someone who is good with a
'divining' rod) figures out where the water is and digs a hole to it.

Usually, we allow for the cost of capital investment (digging the hole,
etc). But here, the big thing is *knowing* where to dig. So, when this guy
charges people to drink the water, how much is (taxable) rent and how much
belongs to the guy?

Dan in Philly

Isn't the guy's knowledge also considered capital?

--
regards , Peter B. P. - http://titancity.com/blog , http://macplanet.dk

"If guns kill, do pencils cause spelling errors?"
.

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