| Subject: | Re: RE: [socialcredit] Questions for Ed Dodson | | Date: | , August 15, 2005 22:11:56 (+0200) | | From: | cymric <cymric @.......nz>
|
Howdy Ed,
I agree with the nature of what you and George see as happening but I disagree
with you interpretation of its nature and its origins.
In your response to W.Ryan and his reference to the A plus B ( responding to
George's claim) you actualy reinforced the A plus B without realising it.
What George and Samuelson have done is observed regulated symtoms and pronounce
the discovery of laws and trends and as one continues in this vein
further evidence of the same dynamics are naturally found. All they are doing
is confirming the existence of a greater dynamic ( relating to cause, generating
symtoms) which their conceptions either cant or dont cant to see.
George's thinking beside this is linial ( which is that which is destroying the
world) and related to one narrow field, real estate, which means he is looking
through a peephole that excludes the context. He is burying himself in
complexity into which people get hopelessly lost, as we have seen here in other
debates, instead of decoding everything through simplicity.
He needs to understand the A plus B, the dynamics of inflation and it big Daddy
the father of dynamics, the debt money system. These are eventually going to
remove 'private property' from society as with the total centralisation of all
power. He would find it easier to read the communist manifesto in one hand and
the protocols in the other. These people blind themselves with false science -
the smoke and mirrors. The deeper they go in a narrow field the further they get
from the big picture.
Sorry Ed but you have a bit of homework in front of you.
Peter H
Ed Dodson" <ejdodson@comcast.net> wrote:
>
> Ed Dodson responding...
> Bill Ryan wrote:
>
> [Dodson] ...location rent is a "first cost" incurred.
>
> [Ryan} Ed, we're trying to pin down first principles. You've
> strayed from the stipulations to my questions in a
> rambling response that fails to address the questions.
>
> Ed here: OK. I'll do my best. What I tried to offer was an explanation
that
> used your specific example.
>
> [Ryan] In this case there is no "first cost." The landowner
> doesn't have to pay rent to acquire the two parcels;
> he already owns the parcels. He didn't pay rent when
> he acquired the parcels because he inherited them from
> a remote ancestor who acquired them by merely filing a
> deed at the land grant office, after meeting certain
> qualifications. The further stipulation is that no
> rent has been collected from the parcels since the
> beginning of time prior to the erection of the
> McDonald's. They had always been vacant land.
>
> Ed here:
> This instance uses the frontier as the "margin of production" (defined
as
> locations on which production incurs no cost for access to land -- i.e.,
> yields no rent under market conditions). The first occupant arrived when
> land in that area of similar potential productivity was freely available
to
> all. As more people arrive, land of equal potential productivity
eventually
> is fully controlled (although not all land controlled is likely to be
> brought into production to its highest and best use, and some will be
> withheld from production with the intent on leasing it out to others or
> selling it outright. IF the owner is able to lease land to others who
then
> cultivate the land or otherwise engage in production of goods or offer
> services, the lease payment is the location rental value as determined
by
> market forces. To the extent this location rent is untaxed, the net
location
> rent will be capitalized into a selling price for land. If, for example,
> investors are expecting a rate of return on investments of 10% annually,
and
> the location rental value of a parcel is $1,000, the approximate selling
> price will be $10,000 (subject to a long list of externalities that
might
> come into play, but, particularly, the seller's sense of future rates of
> increase in location rent).
>
> The fact that your first owner did not pay for the land indicates that
at
> the time the land had no location rental value. At some point in time,
as a
> community grew to include this parcel, its location would begin to yield
> rent because the location was no longer at the margin of production.
Others
> would be willing to pay for access to the location. Thus, the owner (who
has
> inherited the deed to the land) is experiencing imputed rent, meaning
that
> the location, if offered for lease, would yield rent. This location
rental
> value arises because of aggregate community investment, both public and
> private, and not because of what any individual deed holder does with
the
> land held.
>
> Henry George defines rent as follows: "... that part of the produce
which
> accrues to the owners of land or other natural capabilities by virtue of
> their ownership."
>
> In short, rent is a claim on total production that occurs as locations
are
> recognized to have advantages over other locations. These advantages may
be
> natural (e.g., fertility, topography, weather, access to water) or arise
as
> people create communities. Location near the center of a city's business
> district will (all other things being equal) come to have a greater
exchange
> value than locations farther away from where the highest level of
commerce
> occurs.
>
> Getting back to your hypothetical situation, the parcel of land in the
city
> that has been vacant for decades may or may not have a location rental
> value. Most likely it has had an increasing value, but because the owner
had
> no interest in making an investment in developing the site and was
subject
> to very low carrying costs in the form of an annual tax obligation, the
> owner was under to pressure to act -- to develop the site or sell it to
> someone who would. When McDonalds came along, they may have offered the
> owner a price that reflected the owner's expectations of future
increases in
> land values in the neighborhood; or, McDonalds entered into a leasehold
> arrangement that allowed the owner to capture the current location
rental
> value with the prospect of charging more each year as values continued
to
> climb. At some point, McDonalds would have to make a decision to absorb
the
> higher land lease costs or try to find another location.
>
> [Ryan] Is it not correct in Georgist terms that the
> McDonald's a thousand miles from anywhere will collect
> no rent in the foreseeable future inasmuch as it will
> presumably have no sales; whereas, the McDonald's
> surrounded by hundreds of homes will collect rent
> because it will in fact have sales?
>
> Ed here:
>
> If McDonalds establishes a restaurant at the margin of production, but
the
> margin of production has extended out where no one is willing to pay
> anything for access, then McDonalds will have access to that land rent
free.
> They would not receive location rent (either imputed or actual) becuase
the
> location yields no rent in the market.
>
> If McDonalds acquires a location in a bustling city, the location will
> likely have a high location rental value. The owner from whom McDonalds
> purchases the deed to the site will be the big winner (provided the
> community, as most communities have done to date, failed to collect the
> rental value via taxation. Under typical conditions today, McDonalds
pays a
> huge price for control over the land but from that point on may be a net
> beneficiary or victim of all the combined taxes levied on the land, on
the
> building, on its gross revenue, on its equipment and on its fixtures.
>
> McDonalds in the bustling city will likely experience an imputed net
> location rent, but still may not be profitable if its gross revenue
> forecasts fall short, or its other costs of doing business rise.
>
> Let me add one other possible scenario. McDonalds acquires from the
> long-time landowner a city block, constructs a 50-story office building
on
> the site and puts in a large McDonalds restaurant on the street level,
and
> leases out space to other businesses. In this case, McDonalds will
collect
> location rent from the other businesses who lease space in the building.
> Some portion of the tenants' total leasing fee is a return on capital
goods
> (i.e., on the building), and some portion is a return to the location.
>
> I hope this provides the clarification you were asking for.
>
>
>
>
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