And, is it actually a historical fact that George's
books were banned
by the Nazi party of Germany? I
would like a citation for that,
too.
Citations:
William
Vickrey, "The City as a Firm", in Martin S. Feldman and Robert P. Inman,
The Economics of Public Services, London: Macmillan, 1977,
p.334.
Joseph E.
Stiglitz, "The Theory of Local Public Goods", in Feldstein and Inman, The
Economics of Public Services, London: Macmillan, 1977, p.
282.
Regarding Henry
George and the Nazis, see:
Michael Silagi
and Susan Faulkner. "Henry George and Europe: in Germany..." American Journal
of Economics and Sociology, July 1993. Here's an excerpt:
"AT ABOUT THE SAME TIME as the German
Imperial Commissioner of the Kiaochow, China, Territory, Ludwig Wilhelm
Schrameier, composed his memorandum about the land and tax problems in the Far
Eastern colony, the Berlin primary schoolteacher Adolf Wilhelm Ferdinand
Damaschke (1865-1935) founded, with a few members of the defunct Flurscheim
group, a land reform organization, which, beginning in 1904, called itself the
Union of German Land Reformers--a second organization with that name. The
significance of Adolf Damaschke for the further development of the land reform
idea in Germany is described by Theodor Heuss in the New German Biography as
"fateful."(1)
As leader of, and spokesman for, the German land reformers
until his death in 1935, Damaschke gained for himself, after Henry George, the
greatest name in this movement."
I do not know
whether Damaschke was executed by the Nazis or died of natural causes. In
1935, his book A Struggle for Socialism and the Nation was published.
Assuming this book presented any kind of a challenge to Nazi power, he may
have suffered the consequences.
Regarding interest:-
"Interest is viewed in Henry George's analysis as the
legitimate,
market-derived return to capital goods
invested in production."
-
That would be using the term "interest," as the
classical economists
did, in the sense that today
most of us today mean by "profit." But
what about
interest on bank loans? The Georgists I am recently
encountering place that in the category of "rent,"
something ipso
facto "evil" in their ideology.
Specifically, is it "evil" for banks
to collect
interest on home mortgages?
Ed
here:
I have had
something of a running debate with Georgists who hold to this view. I see
the situation as more complex than this. When we make deposits of
our currency or electronic equivalent into our bank account, we expect the
bank to pay us something for having use of our purchasing power. The bank
has to pay for staff, facilities and equipment; so, why should we expect that
the bank would not charge us interest when we borrow from the
bank?
Add the dynamic
of the secondary market. Here, an institutional investor such as Fannie Mae or
Freddie Mac issues bonds to raise funds. The bond holders expect to receive
interest for transferring their purchasing power to Fannie or Freddie. Fannie
and Freddie match these liabilities with mortgage loan assets they purchase
from banks and mortgage companies. The mortgage loans have to yield enough to
pay off bond holders, cover overhead and return a profit to
shareholders.
The injustice
inherent in our system is the element I have previously written about:
the power of government to self-create credit by the issuance of bonds in
exchange for Federal Reserve Notes printed and put into circulation by
government spending.
In the United States it
usually works like this: The
construction of the home is financed by
a short-term
loan to the builder, which is paid off when it is
sold to
the final consumer, who finances his purchase
through a long-term
mortgage.
Ed
here:
Exactly, and a
model of market efficiencies at work.
The process enables homes to be built and consumed
that would
otherwise have never been built. Or would
you argue that it
doesn't? You don't see that
happening in places with antiquated
financial
systems, primitive ideas about "usury," etc. Those
places are permanently condemned to poverty, are they
not?
Ed
here:
I agree. FHA
guarantees to savings banks brought long-term financing to homebuyers and
triggered the explosion in home ownership in the U.S. The creation of the
secondary market brought the same financing structure at the same interest
rates to all parts of the nation. The introduction of the adjustable rate
mortgage and then mortgage-backed securities has made the market even more
liquid and efficient. And, yes, the absence of this type of financial
infrastructure (combined with title insurance, licenses and inspections,
appraisals required to obtain financing, and sophisticated approaches to
evaluating the creditworthiness of potential homebuyers/borrowers) has
condemned many people in the world to terrible housing.
As good as the
U.S. system is, the situation could be that much better if the Henry George
approach to taxing land and untaxing property improvements were in
place.
RE: OWNERSHIP: Own
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