|Subject:||Re: [socialcredit] RE: OWNERSHIP: the "single tax"|
|Date:||Friday, December 10, 2004 20:09:33 (-0700)|
|From:||martinh <martinh @....net>
I was always under the impression that George's "single tax" was on
unimproved site values - developers can certainly be rewarded for what
they do, but Mother Nature has made some areas richer or more convenient
than others, and "rent" is the monetary value of the saving in human
labour between the better site and one that has lesser commercial value.
Land prices similarly are related to rent through the cost of mortgage
So control of credit in the end leads to control of natural resources. The
rich enjoy the rents, and the poor either pay them or go homeless.
Martin Hattersley: 1970-10123-99 St.
Edmonton, Alberta, Canada T5J 3H1
On Thu, 9 Dec 2004, Ed Dodson wrote:
> Ed Dodson responding...
> Bill Ryan wrote (12/9/04):
> Ed Dodson (previously): Nature has a zero cost of production in terms of
> labor expended and/or capital goods utilized. "Rent"
> is the measure of the difference between locations
> and between natural resource-laden lands. There are
> just not enough "best locations" and "best natural
> resource-laden lands" to go around. So, some come to
> have more exchange value than others, the difference
> having nothing to do with what the individual deed
> holders do or do not do.
> Bill Ryan: This train of logic contains several suppositions
> that are open to challenge. I'll touch on only some
> of them.
> You equate "rent" to differences in exchange values
> and conclude that those differences have nothing to
> do with what individual deed holders do or do not do.
> This seems to arbitrarily exclude private development
> from the equation and ignores the benefit to the
> entire community when development occurs. To the
> extent the private developer personally benefits from
> the development, which is not cost free to the
> private developer in any real sense, those benefits
> are earned by the developer, are they not? To the
> extent the entire community benefits from the
> development, which would not have occurred without
> the development, the benefits the community receives
> are unearned by the community, are they not?
> Ed Dodson here:
> The constant refrain from those involved in the real estate trade is:
> "location, location, location," meaning that the highest potential returns
> to the investor are to be found where there is the highest competition to
> locate in an area. These highest value locations exist where population is
> large and (generally) possesses strong purchasing power, where the community
> has committed huge amounts of resources to infrastructure (e.g., clean
> water, modern sewage treatment, police and fire protection, quality
> educational opportunities, efficient public transit, etc. etc.). This level
> of investment occurs over time -- decades or centuries. The desirability of
> the community is based on aggregate public and private investment. An
> extreme example of how a public policy decision turned almost worthless
> locations into increasingly valuable ones is Las Vegas, Nevada. What created
> the value there, what attracted individual investors? The state created a
> special privilege for owners of land by approving casino gambling. Public
> funds were used to construct roadways, an airport, to bring water from the
> Colorado River, and so on.
> Even when a developer creates a new community out of farmland (e.g., Reston,
> Virginia or Columbia, Maryland), these communities attract investment and
> population only because of external public investments. Either there is a
> nearby interstate highway or government announces plans to extend the
> highway system to the area. Either there is a nearby airport capable of
> handling jetliners or government announces plans to construct one. These
> "new towns" are, in effect, edge cities, creating a competing employnment
> center to attract workers who are living in the suburban fringes of an
> existing metropolitan area, such as Baltimore, Md. or Washington, DC.
> Bill, you do ask an important question which is at the heart of the moral
> issue of what constitutes societal versus individual property. I subscribe
> to Henry George's ethics, to the labor and capital goods basis for
> individual property. Thus, taxation of the wealth created by labor and
> investment of capital goods is unjust. Charging private individuals and
> entities the full location rent in return for access and the right to
> develop parcels of land is, on the other hand, entirely consistent with
> Ed Dodson (previously): This exchange value has to do with the fact that
> supply is finite, population keeps increasing and the
> demand for locations is infinite.
> Bill Ryan: Supply is definitely not "finite," because of
> discovery, innovation and development. And demand in
> the economic sense is definitely not "infinite"
> because it is satiable. Even the manic glutton let
> loose in the five star restaurant with an open tab
> will reach the point where he will not eat another
> Ed here:
> We have yet to develop the technology for any large-scale establishment of
> communities floating on the ocean surfaces or attached to the seabeds. And,
> as the apparent effects of global warming seem to be escalating, our ability
> to continue to live in low-lying coastal areas is at risk. Entire cities
> (e.g., New Orleans) could potentially be destroyed by flooding and storm
> surges in the foreseeable future. So, as the earth itself is a finite
> sphere, the portion of the earth that is habitable is more or less finite.
> Some portions of the earth become over time more habitable and some less.
> Deserts expand here, contract there. Some ocean communities lose their
> beaches, barrier islands disappear, while elsewhere the beaches get wider
> and wider every year. As Will Rogers once said, "Friend, buy land, they
> ain't making any more of it."
> As for the demand side of the equation, we can see around the globe that
> wherever purchasing power of workers increases, there is an unlimited
> aggregate demand being created for the "goods of a decent human existence"
> that many of us (a minority of the world's population) take for granted. We
> are a very very long way from even reasonable desires of people being met as
> we also struggle with the introduction of sustainability as a fundamental
> developmental value.
> Ed Dodson (previously): My perspective, then, is that the failure of society
> to collect this fund for use by all of society (even
> for partial distribution to each citizen as a
> dividend) "is more akin to theft."
> Bill Ryan: But you're talking about land. "Fund" refers to
> money, something quite different, right? Where does
> the fund exist that can be taxed? Is not the "single
> tax" tantamount to abolition of private ownership in
> Ed here:
> There was a time in history when the lord of the manor took a share of the
> peasant's crop as rent. Then, the development of coinage enabled people to
> move into the cash economy and the widespread establishment of markets. We
> pay for goods and services today with currency (or, its electronic, bank
> balance, equivalent). The competitive bidding process determines the rental
> value of land (subject to whatever restrictions on use are imposed by
> government). Potential users of land will tend to bid more when restrictions
> are few or nonexistent, less when there are more restrictions. The fund
> exists as the surplus of wealth (i.e., of goods) produced above what
> legitimately belongs to people as a market-derived return to their labor and
> as a market-derived return for the investment of capital goods. Our system
> of currency and credit monetizes the exchange value of this wealth.
> As to whether the "single tax" is "tantamount to abolition of private
> ownership in land," the amount of location rent the community will receive
> is as I suggest above dependent upon what restrictions the community imposes
> on use of land. The rental value is also a factor of how well the community
> protects the individual's rights to enjoy access without undue interference
> and the protection of whatever improvements are made on the land. I can be
> just as secure in my tenure under a leasehold situation as when I hold the
> deed. In either cirucumstance, what is most important is the enforceability
> of the terms of the contract entered into -- the honestly of government
> agents when it comes to enforcing the law.
> Bill Ryan: If so, it is incumbent on you to demonstrate with a
> preponderance of evidence that centralized "non-
> profit" land management by some politburo is
> inherently superior to decentralized management for
> profit, in terms of the public welfare.
> Ed here:
> Government is often a terrible steward of the public domain. Agreed.. I don't
> know how you made the leap from what I have suggested to the idea I would
> support "land management by some politburo." That said, there is the need
> for regional, national and international cooperation regarding land use.
> Pollution respects no borders. Communities sharing rivers and lakes need to
> work together. I am reminded of Carl Sagan's comments about viewing the
> earth from space. No borders can be seen from space. The nation-state is a
> purely artificial and contrived entity conceived to enfore geo-political
> control over some portion of the earth to the exclusion of all others.
> Bill Ryan: Moreover, it is a fact that private ownership in land
> is what we now have. You will have to further
> demonstrate that confiscation will not do more harm
> than good in the disruption that would inevitably
> result. That is the practical reality you do not
> address, is it not?
> Ed here:
> Henry George undestood that the insecurity people experienced throughout
> history was intimately related to being landless. Owning a piece of land and
> your own house means that every year one does not have to face an increased
> payment to the landlord (notice that we still use the term "landlord" to
> describe the person or entity to whom payment is made to live in an
> apartment). There is enough very sound and mainstream economic literature
> making Henry George's case. See Paul Samuelson's basic economics text, as an
> example). As for demonstrations of the real world impact, these are slowly
> beginning to emerge. The proposals put forward by the Controller for the
> City of Philadelphia, if adopted, would put the theory to a good test. As of
> now, all we can point to are the communities that have restructured their
> property tax system to impose a higher rate of taxation on the assessed
> value of land parcels, while simultaneously beginning to reduce the tax rate
> on buildings. These communities all experience increased investment in new
> construction and renovation, even though the financial effect on property
> owners is rather modest (given that the school districts collect most of the
> property tax revenue and have not adopted the same tax rates as the city
> governments involved).
> Bill Ryan: It is the reality that every utopian schemer avoids.
> But hell, on to the Winter Palace!
> Ed here:
> Bill, I have spent over thirty years in the trenches working to revitalize
> communities where housing is falling apart, where there is concentrated
> poverty and where the private sector has made almost no investment. No until
> I came to understand the impact of taxation policies on communities did I
> find the tools to potentially turn this situation around for good. Changing
> the tax system is not the only thing in need of drastic improvement. But,
> without it, the liberty you seem to cherish will be continuously diminished
> in the face of class divisions and an ever-increasing concentration of
> wealth and political power.
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