Georgism is Insane

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Henry George (1839 – 1897)

Georgism has to be the most ridiculous concept ever contrived. I think communism might even make more sense than this. However, I will say the Georgists are a good deal more polite than mutualists.

The idea here is that anyone who uses space (not necessarily land, water too) deprives others from it, and thus should pay “the community” compensation for that deprivation. Essentially, its a property tax, but its based on the value of the land alone, not the improvement per se. This opens up a whole bunch of questions. Who assesses the value of land? Georgists seem to say that the value of land is not the same as its sale price, which is of course ridiculous. Sale price is value. And value to you might be different than value to me. I may want an acre of woods, and value it very much. A friend might find the same to be near worthless. As we know, value is subjective. They seem to think there is an immutable value of land, and its not entirely clear whether they think the value of land can change. Some seem to say yes, noting that land in cities has more value than in the country.

Georgists have a bit of arrogance and presumptuousness to them quoting Locke and Smith as authorities that they are not. Economics and law are evolving philosophies. They assert that because these two said that land cannot be totally owned, only rented from the community, that makes it so. But what even is that community? That is the next question. Even if the land is assessed, what is the level of tax to be paid? Who decides this? They say the community, but that of course, requires compulsion. I want my land to myself, who are you to say otherwise!

Once landowners have paid “the community” for monopolization of the land, what happens with this money? Some have suggested an equal dividend to all, but where does this begin and where does it end? How do you distribute all that money? The logistics problem is the problem of socialism, and given that Georgism has a seed of socialism in this, it has the same problem. Others say the basic services of government will be spent with this money. That produces another question: what services? Roads? Railroads? Airports? Ports? Channels? Police? Courts? Military? Healthcare? Etc. Some have said that the taxes will necessarily be limited so not that much in the way of services can be provided, which is a good thing, if true.

What is the reason for all this? Well, Georgists assert without any evidence that everyone has an equal right to any land. So by using it, you are depriving everyone else of it. They point to the fixed amount of land as the reason. However, there is a fixed amount of everything. If I use some iron, you cant use it. Should I pay you? And everyone else in the world? Georgists say this does not apply to anything except land, without explaining why. The thought is this will prevent land speculation and claiming up of land without using it all, but is this really a problem? The Georgist says instead of paying rent to some arbitrary landlord, you would pay it to a community. There are a lot of questions about how housing would work, especially in cities. In all likelihood, they might be right that this would reallocate land in a better way and put vacant land to use. But it also causes a lot of questions and problems. If the tax goes up on a plot, people might lose their homes. Of course, the rate could be locked in for life, but then can I bequeath it to my descendants or a chosen heir?

There are a whole lot of questions and problems with Georgism still. The main thought is that the tax on the value of the land will vary and encourage people to make the most use of the land. Fair enough, but as above, that could kick people off their land. Given that same high tax in a dense and productive area, how would housing work? Would there be individual owners forced to pay the tax regardless of their ability? Who are Georgists to demand they earn more than they may want to? Or what of rentals? Communists, mutualists, and Georgists dont seem to understand what rent is. Its not just a payment for nothing. You are paying for the use of space, the building, the infrastructure, utilities (maybe), maintenance, etc. It seems that a land value tax would take up 100% of the “surplus” rent. Therefore, a landlord makes no profit unless he provides other services, and he probably will, but why do anything at all? And will a beautiful peace of land with a nice view become unavailable to the poor? I also foresee this creating some ridiculous property maps where people do their best to use as little land as possible and create blobs that are connected by paths, which end up leaving random splotches of vacant land everywhere.

The Georgists still have a lot of questions to answer. In some ways, it defies logic and sanity. In other ways, its a better system than others. Property based taxes are one of the least bad taxes, and can be controlled better than income or sales/VAT, but still are taxes. I would have no problem seeing it tried out in a town somewhere. Indeed, New Hampshire is one of the most property tax reliant states. This has its pros and cons. Our property taxes are very high, but thats one of the only taxes you pay (no income or sales). And in most places, you get to vote on it directly. But as someone once said, Georgism takes the worst of communist and anarchocapitalism into one ideology.

 

PS: If any Georgists happen upon this, feel free to comment with answers. I will update the post accordingly if they satisfy.

UPDATE: A Georgist blogger fisked this post, and I have now written a response.

9 thoughts on “Georgism is Insane

  1. “Georgists seem to say that the value of land is not the same as its sale price.” Cite just one Georgist who has asserted this. You need to back up your false claims with citations.

    • Thank you for your response and criticism. This was intended as a far from perfect criticism largely based on “Geolibertarianism FAQ” by Justin Keith. I would be happy to read any other works of quality as long as they do not drone on incessantly as political philosophers are known to do. In any case, what is the value of land then? Is it based on the sale price? Is it based on some arbitrary assessment? There is a reason I said seem to say. If people are misunderstanding your theory, it is your duty to clarify.

  2. “They seem to think there is an immutable value of land.” Another false statement. No Georgist has ever said this. You make up false statements, and then accuse Georgists of being ridiculous? Tolstoy was right: nobody argues against Georgism. The opponents can only argue against a falsification of Georgism.

    • The claim appears to be intimated by Georgists, as it does by most Marxist descendants. That things have fixed values. WHAT exactly is the tax based on? How would it be applied? What I have seen of Georgism is that either there is some fixed value or it should be some assessed value.

  3. ‘It seems that a land value tax would take up 100% of the “surplus” rent. Therefore, a landlord makes no profit unless he provides other services, and he probably will, but why do anything at all?’

    What a bizarre statement. Today a landlord invariably charges the full rental value of land already, so by the same token why would a tenant bother renting if they do not get any of that surplus rent? For the subjective utility value of the location and the building, because we all need access to land so must either rent or buy our way in the market.
    A good landlord will indeed gather a higher yield than others who pay the same LVT by providing services via better capital allocation and services as a building manager. They will bother if their labour has value, if they are not competitive then they will sell to another landlord who is or an owner occupier,who like a tenant will be attracted by the utility value. Why should landlords need what is an implicit subsidy to remain landlords? If they stop becoming landlords the land doesn’t go away.
    Btw LVT does not collect 100% of the surplus rent, that depends on the rate and even George himself did not advocate full collection of the rent on practical grounds, what it does is lower the capitalised price whilst incentivising efficient use, so landlords will chase rental yields rather than capital gains.

    • Thank you for your response and criticism. This was intended as a far from perfect criticism largely based on “Geolibertarianism FAQ” by Justin Keith. I would be happy to read any other works of quality as long as they do not drone on incessantly as political philosophers are known to do. In any case, what exactly is surplus rent and who is Henry George to decide it exists? This reminds me of surplus value from the Marxist Labor Theory of Value.

      Georgism seems to all be hinged on the claim that no one has any right to use land to the exclusion of others, but that could be applied to anything in the universe. I am using my computer and keyboard to the exclusion of you. Indeed, communists make this very claim about all property, leading to the toothbrush debate and jokes. Georgists seem nothing other than half-baked Marxists and like mutualists always seem super triggered when you question their holy liturgy.

      So are you saying that the rent would be paid to the tax, and then anything else for services by the landlord? The landlord has no right to make money from use of the land? That is to say, that the rent would remain theoretically the same amount for everyone, but much of it would go towards the tax instead of the landlord?

      Why does efficient use need to be incentivized? That sounds like social engineering to a preferred view. There have been criticisms that this would drive owners off their land, such as grandma or multigenerational farmers, etc. I know the theory is that it would largely impact urban areas, not rural.

  4. I’m trying mightily, but failing to discern any Jewish perspective in any of this article. Perhaps if you related your assertions in some way to the Torah or Halakha, it might make some sort of an argument.

    In the meantime, you might consider the words of a slightly famous Jew by the name of Albert Einstein, which he wrote in 1934 to George’s daughter, Anna George DeMille, feminist and advocate of Georgism in her own right, and mother of the famous choreographer, Agnes DeMille : ” Men like Henry George are are rare unfortunately. One cannot imagine a more beautiful combination of intellectual keenness, artistic form and fervent love of justice. Every line is written as if for our generation. The spreading of these works is a really deserving cause, for our generation especially has many and important things to learn from Henry George. ”

    Einstein, of course, is widely considered to be one of the most intelligent people to ever have lived. I’d be wary of attempting to gainsay him, if I were you.

    Henry George was not the progenitor of the ideas which he compiled in “Progress and Poverty” in 1879, but the intellectual descendent of giants, going all the way back to Aristotle and even Mengzi, who wrote of land value taxation in the 5th Century BCE. The core of Georgist philosophy is this: that the Universe was created by G-d for the use of all His children, and therefore no individual may claim any part of it as her Property. Nature, therefore, belongs by right to all the living in common, by virtue of the mere fact of their existence. This right, like all rights, must be equal throughout all time and space, or rights could not be said to be “rights”, in the first place. No accident of birth in time or space can possibly suffice to create a superior claim to any part of Nature. All the living then on Earth at any given time have at least a theoretical, if not entirely practical, right to contend for the exclusive use of any part of Nature.

    Now, we recognise, of course, that security of land tenure and a complex division of labor are necessary for the development of any advanced civilisation. So, we must somehow square our common ownership of Nature with the need to codify the exclusive use of certain parts of it. The only way this is morally justifiable is if each person returns to the community the value of that which they reserve for their exclusive benefit.

    Georgism recognises a fundamental, essential difference between claims of Property in Nature, and claims of Property in the produce of human action. Gerogism rejects the idea that Nature can be Property, and George showed conclusively that any claim of Property in Nature is inherently a denial of any claim to Property in the produce of human action, and vice versa.

    That you seem to believe these ideas open up unanswerable questions does not by any means imply, much less prove, that you are correct. In fact, Georgist principles have been practically applied over and over again in our history, and have always proven successful. Most of the great cities of America and many worldwide owe substantial amounts of their prominence and prosperity to the application of Georgist theory at crucial points in their history. I invite you to investigate.

    You seem to have a fundamental misconception of the difference between “rent”, as an economic function, and “rent” as a collquialism for the contract payments made for the loan or use of property. These are two different things, and until you understand the difference between the two, you will find yourself increasingly confused.

    “Progress and Poverty” is admittedly a large pill to swallow. I often suggest to people that they begin first by reading the much more concise work of George’s follower, John Sherwin Crosby, “The Orthocratic State” (1915), perhaps the best primer on Georgism and libertarianism both ever published, and notably, published years before Ludwig von Mises’ “Nation, State, Economy”, in case anyone was still operating under the very mistaken impression that von Mises was the progenitor of modern libertarianism.

    • Thank you for your response and criticism. This was intended as a far from perfect criticism largely based on “Geolibertarianism FAQ” by Justin Keith. I would be happy to read any other works of quality as long as they do not drone on incessantly as political philosophers are known to do. In any case, this blog isnt concretely tied to Judaism. It is Judaism and libertarianism, combined. Given that Henry George was not around in biblical times, it would be unfair to expect any response to him from the Torah. That is in fact a fallacy.

      Einstein is a self-described socialist and no authority (yea yea appeal to [non]authority) on Judaism, so his opinion is largely irrelevant. He was a physicist.

      The core of Georgist philosophy is this: that the Universe was created by G-d for the use of all His children, and therefore no individual may claim any part of it as her Property. Nature, therefore, belongs by right to all the living in common, by virtue of the mere fact of their existence.

      This is the principal claim of Georgism, but it is without any basis. The Torah does say or imply that all land is owned by God, but there is no demand for rent collection back to Him. If your logic is followed thru, the money should go to Him, not “the community”. The problem with this is self-evident, and He makes no claim to it. Nowhere does it say the land or nature or universe is for all collectively “in common”. In fact, it very clearly in the Torah is stated that various specific portions of Israel are for each tribe, and elsewhere for the Nations. As I said to another commenter, by this logic, you could say that I am excluding you from the use of my computer. What right do I have to do so? Indeed, Marxists DO make this claim to all property, which is why Georgists are essentially half-baked communists.

      I do understand the difference between rent as payment for use and rent as undeserved income. Georgists seem to predatorize on this deliberately so they can do exactly what you are doing and cause confusion. Why not use completely different or fully defined words then?

      I appreciate the recommendation. I am not a full time philosopher, but I will take a look at “The Orthocratic State”.

      The issue really is the fundamental claim is not proven. George just asserts it, makes vague and incomplete justification, and then moves on. That really should be the focus of the criticism, but it is difficult to remain there, especially with the cascading absurdities of the ideology, ending with where does all this tax money go? Services? Thats not libertarian, and who decides that? How? Why should they? A universal basic income? Maybe, but that ends up kind of circular.

      Ultimately, I would love for us all to be able to set about trying out our theories in various polities and see what works. Arguing only gets you so far beyond mootness.

  5. Pingback: Georgism Revisited | Jewish Libertarians

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