Income, Earned Versus Unearned
Some years ago, I asked myself a question: What is an investment, and how does it differ from an act of speculation? I'm getting closer to an answer, especially after hearing Seth and Justin interview two authors on the topic of a man who has become largely myth, and about whom we know almost nothing: Henry George.
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Actually Marx did this as well.
Henry George is largely correct when it comes to land economics, but there are other forms of monopolistic markets as well.
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And George's ideas about scarcity economics has been applied to non-land scarcity as well, for example radio spectra. It's about as limited as land.
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Marx's insistence on labour as the ultimate source of value is derived from the principle that natural resources only has value in terms through the potential involvement of labour and that it fairly obviously precedes capital.
The radio spectrum is "land" in an economics sense as well. I was referring to produced goods that are monopolistic, which is somewhat outside the orthodox Georgist point of view, and come with the unfortunate title natural monopolies (the "natural" is the inevitable economic effects, not that they appear in nature).
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I've not read enough of either to distinguish this for myself, but read enough in the notes from others to know of Marx's over-insistence on labor being the sticking point, especially for later Marxists.
I also glean that the two did not agree on enough to be significant. From the George Wiki:
Although both advocated worker's rights, Henry George and Karl Marx were antagonists. Marx saw the Single Tax platform as a step backwards from the transition to communism. On his part, Henry George predicted that if Marx's ideas were tried, the likely result would be a dictatorship.
The radio spectrum is "land" in an economics sense as well.
I think we agree on that.
I was referring to produced goods that are monopolistic, which is somewhat outside the orthodox Georgist point of view, and come with the unfortunate title natural monopolies. . . .
Scanned the wiki you linked, and saw that it largely meshes with the Georgist view.
Mill also applied the term to land, which ( ... )
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The primary role of the land value tax appears to be ensuring that the state (aka the ruling class) controls access to available land. Any tax high enough to discourage speculation will by definition be high enough to price individuals and small time operators out of the market.
George seems to have commited the same fundemental mistake as Marx in thinking of value as a fixed, almost physical, property rather than a largely arbitrary variable.
Due to the above, discussions of earned vs. unearned income and wealth are problematic because the criteria and quantities involved are subjective, arbitrary, and subject to change.
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While I haven't yet read George directly, what I've read by his supporters insists that the opposite is true. Larger operators have the luxury of sitting on resources as long as the tax is low enough (as it seems to be). If, for example, the cumulative banks holding foreclosed real estate off the market were forced to bear larger yearly holding costs, those foreclosed properties would be forced to the market much, much sooner, lowering the cost of properties in general.
George seems to have commited the same fundemental mistake as Marx in thinking of value as a fixed, almost physical, property rather than a largely arbitrary variable.I'd agree with that, but would not characterize this as a "mistake". The act of monetizing assets (and taxing that monetized value as opposed to a fixed value) distorts land, for example, in other ways, many of those ways exactly necessary to create ( ... )
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I'm sorry but I don't buy it. What this really is, is a rather transperant attempt at discouraging private land-ownership outside big cities. Farmer has a bad year and doesn't make enough of his crop to cover his LVT? Take the farm. Some dude running an independent game preserve? can't have that now can we? Do you think you own the land your house is sitting on? you don't.
i'd agree with that, but would not characterize this as a "mistake". The act of monetizing assets (and taxing that monetized value as opposed to a fixed value) distorts land, for example, in other ways, many of those ways exactly necessary to create speculative bubbles.
There is no such thing as "fixed value". Value fluctuates wildly from person to person and market to market. We monetize assets because it is very difficult to cut a cow into beer sized chunks and there's no guarantee that the bartender likes beef. Money is merely a convenient way as keeping score, its worth is determined as much as by what you can ( ... )
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When you say that a loaf of bread costs $2.75 you're also saying that a dollar costs 0.36 loafs.
Meaning that, at that time, there is enough money out there in the hands of people to price the amount of bread available at that rate. Ah, but what if the mean average amount of money was out there to price bread thusly, but the median amount-half the population below that average, half above-was skewed such that the very poor could not afford the bread? That's a problem.
Money is more than, as you say, "merely a convenient way as keeping score." It is a product of those that control its issue, and therefore those that control its issue have gross advantage over the rest of us. "Let me issue and control a Nation's money and I care not who makes its laws," wrote Amsel (Amschel) Bauer Mayer Rothschild in ( ... )
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