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Land Value Taxation: Rebuttals to Common Objections

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Author Topic: Land Value Taxation: Rebuttals to Common Objections  (Read 7218 times)
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« on: July 12, 2011, 02:48:55 pm »

Is the Real Estate Market Voluntary?

Perhaps the most important conclusion to be drawn from the above article is that, contrary to what right-wing critics of Henry George’s Single Tax would have everyone blindly believe, the payment of land rent is “compulsory” regardless of whether or not it’s diverted into the public treasury. Why? Two reasons.

First, because land itself is fixed in both supply and location. If you go to a furniture store and buy, let’s say, 20 square feet of carpeting, is there automatically that much less carpeting to go around for everyone else? Of course not. Why? Because new carpeting is being produced all the time. The same principle applies to all other products of human labor. But with land it’s the very opposite: since land is fixed in both supply and location, if I appropriate so many acres or square miles of it, then there is that much less for everyone else. Hence Adam Smith’s conclusion that:

    "The rent of the land, therefore, considered as the price paid for the use of the land, is naturally a monopoly price."

-- The Wealth of Nations, Book 1, Chapter 11

Thus, if the Queen of England gets to assert exclusive, unconditional “ownership” of the billions of acres of land to which she holds title, then every other overprivileged aristocrat and absentee landlord gets to do likewise. The end result? An artificial scarcity of available land. And it is this artificial scarcity that allows landlords and slumlords to continually rent gouge landless wage-earners to such an extent that the latter rarely have more disposable income than is needed just to survive (many times not even that much -- hence the growing trend of college graduates having to move back in with their parents).

Secondly, because access to land is a universal precondition to life itself. Thus, in a world in which all land has been appropriated by a mere subset of the population, and in which billions of people are continually driven by the threat of either starvation or harsh weather into competing for access to it, land rent gets paid either way -- and is paid under penalty of "force" either way (as any sheriff who’s had to evict unemployed tenants at gunpoint will readily attest).

Reactionary defenders of privilege often object to this by asserting that, since wage-earners get to choose "who" they pay land rent to, it’s a “voluntary” payment. But as Dr. Fred Foldvary explains in the above article, this is misleading at best, because it conveniently ignores the fact that -- due to the two reasons just mentioned -- they have no real “choice” as to whether they pay, since the only “alternative” to paying is to either beg and grovel for charity or (if no charity is granted) simply starve.


This may be easier for some to understand if we consider the issue of chattel slavery. Would a chattel slave in the 19th century have been any less of a slave if he got to “choose” who his slavemaster was? Of course not. Why? Because he still wouldn’t have been free to choose whether he had a slavemaster to begin with.

    "Would the essence of slavery change if the rules at a slave auction permitted a slave to choose between the two highest bidders for himself? Could the fact that he made such a choice be interpreted as his sanction for his chains? How can it be argued that the citizen is free in a democracy when he has the choice of two candidates if neither candidate is willing to recognize his right to freedom?"

-- James Bovard, Freedom In Chains, p. 132

Same principle here. A person isn’t truly free unless he has not only the choice of who gets to exact tribute from him in exchange for a mere place to stand without being threatened or shot at, but the choice of whether he has to pay such tribute to anyone in the first place. And the bottom line is: in an Austrian School economy, millions if not billions of people would have only the former choice, not the latter -- that is to say, they’d have only the choice of to whom they pay feudal tribute, not whether they pay.

Thus, since the payment of land rent is compulsory regardless of whether it’s collected publicly or privately, the only question is, Does such payment constitute “feudal tribute” regardless of who the recipient is?

The short answer is “no.” To understand why, consider the following analogy.

Let’s say I invent a one-of-a-kind machine that generates unlimited electricity, and that I will it equally to my five sons. Once I pass away, the question immediately arises as to how to adjudicate disputes over who gets access to it, and on what terms. If the eldest son insists on enjoying exclusive possession of my machine, then the government-enforced payment of rent to the other four is, in that context, not a tribute for using that machine, but a fee for the state-sanctioned privilege of denying use of it to those who have an equal right to it. But what if we’re in an Austrian School economy, and what if, realizing this, the eldest son “mixes his labor” with the machine by cleaning it and painting it a different color? Then the court system will likely rule that any and all rental value that is generated by the ongoing competition for exclusive access to the machine is the “private property” of the eldest son. In that context, the payment of rent to the eldest son is not a fee for the privilege of denying use of the machine to those who are thereby dispossessed of their birthright, but a tribute paid by one of the dispossessed for mere access to that which, in reality, he has as much a “right” to as the one receiving tribute. In the former context there is justice, because all five sons are treated as moral equals. In the latter context there is injustice, because they’re not treated as moral equals.

Thus, whether the payment of land rent (returning now to the issue at hand) constitutes feudal tribute or not depends on to whom it’s paid. If it’s paid to titleholders, then it’s feudal tribute, because it’s based on the aristocratic notion of the earth being that to which titleholders have an exclusive right of access. If it’s paid instead (whether directly as a citizen’s dividend or indirectly through the rent-financed provision of public goods and services) to those who’ve been dispossessed of their natural birthright, then it’s mere compensation, because it’s based on the recognition that the earth is that to which all humans (not just titleholders) have an equal right of access.

To understand just how absurdly immoral and anti-“liberty” the Austrian School alternative is, imagine if someone proposed allowing wealthy rent-seekers to buy up all the air “with their hard-earned money” and begin charging everyone else rent for breathing “their” property. Most people, of course, would instinctively object to such a ridiculous proposal. But why they would object? Because they’d realize that the air we breathe is not provided or “allocated” to us by any person or group of persons presuming to “own” it all, but is made available to us by nature -- or by God, if you're religious -- and that to be denied access to it for failing to pay feudal tribute to an airlord is to have the property you have in yourself violated.

Georgists simply apply the same principle to land, because, just as air itself is a free gift of nature, so too is land; and just as access to air is a universal precondition to life itself, so too is access to land. (I realize land and air have different physical characteristics, but in the two key respects I just mentioned, they’re very much the same.)

As for the privatize-everything Austrian School, the bottom line is: if speculators could hoard the air the way they hoard land, and thereby confer to themselves the power of exacting a monthly ransom fee from those needing access to it to live, then, as long as there was a “free market” in the sale and purchase of air titles, there’d be slogan-parroting Austrians all over the place proudly defending this extortion racket in the name of (you guessed it) “liberty” and “private property rights.” They’d be saying things like, “Airlords aren’t parasitizing people through a form of legalized extortion as certain freedom-hating, property-rights-hating socialists have claimed; they’re merely ‘allocating’ the air to the most productive breathers.” 

As ridiculous as that sounds, the sad reality is that, as long as those spouting such aristocratic nonsense were wrapped in the American flag or the flag of “liberty,” millions of gullible people would actually fall for this and start blindly defending the very system that’s parasitizing them -- insisting all the while that only those who hate liberty and private property would so much as question the legitimacy of that system. It’s right out of a George Orwell novel.

Unfortunately, these are the kinds of reactionaries who’ve territorialized the anti-NWO (i.e., anti-war/anti-police state/anti-eugenics/anti-global government) movement, which no doubt pleases the global elite, because that means the number of people who compose this movement will never reach critical mass (since most of the millions of non-reactionaries out there simply have better things to do with their time than listen to label-obsessed reactionaries call them freedom-hating “socialists” and “communists” all day long).

I can only hope that threads such as this one help to reverse that trend.
« Last Edit: July 25, 2011, 09:04:49 am by Geolibertarian » Report Spam   Logged

"For the first years of [Ludwig von] Mises’s life in the United States...he was almost totally dependent on annual research grants from the Rockefeller Foundation.” -- Richard M. Ebeling

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