Fair Tax and black markets

[Fjordbit]

Again, if I required "improvement" to land, we'd get parking lots instead of forests.

This seems to be going in circles based on the argument in front of you. How do ancaps decide if they require improvement or not?

paying some random stranger and putting numbers into a computer don't grant you ownership.

Nothing grants you ownership. all you can get is a temporary exclusionary right to the land.

No, it's not. And if the argument were "I want free stuff," I would concede the point. But it's not. The argument is "this stuff is mine, because I made it."

But you didn't make the land. Period.

Taking land that doesn't belong to someone is fine. Trying to take land that does belong to someone is not. That's when the force comes in.

Which means there's no problem because land doesn't belong to anyone.

You have to have it in order for me to deprive you of it. Since it's not your land, my claiming it deprives you of nothing.

It deprives everyone of their use of it.

They think it's fair. Otherwise they would increase their prices. If they think it's fair, then who am I (or you) to say otherwise?

That doesn't make sense. They aren't selling their coffee shop, the guy with the empty lot is. They don't receive any fair compensation for that, or really any compensation.

I've mostly stopped posting in this thread because I felt like I've said most of what I have to say, but a few thoughts.

Yeah, I'm getting there too. It's just repetition along the lines of:

It's not fair to take something I own.

You don't own the land.

[myrkul]

Again, if I required "improvement" to land, we'd get parking lots instead of forests.

This seems to be going in circles based on the argument in front of you. How do ancaps decide if they require improvement or not?

As I've previously stated, I typically consider marking it out sufficient alteration of the land to claim ownership. "Improvement" is relative.

paying some random stranger and putting numbers into a computer don't grant you ownership.

Nothing grants you ownership. all you can get is a temporary exclusionary right to the land.

Then why are you complaining when I come in and set up shop? After all, your right was only temporary.

No, it's not. And if the argument were "I want free stuff," I would concede the point. But it's not. The argument is "this stuff is mine, because I made it."

But you didn't make the land. Period.

No, I didn't. But I altered the land into something man-made. It is that which I own, the altered, combined product of the land and my labor.

Taking land that doesn't belong to someone is fine. Trying to take land that does belong to someone is not. That's when the force comes in.

Which means there's no problem because land doesn't belong to anyone.

Then who are you paying to use it? You can't claim profit from something you don't own.

You have to have it in order for me to deprive you of it. Since it's not your land, my claiming it deprives you of nothing.

It deprives everyone of their use of it.

They weren't using it. If they were, it would have been their land already.

They think it's fair. Otherwise they would increase their prices. If they think it's fair, then who am I (or you) to say otherwise?

That doesn't make sense. They aren't selling their coffee shop, the guy with the empty lot is. They don't receive any fair compensation for that, or really any compensation.

Well, if the guy was actually selling their coffee shop, you'd have a point. Of course, he's not. He's selling an empty lot which happens to be nearby a coffee shop.

[thoughtfan]

Sorry for bumping this but I wanted to comment particularly on one post.

[Highly appreciating land value] can be equated to the early adopter "problem" with Bitcoin. There are people, who simply by virtue of being early to the party, have a large supply of a suddenly very valuable commodity. Is this necessarily a bad thing? They recognized a sound investment, and bought in early. Yet, there are people from that group, who now have little or no bitcoins. What happened? They managed their investment poorly, and now someone else, who can better manage that investment, has it. Some of those people who have those bitcoins now are new to the community. If they manage that investment poorly, it will go to someone else, as well.

I think the comparison of land to Bitcoin can be a useful one, both in recognising similarities and differences.  But the way I'm seeing it doesn't support your argument.

Those who will have gained the most from being an 'early adopter' of Bitcoin are those who will have mined them then sat on them, keeping hold of them and doing nothing with them other than accumulating more as fast as they can.  If everyone had done likewise everyone's Bitcoin would still be worth nothing.  Fortunately for the rest of us some others, including those who you say 'managed their investment poorly' put their Bitcoin into play and sowed the seeds of it taking off as it has.  It is not an exact analogy with land because as you point out, in the age of homesteading, those who managed most efficiently in terms of maximum returns from crops from their land were able to buy out those who were not doing so well, maybe employing them and with the acquired plots with the better efficiency now producing more food, reducing the cost of everybody's living   There is no parallel with Bitcoin in this respect.

But what if the early adopters had another means of living and were not interested in doing anything with the land?  What if they also had the fortune of being in a location where a city would be built up around their plots? Then it's just like the early Bitcoin hoarder situation because the increase in the value of their land has nothing to do with 'managing the investment' and everything to do with benefiting without having lifted a finger from the creativity, the productivity, the efficiency and hard work of those who created the city around them.

With Bitcoin, the finite-number-of-Bitcoins feature is essential for it to work and whilst the inactive hoarder's massive gain does not sit comfortably with me it is as far as I can tell the inevitable other-side-of-the-coin of Bitcoin's built-in scarcity without which I can't see how it could succeed.  The primary difference to me between the Bitcoin and land situations is that however much Bitcoin is being hoarded, whilst it reduces the amount available and has an affect on price, it does not reduce in any way what can be done with the remaining Bitcoin for those who are using it.  Not so with land.  Having a very reduced land supply available to the same number of people means although the proportion of the available land is the same, as it is with Bitcoin, for land the square footage or acerage owned is a fraction of what it would otherwise be and you simply can't do with smaller area of land what you would with a bigger area.

But I'm not ready quite yet to let go of the idea if I've bought a property it is mine.  Maybe it's something as simple as the similarity between the words 'common' and 'commune'?  The idea of someone telling me land I bought belongs to the 'commons' is unnerving.  Yet there seems to be a justice in recognising the difference between an increase in the value of property arising out of something the owner has done to it (which is rightfully his) and an increase in value arising out of things others have done, whether privately by neighbours or things like train stations built with public funding.  It seems crazy to me that the efficiency of commerce and employment should be severely hampered by taxation when there's a means of tapping the unearned wealth of increased land value at virtually no cost.*  I actually prefer the term 'Location Levy'** than land tax because tax to me is taking from me something I earned.  I'm finding it more difficult to remain persuaded that the increase in value of my land at the hands of others' efforts is mine by right.

But how attractive to Bitcoiners is the following potential gain to be had by switching from today's system, replacing all other forms of taxation with the Location Levy?  The only thing that the government would need to know in order ascertain the amount of the Levy due would be what my land is worth.  This means they no longer need to know how much I earn, how and on what I spend my money, how wealthy I am, whether my investment is in business, commodities or whatever I fancy - and they don't need to care what currency I choose to trade in INCLUDING BITCOIN - and in this situation, there's no reason that they shouldn't also accept the Levy in Bitcoin!  This truly has the potential to free us up economically providing we're prepared to take that leap of a paradigm shift and accept that the increase in the value of the land beneath us that was not as a direct consequence of something we did - IS NOT OURS BY RIGHT!  It is to me a high price to pay in terms of letting go of a formerly deeply entrenched principle of property ownership - but right now I'm thinking it might be worth it.

Tf

* myrkul, Please don't try and argue against this particular point again (land tax not having an affect rent and the sale price of the lands's produce).  I know the way you put it sounds plausible and seems self-evident to you and you say you don't understand the graphs Explodicle presented but if you did take the time to understand them or asked any economist, irrespective of their support of land tax or lack thereof, they will tell you that taxation of land has has next to zero effect on rent.  It's just the way it is.  Only those who don't understand argue that point.  There are plenty other arguments to be made on this issue but you won't win that one against anybody who understands.  I won't have that argument with you because i) a number here have tried to explain it to you already and you won't accept it and ii) you seem to me to be quite capable of doing the research and study required to understand it for yourself should you so choose.

** This is Tony Vickers's term (author of Location Matters:Recycling Britain's Wealth)

[myrkul]

I think you sort of missed my point comparing Bitcoin to land.

Someone who put their bitcoins out there and invested wisely profited even more than those who just sat on it. Those who invested poorly - say, by trying and failing to play the exchange market - lost out, and those are the people I referred to who now have little or none of their coins.

In the land analogy, this becomes investing wisely (developing your land), sitting on it (keeping the land in an undeveloped state), or investing poorly (developing your land in such a way as the market does not want - say, a pig farm in the city).

Now, you have a fine point that you cannot do as much with a smaller tract of land - but this is already factored in in the price.

Now, as to land tax not affecting rent, It seems pretty self-evident that it would. I am willing to entertain the idea that I am wrong, however. I am not what you would call a "visual learner." I do much better understanding concepts when explained in text, rather than obscure graphs. I'd gladly research it myself, but a link to (at the very minimum) a Wiki page would be appreciated so that I have a starting point.

[firefop]

Now, as to land tax not affecting rent, It seems pretty self-evident that it would. I am willing to entertain the idea that I am wrong, however. I am not what you would call a "visual learner." I do much better understanding concepts when explained in text, rather than obscure graphs. I'd gladly research it myself, but a link to (at the very minimum) a Wiki page would be appreciated so that I have a starting point.

Land use prices (aka rents) are really much much more dependent on factors other than tax. Suppose you have some property that you decide to rent, how would you figure out how much you're going to charge in rents? I can tell you it isn't based on tax rate... it is entirely based on greed...

That is: you would rent it for the maximum amount you could get for it. Period. You aren't going to be able to increase that rate past what the market will bear. And you'll always increase the rents to get as close as possible to whatever the market will support. This is why underdeveloped rural locations grow very slowly, there just isn't a profit in 'investment realestate' unless you have very good support for the rental prices in that area.

[myrkul]

you would rent it for the maximum amount you could get for it. Period. You aren't going to be able to increase that rate past what the market will bear. And you'll always increase the rents to get as close as possible to whatever the market will support.

This makes sense... And a higher tax as a percentage of land value wouldn't increase the rent you're able to pull from it. It would, however, decrease the utility of the land as rental property, possibly even forcing it to stay vacant. I think I'm beginning to see how the geoist system is designed to work. That's not to say it would, of course, and it would require a coercive State to enforce these taxes.

[thoughtfan]

@ myrkul

Apologies for the tone of that footnote.  I read it again this morning and appreciate that you did not take it as condescending which you justifiably could have.

Now, as to land tax not affecting rent, It seems pretty self-evident that it would. I am willing to entertain the idea that I am wrong, however. I am not what you would call a "visual learner." I do much better understanding concepts when explained in text, rather than obscure graphs. I'd gladly research it myself, but a link to (at the very minimum) a Wiki page would be appreciated so that I have a starting point.

I will admit it does seem counterintuitive that it wouldn't and I did take the claim with a pinch of salt the first few times I came across it.  It was an economics teacher drawing those diagrams on the back of an envelope in the pub accompanied by his explanation that convinced me.  The downside of that is I can't hyperlink my resource   I've done a quick search this morning to no avail and will look further when I have time (it would be good for me to go through it again too) but I am given to understand variations of those graphs form part of classic economics primer courses.

I think you sort of missed my point comparing Bitcoin to land.

Someone who put their bitcoins out there and invested wisely profited even more than those who just sat on it. Those who invested poorly - say, by trying and failing to play the exchange market - lost out, and those are the people I referred to who now have little or none of their coins.

I don't think I did miss your point.  I understand, as illustrated by my homestead example, the positive benefit to all from productive investment.  But I remain convinced, unless you can show me otherwise, that the direct correlation you're trying to make undermines rather than supports your argument.  I might be more inclined to accept the claimed parallel if you could give me one example of how an early adopter using Bitcoin for investment could have done so phenomenally well that it would have given them a higher return than had they just sat on it and accumulated it without spend for the first 18 months or so.  Even if you count trading on the exchanges as 'investing' (which to me is speculation) someone would have needed to be both extremely smart and extremely lucky to have made money repeatedly selling bitcoin just prior to occasional downs AND buying it back again just as the price was returning to growth.

This is why the parallel with Bitcoin better illustrates the problem with land speculation for me.  Because (more so now than in homesteading days) the economic principles you're talking about which work so elegantly in the homesteading and early economy circumstance become virtually insignificant when the wisest thing for virtually anybody with capital to do in any city worldwide at virtually any time* is to invest a small proportion of it in productive economic activity whilst having the rest of it sitting in land driving up the price at which everybody else who would like to do anything (from having somewhere to live to setting up a factory to creating a trading floor) to contribute to the economy themselves.  Because there's nothing anybody can do - even just standing somewhere - that does not require land.

And what has surprised me the more I've looked into this is the number of names I know of from history who have recognised land as needing to be treated differently to labour and capital - including capitalist heroes such as Adam Smith and Thomas Payne, the latter for whom, as I recollect, was quite passionate about the rights of man

I'm not saying I have all the answers nor, as I admitted, am I quite ready yet to let go of my deeply entrenched view that land I consider to be my (or my family's) property is owned by us and not subject to the whim of the majority.  But I'm having to acknowledge this is not a position that I can justify with argument.


Tf

* Occasional downward blips occur in any economy, exacerbated by occasional speculation bubbles when they eventually burst - but I am not counting cities here where the political situations such as war or extreme governmental fiscal irresponsibility takes them outside of the normal dynamic.

[myrkul]

@ myrkul

Apologies for the tone of that footnote.  I read it again this morning and appreciate that you did not take it as condescending which you justifiably could have.

I tend to take everything on the internet with several grains of salt. Unless you make it abundantly clear you're treating me like dirt, I give you the benefit of the doubt.

I will admit it does seem counterintuitive that it wouldn't and I did take the claim with a pinch of salt the first few times I came across it.  It was an economics teacher drawing those diagrams on the back of an envelope in the pub accompanied by his explanation that convinced me.  The downside of that is I can't hyperlink my resource   I've done a quick search this morning to no avail and will look further when I have time (it would be good for me to go through it again too) but I am given to understand variations of those graphs form part of classic economics primer courses.

Which my education as an Electronics technician skipped. Not much call for supply and demand curves when you're more concerned with voltages and resistance. As you can see above, though, I've had the concept explained in a reasonable manner, and it makes sense. I admit part of my reluctance earlier might have been the source.

I think you sort of missed my point comparing Bitcoin to land.

Someone who put their bitcoins out there and invested wisely profited even more than those who just sat on it. Those who invested poorly - say, by trying and failing to play the exchange market - lost out, and those are the people I referred to who now have little or none of their coins.

I don't think I did miss your point.  I understand, as illustrated by my homestead example, the positive benefit to all from productive investment.  But I remain convinced, unless you can show me otherwise, that the direct correlation you're trying to make undermines rather than supports your argument.  I might be more inclined to accept the claimed parallel if you could give me one example of how an early adopter using Bitcoin for investment could have done so phenomenally well that it would have given them a higher return than had they just sat on it and accumulated it without spend for the first 18 months or so.  Even if you count trading on the exchanges as 'investing' (which to me is speculation) someone would have needed to be both extremely smart and extremely lucky to have made money repeatedly selling bitcoin just prior to occasional downs AND buying it back again just as the price was returning to growth.

I would consider selling bitcoins for cash and buying more mining hardware to be "investing," and you can't deny that that was a profitable strategy, and continued to be for some time. Now, though, the "land-grab" is starting to slow down, and if you want to grow your investment, you have to put it to work.

Land, like any resource (even air) is scarce. It's more scarce than some other resources, true. But that limited supply doesn't change the way you deal with it, just the relative value. Just like time. Everyone has an exceedingly limited supply of time, but it is bought and sold like any other commodity.

[thoughtfan]

I tend to take everything on the internet with several grains of salt. Unless you make it abundantly clear you're treating me like dirt, I give you the benefit of the doubt.

Appreciated

I would consider selling bitcoins for cash and buying more mining hardware to be "investing," and you can't deny that that was a profitable strategy, and continued to be for some time.

It was indeed profitable but I didn't mention it because it's where the analogy with land falls down.  You can't grow produce on Bitcoin and you can't mine more land!

Land, like any resource (even air) is scarce. It's more scarce than some other resources, true. But that limited supply doesn't change the way you deal with it, just the relative value. Just like time. Everyone has an exceedingly limited supply of time, but it is bought and sold like any other commodity.

I would again beg to differ.  Is it not someone's time that's for sale or time as a measure of how long something is hired you're talking about here?

Now, though, the "land-grab" is starting to slow down, and if you want to grow your investment, you have to put it to work.

It appears to me that in this respect there's an inverse relationship between bitcoin and land in that in the early days there would have been very little incentive to do nothing with land and the benefits of doing so have grown exponentially ever since.  In contrast, the best time to do nothing with Bitcoin (assuming somebody else would in order that it becomes popular) was right at the outset*.  As time passes and more can be done with it the incentive to use it productively will increase.

But unless the time comes when we treat land differently than capital I can't see that anything is going to change as the curve grows ever steeper (booms & busts accepted) and associated problems and wasted economic opportunity will get so exacerbated that they become more and more difficult to deny.

Anyway, I don't think I'm going to be convincing you on the merits of the 'Location Levy' any time soon so if you don't mind we'll agree to disagree.  I am not saying I'm right and you're wrong but in enjoying reading through the earlier part of the thread when I saw your analogy between land and Bitcoin I wanted to add my take on it to the discussion and I appreciate your indulging me in so doing.

Best,

tf


*I acknowledge in some people's eyes we are still at 'the outset'.

[myrkul]

I would consider selling bitcoins for cash and buying more mining hardware to be "investing," and you can't deny that that was a profitable strategy, and continued to be for some time.

It was indeed profitable but I didn't mention it because it's where the analogy with land falls down.  You can't grow produce on Bitcoin and you can't mine more land!

Well, technically, you can mine more "land" if you view it simply as "space." The traditional view of "land" is measured in area. Perhaps a more "future proof" metric would be to use volume. Certainly would make more sense once we're off this ball of rock. Now, I know of no way to equitably distribute the current volume, and given that mineral rights and airspace rights typically come with land ownership, that would tend to imply ownership of a pyramidal "slice" of the earth's crust and atmosphere.

But I get your point, and my little exception aside, you're right. No analogy is perfect - else it wouldn't be an analogy.

Land, like any resource (even air) is scarce. It's more scarce than some other resources, true. But that limited supply doesn't change the way you deal with it, just the relative value. Just like time. Everyone has an exceedingly limited supply of time, but it is bought and sold like any other commodity.

I would again beg to differ.  Is it not someone's time that's for sale or time as a measure of how long something is hired you're talking about here?

Time ~= labor. You can use them interchangeably.

But unless the time comes when we treat land differently than capital I can't see that anything is going to change as the curve grows ever steeper (booms & busts accepted) and associated problems and wasted economic opportunity will get so exacerbated that they become more and more difficult to deny.

Land is capital, though. It can't be moved, and has some unique factors affecting it's market value, but it is capital, no more or less than, say, your automobile.

[thoughtfan]

Time ~= labor. You can use them interchangeably.

Surely not?  Time, unless it is in reference to someone's or something is worth nothing.  The sensible reply to the question 'How much would you charge me for an hour?' is 'An hour of what?'  I can't just buy an hour from you.

[myrkul]

Time ~= labor. You can use them interchangeably.

Surely not?  Time, unless it is in reference to someone's or something is worth nothing.  The sensible reply to the question 'How much would you charge me for an hour?' is 'An hour of what?'  I can't just buy an hour from you.

But that is exactly what you are doing when you hire me. There are several professions (mine included) where the proper response is an amount of currency. Prostitution is another one.

Take any phrase about labor, and replace the word "labor" with "time," and I can virtually guarantee that it will not only make sense, it will retain the original meaning. (excepting, of course, phrases regarding maternity - "she went into time" just does not make the same sense.)

Now clearly, you can't "trade" time in precisely the same sense as other commodities, for instance, as in the movie "In Time," since like land - or more accurately, "space," - time is not mobile. What you can do, however, is exchange your currency (bought with your time) for my time. If it took you 2 hours to earn the $25 it will cost you to have me repair your computer (which will take me one hour), but it would take you three hours to do it yourself, you can see this is a good deal.

[thoughtfan]

...What you can do, however, is exchange your currency (bought with your time) for my time.

I think we both understand what time is and the way it works with division of labour and specialisation.  My point is that what you are referring to is, as you used it here, 'your' time.  It just another way of saying is 'your'  labour.  Of course 'your (or anyone's) time' is interchangeable with the 'your (or anyone's) labour' because you are referring to the same thing.  And if we're are talking about labour it is one of the three classical economic classifications as previously mentioned: land, capital and labour, each of which have their own charecteristics withenough distinguishing features not to be able to use them indiscriminately interchangeably without losing meaning.

What I still really don't get I'm afraid is how your comparison of time with land gives us anything of use in this discussion.  But I'm happy to leave that one 'un-got' for now

[myrkul]

What I still really don't get I'm afraid is how your comparison of time with land gives us anything of use in this discussion.  But I'm happy to leave that one 'un-got' for now

What I'm saying is that time (labor), space (land) and matter ("capital") are all types of capital in the economic sense. They are all three limited resources upon which we each draw.

I'm not sure exactly how this is relevant to this discussion either, save for the fact that it is this discussion which led me to that conclusion.