Swatting Down Wendy McElroy’s Refutation of Georgism

At The Daily Anarchist, principal contributor Wendy McElroy has published a two piece series that aims to first define Georgism and then refute it. The first part, the definition, is here. The refutation that follows is here.

As a defender of Georgism, I have published a number of posts on this blog knocking down these type of critiques that intermittently pop up. My principle argument is not that Georgism is the only position on land that is consistent with libertarianism but rather that Georgism is not inconsistent with libertarianism. In particular this usually means debunking the purported equivalency of Georgism with land collectivism, an oft-repeated refrain that simply isn’t accurate. This bogus equivalence lies at the heart of McElroy’s definitional critique. So once more, for the record, let me state unequivocally that:

the proposition of the right of equal access to land (p) DOES NOT EQUAL collective ownership(q)

p is neither a sufficient nor necessary condition for q. Hence, there is no logical relationship between the two propositions. The Georgist position is that the proposition (p) establishes the exclusionary use of land(=ownership) as a privilege that bears the market price of the opportunity cost of the use of the resource. Simple. As I sometimes put it, you are more or less buying your way out of “land collectivism” at the price of its opportunity cost. This contrasts with other enforcement models of private property that purport to be “private” while empirically demonstrating a thorough intertwining with collectivist enforcement.

Now some Georgists may emphasize the moral principle behind the enforcement model. However, I tend to emphasize the agency and “rent-seeking” problems it addresses. After all, Henry George didn’t divine his principle from the bowels of moral and theological introspection(of course, just to note, the concept of “ground rents” long preceded Henry George). No, he derived his principle from the observation of inequality and privilege that often seemed to be a product of matured governments(specifically compared to the less mature ones out West at the time). He was addressing an empirical problem regarding economic rents.

McElroy commits a potential logical fallacy by claiming that the empirical modern absence of Georgism is evidence of its illegitimacy. I would contend that’s a rather peculiar argument for a libertarian to make because the same argument can be used to discredit libertarianism itself given its own empirical problem: namely, where is it? Historically, its nonexistent, sans a belated reference to medieval Iceland. I would be careful about wielding that tool.

Given that I methodologically adhere in large part to the old French liberal class conflict model–the ancient and modern(liberal) notions of liberty are in conflict and this conflict is defined by the struggle between rooting economic life in the polis(the ancient version) vs modern (liberal) view of the State as artificial and a compliance mechanism only(but not the source of compliance)–I would expect Georgism to be buried as the ancient version progresses in influence. In the modern parlance, we would recast this conflict in terms of the public choice rent-seeking model. Contra McElroy, it is the absence of Georgism(or ground rents as the fiscal source of government) that gives credence to the class theory method. If, instead, we saw that governments derived their fiscal source(and public financing) from ground rents, then the French liberal class model would clearly be an invalid method. So from my methodological framework, the absence of Georgism is a source of confirmation.

Now McElroy, who from my understanding, dismisses the class theory method–or at least used to–apparently applies a different method. Of course, she has to resolve how government and public institutions can select the correct private property enforcement model while nonetheless driving us relentlessly toward a total collectivist outcome. This tells me either: (1) Lockean property rights are a foundation of the Total State or (2) they provide no effective constraint mechanism against the Agency of the State.

Refuting the Refutation

Now let us consider McElroy’s 3-point refutation:

(i)As a matter of principle, you cannot claim a right to something you do not own – land – simply because you mix it with something you do own – your labor.
“If this is true, then it proves more than I believe Georgists wish to accept.”

Unfortunately, I expect more out of a scholar such as McElroy. Most libertarians today recognize the weakness of Locke’s arguments from the Second Treatise. Reference, for example, de Jsasy or Nozick. Indeed, it was Nozick who gave us the revised “Lockean Proviso” which makes a clear case that legitimate recognition of agent claims to property or labor are constrained by a condition that the private property regime makes no one worse off relative to the absence of such a regime. Indeed, it is this revised proviso which I identify as the “libertarian principle.” The dreaded conclusion that McElroy warns against is what I consider to be the foundation of any libertarian social order.

Now, to be fair, McElroy later contends in her first point that “the libertarian principle”(although she doesn’t refer to it by that identity) would emerge naturally and spontaneously from a free market in property. Frankly, it’s not my objective to argue this point. I will only point out that empirically this doesn’t occur. Of course, it may have something to do with the fact that a spontaneous market in property is not our only agency. There is that pesky agency known as “the State” that keeps intruding on our hypothetical models. The positive fact is that if we show the State, we show libertarian violations in the Lockean property model. Period…

But the point remains that natural resources belong equally to everyone.
“Again, I doubt that Georgists wish to follow this argument to its logically conclusion”

I have already discussed this. McElroy is engaging in a straw man argument. There is no logical relationship between the proposition of the right of equal access to land and collective ownership. Hence, there is no logical argument to follow to its conclusion.

Justice requires there to be an authority to distribute the ‘unfair’ advantages enjoyed by those who use and occupy land.
“Who is to decide whether it is to be prairie value or market value? Whether a land tax is to be permanent or be liable to increase?”

This is the argument, borrowing apparently from Auberon Herbert, that warns against the Real Estate Appraiser becoming the total source of Statism. Really, a bit of a vacuous argument. Real estate appraisal methods have emerged as a product of convention and are not an arbitrary thing. If I were to compose a list of the foundational threats of total Statism, the modest real estate appraiser would come in low on the list, somewhere next to the dreaded landscapers. Humor aside, the obvious flaw with Herbert’s argument is that the Real estate appraiser and the tax assessor already exist as long-standing staples in the Lockean scheme. To aim your guns at this agency is also to shoot at your own foot.

What is Required to Refute Georgism

I’ve grown tired of the recycled arguments against Georgism that usually derive from the same flawed method of argument: Georgism leads to a contradiction in my moral foundations regarding property. That’s not a method of rational argument. It’s a characteristic of a religious argument. If you want to refute Georgism you are going to have to do it rationally. The rational method has to demonstrate that land rents are quasi economic rents. This is going to be a bit difficult to demonstrate because of the many counter-factual examples that demonstrate ground rents closely approximate a shift of producer surplus to public surplus without any deadweight loss or loss of consumer surplus. Your theory is essentially going to have to encapsulate a Quantum Theory of Economic Rents, meaning institutional apparati determine the observed behavior of rents. Of course, in many ways I do hold to a quantum theory of economic rents. It’s just that there is yet to be sufficient evidence that ground rents demonstrate quantum properties(which, of course, is ultimately a statement on our institutions).