Defending Georgism, Once Again

Wendy McElroy invokes 19th century British Voluntaryist Auberon Herbert’s critique against Georgism as “the best and most complete refutation of Georgism and the single-tax that she has have ever read.” I admit, I’ve never previously read Herbert’s critique. But now I have. And I remain unconvinced. And, frankly, I’ve read better critiques.

Let’s summarize his critique by a series of bullet-point summations:

“The open market is the only true and impartial distribution of property–the only distributor that does not employ favor and force.”

Georgism is an open market process for the impartial distribution of private real property. In fact, Georgism, both conceptually and empirically, is meaningless without an open market. The ground rents(frankly, calling such a tax is a misnomer) are determined by the free market.

“But if in order to turn a natural object into a useful object it is necessary to mix human labour with it, then it is reasonable to believe (I won’t now put the case more strongly) that the object in question must be capable of being owned by the owner of the labour; otherwise you would create this curious position that a man must give his labour, whilst the profit of the labour–at least, that is to say, a part of it–would go to somebody else;”

Labor is not a necessary condition to turn land into a useful object. Empirically demonstrated by the case of land speculation. And, once again, Georgist rent is applied against the “unimproved value of land,” not the improved value.

“I am sure my friend wishes to be consistent. He must remember that everything is in part a gift of nature. If his proposition is true about gifts of nature, why should one gift of nature belong to everybody. and another gift belong to the individual? The soil belongs to everybody, says my friend, because it is the gift of nature. But so also the apple tree at the bottom of my garden is in part (the largest part) a gift of nature. “Oh, but you have mixed your labour with it” he may reply. True. But then, as he has just shewn us very clearly mixing what is your own with what is not, you cannot enlarge your rights. The apple tree then clearly cannot be wholly mine–being in part a gift of nature; and if I wholly appropriate it without allowing any passers-by to pluck two-thirds of its fruits, I am nothing but a robber stealing from the public. So it is with every single thing you can name. If we cannot rightly appropriate gifts of nature, my friend is a robber as regard the coat he wears, the the loaf he eats. At every moment of his life he is defrauding the public. And here I should ask all readers to consider the awful, indescribable complications arising out of my friend’s dogma. Every article grown in every part of the world ought to be divided in parts between the grower and the rest of the world.”

Quite simply, Herbert conflates “equal distribution” with “equal access” in trying to create a moral dilemma for a position that treats land as part of commons. “The Commons” means “equal access to,” not “equal distribution of.” Treating land as part of commons is often conflated with “land collectivization.” But let us be clear: starting with a position of land as part of commons means everyone has equal access to land and for one to have exclusive use of land is an abridgment of another’s liberty, indeed, inalienable right, for their own use of such land. The privilege of exclusionary use of such land is a monopolization of resource that creates rent. This is Georgist rent.

I’ve read Benjamin Tucker’s critique of Georgism; I’ve read Murray Rothbard’s critique; I’ve read Roderick Long’s critique. I’m not convinced. The fact is, land or ground rents were a well established concept in classical economics. With the advent of the marginalist revolution and neoclassical economics, land would be lumped in with capital goods as an identical factor of production, which from a political economy standpoint, is a bad development in terms of assessing economic rent. From a marginalist standpoint, a compelling case can be made that Georgist rents are vital to an accurate reflection of opportunity costs that enforce the most efficient use of scarce resources in a free market. And that in an efficient free market where there are no Tullock economic rents derived from land ownership, there is no so-called “public goods problem.” Georgist rents flowing to a some sort of governing institutions or redistributed back to the general populace as a dividend constitute neither a wealth transfer nor a deadweight loss. From an institutional standpoint, I have yet to be convinced by any compelling counter-arguments.

10 thoughts on “Defending Georgism, Once Again

  1. I wonder if the most compelling argument isn’t that implementing Georgism requires a governing institution with the power to estimate the unimproved value of a piece of land, tax it, and distribute the results. It seems to me that there are (a) legitimacy problems—nothing obviously entitles the governing authority to do this and (b) abuse problems—it seems clear that it would be easy for the envisioned authority to use its collection and distribution powers to punish, manipulate, and control others and to enrich itself and its cronies.

    I’m sympathetic to some sorts of Geoist anarchist proposals, but I’ve never seen them spelled out in a way that shows how they could work without this sort of central authority. Even if they could, I’m troubled by the worry that determining the unimproved value of a parcel of land seems to require the ability to answer unanswerable counterfactual.

    My own vision of anarchism is one in which a thousand flowers bloom. I’d expect to see a landscape dotted with communities (both contiguous and virtual) endorsing property and other rules reflective of an enormous range of ideologies—from anarcho-primitivism to anarcho-communism to anarcho-syndicalism to mutualism to Geoism to Chartier-style market anarchism (whatever that is) to various sorts of ancappery. I certainly don’t want to interfere with a legal regime that’s Geoist, as long as it’s peaceful. But I don’t think I’d vote for one for my own regime.

  2. Gary:

    “(a) legitimacy problems—nothing obviously entitles the governing authority to do this”

    One thing to note is that (most) geoist anarchists don’t want to collect land rent by force. Rather, think of it as members agreeing to accept other members claims to property rights in the land on the condition that each member pays rent on the portion they’re excluding from the others. An-caps say they’ll hire protection agencies to do this for them, but if we assume that protection agencies are motivated by profit, then it seems to me that such services would be vastly more expensive than the geoist alternative (since the protection agencies would have to be paid enough that it wouldn’t be profitable for them to take the land by force and then register it with the geoist agency themselves), so voluntary geoism could very well take hold by market processes.

    “(b) abuse problems—it seems clear that it would be easy for the envisioned authority to use its collection and distribution powers to punish, manipulate, and control others and to enrich itself and its cronies.”

    If implemented as a voluntary organization, it certainly wouldn’t have power to punish. Moreover, it depends what kind of authority you envision doing this, and what kind of power the people have over it. Assessing land rent and dividing it among the community in equal shares doesn’t really require too much work and there’s no reason to give the assessors any power: they could merely be contracted by the community to make a recommendation which is then ratified either by the community (small-scale direct democracy or consensus democracy) or by some form of free-market courts hearing individual challenges.

    “Even if they could, I’m troubled by the worry that determining the unimproved value of a parcel of land seems to require the ability to answer unanswerable counterfactual questions.”

    If there’s a healthy property market, this isn’t really so hard: just look at sales of various properties and use linear algebra to untangle which parts of the sale are going towards improvements (by grouping similar improvements together) and which parts are going towards the land (by grouping adjacent properties together). But even if you think it can’t be done 100% accurately, surely you’d agree that a decent heuristic is possible, e.g. in urban areas, one in which distance from city center or from certain services gives a set rate per sq. foot. And since the main goal is to stop the hoarding of unimproved land by speculators (while still offering more flexibility than a mutualist occupancy-and-use standard would), a decent heuristic would probably be good enough.

  3. dL: Have you seen Kevin Carson’s critiques of geoism? e.g.,

    http://mutualist.blogspot.com/2005/06/almost-thou-persuadest-me-or-why-i-am.html

    He focuses mainly on forms with a central geocommunity government that provides some “public goods” services, but towards the end has a decent argument as to why a geoist conception of rent would be less necessary in a mutualist society (although I think he overestimates the extent to which economic decentralization will eliminate scarcity rent based on location).

  4. I think it’s kinda funny to see anarchists say “I can’t imagine how such a system would work”.

    Maybe anarchists should treat Georgism in the following manner:
    1) A general principle of justice (alongside other principles), with the details of administration to be worked out as they become relevant.
    2) A description of the least objectionable activities of the state–the activities that will not, in themselves, be the target of interference/obstruction/avoidance.

  5. For the heck of it, I want to explicitly respond to the apple tree example:

    Herbert says: “But so also the apple tree at the bottom of my garden is in part (the largest part) a gift of nature.

    dL says: “The privilege of exclusionary use of such land is a monopolization of resource that creates rent.”

    As dL indicated, the issue is not whether a person benefits from nature’s gift, but whether he prevents others from benefiting. No-one is deprived of apples by the fact that another person has decided to grow an apple tree.

  6. To be clear: I have no objection at all to the kind of voluntary arrangement Miko describes, in which there’s no power to punish or seize the property of the unconsenting; if this sort of thing were sustained by social norms I would regard it not only as acceptable but as attractive, as a way of providing the economically vulnerable with some valuable security. And clearly an agreement-based system could incorporate whatever sort of metric of unimproved value participants wanted to adopt. I repeat my support for the blooming of a thousand flowers.

  7. I find Herbert’s first point to be most persuasive (though I am probably interpreting it differently than he meant it). To paraphrase: since we currently treat land as exchangeable property like all other property, there is no particular justice in returning in to “common” use. It has been privatized, and mixed with other property. It has been purchased in good faith, and is morally indistinguishable from other property.

    This was mildly persuasive. My first response in favor the the single tax is that the primary concern is to restore the common asset, and the exact method of restoring it is a secondary issue. Stolen property is still stolen, regardless of whether it has been transferred. My second response to the above argument is to question whether land was ever really treated as property like any other property. Land is currently taxed in almost every jurisdiction of America. When it is not directly taxed, it still forms the basis of government authority to lay other taxes. If we were to convert all governmental taxes and regulations into a virtual tax burden on land, I think we would find that it is currently taxed at its full value and more…so I reject the idea that laying a tax on land would be particularly unfair. Finally, if we were to abolish the current state in one fell swoop as a fundamentally unjust system, I’m afraid that the current distribution of property (or much of it) would have to be declared illegitimate also.

  8. “Finally, if we were to abolish the current state in one fell swoop as a fundamentally unjust system, I’m afraid that the current distribution of property (or much of it) would have to be declared illegitimate also.”

    Yes, absolutely: land stolen or engrossed by the state, or stolen by the state’s cronies with state approval would surely need to be returned to the victims or, if they can’t be identified and the property is held by the thieves or cronies, treated as up for grabs by homesteaders (cp. Rothbard’s “Confiscation and the Homestead Principle”).

  9. Gary:

    I would dispute that “determining the unimproved value of a parcel of land seems to require the ability to answer unanswerable counterfactual.”

    I would reference this link at Freedom Democrats:

    http://freedomdemocrats.org/node/3852

    that discusses this issue in several places within the commentary. In short, it’s no more of “an unanswerable counterfactual” than the appraising of real property for the purpose of real estate loans or in the assessment of tort compensation for legal claims/injury.

    I also think Ricketson is correct on how I, along with many Georgists(within libertarianism), approach Georgism, which is from an institutional justice perspective. Libertarian Justice, thinly composed, consists of Self-Ownership, NAP, and typically Lockean Homesteading. Now Lockean Homesteading is really derived from the(classically) liberal tradition. Georgism is another alternative that likewise derives from the liberal tradition. In my case, I’m interested in switching out one liberal tradition(the Lockean position) with another(the Geotgist position) in terms of formulating a libertarian justice framework and then examining the institutional implications from (1) sociological perspective rooted in methodological individualism (2) political economy and economic rent.

    In no way should my defense of Georgism be construed as an attack on Lockean homesteading or mutualist occupancy(Mutualist occupancy is another alternative that can be swaped out with Lockean homesteading. And the mutualist position actually derives from the historical libertarian tradition and not from the liberal tradition). I’m not interested in that. I will, however, defend Georgism from attacks or criticisms usually centered either (1) Georgism morally violates self-ownership (2) Georgism is institutionally equivalent to collectivism.

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