patrick.net

The Bush years have seen a rise in debt slavery born out of an unrestrained credit bubble. We might call this Bushanomics. It funds both housing and the continued Iraq fiasco. Things have not gone well there so now we are going to spice things up with a troop surge. The Bush recipe continues to ripen prospering some and ruining others. Its repercussions are likely to reach well beyond January 2009.

I don't think it's terribly difficult to deconstruct Georgist arguments.

Land is valued, in a free market, by its various components. Land has intrinsic value, which sometimes maybe very low or effectively zero -- such as undeveloped, inaccessible swampland. Some land has very high intrinsic value, such as natural harbors or fertile farmland.

Potential usage also drives land value. Extraction of resource, establishment of productive commerce, industry or residential stock.

Microeconomics is the final component. Supply and demand. George lived during a period of dramatic capital creation, the industrial revolution. Had he lived to write about late 20th-Century Gary Indiana, he would have realized the essential flaw in his theory.

There certainly is a huge state component in apportionment of land, and thus in one of its fundamental value drivers. Regulations implied and explicit also serve to introduce friction into the free market function of the land market. Not all of this is bad. For example, the short-term benefit of building landfills next to schools is probably outweighed by the long-term detriment.

But, how exactly would one (one being a sovereign governing body) go about "depressing land prices"? I'm very curious to hear what grand price-control scheme will produce superior economic outcomes, especially given the enormous inefficiencies introduced by that very act.

People have always valued land, even when land ownership was prohibited (all land owned by the state). All that happens then is a "secondary market" or "black market" for land rights emerges spontaneously. So it costs political currency instead of ubiquitous tender currency, but the land still has value far beyond George's notions.

And let's roll back to the pre-Feudal period when apparently land was abundant, free, and we all lived in harmony. Who owned land in the various empires of Antiquity? How was land apportioned? By a market, or by the point of a spear? Even the non-agrarian peoples fought fiercely over land as it represented hunting territory. That land had value, and there was a market for it. Just not a market very sympathetic to making the wrong bet.

But today, with all our terrible notions of personal property rights, land ownership, an impartial arbitrating marketplace, and as close to equality of ownership as has ever existed, we're to believe we're all just slaves? Oy.

Land is valued, in a free market, by its various components.

Absolutely.

Land should not be free. In fact, everything should have a price.

No. Alternatives to private landownership is filled with moral hazards and inducements to inefficient behavior.

BTW, anyone here want a 10 months subscription to the Economist? I traded some unusable NW frequent flier miles for a year's subscription but I find its editorials even more indigestible than when I cancelled it the first time in 2002. I couldn't get any money back if I cancelled my subscription, so I'd be happy to send the remainder of my subscription to someone here.