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naraburns  nihil supernum  1yr ago (text post)   36220 thread views

Culture War Roundup for the week of October 24, 2022

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Apparently the UK's entire net worth was £10.7 trillions in 2020 according to the ONS, their chief statistic agency. What's remarkable is that a whopping 60% of that is "non-produced, non-financial assets".

That's a fancy way of saying land. Why isn't this fact more well known? Should we expect it to be different for other countries? And why aren't more people talking about Georgism?

I made a top-level comment here a couple of weeks ago that tried to outline some of the major updates on the Georgism discussion in the ratsphere.

(Editing for less strawmanning.) I think that a lot of the problem is that Georgism strikes at the heart of fundamental value differences for folks. Many people seem to equate Georgism with Communism, or redistribution of wealth, which I don't find convincing.

For instance:

@bnfrmt:

LVT is equivalent to the state seizing all land, and renting it back at market rates; it's expropriation on a massive scale.

@Brannigan:

Georgism at heart is about identifying what is often the most precious possession a person can have, that most of the middle class has spent 30 years of their lives working to pay off, to render to their posterity, and stealing it from them despite the fact that they haven't really done anything wrong.

@laxam

"We know better than you how you should use your land", is roughly analogous to, "We know better than you what you should put in your body".

@Westerly

This strikes me as rationalists rationalizing their own class self-interest. The same way EA just so happens to only support democrat politicians, rationalism coincidentally just so happens to work out extremely well for the types of people that are rationalists. Easy to be YIMBY when you are 25 and living in a rented apartment in San Francisco.

@naraburns

My concern with LVT is that I regard most kinds of property tax (as well as income tax) as fundamentally immoral

@The_Nybbler

Still low-effort is "it's communism, but only with land". But given how bad communism has turned out, I think it's sufficient. The Georgist LVT is equivalent to the government owning all the land and leasing it out to the highest bidder.

@MeinNameistBernd

Frankly advocating "georgism" is the "break out the guillotines" limit for me, because the victims are my people and the preparators are /r/neoliberal vampires.

These are not cherry picked responses - all of these had at least 10 upvotes, and in many cases 25+.

Some of the responses were less charitable, which has led to me getting heated on this topic, such as people literally calling me a vampire (and getting 15+ upvotes) for arguing for a type of land reform.

Many, many people, who'd spent their whole lives investing in their homes, would see most of that value vanished in a puff of smoke.

Agreed! an instant switch from 0 to 100% LVT would be appallingly dehumanizing and unfair. I would argue for a measured approach of say ratcheting up a LVT 10% every 5 years or so, up until you hit the 60% or 80% benchmark. Hopefully this would lessen some of the burdens of transitioning while also letting us eventually reap the benefits.

My suspicion is no; state evaluation of land values for taxation already exists in various places, and it doesn't tend to value things very accurately.

This is probably the strongest argument against Georgism from a practicality standpoint. I believe that with modern technology, especially machine learning models, we can make land valuation far more accurate though. We simply need the political will to fund appraisers and assessors more, as well as care more about their accuracy. Right now in the U.S. especially their offices are an understaffed, underfunded joke. No wonder they aren't accurate.

Auction-based methods, on the other hand, are clearly designed for robots rather than people. Yes, I know, the system has a certain intellectual elegance, but if you actually tried it for real, people who aren't up on the latest housing-market trends would be getting screwed over constantly.

Ideally a profession of folks who advised people here would crop up, same as in many complex markets. Admittedly this gets a bit hazy, but I'd imagine we could figure it out and the market would eventually correct.

None of that matters, though, if we can't get there from here.

Do you still think this is true if we do a slow, decades based move to LVT?

If we raise the LVT by 10% every 5 years until it hits 80%, some quick math says this is equivalent to about a 50% instantaneous wealth tax. Which is still huge!

Specifically land wealth tax, but yeah I won't pretend that an LVT is not a tax on landowners. That is one of the main arguments for it.

So it's certainly possible, but if you want the transfer effects to be small, we're talking centuries rather than decades. Maybe that's a good idea?

It is definitely possible, I refuse to believe that this is such a hard problem. The government can do big projects and overhauls that work well, see Manhattan project, moon landing, etc. but only if there is strong political will. For transfer effects, I am fine with them being large. I'm convinced the current setup for the land market is directly disincentivizing improving land, and that has gigantic knock-on effects throughout the economy.

Thanks for pointing that out, I could definitely make my stance more clear. What I mean to say is that it is not total redistribution of wealth purely to make people equal.

Land value tax is not about getting rid of capitalism and replacing it with some totally egalitarian society, as is the goal in communism. The core point of Georgism is instead to make the land market function more efficiently, in a way Georgism is less communist than the current system, in which landowners are granted special privileges and can operate in a distorted market thanks to the State. Another way to put this is that the way we trade land is a form of crony capitalism, and Georgism aims to return a true capitalist framework to land, by using capital as a forcing function to use land efficiently.

That’s why when people equate it to Communism I find it facile and not giving Georgism a fair shake. Are you saying that any redistribution of wealth period, even if it makes markets function better, is equated with full blown Communism?

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