Frank's Georgist shtick . . . perversion?

[maineiac]

Why does he do it?

Wouldn't he have more success if he couched the principles of his position in layman's terms?

I asked him once to post a succinct paragraph illustrating his philosophy for the benefit of we lesser intellects. He gave me several links, none of them succint, or even paragraphs.

Is Frank a troll, and if so, whom is he trolling?

[FrankChodorov]

Wouldn't he have more success if he couched the principles of his position in layman's terms?

they are actually classical liberal terms that is nothing more than taking the right of self-ownership to it's radical Lockean, logical conclusion...

[eques]

"Economic rent" is a zero-content phrase for me.  I've tried reading about it and I still don't quite get it.

What, in vernacular English (without using hyperlinks!), does it mean?

[FrankChodorov]

"Economic rent" is a zero-content phrase for me.  I've tried reading about it and I still don't quite get it.

What, in vernacular English (without using hyperlinks!), does it mean?

in it's most simple terms - the return on land not attributed to the labor upon it.

[Braddogg]

"Economic rent" is a zero-content phrase for me.  I've tried reading about it and I still don't quite get it.

What, in vernacular English (without using hyperlinks!), does it mean?

in it's most simple terms - the return on land not attributed to the labor upon it.

::shudders::  Frank, mind if I try?

The current property tax system taxes two things -- the value of the land, and the value of what is built on the land.  The idea of "economic rent" is to seperate these two things, and only tax the value of the land.  It helps explain why Frank thinks that the so-called "view tax" is a good idea -- it is a tax that is assessed on the value of the land itself, rather than what is built on the land.  The reason Frank thinks that "economic rent" is valid, and a way of explaining the term, is this: Land belongs to everyone.  By claiming and using a portion of the land, you are, in effect, "renting" the land (because you can never really "own" land, because it belongs to everyone).  How do you determine how much the land is worth?  That doesn't seem to be a problem (so Frank says), because they do it in determining property tax.

That sound about right, Frank?  And did that make a lick of sense, eques?

[FrankChodorov]

That sound about right, Frank?

not too bad...

The idea of "economic rent" is to seperate these two things, and only tax the value of the land.

they already are seperated on your tax bill...

economic rent IS the socially created value of your land.

It helps explain why Frank thinks that the so-called "view tax" is a good idea

this is a non-sensical statement...makes about as much sense as saying I think gravity is a good idea.

there is no such thing as a "view tax"...views have always been a factor in the price of land it is only over the last 10-15 years that the assessing companies have enough confidence that they can apply a view factor because they have enough objective data points.

what I think is a good idea is that rather than the landowner collecting the socially-created land values which violates the absolute right of self-ownership of those being excluded it should be collected and retained socially (equally and directly by neighbors within a community).

The reason Frank thinks that "economic rent" is valid, and a way of explaining the term, is this: Land belongs to everyone.  By claiming and using a portion of the land, you are, in effect, "renting" the land (because you can never really "own" land, because it belongs to everyone).

again...saying i think economic rent is "valid" is like saying gravity is valid.

as a radical Lockean I believe that everything that exist prior to human labor is owned in common (not unowned) and that just appropriation (private exclusive use) can only occur if "enough and as good is left in common for others" - the test being the appearance of economic rent.

so private exclusive use is necessary because it enhances the common good (surpluses produced on land can be voluntarily traded for) but the collection of economic rent by those that enclose can only come at the expense of the absolute right to self-ownership of those you exclude.

[eques]

"Economic rent" is a zero-content phrase for me.  I've tried reading about it and I still don't quite get it.

What, in vernacular English (without using hyperlinks!), does it mean?

in it's most simple terms - the return on land not attributed to the labor upon it.

::shudders::  Frank, mind if I try?

The current property tax system taxes two things -- the value of the land, and the value of what is built on the land.  The idea of "economic rent" is to seperate these two things, and only tax the value of the land.  It helps explain why Frank thinks that the so-called "view tax" is a good idea -- it is a tax that is assessed on the value of the land itself, rather than what is built on the land.  The reason Frank thinks that "economic rent" is valid, and a way of explaining the term, is this: Land belongs to everyone.  By claiming and using a portion of the land, you are, in effect, "renting" the land (because you can never really "own" land, because it belongs to everyone).  How do you determine how much the land is worth?  That doesn't seem to be a problem (so Frank says), because they do it in determining property tax.

That sound about right, Frank?  And did that make a lick of sense, eques?

Okay... I've seen "economic rent" used in other contexts, but I think I understand the concept a bit more clearly.

The other context I saw it in referred to that of petroleum.

I still have to work out whether I agree with "land owned by everybody" principle, as well as whether I think that it's appropriate for an agency to collect economic rent on behalf of society, but at least I have half an idea what's going on when Frank pops out with "economic rent."

Though I do have to admit that land ownership is a bit of a funny thing... at first, there was a "I found it first!" claim to the land, and then there was more of a "My guns are bigger than yours!" claim to the land.  Now, it's more like a "You can have it as long as we don't need a new strip mall!" claim to the land.

Can economic rent be collected without coercion, or is that not a concern?  That is, where do the monies collected as economic rent go, or, where are they supposed to go *to*?  What is the most appropriate use for economic rent once collected?

[FrankChodorov]

Can economic rent be collected without coercion, or is that not a concern?

all enclosure of land beyond Locke's proviso (enough and as good left in common for others) FORCES a legal and monetary obligation on those being excluded - immediately for tenant and in the future for a buyer - that violates the excluded's right of self-ownership.

even in anarchy (no government) the collection of economic rent by private thugs is FORCE that violates the right of self-ownership of those being excluded.

so if libertarians believe at all in their fundamental tenet - the absolute right of self-ownership - they should be advocating the VOLUNTARY SHARING (directly and equally) OF THE ECONOMIC RENT WITH THEIR NEIGHBORS (and their neighbors with them) inorder to uphold EVERYONE'S absolute right of self-ownership.

where do the monies collected as economic rent go, or, where are they supposed to go *to*?

from those excluding to those being excluded - directly and equally.

if the economic rent is collected and spent by the govenment then the economic rent isn't owned in common - it is owned collectively.

I don't believe in collective rights...only individual rights (in common is an individual right).

What is the most appropriate use for economic rent once collected?

it is not charity but rather compensation for being economically disadvantaged by privilege inorder to uphold the absolute right of self-ownership.

the landowner's right of self-ownership is intact because:

1. they don't produce the land
2. they don't create the unimproved land value (economic rent).
3. in a pure economic rent sharing scenario there would be no purchase price to land - just sharing based on the market valuation of the location.

[Roycerson]

Can economic rent be collected without coercion, or is that not a concern? 

We've covered this.  I made Frank walk me through step by step.  I managed to take the pieces of a much larger thread and use only the conversation between Frank and I.  Believe it or not.  I did this to SAVE you some reading.  There were a couple of posts with multiple quote/responses that I have seperated here but it's mostly linear and my question should give you context for his replies. 

Roycerson:  I think that roads are currently traveled by millions of people.  That no one has a right to up and claim rights to them and start excluding others.  The government doesn't have a right to sell those roads to a private entity without the consent of 100% of the people who currently pay for and utilize them because currently no one has a greater claim on them than anyone else.

The question becomes:  How do we maintain them w/o coercion and without preventing people from travelling wherever and whenever they want?  Even if they don't have a penny to their name.

Frank: the right of way is owned in common as an individual right with the sole role of the state to insure these individual rights from infringement

the actual roads themselves are owned collectively and leased to private entities for maintenance and capital improvements with a fixed rate of return when transfered to the next lease bid winner (this is how Mt. Sunapee in NH is run)

the financing of all new roads is by collecting the land rent increase that would occur by the monetary advantage of living near a road
Roycerson: It has not yet been sufficiently proven to me that this can be done w/o violating a person's right to self-ownership.

Frank: the right of self-ownership is the basis for property rights (I own myself) and the resulting labor to provide one's sustenance is the natural extension of self...so property rights are based on labor.

the unimproved land values that result from locating a road near someone's land is not the result of the landowner's labor - so their right of self-ownership is preserved.

so we have two scenarios to deal with:

1. natural economic rent which results from rising populations and the private labors of neighbors improving their property resulting in positive externalities

- the natural economic rent is to be shared equally and directly between neighbors within a community

2. social economic rent which results from public infrastructure investments

- the social economic rent is to be collected to finance the public infrastructure investment.

everyone is subject to #1 wherever there is natural economic rent.

anyone who doesn't agree with the collective decesions made about the building of public infrastructure and funded by ground rent are free to vote with their feet and join another community that finance roads in a diffeerent way.

Roycerson:  So my family and I find us a plot of land and start farming.  The land has no economic scarcity rent because we're 50 miles from our nearest neighbor. 

10 years later someone comes and builds a road and people start settling the surrounding areas.  Now my land does have scarcity rent attached and you think I should start giving a portion of my labor for the maintenance of the road or be physically removed from the property I've been farming for the last ten years.  correct?

Frank: no portion of your labor created the economic rent...

1. your don't produce the land
2. you don't create the unimproved land values
3. if there was no economic rent then you homsteaded the land not purchased it

just go to the bank and take out a home equity loan on the appreciated land value to be paid at title transfer.

or better yet allow a lien to be placed on your appreciated land value, deposit the lien in a local land bank (non-redeemable), and have the land bank distribute "rent vouchers" for natural and social economic rent...

Roycerson: So if this mythical farmer does nothing at all than he is allowed to remain on his land but the land bank holds deed to it and gets the economic benefit from the externalities that cause increase of unimproved value?

An affirmative response will get you more questions from me.

Frank: not a deed - a lien...

the land bank doesn't "get the economic benefit" as the land bank converts the non-redeemable lien backed by economic rent into a local currency and distributes it directly and equally amongst the members of the community.

Roycerson: I assumed the land bank wasn't using the lien for it's own benefit but intended to imply that they gained control of the increase in unimproved value. which seams to be the case.  We're good here.

If the land bank does not have the ability to sieze the land than where does the value of the currency come from.  Is it redeamable?  What are the specific conditions of this lien? 

Obviously, the man who claimed his land rather than purchase it and who has, by his own inaction, allowed a lien to be placed on the unimproved value does not in the end profit from the increase in unimproved value and I'm OK with that.  He paid nothing and when he's ready to leave he gets nothing of the unimproved value.  He got to use the land for free for ten years.  Still no force involved here.

Now he's ready to sell the land.  He is of course entitled to be compensated for his improvements?  There is a lien on the unimproved value.  How does this work?

Frank: ok - let's scrap the land bank idea for now...it has served it's pupose.

Roycerson:  ohh but I have land baaank queestiioons 

Frank: instead the unimproved land value is only due to your neighbors upon title transfer (sale or death).

Roycerson: wow you really are scrapping the land bank.  So I have lived on this land for ten years and do not have to pay taxes/rent/whatever until I transfer title?  At this point I sell the property and presumably owe the unimproved value to xfund for redistribution to those who have been excluded from making use of the land?  Still don't know exactly how that is done. 

Frank: the only question (as you point out) becomes one of whether or not a market value can be determined for unimproved land value and improved land value.

but this is done everyday by the private insurance world - when you purchase insurance for replacement cost, they are only calculating improved value (capital and labor) and not unimproved land values (economic rent).

if you have a total building loss the land values are still there as all of the infrastructure that makes the location unique are still intact.

Roycerson:  No doubt it can be done.  The question becomes: By whom?

Frank: pre-distribution not redistribution - redistribution means that the landowner has a rightful claim on the socially created economic rent.

private industry does it here in NH via market valutaion/assessments.

but it is backed by the force of the state and this is a RIGHTFUL use of force becuase it upholds the SUPERIOR and ABSOLUTE property rights individuals have to their labor products and thus the right of self-ownership itself.

Roycerson: pre-re whatever.  Distribution is good enough for me.

Now we're back to the land bank.  Whether unimproved value is due upon title transfer or is acquired by lien at the time economic rent is accrued the value still has to be distributed. 
Frank:  one continues the US dollar the other creates a new local currency...

Roycerson: There are a couple of other details.  Inheritance.  Can this hypothetical farmer leave the land to his son or any other person/persons of his choosing leaving the lien intact?
If so, can he transfer ownership at a time other than his death.  Recieving payment, or not recieveing payment, as he chooses for the improvements and still leaving the lien intact.
Frank: yes with the lien and local currency.

no with economic rent due at title transfer with US dollars.

Roycerson: well lets not continue the US dollar it's as imaginary than our farmer.  My concern is that the new local money is equally imaginary or is backed by use of force.

lien AND local currency for inheritance?  I would hope this farmers son could just keep on farming and continue to act as if the land bank did not exist. 

Am I right to assume that in this scenario if a person dies with no heir the state exercises it's lien and takes possession of the land and sells it to the highest bidder.  The total price - value of improvements = unimproved value which can then be used as a benchmark to judge the economic rent of the surrounding land? 

US Dollars?  Is this an important part of the plan or can we call it.  Something of monetary value other than local currency?  Commodity based currency perhaps whether paper or electronic.  Or real currency made of silver or rubies like the liberty dollar.  It seems this is key to the value of the local currency.  It is backed by the guarantee of the state/city/entity that it will recieve value from the land upon title transfer?

Veloym (funny enough to include):  The new form of currency shall be Skittles. Different colors shall represent different demoninations.
Our ring-buying alien friends may desire colors/flavors which do not appeal to mere humans, but I'm sure we can work something out.

Frank:  I believe currency is a social construct and not a store of value.

the liens are non-redeemable but the currency derived from them are based on the trust of rising local land values that are socially created...

Roycerson: Why why not use real money?  If you're not using real money than why must the economic rent be paid in US dollars?  You were doing so well.

Frank: in a title transfer system, all I am saying is that you are going to have to make the collection of the economic rent at transfer of title...I don't really care what system of money is used for this (what are you calling "real money"?).

in the lien system, the appreciated land values are the backing of the local currency but they are not redeemable so that is unacceptable to hard money cranks (is this your real money?).

Roycerson: why not redeemable?  Can I pay economic rent in local currency?  Fiat money is only valuable because the government accepts it.  If the government doesn't except it than how can you expect people to?  Will other localities have incentive to accept this local currency for payment of economic rent?

Frank: if you make the land liens redeemable then the landowner would have to sell the land or pay some other way and that is what I am avoiding by it being non-redeemable...

can you "pay economic rent in a local currency" that is not backed by land - sure but again I am trying to devise a system inwhich it is shown that the landowner doesn't have to pay with something that is created via their labor because the economic rent is not created via their labor.

as I said - forget the land liens/land banks/rent voucher currency...it served it's purpose to show the landowner is not being "taxed" on their labor.

the simplest system then is the collection and distribution of economic rent at title transfer (sale or death) whatever form of currency is used (hard money or fiat)
Roycerson: By making it non-redeemable I think the intrinsic value of the currency is jeopardized.  I think it could be done with redeemable currency but without forcing the farmer to sell.  I just wrote a paragraph about how and deleted it because my thoughts are not yet fully developed.  It will suffice that a lien on the unimproved value is something that has real monetary value.  The local currency essentially represents a share of the holding and would likely be subject to trade and speculation.

Let's assume at this point that we agree the system we've discussed does not violate anyone's right to self-ownership and by extension their right to the proceeds of their labor.  It, in fact, secures as best it can those rights for those that are denied the same oppurtunity afforded our farmer in access to land with which to exercise his labor.

Now we're back to the original topic of the thread, the funding of roads, and your contention that this would be done by the collection of economic scarcity rent.  If economic scarcity rent belongs to the people and the purpose of collecting it is to return it to it's rightful owners than how is it going to be used for road maintenance?  Other than voluntarily by neighborhood associations, business owners etc.  However if that is your answer than it hardly necessitated the raising of the topic of economic scarcity rent in the first place.
Frank: our dollars today are non-redeemable notes backed by the assets of the US Government which includes land assets of 40 trillion dollars.

I view economic rent 2 ways:

1. natural economic rent (population increases & the positive externalities of your neighbors labor)
2. social economic rent (public infrastructure investments)

so the social economic rent comes from public infrastructure investments...when we build a public road, a sewer line, etc. we increase the land value of those near it.

all public infrastructure investments can be financed via collection of the social economic rent...

Roycerson:  Ohhh man.  Now you gotta go and figure out what portion of increase in land value is due to public infrastructure investments.  Why can't life be easy?

I think I'm good for now.  Thanks.

[FrankChodorov]

nice job Royce...you carpenters know how to be efficient.

you would think that I would take a hint and just copy and paste over and over rather than re-typing - huh?

[SeanSchade]

Frank, I would appreciate any critique you may have of my understanding of this topic.

One of the purposes of economic rent is to prevent speculation and land grabbing by making it unprofitable?

For example, let's say a farmer has 1000 acres. The economic rent is $1 per acre, or $1000 total. He earns $2 per acre via agriculture for a net of $2000. His profit would be $1000 after paying the economic rent due to his neighbors. Correct?

Now let's say the farmer still has 1000 acres, but only farms 500 of those acres. He still earns $2 per acre, but now is only netting $1000 because he isn't fully utilizing the land that is claimed. In this example he would have zero profit.

This scenario would appear to prevent land investors or speculators from purchasing the best land and sitting on it hoping to sell it for a profit later.

If you have ever played SimCity this kind of makes sense. As you run out of land, scarcity, you rezone to a higher value or density. Now in SimCity the old houses, factories, and farms get bulldozed, and new higher capacity buildings get built in their place. How would this work in the real world?

[maineiac]

Oh, please, no!

???

[SeanSchade]

Oh, please, no!

???

What? 

Am I way off base here in your opinion?

[burnthebeautiful]

Ok, I get it now. Frank believes if I exclude people from my property I should pay them money in compensation. Well fuck that, people own their property, they don't owe anything to the people being excluded. I'm excluding you from my property? Boo hoo.

[citizen_142002]

I say that land is a commodity. Sure it wasn't produced by labor, but in order to obtain property you have to either trade the fruits of your labor (money), or you have to homestead the land and make it usable/accessable to human beings through your labor.
I understand what Franks says, but I don't agree with it. All property is either protected by the point of a gun or by the good graces of others. Frank makes it sound like the exclusivity of land ownership is uniquely reliant on the threat of force, but with out a government AND without property owners willing to defend their property, all property would be taken by those who wish to have it. All property needs to be defended or it will be taken from you, but Frank implies that the situation with realty is somehow unique.
It's not.