Topics: Commentary, Multimedia Tags: fred harrison
Posted on Wednesday, February 4th, 2009
Author:
Karl Fitzgerald 
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Fred Harrison and the Motherlode team discuss the importance of capturing land rents to avoid future financial catastrophes. All this and more amongst the momentous backdrop of the 100 year anniversary of the People’s Budget! Forward this onto your friends. Thousands must see it!
Make sure you check Fred’s extensive list of clips too.
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February 4th, 2009 at 12:02 pm
I’m trying to get my head around your proposed solution to the boom/bust cycle. You are saying that moving from an income-tax to a land-tax would solve the property side of the cycle. Wouldn’t people be taxed the same in the end? Without government cutting spending (and therefore taxes), how would we all be better off?
I am thinking that preventing credit expansions and cutting government spending and interference (bailouts, fiscal stimulus, tariffs, first-home-owner grants etc) would be the way to go.
As you may have gathered already, I’ve been influenced lately by the Austrian school of economics but I am still early in my economic education. However, do you guys have a response to the words of Murray Rothbard?
http://mises.org/rothbard/georgism.pdf
Why are you guys Georgists rather than Austrians? Is it more of an ethical question of land ownership?
February 4th, 2009 at 12:43 pm
Hi Steve,
good questions. You can hear Fred Foldvary in this interview on the synergies between Austrian and Georgist economics. About 9 mins into the interview he gets onto it following geo-anarchism & geo-libertarianism.
The reason why we are georgists can be summed up by one of our favourite sayings:
“If you own all the money in the world, and I own all the land, how much do you think I’d charge you for your first night’s rent?”
The difference in taxation is that those who hold control of our natural opportunities, ie the ability to use our own 2 hands to make a living on land (whether urban or rural), the landlords would be forced to pay compensation back to society in return for the privilege of owning some of this precious earth. At present the multitude of tax dodging techniques ensure that their contribution to society is minimal. Meanwhile, the working class pay their taxes to fund the infrastructure and services that make land more valuable.
A switch to land rents would fund the abolition of income taxes, GST, payroll and some say even company taxes. You can’t hie land in a tax haven.
Thankyou for alerting me to the Rothbard article. After a quick scan I can see that he starts off well. However he falls into the all to familiar trap of mis-understanding the role of private and public property rights. A key point of clarification is that property rights in land have 2 elements. There is the private right to put up a fence and to improve one’s property/ build a house, better gardens etc and for that owner to keep those rewards.
However, there is also the public right to a share in the naturally appreciating value of land. With a naturally increasing population and social progress, prime locations are always more valuable in the long run. This is called economic rent.
A Site Rental fee or Land Value tax would easily capture this economic rent when effective yearly valuations and a flat rate are charged. There is no need for bureaucrats to be involved in land ownership any more than they are today with council rates etc.
Fred Foldvary is the man you want to read/ listen to. Make sure you hear his talk on the GFC from Dec 11th, 2008 too on the Renegade Economists interview page.
http://foldvary.blogspot.com/
http://www.foldvary.net/
regards,
K2