May as well go to the most appropriate community...

isocracy

So, the people of equal-rule are telling us what? That since they can't grasp the Time Cube, they've given up on physics and are tackling economics instead? With all due respect, should I call the cops and tell them that ikilled007 has kidnapped you and is now posting under your name?

Re: isocracy

Nobody can grasp the Time Cube. Well, nobody sane anyway..

Re: isocracy

g-d, I hope I'm just not getting the joke you're making.

Catch-22 again

An interesting paradox, but it makes sense. Time can be controlled, but only by the insane.

The call for Lockean Agorism is based on an ontologically flawed account of nature. Just thought I'd point that out.

You've mentioned this before, and in as many words. Go on.

Lockean Agorism, as well as Nozick's need for the Lockean Proviso in Anarchy, State, and Utopia (that one leave as much and as good for others) is based on an account of nature where the commons are owned by everyone thereby implying that everyone has a necessary right to it inasmuch as they have a necessary right to other things we consider property. However, when one delves into this issue it is easily found to be flawed since the basic support seems to lie in that people have apparent unfettered access to the resources and can be explained away by analogy; if I were to leave my door unlocked and open this would give people as easy access to the property within as they would have to any natural resources and yet, somehow, we would not consider the property in the home to be "owned" by everyone. The key to the issue is to dispel the myth that everyone has necessary ownership of natural resources, but still constrain it through a labor theory of ownership such that one cannot simply amass property that they have not modified.

The analogy is incorrect; produced goods should not be compared to natural resources in this manner.

but still constrain it through a labor theory of ownership such that one cannot simply amass property that they have not modified.

BTW, this part is fine. In pragmatic terms it really doesn't make much difference, but I can change a few words so it's clearer...

I am not interested in Mises view on whether it turns to socialism or not; that was not the point of contention. The issue is whether or not Lange's model could provide - or at least reduce - a reliance on market feedback in favour of trail and error adjustments and 'spot markets'. Most seem to think that he was correct in that regard.

Marxian-influenced Geogian who incorporates a fair bit from the Austrians.

Oy..."third way" schemes make me nauseated. And the article reads like it was written by a first year econ student. Not saying he's wrong because of that, I'm just saying that's what it reads like.

Before addressing the central thesis, let me get a few things off my chest-

Firstly, I find the, "but the Free Market forces really only work under perfect conditions!" argument to be trite and tired. Free Market forces do not only work under perfect conditions. They only work *perfectly* under perfect conditions. That is not to say they don't work just fine and dandy when you throw in complicating factors like imperfect knowledge, externalities, moral hazards and etc. The game changes, and the movements of Invisible Hand are augmented because of that, but it'll still do it's job, and in the same general way that the models which are "justly lampooned" predict. (I realize that you're probably not arguing that the Invisible Hand only works under perfect conditions in the first place, but still...it's a sentiment I have seen expressed so many times, and it is sort of repeated in the article.)

Secondly, a pure free market contains probably the highest measure of "democratic control" of the market that is possible on Earth, if you take "democratic" to mean rule of the people. In a free market, the people DO rule. Each dollar is like a vote, each product and service, a candidate. In a planned economy, the govenrment rules, and at best, all we have is a virtual representation of our will in the market (which is unecessary to begin with, cause I can express my own will in the market better than anyone else can).

Thirdly, and I know I might be alone in this, cause everyone from Marx to Smith seems to disagree with me, but I do not agree with the "landlords are useless" attitude. Landlords do not "produce" anything, but they give access to capital. True, the author of the article makes the very point that land should not be confused with capital-

the conflation of land and capital into a single entity has all the signs of a tragic mistake

-but he (or she) doesn't really explain *why* I shouldn't think of land as capital. Land is capital- makes sense to me.

But as I said, landlords give access to capital that I believe probably wouldn't exist if not for the phenomenon of landlordism. If land-capital was "publically" owned, there still would be a landlord, it'd just be government. But since government is not supposed to be out for profit, the profit/price mechanism, that even the author apparently recognizes as valuable, is broken down when it comes to that resource. Governments would have to portion out land-capital by some other system derived that central planning (and I needn't even go into the problems that will invariably arise from that). Landlords, on the other hand, driven by profit, demand the highest price they can conceiveably get, and so help to ensure in a small way that the most profitable enterprises will have access to valuable capital. Under "public control", there is a much greater chance that a less valuable enterprise will have access to capital that a more valuable enterprise could have used instead.

You might respond that we could have bids on the land-capital to function as a check against this. But then, government would be out for the highest possible price it could get, and we're right back to what a private landlord would be doing, only at a much greater cost in terms of tax dollars. So you see, even at it's best, and I mean tip-top, immaculate best, the government could only do as good as a private landlord, and almost always at a greater cost.

I'd go on, but it's 5:30 AM right now, and I can barely keep my eyes open. I'll tackle the main thesis point later, and this is probably enough fodder for a decent discussion anyway.

the conflation of land and capital into a single entity has all the signs of a tragic mistake

Maybe they mean the commodification of land? I can't remember who coined the term "false commodity" though as it's been a while since my Comparative Politics course.

Even that, I don't believe. Why should I consider land a "false" commodity? A quick jaunt to Dictionary.com defines comodity as:

an article of trade or commerce, esp. a product as distinguished from a service.

Okay, so land isn't a "product" (in it's native, untouched state, anyway. One you've developed land for a particular use- industrial complex, shipyard, vineyard, etc- I say it IS a product), so maybe in THAT way it's not a commodity, but other than that, I don't see why I should think land isn't one.

The development represents an improvement on land; the improvement is the degree that it is a product in the sense you describe.

Yeah, I can't remember the guy's arguments or even who he was, unfortunately...I just remember there were three: land, labor, and one other though it might have been based on a specialized definition of "commodity" as well...

And the article reads like it was written by a first year econ student. Not saying he's wrong because of that, I'm just saying that's what it reads like.

It is a draft :) But damn, I wish I wrote economics essays with that sort of scope in first year!

Firstly, I find the, "but the Free Market forces really only work under perfect conditions!" argument to be trite and tired.

A free (i.e., no government interference) *is* distinguished from a perfect market.

Each dollar is like a vote, each product and service, a candidate.

That's a bad analogy (made by everyone from Eurocommunists to Libertarians) - the suggestion that one dollar equals one vote is an anathema to democratic thought.

Landlords do not "produce" anything, but they give access to capital.

Go on. How do they do this?

Governments would have to portion out land-capital by some other system derived that central planning (and I needn't even go into the problems that will invariably arise from that). Landlords, on the other hand, driven by profit, demand the highest price they can conceiveably get, and so help to ensure in a small way that the most profitable enterprises will have access to valuable capital

I do not see why a government could not auction leasehold and thus receive the market rate.

That's a bad analogy

It's not a perfect analogy, but it's not a "bad" one either. It may have been better if I had said one "economic transaction" is one vote, maybe not one dollar.

Go on. How do they do this?

Well...by giving access to capital!

Seriously, that's what they are doing when they rent out space on their property that they either developed, or purchased already developed. They are renting access to land capital, just like movie studios sometimes rent out film equipment, or even somewhat like a bank lends out money that they didn't make, but charge a price for access to it in the form of interest.

Without the ability to profit from developing/renting out a piece of land, or what they've produced on it, why would anyone do it? Only through the ability to profit from producing land capital is land capital produced/facilitated/developed, whatever you want to call it.

You may say the government can do this too, and you're right (to an extent). But at the moment, I'm just pointing out that landlords aren't a waste.

I do not see why a government could not auction leasehold and thus receive the market rate.

It could, but like I said in my last comment, all you've done is traded one landlord for another if the government is to be concerned about getting market price. And would you rather have a government bureaucracy as a landlord or a private citizen as your landlord? As someoen who *does* rent business space, I have to say I'd prefer the private citizen.

Put another way, at it's very best, government could only play the role of landlord as good as a private citizen, but not better. And not without a higher cost than a private citizen would incur.

And would you rather have a government bureaucracy as a landlord or a private citizen as your landlord?

Think of it in terms of opportunity cost. Governments - from local councils upwards - can derive their income from taxing the goods and services people produce or by leasing the resources that people use. Which is preferable? Which have economists since Smith onwards said is preferable?

My impression: the piece doesn't "prove" very much in my mind. As I read it, I either agree with the statements or I do not, and I see few new reasons that I agree with what I agree and few reasons to change my mind in with what I don't.

For example: You properly characterize the perfect competition model as unrealistic and note that some don't like it. That's true, and the people you list are a few of the examples of detractors. However, you ignore the fact that Austrians (an example that is close to my heart) ALSO find the perfect competition model to be unrealistic. Yet, the Austrian approach shows that we don't have to abandon perfect competition in favor of a "monopoly theory".

Or, you mention the "same sort of fallacy that free market dogmatists engage in", yet I'm not sure what that fallacy is.

One point that is always interesting to me: in the passage ikilled007 cited you mention that Lange's response is "largely considered a successful response". I'm not sure who it was that pointed it out (It may have been Joe Salerno), but in as far as it is a successful response, it's a concession to Mises and Hayek's point. Lange basically says "You're right, we DO need prices to allocate resources" and then says that the State should just set some prices and play with them until they are "right". There are a number of problems with this position. (1) The State has no clear incentive to get prices "right" - entrepreneurs, however, do since their income depends on it. (2) If the State sets prices the way the market would under the same conditions (a single supplier), those prices will be monopoly prices - which is generally considered "not a good thing". (3) If the State sets prices the way the market would, then why are we bothering having the State do it? The market would do the same thing, and has incentives to do so. The State has to try to do it, and potentially against its own incentive structures.

Like ikilled007, I don't think that we can say that landlords don't add anything to the productive process. I would argue that they add to the productive process in exactly the same way that capitalists and laborers do: by directing their resources to the most productive use. Therefore, they should be paid accordingly. We don't pay capitalists because they own capital. We pay them because they direct that capital toward ends that satisfy consumer wants. We don't pay workers because they labor. We pay them because they direct their labor toward ends that satisfy consumer wants. We don't pay landlords because they own land. We pay them because they direct their land toward ends that satisfy consumer wants.

That said, there is something to the claim that land taxes are one of the least distortionary forms. It appears that the supply of land is perfectly inelastic (or nearly so), and, therefore, taxes shouldn't distort the provision of land. In fact, we could have a 100% land-tax and not distort anything at all. Except, of course, that the uses that land can go toward are heterogeneous, so that there is a gain from making sure that land goes to its most productive use. A 100% land-tax would eliminate any incentive to ensure that land is used as productively as possible. (I've heard that some Georgists have argued for, basicall, a 99% land-tax to preserve the allocation incentives, which would get around this problem... if there were no adjustment costs to deciding the allocation of land, which I think is unlikely.)

Of course, there's also the difficulty we've talked about before of separating the value of "land" from the value of "improvements to land" when the two are not "sold separately" - which means any division must, by necessity, be basically subjective and arbitrary (though it may follow an arbitrary rule).

I'm not seeing that any of these difficulties (being the ones that I'd worry about) are solved here. Though, obviously, you didn't have much space to try and solve them.

Firstly, I really appreciate the remarks you've made here and the time you've spent to make them. Your comments are, as always, insightful and have given me food for thought.

I agree with your comments regarding Lange, especially concerning matters of motivation. Lange, in may ways, was engaging in an intellectual exercise - was it possible, he was asking in response to von Mises, to have state-regulated market (or near market) values?

I will disagree with you on the matter of landlords and capitalists being rewarded for directing their resources to the most productive use, because productivity isn't necessarily the goal for either - the goal is profit. The most profitable use of a capitalist is to find improvements in productivity. But he most profitable gain for a landlord is to acquire position in places where they think others will be productive (and lease those out to producers).

The problem of separating the value of land from the improvements is a genuine one; real-estate valuation (site value and capital improved value) is, of course, something that local council engage in for rates - or at least they do here - and with a fair degree of accuracy. It's a science, albeit an imperfect one.

Agreed that the goal is profit. But, the most productive use should also be the most profitable (at least given market prices, and relatively small free-rider problems). Here, I think part of the problem might be that we're using "productivity" in slightly different ways. My sense is that you mean something like "physically productive", where I mean "value productive". So, while it might be that a capitalist can earn a profit by being more physically productive (an option not available to those simply owning natural resources), a landlord can certainly earn a profit by being more "value-productive" - that is, by taking the "fruit of the land" and putting it toward a more valued use. (For example, leasing a natural apple grove to an apple wine producer rather than an applesauce producer.)

In fact, that's how landlords earn profit, they find land whose resources are being poorly used (or not used at all), acquire it, and reallocate the resources to higher-valued uses. In terms of value-production, that reallocation of existing resources is a "productive" activity, and will result in profit.