In Israel, yes. In a lot of places (US, Canada, Russia, etc.), no.
Actually (and this is really ironic), I’ve seen more active and more price-elastic real-estate markets in Israel than in the US.
Which is (or used to be) notable for strong property rights.
Taboo the word capitalist and use it as I defined it. This is not an issue of your ideology regarding “strong property rights” or the supposed immorality of land-value taxes. It’s public policy, so the broad parameters have already been set: a broadly capitalist economy with state interventions to ensure market efficiency and an active debate over the degree to which state interventions should fight poverty. Given an acceptance of state intervention to ensure the efficiency of markets, land-value taxation has been studied and tested and shown to be an effective policy.
At some point you will not produce enough value and it will become not efficient to feed you. Sorry.
Yes, like it or not, that is what happens in a capitalist economy when nobody intervenes.
The fundamental problem is that if you tax income, the person cannot be unable to pay the tax (except by the size of the tax being so large that he hasn’t enough money to live on). If you tax land, the person can be unable to pay the tax. Furthermore, they can be unable to pay the tax out of no fault of their own—they need not be real estate speculators for the value of their land to suddenly go up, or for them to lose their job. And the land may also have some value to them which it would not have to other people who buy the land when they are forced to sell it, resulting in a deadweight loss when they are forced to sell. How is this good public policy? You’re describing it as beneficial to public policy in generalities; if you said outright “someone who has a mall open up near his house, should be forced to travel 30 extrta minutes a day to get to his job, and live too far from his sister who takes care of his kids,” nobody would call that good public policy.
If you tax land, the person can be unable to pay the tax. Furthermore, they can be unable to pay the tax out of no fault of their own—they need not be real estate speculators for the value of their land to suddenly go up, or for them to lose their job.
This is a feature, not a bug.
if you said outright “someone who has a mall open up near his house, should be forced to travel 30 extrta minutes a day to get to his job, and live too far from his sister who takes care of his kids,” nobody would call that good public policy.
I call scope insensitivity: why is that bad public policy? Someone already deemed the mall worthy of being built and opened, so why should the comfort and convenience of the mall’s hundreds or thousands of visitors be impeded for the sake of one guy who happens to live near there or own land near there.
Besides which, in real life, malls are usually not opened in residential areas at all, thanks to zoning and planning laws. And yet, those same zoning and planning laws get perverted to serve landowners’ class interests over those of the general population who need a place to live, as do building-value real-estate tax laws.
I’ll counter with my own scenario, this one being considerably less fantastical: why should hundreds of thousands of working people across the Bay Area in California or New York City be kept without affordable housing, sometimes even homeless, just so that landowners in the center-city areas can make massive amounts of money off pure location-value? A land-value tax would be the most egalitarian way to force the land rentiers to themselves support, rather than oppose, an increase in urban density, which would let a freer, more efficient market allocate space in desirable locations.
Remember as you contemplate this scenario, that oftentimes the working-class/salaried-class citizens competing so hard for affordable housing are the very people who made the location desirable in the first place, as with artists in Brooklyn or technology workers in California.
Someone already deemed the mall worthy of being built and opened, so why should the comfort and convenience of the mall’s hundreds or thousands of visitors be impeded for the sake of one guy who happens to live near there or own land near there.
The fact that the person living near the mall benefits from being near his job and family has value only to him. If he is forced to move, that value is simply lost, not gained by the next person who moves in.
Besides which, in real life, malls are usually not opened in residential areas at all.
That’s fighting the hypothetical. If you don’t think malls are a good example of something out of the property owner’s control that can raise the value of the property, pick something else that is.
why should hundreds of thousands of working people across the Bay Area in California or New York City be kept without affordable housing, sometimes even homeless, just so that landowners in the center-city areas can make massive amounts of money off pure location-value?
My point is that this screws people who are not landowners making money from location value.
Remember as you contemplate this scenario, that oftentimes the working-class/salaried-class citizens competing so hard for affordable housing are the very people who made the location desirable in the first place
Oh, I haven’t forgotten that, but that favors my side. Those people are, in your comparison above, the “hundreds of thousands of working people” screwed over by the land tax, not the landowners making “massive amounts of money off pure location-value”.
If you tax land, the person can be unable to pay the tax.
In the US it works with an interesting twist. Most land is taxed (you pay property taxes), though not by the federal government. However if that’s the land you live on, it usually cannot be taken away from you in bankruptcy. So if you are unable to pay property taxes, you may be forced into the bankruptcy, but not off your land. It’s not a universal rule and depends on your state laws and circumstances of your case, but I think that the house you live in and the land it stands on are protected from the creditors under most states’ bankruptcy laws.
I’ve seen more active and more price-elastic real-estate markets in Israel than in the US.
The US is big and different. The real estate market of Manhattan is not at all like the real estate market of South Dakota. The point is that there is enough cheap land. It’s not a binding constraint unless you need a specific location.
with state interventions to ensure market efficiency
Color me sceptical. State interventions often claim to pursue market efficiency while in practice they just implement crony capitalism.
I am very suspicious of invocations of generic “market efficiency” which do not specify exactly who and how will benefit from it. Often enough it’s no more than a “think of the children!” cry.
Yes, like it or not, that is what happens in a capitalist economy when nobody intervenes.
Bullshit. The US is the canonical capitalist economy and and it doesn’t happen. And people starve to death under feudalism or under communism, too, and in rather large numbers.
You should distinguish between the caricature of capitalism in your own mind (in which, I suspect, nobody ever does anything which does not lead to profit in terms of moar money) and real-life societies.
The point is that there is enough cheap land. It’s not a binding constraint unless you need a specific location.
Everyone needs some kind of specific location. Almost nobody can actually find a use for land in South Dakota; that’s why it’s so cheap. This reinforces my point that real-estate is non-fungible, particularly between locations.
Bullshit. The US is the canonical capitalist economy and and it doesn’t happen.
Please demonstrate, to the massive spite of anti-hunger and anti-homelessness campaigns in the USA, that taking away all state and charitable interventions (as I had specified: when nobody intervenes), with particular emphasis on the state interventions, would result in a state of affairs in which no statistically significant quantity of people are subject to death by starvation or exposure.
This reinforces my point that real-estate is non-fungible, particularly between locations.
Humans are non-fungible too, to about the same degree.
...that taking away all state and charitable interventions
You are still confused between the map and the territory. What you think of as “pure capitalism” does not exist, has never existed, and will never exist. It’s a model!
Let me assert that real-life societies which we call “capitalist” do much better at preventing death by starvation and exposure than societies which we call “non-capitalist”.
How many people starved to death in the US during the last ten years because they were too poor to buy food?
How many people starved to death in the US during the last ten years because they were too poor to buy food?
Reading through this, for the purpose of this debate it might be better to ask how many people starved to death pre-Great Society legislation, or pre-New Deal, as both sweeping-changes implemented socialistic attempts at poverty amelioration.
Would you like to compare the US to Soviet Russia which was as far from capitalism as it was possible to get?
By the way, the question how many people starved to death “pre-Great Society legislation” has been asked. The answers vary from none to some small number.
The poor tend to turn to crime or emigration in to avoid starvation. That means things can be quite bad witout showing up as actual famine. Things have to be very bad indeed for there to be nothing worth stealing.
There are examples capitalist countries which are indeed in this intermediate zone of high crime and emigration, eg South Africa and much of Latin America.
You are still confused between the map and the territory. What you think of as “pure capitalism” does not exist, has never existed, and will never exist. It’s a model!
You’ve got this backwards. I proposed a model of capitalism that fits the entire OECD. You have countered by chopping off my specification when nobody intervenes and saying I’ve confused map and territory.
We are talking about situations where economically useless people starve to death. That does happen in your model, that does not happen in OECD in reality. That makes me think that within this context you have a bad model which does not reflect the real life.
Of course you can propose a model in which anything you want to happen, happens. So what?
We are talking about situations where economically useless people starve to death.
No, we are talking about situations in which economically useless people starve to death without state intervention. Thus we can simply count the number of people dependent for their subsistence on welfare-state subsidies, which is quite a lot, actually.
At some point you will not produce enough value and it will become not efficient to feed you. Sorry.
Which is (or used to be) notable for strong property rights.
In Israel, yes. In a lot of places (US, Canada, Russia, etc.), no.
Actually (and this is really ironic), I’ve seen more active and more price-elastic real-estate markets in Israel than in the US.
Taboo the word capitalist and use it as I defined it. This is not an issue of your ideology regarding “strong property rights” or the supposed immorality of land-value taxes. It’s public policy, so the broad parameters have already been set: a broadly capitalist economy with state interventions to ensure market efficiency and an active debate over the degree to which state interventions should fight poverty. Given an acceptance of state intervention to ensure the efficiency of markets, land-value taxation has been studied and tested and shown to be an effective policy.
Yes, like it or not, that is what happens in a capitalist economy when nobody intervenes.
The fundamental problem is that if you tax income, the person cannot be unable to pay the tax (except by the size of the tax being so large that he hasn’t enough money to live on). If you tax land, the person can be unable to pay the tax. Furthermore, they can be unable to pay the tax out of no fault of their own—they need not be real estate speculators for the value of their land to suddenly go up, or for them to lose their job. And the land may also have some value to them which it would not have to other people who buy the land when they are forced to sell it, resulting in a deadweight loss when they are forced to sell. How is this good public policy? You’re describing it as beneficial to public policy in generalities; if you said outright “someone who has a mall open up near his house, should be forced to travel 30 extrta minutes a day to get to his job, and live too far from his sister who takes care of his kids,” nobody would call that good public policy.
This is a feature, not a bug.
I call scope insensitivity: why is that bad public policy? Someone already deemed the mall worthy of being built and opened, so why should the comfort and convenience of the mall’s hundreds or thousands of visitors be impeded for the sake of one guy who happens to live near there or own land near there.
Besides which, in real life, malls are usually not opened in residential areas at all, thanks to zoning and planning laws. And yet, those same zoning and planning laws get perverted to serve landowners’ class interests over those of the general population who need a place to live, as do building-value real-estate tax laws.
I’ll counter with my own scenario, this one being considerably less fantastical: why should hundreds of thousands of working people across the Bay Area in California or New York City be kept without affordable housing, sometimes even homeless, just so that landowners in the center-city areas can make massive amounts of money off pure location-value? A land-value tax would be the most egalitarian way to force the land rentiers to themselves support, rather than oppose, an increase in urban density, which would let a freer, more efficient market allocate space in desirable locations.
Remember as you contemplate this scenario, that oftentimes the working-class/salaried-class citizens competing so hard for affordable housing are the very people who made the location desirable in the first place, as with artists in Brooklyn or technology workers in California.
The fact that the person living near the mall benefits from being near his job and family has value only to him. If he is forced to move, that value is simply lost, not gained by the next person who moves in.
That’s fighting the hypothetical. If you don’t think malls are a good example of something out of the property owner’s control that can raise the value of the property, pick something else that is.
My point is that this screws people who are not landowners making money from location value.
Oh, I haven’t forgotten that, but that favors my side. Those people are, in your comparison above, the “hundreds of thousands of working people” screwed over by the land tax, not the landowners making “massive amounts of money off pure location-value”.
In the US it works with an interesting twist. Most land is taxed (you pay property taxes), though not by the federal government. However if that’s the land you live on, it usually cannot be taken away from you in bankruptcy. So if you are unable to pay property taxes, you may be forced into the bankruptcy, but not off your land. It’s not a universal rule and depends on your state laws and circumstances of your case, but I think that the house you live in and the land it stands on are protected from the creditors under most states’ bankruptcy laws.
The US is big and different. The real estate market of Manhattan is not at all like the real estate market of South Dakota. The point is that there is enough cheap land. It’s not a binding constraint unless you need a specific location.
Color me sceptical. State interventions often claim to pursue market efficiency while in practice they just implement crony capitalism.
I am very suspicious of invocations of generic “market efficiency” which do not specify exactly who and how will benefit from it. Often enough it’s no more than a “think of the children!” cry.
Bullshit. The US is the canonical capitalist economy and and it doesn’t happen. And people starve to death under feudalism or under communism, too, and in rather large numbers.
You should distinguish between the caricature of capitalism in your own mind (in which, I suspect, nobody ever does anything which does not lead to profit in terms of moar money) and real-life societies.
Everyone needs some kind of specific location. Almost nobody can actually find a use for land in South Dakota; that’s why it’s so cheap. This reinforces my point that real-estate is non-fungible, particularly between locations.
Please demonstrate, to the massive spite of anti-hunger and anti-homelessness campaigns in the USA, that taking away all state and charitable interventions (as I had specified: when nobody intervenes), with particular emphasis on the state interventions, would result in a state of affairs in which no statistically significant quantity of people are subject to death by starvation or exposure.
Seriously. Call bullshit all you like, but the numbers don’t lie.
Humans are non-fungible too, to about the same degree.
You are still confused between the map and the territory. What you think of as “pure capitalism” does not exist, has never existed, and will never exist. It’s a model!
Let me assert that real-life societies which we call “capitalist” do much better at preventing death by starvation and exposure than societies which we call “non-capitalist”.
How many people starved to death in the US during the last ten years because they were too poor to buy food?
Reading through this, for the purpose of this debate it might be better to ask how many people starved to death pre-Great Society legislation, or pre-New Deal, as both sweeping-changes implemented socialistic attempts at poverty amelioration.
Compared to what?
Would you like to compare the US to Soviet Russia which was as far from capitalism as it was possible to get?
By the way, the question how many people starved to death “pre-Great Society legislation” has been asked. The answers vary from none to some small number.
The poor tend to turn to crime or emigration in to avoid starvation. That means things can be quite bad witout showing up as actual famine. Things have to be very bad indeed for there to be nothing worth stealing.
There are examples capitalist countries which are indeed in this intermediate zone of high crime and emigration, eg South Africa and much of Latin America.
You’ve got this backwards. I proposed a model of capitalism that fits the entire OECD. You have countered by chopping off my specification when nobody intervenes and saying I’ve confused map and territory.
So what is the purpose of your model?
We are talking about situations where economically useless people starve to death. That does happen in your model, that does not happen in OECD in reality. That makes me think that within this context you have a bad model which does not reflect the real life.
Of course you can propose a model in which anything you want to happen, happens. So what?
No, we are talking about situations in which economically useless people starve to death without state intervention. Thus we can simply count the number of people dependent for their subsistence on welfare-state subsidies, which is quite a lot, actually.