Unlike you, I already knew what microeconomics meant. Here's a clue: this debate centers around a macroeconomic issue.
Oh, you wish it was, and that's how you're desperately trying to frame it, as that would appeal to your collectivist sensibilities. That is also the only way you can insist on referring to land supply as fixed and perfectly inelastic - seeing everything only "economy-wide", in the collective -- with the more controversial
aggregate demand and aggregate supply (as if that meant anything at all, since virtually everything, productive and non-productive, used and non-used, can be counted as part of "the economy").
Inelasticity of land supply for "the economy", in the aggregate, breaks down utterly and completely when you pull your head out the aggregate "economy-wide" ass void, and view land strictly from the level of the individual and/or competitive firm, and also examine supply in terms of "availability to use" (e.g., zoning laws on the public sector control side, or industry-specific use on the private firm side). The ONLY way that you can even begin to examine and explore heterogeneity of supply and demand in a way that allows us to predict actual behavior is through microeconomics.
And the total supply of land is what is in existence.
And that's where you, as an aggregate thinking collectivist, unwilling or incapable of reasoning at the level of the individual, continuously fail.
It is not true of the land market, because land is not produced. As you say, everyone wants to buy low and sell high: whether land prices are generally low or generally high, either the buyer or seller isn't getting his way (during the bubble, sellers were happy, but buyers had to assume loads of debt, whereas now, sellers are all "woe is me" whereas buyers feel they're getting a great deal). Because of this, the sale of land is not affected by price.
Gibberish. Obfuscating geo-gibberish, as you focus on the idea of production as if that was the locus, or prime determinant for the supply of all goods. And once again you did it -- you focused on "
the sale of land", and not "the
supply of land" (which requires no sale, but only availability at a given price).
In fact, price is affected exclusively by demand.
Which price? Market price? Demand price? Supply price? Tell me you're not pulling a Roy-semantics game by conflating every usage of the word price as if it means "past tense" market price exclusively. Either way, you're so dead wrong it's pathetic. Market price absolutely requires and is affected by, a consummation of both supply and demand. Supply price is just a theoretical construct - as it is the lowest theoretical price at which a given quantity of commodities will be offered under given conditions.
Every owner is a potential seller. At all times.
In theory, yes, but who gives a shit about potential when we have the more important reality; one where we can observe that not every owner is a seller at all times, and certainly (and even more importantly)
not at all prices.
Land changing hands does not affect the supply of land.
Only because you don't know what supply is.
The Egyptian Mohammed Ali taxed the ownership of date trees. Result? The trees were cut down to avoid the tax. Supply was reduced.
Yes, that is one consequence of a market-distorting tax, no differently than shortages created by farmers who will DESTROY CROPS or give them away rather than sell them in the case of price controls, or the hidden tax inherent in hyperinflation. The supply is destroyed in those cases because the commodity is perishable, or can be destroyed. And in the real world, there are people who walk away from LAND to avoid paying mortgages and taxes they can no longer afford. And there are even some who will destroy the property on the land, and many who would destroy the land itself if they could. Not just to avoid the tax, but to spite and sabotage the efforts of those who distorted the market and stood to benefit from that distortion in the first place.
QUESTION BEGGING STRAW MAN ALERT:
You stupidly think that the date trees only constituted supply if the owners of them were actively trying to sell them, but in reality, the supply of date trees was what was in existence, because others could possibly buy them from their owners...
Could you be any more wrong? The owners were not selling transplanted date trees. The trees that were taxed WERE NOT FOR SALE. In essence it was the land that was taxed, on the basis of how many date trees it it had thereon. That was, regardless of the condition of each tree, and without regard to whether they even produced anything at all. A similar tax was placed on the produce, along with compulsion that dates be sold to Ali at prices which he determined.
You stupidly think that all owners are automatically sellers, and that anything in their possession is part of "supply", given that others "could possibly buy them". That's both moronic and far from reality. The landowners who were unfortunate enough to have date trees in that time were never WILLING AND ABLE to sell the trees separately from their land in the first place. And even if they could sell them, it would only be to those who were willing to undergo the same compulsory SLAVERY to a market-distorting tax
based on ownership of a resource.
But once they were cut down, the supply was reduced. And that's what happens when you tax things that are not fixed in supply: the supply is reduced.
Ask Pat if you can buy a clue, because your definition of supply is still whack.
When they cut those trees down,
the supply was not reduced, because those trees were never part of any supply in the first place. Even if they were part of the supply (transplanted trees being bought and sold like other commodities), the artificial cost of ownership imposed by Ali would undergo two logical steps for any profit-maximizing date tree owner. Firstly, the trees would offered for sale at a reduced price. If the tax was great enough, that price would drop to zero, as trees would be offered up for free.
"Hey, want to buy a
date palm tree compulsory slavery contract with Ali -- cheap cheap?" (market supply increases)
"Shit no, the tax makes it not worth it to own at all."
"OK, do you want to take them off my hands for nothing? Just haul it away onto your land for free?"
"Hell no! I would just end up owing Ali, and there would be no benefit to me."
"OK, I understand, because that's the shit sandwich I've been put in."
::: chop chop chop :::
Why? Because while date trees would have been cheap to buy, they were
not at all cheap to own -- all because of a market value distorting tax. ONE potentially high price to a seller, for outright ownership, turns into a perpetual RENTAL price (no ownership without paying that price) that NEVER ENDS. Thanks for the "financing" on the interest-only loan, state. Fuck off.
They only drive up the rents to neighbors' land to the extent that their neighbors' land is more economically beneficial to own.
...for those who actually economically benefit, you mean -- like those who actually sell their land and take a profit. It may be a NUISANCE to others, based on their preferences, tastes and values.
How are entrepreneurs going to make money investing in improvements that are not in demand?
Well, you're obviously not a entrepreneur, that's for sure. That is the beauty of it all -- the big difference between economists and theorists in a vacuum, and risk-taking entrepreneurs in the real world. Demand is not just "an existing pie", nor is it fixed, inelastic or homogeneous. It really is, in many cases a "Field of Dreams". Like pet rocks, or Casinos in the desert, or even Personal Computers. Demand from the Entrepreneur Supply Side (in a free market) is all about risk, enticement, momentum, gravity and critical mass, and whole volumes of HUMAN BEHAVIOR factors that most economists are incapable of comprehending, and haven't the first clue how to accurately describe.
Well, you have it ass-backwards. That's just a fact. You don't spend hundreds of millions of dollars building buildings in the hope that, someday, its cost will be justified. Not if you want to remain in business. High land values precede skyscrapers; they're what justifies such an intensive use of land.
Strawman. Setting aside DUBAI (which thoroughly falsifies your claim), I never claimed that, as a rule, hundreds of millions of dollars was spent on a skyscraper in the hope that someday anything would occur. You're the one that has the genesis completely ass-backwards, as a matter of absolute fact, because you don't see that it's lock-step.
Imagine a stop-motion video of New York, Hong Kong, and Las Vegas, going from the distant past an on into the present. Large skyscrapers are preceded by smaller skyscrapers, which are preceded by buildings several stories high, etc., - the initial investment is made, the economic activity that follows feeds that investment, and fuels the growth of those buildings, no differently than trees. That is not due to the "land values", which are only a consequence of the economic activity that resulted from all the initial improvements.
And there's also condominiums. When George Jefferson made it, he moved to the East side, to a de-luxe apartment in the sky!
Yeah, when you live in a market that was built in a rabbit hole economy, all kinds of distortions occur. The one thing that does attract and appeal to elites and elitists where vertical concrete hive monstrosities are concerned - Penthouse Apartments. Being high in the sky, and "above" everyone else. In other words, NOT MOST PEOPLE.
In point of fact, Midtown Manhattan is some of the most expensive land on earth, and that's so because so many people have such a strong desire to live there. Manhattan's fucking awesome. While it's true that people who don't live there can enjoy the opportunities and amenities available in Manhattan, it's also true that it's very expensive and inconvenient to do so if you don't live near it. That's why the privilege of living in Manhattan is so costly. It's unfortunate that improvements are under-provided, because without that misallocation of resources, we'd all be much better off.
I have lived in Manhattan and Shanghai, and can appreciate what those of actual means see in them. I can also see the mundane and the nightmare elements for those who are of limited means living in those cities. So you're happy to party in "fucking awesome" Manhattan, I see it. But you also sound like a typically clueless liberal to me -- someone with a sociopathic disregard for the sacrifices required by all the millions of little worker bees who shoulder the real burdens that were never necessary in the first place.
The LVT would make owning a home far, far less expensive than it currently is.
Bullshit. LVT would make BUYING a home less expensive -- just like date trees on Ali's turf would have been less expensive - TO BUY. LVT would not make OWNING a home less expensive. Quite the opposite, because the very mechanism by which the price did drop was through an artificially increase in THE COST OF OWNERSHIP. The smart money didn't want to be on that economic treadmill either.
FAIL.
