And so the time comes at last to part, as I have said everything I wanted to say. I have tried to focus on the important issues and ignore irrelevancies (such as Roy
attempting to prove something pro-LVT with Atlas Shrugged, which clearly either he has not read or he has forgotten that in Galt's Gulch the land was owned privately and absolutely and was bought by the money of Midas Mulligan, who got it from giving loans to successful businessmen. Or Matt Butler conflating the shale in the Rockies with the sweet crude in North Dakota and so getting the quantity incredibly wrong.). I have not always been too strict about that, we have had some fun along the way, but at least I think I have, finally, addressed every interesting or potentially persuasive (if it had been anyone but Roy saying it) point that Mr. Roy gave me or that I could invent. I left the Bible stuff to AquaBuddha, who did very creditably. There's all kinds of references in the Bible supporting the idea that land is meant to be private property. The Bible as a whole is a very pro-property book. Of course, the Bible is true, so it being pro-property should be no surprise.
Anyway, I've tried to address this idea of LVT/landowning-as-theft from every different angle and approach possible. I saved one pro-LVT argument for last, since it appeared to be, in Mr. L.'s own opinion, his strongest, most devastating, most unanswerable argument. Since we have reached 100 pages at last, it is time to address the Pan-Ultimate LVT Argument. Here it is:
The Question:
"How, exactly, is production aided by the landowner's demand that the producer pay HIM for what government, the community and nature provide?"
In the end, however, it turns out that this is not going to be very difficult to address after all. It's a bit of a let-down, an anti-climax. Production is aided by the land owner (or harmed by him) because of the good decisions (or bad ones) that he makes regarding the disposition and management of the land. Allowing the market to reward his good decisions and punish his bad ones ensures that there will be a tendency for production to be aided by the landowner instead of harmed. Every other sector of the market functions the same way. Competition and consumer preference means that behavior not aiding production to satisfy humans' wants will be punished, while behavior which does will be rewarded.
Mr. L. will say "But the landowner doesn't do any labor, thus he's a parasite". Well that's just the Calvinist Smith talking. Everything was all about labor to Smith -- the pain of labor was good and righteous and that is what gave economic products value. But bzzt, wrong, in fact the subjective preferences and values of humans is what gives goods value. The labor theory of value is so shot full of holes and absurdities it's impossible for me to shoot any new ones in it. So anyway, it's wrong. Labor is irrelevant to value. If I can satisfy millions of consumers by doing no labor whatsoever, then of course I should get paid tremendously for it. I deserve it! The end goal is millions of satisfied humans, not some kind of ascetic labor for the sake of labor. And the landowner, if he makes decisions regarding his land which satisfy his fellow humans, then obviously he's contributed to the satisfaction of his fellow humans. He's created value, or "aided production" as Mr. L. phrases it.
But the landowner can get rich even just by leaving the land idle and that's inefficient and horrible, says Mr. L. Well, who says leaving it idle is inefficient? In many cases, that is the most efficient thing to do. Putting improvements on the land might actually lower the value of the land for someone coming along later. Let's say you build a gas station on some land. OK, now a couple years later it turns out that would've been a great place for an apartment complex. The apartments are a much better, more efficient use of he land, according to market preferences. Now the gas station will need to be torn down -- it's a dis-improvement, an annoyance, and a large cost. A speculator wise enough to hold it out of use and off the market for a couple more years could have saved everyone a lot of money. That is, he could have created value.
Land owners perform a very important entrepreneurial function: they allocate and make ultimate decisions regarding scarce land. This is not a parasitic function. This is a critically important function. They may delegate many or all of the decision-making to managers. Fine. So too may the shop owner or restaurant owner delegate many or all of his decisions to managers. But the owner in all cases still plays a vital role. He must find and hire the best managers. He must make sure the managers are doing a good job, making him lots of money. And he is always and unavoidably the ultimate manager, the manager of managers, the one with the money on the line and who determines the direction and future of the restaurant or shop or land. He must correctly anticipate consumer desires. In landowning, that means anticipating city growth trends, adopting new and innovative ways of utilizing land if they will allow better satisfaction of consumer desires, rejecting them if they will not, making connections and putting together projects (roads, electrical, water, making it all fit together, on a free market landowners would do all this, not the state; there's no reason to put the state in charge of roads, electrical, water, or any of those kinds of things, it will be the job of clever landowners working together to make everything fit together into urban [or rural, or suburban] spaces people will love), keeping land undeveloped when it will be most efficient to do so, developing it when that will be more efficient, and deciding what will be the best and most profitable type of development for which to use the land. And much more! Landowners have a busy, busy job, a lot to do.
A big landowner may not be down in the trenches doing lots of manual labor improving his properties. Instead his labor is making decisions. Well, just so the big CEO's job is largely decision-making. Decision-making is important. It is productive. It is, in fact, indispensable and probably the most productive thing one can do!
That is why production is aided by the landowner getting paid. By the way, the other side of this is that he can sustain losses, too. Under Mr. L.'s Platonic ideal, he can't make any profit, but neither can he incur any loss. That's bad. Via the fantastic and quasi-miraculous mechanism of profit and loss, markets reward the value-producing, punish the value-destroying, and thus get more and more of the productive and less and less of the destructive. Without that incentive mechanism, there is no reason for any landowner (land-tenant under Mr. L.'s ideal) to take any risks, to go to any huge mental effort regarding his land, to do anything to try to increase the value of his land. That increase will go to the nation-state; he won't see a dime. Also the best landowners will not be able to progressively control more and more land while the worst lose more and more to their superiors outcompeting them. There is still an incentive mechanism in the ability to make profit or loss on the
improvements, Mr. L. will belaboringly remind us, but there will not be any such mechanism on the land itself. The loss of that mechanism will cause the land allocation to become, eventually, crummy.
I wish there were more to say regarding this The Question. But it's really quite simple: land managers have control over an important part of the economy: land. That being so, they perform an important economic role. That role may be performed either well or poorly. The way to encourage superior performance is to allow these land managers to be subject to market forces and incentives, driving them towards ever-greater efficiency and productivity in satisfying customer wants. That is, to let them be landowners and not landtenants, and thus receive the full rewards of their wisdom or bear the full costs of their folly.
I shall not truly depart, I think, but will continue popping in to see if anything interesting is happening. I will perhaps make a table of contents linking to my most substantive posts of the thread for easy reference. But for now, I really have nothing more to say. I think that I have made a somewhat good case for landownership, and that I have unraveled and disposed of the case against it at least to an extent.
This was the best Georgism thread ever. I'd like to thank Roy L. for being my muse. And now in conclusion, Roy, I'd like to shock you by announcing that you are right! I have been lying all along. All the things you said were lies really were lies. All the things you said were just stupid or absurd really were idiotic and nonsensical. I didn't think it was possible, but you convinced me. Your style of argument is abrasive, it is hard-hitting, but as you say, realizing you're on the side of evil is hard, and so it calls for hard medicine. You never compromised the truth and so finally I was forced to truly and deeply reexamine my beliefs. Thank you for helping me to see my mistakes and how messed up my world-view was. Please, don't ever change your arguing method. It is the most effective one. Keep up the good fight for Land Justice!
