Renegade Economists on broadcast and pod

Melbourne radio 3CR’s weekly Renegade Economists show is now available by podcast.  To my knowledge this is the first podcasting, and the only current radio broadcasting, by any Georgists.

Main presenters Karl Fitzgerald and Alice Bleby are associated with Earthsharing Australia, whose numerous activities now include a filmmaking competition.

Funding transit from TIF’s

A new paper(pdf) by Andrew Heidel proposes using TIF money to fund development of new stations along existing CTA rail lines. He identifies a number of potential sites, implements a simple method of ranking them based mainly on past TIF growth and ridership potential.

Why Canberra’s land leasing failed

Australia’s capital, Canberra, was set up as a leased-land community, so that, as PM Edmund Barton said, “we shall be able to get the land on fair terms, lease it on fair terms and still make a profit for the Commonwealth.”  While economically land leasing can be similar to Henry George’s proposal to collect the land rent, serious mistakes were made.  In particular, lease rates were to be re-evaluated only every 20 years.  Thus, a lease could gain speculative value, and by the time revaluation was due a significant interest was opposed to it.

Details are in an article by Leo Foley, reprinted in the Australian Georgist journal Progress.

Slashdot discussion on IP

The general issue of “Intellectual ‘Property’” was raised today on Slashdot, and the ensuing discussion makes just about all the important points. Most people accept some sort of IP, but length of protection, especially for copyrights, is too long. Some question whether IP is legitimate at all; others point out that patents do require holders to provide details of their inventions, thus preventing long-term trade secrets. And there’s a link to what seems to be a fine book Against Intellectual Property, which can be purchased in hardcopy or downloaded free.

Progress in Pennsylvania, maybe Connecticut

The March ‘08 issue (pdf) of the Center for the Study of Economics’ Incentive Taxation newsletter has a couple of positive notes.

Washington, PA, a split-rate city for decades, solved a budget deficit by raising the tax on land to 82.63 mills, while taxing buildings at a rate of only 3.5 mills. Thus the added tax burden goes mainly to people who are leaving land idle, and doesn’t discourage productive construction or investment.

And in New London, CT., the Re-New London Council recommends a land tax because of its benefits to, among other things, housing affordability. Had such a policy been in place over past decades, perhaps the Kelo case would never have happened.

Price of land in NY/NJ area

A new report from the New York Federal Reserve Bank looks at land price patterns around their metropolis (specifically, New York City less Richmond, plus ten New Jersey counties). Like Barker’s work noted here last year, they used sales of vacant land to indicate the value of land in general. But while Barker’s purpose was to estimate total land value and land rent, the New Yorkers’ objective is to see how land prices relate to parcel location and other characteristics, and describe trends over the 1999-2006 period.

Defining the center of New York as the Empire State Building, of course they found that the distance thereto is inversely proportional to land value. They observed a very sharp increase in average prices, from $46.65 in 1999 to $366.08 in 2006, with the increase especially pronounced in land intended for residential use.   Of course this rate of increase cannot be sustained, as a subsequent analysis might document.

The paper notes that even vacant land may be “improved,” for instance by having been graded and having utilities.  Improved lots of course are more valuable than otherwise identical lots.  So do Georgists want to tax the improved value or the “raw” value?   I think it was William Vickerey who pointed that this really isn’t a big problem. Either could be used as a base, as long as assessment practice is consistent.

Thanks to Richard Biddle and CityEconomist

Racism and land value taxation

Prosper Australia exec Gavin Putland has written an insightful analysis (“Still on the Mountaintop”) of how a policy of taxing productive activity almost guarantees, under American conditions, that blacks will suffer economic discrimination and be overrepresented among the poor and unemployed. The link is thru NAIRU, which requires a substantial level of unemployment in order to prevent ruinous inflation.

“full employment” means enough unemployment to cause enough wage restraint to give stable inflation. So we’re living in a system of enforced failure. A percentage of people have to be unemployed, and therefore, at the boundaries of unemployment, another percentage of people have to be underemployed or intermittently employed or precariously employed. In other words, the economy is being run in such a way that a certain percentage of people have to be losers.

He explains what seem logical reasons why Africian Americans, rather than other minorities or the entire labour force, bear this burden. The solution is to tax “land-like assets” instead of “house-like assets” and the work that goes to produce them, resulting in increased employment opportunities with less inflation, among other benefits. The piece includes detailed explanation of why even landowners will be better off under this reform.

Even experienced Georgists will benefit from reading Putland’s accessible explanation.

Unruly Americans

Just finished Woody Holton’s Unruly Americans and the Origin of the Constitution.  He’s not the first to point out that the Constitution was established largely to protect the interests of creditors, especially those holding government bonds used to fund the American Rebellion.  Bond speculators benefited, as did all creditors, with the states prohibited from issuing paper money, and a federal court system established. Holton gives relatively little attention to land issues, tho he notes that under the Confederation the cost of using the military to secure western land exceeded the revenue from land sales.

The Constitution provided for significant federal military, which not only protected settlers (and their landlords) from Indians but also could aid in putting down slave rebellions.  Holton notes that, by making debts more enforceable, the Constitution also made credit more available to Americans.  He doesn’t seem to doubt that more debt would be a good thing.  He also seems to think that tariffs were an appropriate source for federal revenue, tho acknowledging that excise taxes, such as on whiskey, could lead to difficulties.  He approvingly notes that higher tariffs allowed the easing of taxes on land.

Henry George, of course, opposed tariffs as a hindrance to trade, and thought government at all levels would best be funded by a tax on the value of land and other natural resources.  And George suggested that a government which does not assist in collection of private debts might discourage excessive lending.

Despite his apparent failure to appreciate such economic fundamentals, Holton’s book is well worth the read for a description of the conditions and methods which brought about the original U S Constitution.  (There is a little discussion of the Bill of Rights, which Holton sees as having been promised as one of the compromises necessary to get an elite-favoring constitution ratified, and even less of the subsequent amendments.)

“No country in the world affords such a field for speculations both in paper and land” as the United States, Noah Webster declared in 1791.  One of the most successful of the speculators was Abigail Adams.   [-- page 267]

Bus Rapid Transit and Land Values

Network effects seem to be the main impact of bus rapid transit on land values, at least according to a Lincoln-supported study of Bogota, Colombia.  The analysis suggests that an extension of BRT service in 2003 may have had little impact on land prices in the area of the extension, but greatly increased land costs in an area which was already served by BRT previously.   The explanation could be a network effect– as the area served by BRT expands, the value of access to the system also expands.  A 15%- 20% increase in “property” value was found.   Obviously if one were looking only at land value, the percentage would be higher. Also, the data source was asking prices rather than actual transactions.

The study is described here (free registration required, or use bugmenot) , and a more detailed working paper is here (ditto).  The basic finding is that, yes, you can expect to fund transit from a land value tax, and it can be appropriate to use systemwide funding sources to pay for extensions.

I would have said that there is no “bus rapid transit” service in Chicago, but I can’t refute the wikipedia claim that the McCormick Place Busway is BRT.  For regular transit passengers here, however, there are no bus routes which are isolated for any distance from automobiles and other traffic.

At least they spelled the name right

I’ve gotten reports from a couple of HGS friends about Jonah Goldberg’s Liberal Fascism, which mentions Henry George a couple of times, not in a favorable light. I rarely find it worthwhile to read Goldberg’s columns in the Tribune, so I would hardly waste time reading his book, but I have been lent a copy of it and found two references to Henry George in the index.

Posted in Georgist, Miscellaneous outrages | 2 Comments »

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