My Georgist Scholars Wish List
H. William Batt
[Reprinted from
GroundSwell, January-February 2008]
Just to make sure that I never lack for things to do, I like
making lists. And among my lists are articles that I would like to
write or have someone else write on Georgist subjects. I also have a
list of dream projects -- both research and advocacy -- that I'd
like to see done, but that's for another time.
As for the writing projects, some I don't think I could do a very
good job on, and it would be nice if some others with greater
talents were able to pick them up. I will list some of them here,
ordered according to the major area of academic prowess that is
needed. They generally fall into the categories of history,
philosophy, politics, economics, and art. But inevitably there is
overlap.
The history project I think is most needed is an account of land
speculation in the US. A spate of new books on the lives of various
notable American figures makes references to how they made their
money, and in most cases it has involved cornering a hold on natural
resources, especially land. Many books out in the past five years
about the Founding Fathers relate how deeply involved they were in
the land business. Ed Dodson recently drafted a short piece
outlining several of these figures, but a complete account would
involve many articles, or even a book or two.
But as important as any account of people and land is the need for
how interdependent land and transportation investments have been.
How did the early canal system -- especially the Erie Canal -- alter
the land development and its values, just in upstate New York alone?
How did the laying of railroad track change land use in various
areas of the nation -- and even in the location and rise of cities
themselves? A third puzzle to me is how it has come to pass that the
major political party division has been between a labor oriented
clientele and a capitalist clientele? Is it because land, as in
economics, has dropped from visibility? Is it because political
parties are largely organized at the state and national level,
whereas land use issues are largely local in nature? I think Mason
Gaffney, somewhere in his writing, raised the question in passing,
but it needs more probing.
I often think about how helpful it would be to have a coherent
statement about what on earth we should make private and what should
be public? The public-private division seems to be a matter of civil
debate right now, and the privatizers are winning. But if there is a
realm that is worthy of being called "the commons," we
need more extensive discussion about what it is. I will be making a
dinner speech on this subject in May, but it deserves far more
attention. Along with this goes a discussion of what it means to "own"
something, especially when we're talking about air, water, land, and
other elements of nature. These fall into the category of
philosophy, and we would do well to try interesting that discipline
in our discourse.
Lawyers talk about property as a "bundle of rights," and
the matter of ownership is best addressed in its forums, at least if
they can be induced to think about what ought to be rather than what
is. When the components of that "bundle" are enumerated,
economic rent is never even included. We need to engage with law
professors, most of whom have never heard of our perspective. The
only organized intellectual community now exploring this realm is
Chicago's Journal of Law and Economics, as far away from our ideas
as one can be. The extent to which so many matters of property and
ownership have been subsumed by law means that Georgists are
disadvantaged by not having our views known in that community.
Of course raising the discussion of economic rent is the greatest
challenge of all! To neoclassical economists, it is a trivial factor
if it exists at all! As long as this view holds Georgists will be at
a loss to make ourselves part of the public dialogue. But if first
we are able to demonstrate its magnitude, the question immediately
arises as to who is entitled to it. Who, in a word, should get the "free
lunch." These words are becoming better known, ironically due
to Milton Friedman's popularization in his book, "There is No
Free Lunch." Georgists both know there's a free lunch but know
who is now getting it!
Ground rent needs to be better explained than it is now, even by
us. Only recently have I come to appreciate the distinction between
"stock" and "flow" as economic concepts. If we
appreciate that rent is a flow, simply passing through site parcels
and not fixed there, it allows us to better understand its
relationship to place and time. I've wondered if we might explain
rent like the flow of water through the ground, or like an aroma
through the air. There are common phrases that we could use to
better illustrate this. Where did the phrase, "the fat of the
land" come from? How about "Pay me now or pay me later,"
or "You can't have your cake and eat it too."
I've been challenged recently to fight attempts here in New York
State to cap, or even eliminate property taxes. But if one were to
suggest then that most of the "capital gains" from the end
sale of a property parcel, were to go to government, there would be
little opposition. I view this as the choice between "lump-sum"
payment and "auction rental." We're seeing the former
pattern right now with the sale of pollution rights and of the
reallocation of the spectrum.
Given how land values appreciate in the face of other uses in
propinquity, how intellectually honest, as well as fiscally prudent,
is the Nature Conservancy program? The public protects open space by
buying it up to take it off the market, paying market price in doing
so. Wealthy people take a tax deduction by donating it first to the
Nature Conservancy as an intermediate step to its final acquisition
by the public. Moreover, is this practice conducive to good land use
configurations?
Our tax policies do so much else to distort sound land use design
that we Georgists are well positioned to contribute to the debate.
It's not just the rural landscape that is affected by sprawl and the
Nature Conservancy's program. It's urban areas even more so, not
just by the amount of vacant space, underused sites, and depreciated
structures, but in the improper and inefficient use of so many
sites. We have long recognized how infrastructure investments have
affected development patterns -- just look at what happens at
highway intersections or where new sewer and water lines are laid.
We're now seeing new technology make a difference: I have a map of
my city's WiFi "hotspots," and I have wondered how much it
has influenced site values. And with the rising cost of driving, how
much does being on a bus-route make a difference? If downtowns rise
in site value and peripheral areas become less attractive, how can
we show changes in the land value gradients in cities?
The overarching question that needs to be asked is how the tax
policies used can and should influence behavior. There is an
oppressive conventional wisdom in some circles that taxes should not
be used to influence behavior. But this is really nonsense, as taxes
in fact already influence our choices profoundly. A better question
to be posed is whether there are taxes that will not influence
behavior, and what those taxes are. That is, taxes that are "neutral."
Georgists know that a tax on land value is in fact neutral, because
the tax is incorporated -- economists say capitalized -- in the
price of the parcel. To be sure, a shift from contemporary
conventional taxes will alter behavior, as it should. But this is a
correction of a previous distortion. The question is not abstruse;
just three months ago, C-Span posed it as a call-in problem to its
viewers.
These are some of the challenges that I've jotted down on occasion
as I've thought of them. Many, even most, are beyond my ability to
explore. But we need to think about how to address them. If we don't
who will?