🚀 go-pugleaf

"Fabrizio J. Bonsignore" <fbonsignore@beethoven.com> wrote in message 
news:768f7623.0410071613.2d3da9aa@posting.google.com...
> "sinister" <sinister@nospam.invalid> wrote in message 
> news:<edc9d.9061$x65.7649@trnddc06>...
>> "Fabrizio J. Bonsignore" <fbonsignore@beethoven.com> wrote in message
>> news:768f7623.0410070553.346b0d71@posting.google.com...
>> > Latinamerican countries follow all 'recipes' of academia and yet fail
>> > to achieve sustained development. Could it be that people actually
>>
>> Therein lies the problem.  As poster "royls" points out repeatedly on 
>> this
>> list, economics (academic and otherwise) has become corrupted insofar as
>> they have obscured the "Georgist" critique of taxation---to wit, in its
>> broadest form, that Ricardian land rents should be mostly taxed away, and
>> other taxes that are both more distortionary (less efficient) and less
>> equitable should be reduced.
>>
>> I haven't researched what those in favor of land value taxation have to 
>> say
>> about tax structures in Latin America, but given the penury in places 
>> like
>> Brazil, I can't imagine it's good.  Not to mention all that anecdotal 
>> stuff
>> about huge landholdings in there.
>>
> But I don`t think a particular tax structure would solve
> underdevelopent.

You're wrong.  Of course, you're right insofar as to have a "good" tax 
structure, one must have a strong state, so you can't have a good tax 
structure without other things, and clearly the state structures must come 
before the tax structures.  Here, "strong" is meant in the best possible 
fashion---able to enforce state power, and also able to know where not to 
apply state power.  (Paradoxically, states that are nominally stronger, like 
the USSR, are in fact weaker because their overextension of state power was 
actually limiting---as seen by the crumbling of the USSR.)

Underdevelopment is *partly* an economic condition (as opposed to 
social/cultural, if one can meaningfully draw distinctions).  Economics is 
largely about resource allocation.  Land is a fundamental 
resource---classical economists properly realized that it was one of the 
three factors of production (land, labor, capital).

If land is undertaxed, it is likely to not be used efficiently.  That has 
implications not only for agriculture, but for labor (because you need a 
place to work, even if you're not an ag worker) and, I presume, (less 
directly) for capital.

If I recall correctly, places like South Korea and Taiwan experienced 
soaring development *after land reform*.  A land value tax would accomplish 
the same thing, even more efficiently.

>> In case you're not familiar with it, LVT proponents wouldn't necessarily
>> advocate breaking up large estates and then making land grants (though 
>> Latin
>> America might be so screwed up that that might be a necessary initial 
>> step).
>> Rather, they advocate taxing away (at least much or most of) Ricardian 
>> land
>> rents---that is, the income on land due to the land itself (its location,
>> fertility, etc, as opposed to improvements on the land).  This allows a
>> market solution that promotes *both* efficiency and equity.  One of the 
>> few
>> win-wins in economics.  One interesting point is how modern economists 
>> have
>> gone out of their way to obscure it; Georgists and their allies argue 
>> that
>> it's because they're in the pockets of the wealthy, many/most of whom are
>> (big) landholders.
>>
>
> Even if taxation were able to absorb Ricardian rent, we would then
> have the problem to distribute that G income. The budget is subject to
> a political process and there are no guarantees that the assignment
> will be spent in such a way that it will promote development, even if
> it is totally absorbed by public works (infrastructure) or bureaucracy
> (labor), which most certainly won`t be the case. It is not a pure
> market solution. There is no easy way to solve underdevelopment.

That's true.  That's why you need a reasonably strong, (relatively) 
non-corrupt state.  If you don't have that, you're stuck.

I would argue that with land value taxation and the subsequent freeing of 
labor, the "pressure" for people in the middle or lower ends of the wealth 
distribution to try to seek financial guarantees from the state (e.g., cushy 
civil service job, etc) would lessen, because there would be an attractive 
alternative as growth took off and land tax mechanisms created better 
opportunities for both labor and capital.

> I proposed a policy to handle land ownership with the purpose of
> evening out wealth distribution, on the assumption that for families
> owning a place to live is better than renting.

Right.  But a better way to do it is with land value taxation.

Here in the US, there is a huge policy apparatus with the purpose of 
encouraging single family housing (tax breaks, zoning rules, etc).  Perhaps 
it benefits people in the middle of the wealth spectrum, but it certainly 
doesn't benefit those at the bottom, and it leads to really inefficient use 
of land (further hurting those on the bottom, who have to pay more in rent, 
or live further from their jobs, or in the worse case have nowhere to live 
at all).

>> Good links, from a "geo-" libertarian point of view (which I don't agree
>> with in its entirety, but these are really well written):
>>
>> http://members.aol.com/_ht_a/tma68/geo-faq.htm
>> http://geolib.pair.com/essays/sullivan.dan/royallib.html
>>
>> Finally, note that there's nothing "socialist" about LVT schemes.  Nor
>> anything remotely Marxist---the person who did the most to push LVT 
>> (Henry
>> George) had substantial disagreements with Marx.
>>