response to 'Killer Arguments Against LVT, Not (104)'

this is in response to a blog-post discussing voluntarism vs 'justified' 'legitimate' coercive taxation. there's no way i could fit my rambling response into a comment so i post it here in the hope someone may give it some thought.

Let me just begin by saying that I consider anyone not in favour of anarchism to be a faux-libertarian. Im no friend of pro-state samizdata Pearce thats for sure and find it stunning that he should be arguing against taxation and in favour of voluntarism. I can only assume he's happy to compromise his pro-state ideals by pretending to be a voluntarist for the sake of petty internet points scoring.

my problem with lvt is not particularly due to its merits vs other forms of taxation but with it being necessarily coercive. there is no way any form of taxation can ever be described as voluntary. im not anti lvt - im anti tax full stop.

i just searched for a reference to Rothbard's comments on the in-necessity of a monopoly on property registration and found Rothbard's critique of georgism. there is also a pro-georgist counter argument critiquing Rothbard's critique. the comments are worth scanning, in particular the one from Jock Coates.

anyways onto my responses to the arguments raised in Wadsworth's post:

5. “Would CE get away with increasing their monthly rents to £1,400? Of course - the next person who comes along looking for office space will be indifferent between paying £1,400 rent BR-free on one side, or £1,000 rent + £400 BR on the other side.”

doesn't this completely ignore the profit motive? Why would the un-taxed landlord not lower his rates by even 1 pound to increase his market share? By focusing on justifying tax as voluntary you seem to be ignoring any possibility for competition. With profit driven competition between the two landlords driving down prices rents would probably discover and reach the natural market value except the untaxed landlord would always have a 400 pound advantage. So the 'next person who comes along looking for office space' wont face a choice between two identical rents and therefore perhaps 'voluntarily' chose to be taxed 400pounds. No-one would voluntarily chose to pay 400 pounds above market rates. In a competitive environment the rates would not be identical and therefore the argument for the 'voluntary' acceptance of the 400 pound tax margin would not stand up.

“7. If the government then declares the other side of the street (where all the offices belong to private landlords) to be a BR-free enterprise zone, would they not also increase their rents to £1,400 a month? Yes they would, why wouldn't they? That's the new going rate.”

again – no. why on earth would 1400 pounds be the 'new going rate'? Where is the profit motive and competition in this scenario? Profit driven competition would completely remove the 400 pound artificially added component. No matter how sticky that price may be it would eventually come down.

“the total rent = location rent + how nice the building is.”

this is what I cant understand about the reciprocity demanded by lvt proponents. Unless lvt is going to exist in a world of state provided services what is the justification for the 'location rent' component? If the office building benefits from drainage services and the owners of the building are voluntarily paying the private drainage providers then why should they owe the state or society anything? Any and all direct services will have been voluntarily paid for and any indirect value from location and proximity will be a component of the market price of the building. The chain of people involved in establishing the building in that location have added this value and have been rewarded by receipt of the greater market value. If a nearby sandwich shop can be considered to add indirect value then the sandwich shop will already be receiving reciprocal reward in the form of additional customers. There is no need to coercively redistribute anything when voluntary transactions of the market already distribute value to those who have earned it.

Chefdave - “When we purchase land what we're really buying is a government granted license to collect taxes in a certain location. Given that the number of locations are finite in supply the owners of these licenses hold a monopoly power to extract rents. Yes, this is a "private" exchange but voluntary it is not as non-owners have little alternative.”

land is a finite resource and therefore a scarce commodity. However it is only the existence of the coercive state and its control of land use that gives rise to this monopoly power to extract rents. the view that transactions involving a finite and scarce resource are in some way coercive is perhaps valid but it seems a lot closer to anti-property libertarianism such as Proudhon. If a renowned shoe maker only makes 5 pairs of highly demanded shoes can this be described as coercion?

Chefdave's view only holds if you have already accepted the legitimacy of state ownership of all land. Rothbard and others have already argued away any contention that a state is necessary to register property ownership. There is no need for monopoly in land registry.

"This is where I differ with Georgists. I believe land that is totally unused and physically unclaimed is owned by no one. Therefore the homesteader who fenced off 20 acres that was unused by anyone and begins "working the land", has not aggressed against anyone.

The Georgists believe that original land is owned by everyone. So as soon as one person claims ownership and is not willing to pay a property tax to the world, that person is aggressing against every
other person in the world.

Our conclusion was this: some arbitrary assumption is required, in this case you arbitrarily accept that original land is unowned or owned by everyone. In the first case, laissez faire capitalism proceeds without any further coercion. In the later, state coercion is always present and furthermore the risk of corruption inside the state is extremely high."

He refused to accept that

a) The idea of somebody marching off and 'claiming' spare 20 acres was entirely irrelevant in today's society; or

b) That the concepts of 'land ownership' and 'the state' are synonymous; or even

c) That the rent on the mythical spare 20 acres which nobody else wants would be precisely $zero anyway.

d) And I am a Georgist and I personally do not believe that 'the land is owned by everyone'*, that's far too abstract for my mundane self, what I observe is that the rental value of land has mainly to do with what 'society in general' does in the surrounding area and not the efforts of the owner (slightly different for farmers of course).

* Actually land can't belong to anybody so it can't belong to 'everybody' either, so all land is stolen. But I'm a patriot. For sure, if the British people lay claim to all the land in the UK then they have stolen it from the rest of the world, but as a sovereign country, we owe the rest of the world precisely nothing and it's up to other countries to sort themselves out.

I cant agree more with the sentiments of your correspondent although how he is a FL'er and not simply an anarchist working from objective lockean property rights theory I dont know.

In answer to Wadsworth's point of reply a)

yes such homesteading is perhaps irrelevant as a practical action in today's geography but the principle is the only basis upon which any concept of property and therefore exchange can possibly work. The theoretical first homesteader is the legitimate originator of the property (whether real estate or otherwise) and is justified in any voluntary trades. Upon this base rests the entire theory of property and exchange. the legitimacy of current property rights rests upon a chain traced backed to such a theoretical original homesteader. What is the georgist theory of property if not derived from lockean homesteading?

In answer to Wadsworth's point of reply b)

“the concepts of 'land ownership' and 'the state' are synonymous” this is going to need a massive amount of justification. If you are assuming the necessity of a coercive monopoly for property registration please see rothbard et al for counter arguments.

In answer to wadsworth's point of reply c)

“the rent on the mythical spare 20 acres which nobody else wants would be precisely $zero” how is that relevant? Not all property ownership is dependent upon or designed for rent.

“land can't belong to anybody” what?! why? Who does it belong to?

if the British people lay claim to all the land in the UK then they have stolen it from the rest of the world, (WTF?! no) but as a sovereign country, we owe the rest of the world precisely nothing and it's up to other countries to sort themselves out.

If this we dont owe noone else nothing argument holds true for 'sovereign states' then if the concept of the sovereign individual (im an anarchist not a fmotl'er) is legitimate and the concept of the sovereign state is not legitimate then how can the social obligation of reciprocal recompense inherent in lvt be justified?

If human individuals are recognised as legitimate entities and property rights are recognised as legitimate then it follows that the individuals own themselves and the coercion necessary for a state and any form of taxation is illegitimate.

If you believe in the sovereignty of the uk state in the anarchy of the world as your above statement seems to suggest yet you still believe state taxation and land ownership legitimate then it follows you must believe the state to own every individual in its dominion? If the state does not own the individuals then the coercion required for taxation and land use restrictions is illegitimate.

Youre either an propertarian anarchist or a propertyless slave. Hoping that the coercion you are struggling to justify may limit itself is futile. As your american correspondent says if you argue that original land is owned by that state (whether this is on the behalf of some mystical social contract group or not is irrelevant) “state coercion is always present and furthermore the risk of corruption inside the state is extremely high."

whatever name you label minarchism, be it geogism, libertarianism, laissez faire, there is always the seed of oppression that inevitably grows. Just look to the USA founded explicitly on such principles and designed expressly to limit coercive government – nonetheless in but a few hundred years it has grown into leviathan.

Again to address chefdave's points

1. They're effectively denying the landless's right to themselves, you can only be yourself on land, if you have to pay for that right then you're paying somebody else for your right to live. That is wrong.
   
   2) There's the theft element. If I turned up at your workplace and claimed your wages RL's would be up in arms, yet landlords are able to do this when they charge for access to transport infrastructure or proximity to a school, somebody else has provided the service yet they're taking payment.

1)an individual is not born in mid air. One would assume the parents would not charge their own newborn rent. So even in a world where every single inch of terra firma has been homesteaded and not a single land owner is willing to sell some living space there will be no landless individuals. Noone will be shot for tresspassing upon birth.

2. the view that the illegitimately landlord takes payment for services provided by someone else only holds if the school and the roads of the chef's example are provided free at the point of use. If the road is privately held and the school privately owned then any user whether the landlord himself or the tenant will be paying for access directly. Use of 'free' 'social' resources can only be illegitimately capitalised on by the landlord if the school and the road are not privately owned.
   Here georgist libertarians seem to argue against property rights for some reason. Property rights are objectively justified and derived from the unarguable concept of self ownership.
   Without property rights there can be no self ownership and without self ownership there can be no basis for individual freedom. In this case any form of libertarianism will fall down. Social organisation cannot be based upon subjective whim. No matter how well argued the case for certain forms of taxation or governmental structure are unless they are based upon an objectively justified first principle they are no more valid or legitimate than tyrannical absolutist monarchical slavery or socialism.

In answer to logan

before challenging the homesteading principle as a justification for property ownership first you should at least identify your alternative if not fully justify it. What is stopping a 'second-comer' from declaring himself owner of your property? Is there any philosophical basis for your acceptance of the status quo? Im not saying youre not the legitimate owner of your property but if you argue against homesteading you are arguing against the concept of property itself. The status quo you seek to uphold is built upon a loose assumption of the vlaidity of lockean property rights. Your property is your own because you voluntarily traded with the last owner in a chain that theoretically stretches back to the original homesteader. Unfortunately history means that almost certainly at some point the land was coercively seized but this is beyond the theoretical discussion at hand.

Logan's example of two 'co-homesteaders' does not pose any kind of challenge to the homesteading principle. There is no problem. Logan has just described two individuals who have peaceably homesteaded adjoining triangular patches of land. There is no objective reason why land properties must be delineated in square plots. 'if noone can own the full and perfect square then homesteading fails' is no argument.

Logans second argument that an individual with superior abilities is no more entitled to the justly earned rewards of his superior labour is another georgist argument against property and in favour of 'social justice' and redistribution. If youre a better accountant than me it stands to reason that in a libertarian market of voluntary exchange should you earn more. The same coercion you advocate against the superior bolt earning the farther plot of land would equally support the notion that the earnings of the superior accountant should be shared amongst the inferior accountants who have done nothing to earn it. Individuals have differing abilities and all attempts to ignore or correct this undeniable fact are not only illegitimate in objectivist ethical terms but in empirical terms have historically failed.

The reason why libertarians are prone to people's front of judea syndrome is that they are individualists how fail to grasp the essential concept of self ownership.

The rival factions of libertarian thought outside of anarchism all hold the existence of a coercive state to be legitimate. As long as there is a monopoly of legitimised aggression there will be disagreement amongst those on the receiving end. Every individual wants the power of the state pointed elsewhere. if, as a libertarian, you seek individual freedom then you need to realise that this can never be realised as long as you accept the legitimacy of coercion. Without the assume legitimacy of the state this argument among libertarians over the 'correct' form of taxation would be nonexistent. Likewise all other contentious issues. The beautiful perfection of the market and the voluntary exchange that drives it would answer every question.

Wadsworth's admirable contention that “income tax, and the very concept of state-protected land 'ownership' without compensation,” are “abominations” is as valid as the old maxim of “no taxation without representation”. But both are irrelevant unless you accept the fundamentally illiberal existence of the state. Either you accept the objective truth that the individual is the true unit of social organisation – not the mythical collective – and thus embrace the principle of self ownership and its preclusion of legitimised aggression in the form of the state or you argue in favour of continued oppression.

Chefdave – what are these “systemic human rights abuses” that us rothbardians are guilty of defending? Either we base concepts of social organisation on objective truths or we surrender to subjective fanatasy. Human rights beyond unarguable self ownership and the derrived principles of property, non-aggression and voluntary exchange are not objective. The Un charter of human rights includes random bollocks about holiday entitlements. These are not inalienable universal human rights. If they were they would not vary across history and geography. They are subjective entitlements and are entirely dependent upon your acceptance that the state owns you and can divvy out goodies.

Wadsworth

“IanB. If Player's 6 were now duty free, they would set the price rather lower than the price of other cigarettes to win market share, so maybe £6 instead of £7. In any event, in this case, Player's would have such a favourable position vis a vis other manufacturers that they can clearly be said to be rent seeking.

Or - just take real life. Smugglers buy fags in France for (say) £3 and sell them over here for £5 a packet. They have to undercut the shop price by a bit to get the business.

Ask yourself - would a smuggler be able to buy fags for £3 in France and sell them for £5 in Turkey, where fags only cost £1?

Or - what if tobacco duty and VAT were scrapped on fags? Would all manufacturers continue to charge £7? Certainly not, the price would drop accordingly (as we know from other countries with lower duty - they don't all charge £7).”

does this reply not completely refute your own original assertion that “Would CE get away with increasing their monthly rents to £1,400? Of course ” and “If the government then declares the other side of the street (where all the offices belong to private landlords) to be a BR-free enterprise zone, would they not also increase their rents to £1,400 a month? Yes they would, why wouldn't they? That's the new going rate.”

how come there is no competition and downward movement in the rental market but you are happy to accept that there is in the cigarette market?

Your two examples do not agree and are incompatible with your attempt to justify lvt as a 'voluntary' tax. The following two statements cannot both be true:

“would they not also increase their rents to £1,400 a month? Yes they would,”

“ Would all manufacturers continue to charge £7? Certainly not, the price would drop accordingly”