Robin Hanson may very well be the clearest and deepest thinker on the planet, so it's no small problem when he blogs "Why I'm Not Libertarian". Let's see if we can rescue his inner libertarian.
Public goods: intellectual property. Hanson claims: "You have no fundamental right to enjoy the innovations produced by others without compensating them." A libertarian would counter: you have no fundamental right to give innovations away and then demand compensation from those who chose to enjoy them at your initial offering price. If you can use contracts or technology to propagate your innovations without actually giving them away, libertarians should not call you a force initiator. Your only problem will be when someone breaks your contract and shows the innovation to a third party not bound by the contract. This problem smells like it could be solved through some combination of insurance, bonding, and watermarking. If (like many libertarians) Hanson worries that such a solution might not be efficient, then he should at most support the patent value tax and copyright that exempts non-commercial use.
Common goods: natural resources. Hanson writes "It is probably sometimes efficient to initially allocate property in other ways than via the usual 'making'", and links to his interesting article about orbits and sunlight. We geolibertarians can only shout "amen" to his point about the unjustness and inefficiency of the "royal libertarian" notion that first use/control of a space (land, orbit, spectrum, air corridor) creates the same sort of property right as in an object. As for the general case of non-excludable goods (a.k.a. common goods a.k.a. natural resources), the Lockean mandate to leave "as much and as good" translates quite naturally into pollution/congestion taxes and exclusivity auctions. The same sort of analysis when applied to land yields a land value "tax".
Creation of persons. Hanson writes "It is probably efficient to endow parents with partial ownership of their children." Maybe, but you don't need formal legal title over an agent you can program, and that's effectively what we already do to our kids through genes, mammalian bonding, and acculturation. This should be all the more true in Hanson's future filled with artificial persons mass-produced via emulations of very-carefully-chosen template brains. Hanson doesn't make the case that libertarian principles are necessarily inefficient here.
Social contracts. The most unlibertarian statement Hanson makes is almost an afterthought: "And it is probably efficient to enforce non-explicit contracts, such as among very large groups." One could take this as a placeholder for all the usual debates between anarcholibertarianism and minarcholibertarianism. I prefer instead to cut this Gordian Knot with the magic of radical Foldvarian federalism, where the leaf nodes are essentially homeowners' associations, and secessionists are dared to fully opt out of the services and protections of their community. As far as I can tell, Foldvary's geolibertarian vision could deliver all of the efficiencies Hanson might desire from social contracts.
Harm vs offense. Hanson writes "people can hurt each other 'non-physically' via info in so many ways". Hanson doesn't seem to recognize how slippery a slope he's on here. He wants to talk about information (gossip, blackmail, etc.) as being dangerous/harmful, but any "info harm" here is fundamentally a case of not liking how somebody else has used his freedom of association. If you can claim a "harm" just because other people are associating in a way that is suboptimal for your utility, then every act (and omission) is "harmful" to pretty nearly everyone. Freedom of association is efficient, and I don't see Hanson carving out a coherent set of "info harm" exceptions.
Conclusion. Hanson is right to demur from Bryan Caplan's allodial anarcholibertarianism. Most of Hanson's complaints can be addressed by the principles and prescriptions of geolibertarianism. However, he might only call himself "geolibertarian-leaning", since he has made it very clear that his root value is economic efficiency rather than personal liberty. That's OK -- we don't need to debate whether geolibertarianism is good because it works, or works because it's good.
Tuesday, August 09, 2011
Saturday, July 30, 2011
Geolibertarian Tax Policy
As a geolibertarian, I advocate equal taxes on all income: zero.
Geolibertarians oppose all taxes on things that aren’t aggression: honest income (wages, interest, dividends, profits, gifts, and inheritance), clean production (including value added), consensual transactions (e.g. the sale, import, or export of goods and services), and fairly-acquired wealth (e.g. real estate improvements, capital, or other produced assets).
Geolibertarians favor taxes/fines only on aggression — e.g. polluting, depleting, congesting, or monopolizing the commons. In practical terms, this means
Geolibertarians oppose all taxes on things that aren’t aggression: honest income (wages, interest, dividends, profits, gifts, and inheritance), clean production (including value added), consensual transactions (e.g. the sale, import, or export of goods and services), and fairly-acquired wealth (e.g. real estate improvements, capital, or other produced assets).
Geolibertarians favor taxes/fines only on aggression — e.g. polluting, depleting, congesting, or monopolizing the commons. In practical terms, this means
- policing negative externalities through green pricing (e.g. pollution taxes)
- protecting unowned natural resources with severance fees
- financing club goods (e.g. highways, bridges, pipes, wires) through usage/congestion fees
- financing public goods (e.g. streets, flood control, national defense) by taxing the extra land value they create
Saturday, May 22, 2010
The Definition of Insanity
The definition of insanity is repeating that trite Einstein quote over and over and expecting people to consider it insightful. It isn't. At all.
Tuesday, February 09, 2010
Why Tax Land Value?
The reason economists say that a tax on land value is the "least bad" tax is that such taxes have no deadweight loss. Any tax on production or exchanges or movable assets causes economic inefficiency. A tax on these things causes a deadweight loss (i.e. allocative inefficiency) because people who would have more marginal benefit than marginal cost are not buying the good or service — just as a subsidy induces people to buy who impose more marginal cost than their marginal benefit. However, this effect of taxation does not happen when the supply of the taxed good is perfectly inelastic, as is the supply of land — more precisely, the surface area of the Earth. Sites cannot flee or evade taxation, and the available amount of them is not reduced when they are taxed. (When a tax is not on a good but rather on a "bad", like pollution or congestion, it's the very absence of the tax that causes allocative inefficiency, because external costs are not internalized.)
Taxing land value is not only more efficient than taxing production or exchanges, but it is also less intrusive. All the government needs to know is who owns each plot of land and how much the unimproved land is worth. Appraisers and insurers make such calculations routinely, and one variant would have each land-holder self-assess as long as he's willing to take any offer over his assessed value. There's no need to audit anyone's behavior, as with taxes on income/production/exchanges. You don't even need to visit the site or look over the fence, as you do with taxes on land improvements or square footage. For illiquid landholders, taxes could accumulate as a lien against the property, capped at its market value, so nobody need ever be taxed off the land they hold.
Land value taxes need not even be strictly mandatory. If you as a landholder decline to return to our community the ground rent you appropriate from us, then we could simply disconnect you from our wires and pipes, and while you’re in arrears we could publish your name, address, and photo as someone whose property and person are excluded from the protections of our LVT-financed police and courts. If we catch you using any of our streets, parks, or other LVT-financed public goods, then you would owe the arrears on your parcel's land value tax, per the terms of the no-trespassing signs prominently marking those public goods.
Land value taxes are naturally local, and so encourage Tiebout Sorting. If the the local mix of government services is too high (or too low) for your taste, or if they aren't a good value for the LVT rate financing them, then you can vote with your feet. By contrast, income and sales taxes tend to get centralized at the state or even national level, because (unlike land) income and sales can flee to lower-tax jurisdictions. (New Hampshire is among the most free states, and gets the highest percentage of government revenue from property taxes. California finances its high government spending with high centralized state income taxes that rose after Prop 13 restricted local property taxes in 1978.)
LVT retrieves the extra land value created by public services — streets, pipes, levees, police, parks. This creates pressure to defund public services that do not actually add value in the free market for land.
LVT turns out to closely model how consensual private communities tend to govern themselves. Malls, business parks, hotels, condominiums, homeowners associations — all tend to "tax" their tenants not according to profits or revenues or inventory or improvements, but mostly by site value (for which square footage is often a good proxy).
LVT imposes a built-in ceiling on government revenue. Critics of land value taxation claim it wouldn't raise enough revenue because ground rent is allegedly only a small fraction of GDP. That sounds like a good thing to me. If government revenue is restricted by definition to ground rent and fees for polluting/congesting/depleting the commons, then government cannot be nearly as big as when it is allowed to tax labor, production, exchanges, and all resulting products. Once you have taxation of people's labor and exchanges and produced assets, there is no limit to what the government can take from you.
Taxing land value is not only more efficient than taxing production or exchanges, but it is also less intrusive. All the government needs to know is who owns each plot of land and how much the unimproved land is worth. Appraisers and insurers make such calculations routinely, and one variant would have each land-holder self-assess as long as he's willing to take any offer over his assessed value. There's no need to audit anyone's behavior, as with taxes on income/production/exchanges. You don't even need to visit the site or look over the fence, as you do with taxes on land improvements or square footage. For illiquid landholders, taxes could accumulate as a lien against the property, capped at its market value, so nobody need ever be taxed off the land they hold.
Land value taxes need not even be strictly mandatory. If you as a landholder decline to return to our community the ground rent you appropriate from us, then we could simply disconnect you from our wires and pipes, and while you’re in arrears we could publish your name, address, and photo as someone whose property and person are excluded from the protections of our LVT-financed police and courts. If we catch you using any of our streets, parks, or other LVT-financed public goods, then you would owe the arrears on your parcel's land value tax, per the terms of the no-trespassing signs prominently marking those public goods.
Land value taxes are naturally local, and so encourage Tiebout Sorting. If the the local mix of government services is too high (or too low) for your taste, or if they aren't a good value for the LVT rate financing them, then you can vote with your feet. By contrast, income and sales taxes tend to get centralized at the state or even national level, because (unlike land) income and sales can flee to lower-tax jurisdictions. (New Hampshire is among the most free states, and gets the highest percentage of government revenue from property taxes. California finances its high government spending with high centralized state income taxes that rose after Prop 13 restricted local property taxes in 1978.)
LVT retrieves the extra land value created by public services — streets, pipes, levees, police, parks. This creates pressure to defund public services that do not actually add value in the free market for land.
LVT turns out to closely model how consensual private communities tend to govern themselves. Malls, business parks, hotels, condominiums, homeowners associations — all tend to "tax" their tenants not according to profits or revenues or inventory or improvements, but mostly by site value (for which square footage is often a good proxy).
LVT imposes a built-in ceiling on government revenue. Critics of land value taxation claim it wouldn't raise enough revenue because ground rent is allegedly only a small fraction of GDP. That sounds like a good thing to me. If government revenue is restricted by definition to ground rent and fees for polluting/congesting/depleting the commons, then government cannot be nearly as big as when it is allowed to tax labor, production, exchanges, and all resulting products. Once you have taxation of people's labor and exchanges and produced assets, there is no limit to what the government can take from you.
Thursday, January 07, 2010
Free Style
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