Just subscribed a few days ago and came across this one. I like your framing of this. A lot of folks see harberger taxes as the solution to this but it seems like you are going after a slightly different model. Excited to see where you go with it!
I think Harberger taxes could actually be a great complement to the idea of a Commonwealth City/Entrepreneurial Georgism.
I think there needs to be guardrails around that approach because I do think the displacement risk is a really big problem. But I have an idea about how to solve it that I'll cover in a future issue. Thanks again for reading!
Brilliant. I have been thinking about institutional investors buying up properties in cities in which they do not live. Why? What effects will that potentially have on labor investors in this ‘newish’ vision.
Essentially the landowner can continue to increase the rent extracted from labor and capital as productivity increases, meaning capital and labor split whatever is left over. So land will continue to get more expensive, but wages will not keep pace. The land is the scarce resource and can't be replaced - while labor and capital can. In effect the outcome for labor is that wages don't really increase as the economy gets more productive since the landowner can capture that productivity gain in higher rent. Here's George's wording of it:
The reason why, in spite of increase of productive power, wages constantly tend to a minimum which will give but a bare living, is that, with increase in productive power, rent tends to even greater increase, thus producing a constant tendency to the forcing down of wages.
Just subscribed a few days ago and came across this one. I like your framing of this. A lot of folks see harberger taxes as the solution to this but it seems like you are going after a slightly different model. Excited to see where you go with it!
I think Harberger taxes could actually be a great complement to the idea of a Commonwealth City/Entrepreneurial Georgism.
I think there needs to be guardrails around that approach because I do think the displacement risk is a really big problem. But I have an idea about how to solve it that I'll cover in a future issue. Thanks again for reading!
Brilliant. I have been thinking about institutional investors buying up properties in cities in which they do not live. Why? What effects will that potentially have on labor investors in this ‘newish’ vision.
Essentially the landowner can continue to increase the rent extracted from labor and capital as productivity increases, meaning capital and labor split whatever is left over. So land will continue to get more expensive, but wages will not keep pace. The land is the scarce resource and can't be replaced - while labor and capital can. In effect the outcome for labor is that wages don't really increase as the economy gets more productive since the landowner can capture that productivity gain in higher rent. Here's George's wording of it:
The reason why, in spite of increase of productive power, wages constantly tend to a minimum which will give but a bare living, is that, with increase in productive power, rent tends to even greater increase, thus producing a constant tendency to the forcing down of wages.
The full summary here is fantastic: https://astralcodexten.substack.com/p/your-book-review-progress-and-poverty?s=r