Geolibertarianism

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Geolibertarianism is a political movement that strives to reconcile libertarianism and Georgism (or geoism).[1][2] Geolibertarians are advocates of geoism, which is the position that all land is a common asset to which all individuals have an equal right to access, and therefore if individuals claim the land as their property they must pay rent to the community for doing so. Rent need not be paid for the mere use of land, but only for the right to exclude others from that land, and for the protection of one's title by government.They simultaneously agree with the libertarian position that each individual has an exclusive right to the fruits of his or her labor as their private property, as opposed to this product being owned collectively by society or the community, and that "one's labor, wages, and the products of labor" should not be taxed. Also, with traditional libertarians they advocate "full civil liberties, with no crimes unless there are victims who have been invaded."[3] Geolibertarians generally advocate distributing the land rent to the community via a land value tax, as proposed by Henry George and others before him. For this reason, they are often called "single taxers". Fred E. Foldvary coined the word "geo-libertarianism" in an article so titled in Land and Liberty.[4][verification needed] In the case of geoanarchism, the voluntary form of geolibertarianism as described by Foldvary, rent would be collected by private associations with the opportunity to secede from a geocommunity (and not receive the geocommunity's services) if desired.[5]

Geolibertarians are generally influenced by Georgism, but the ideas behind it pre-date Henry George, and can be found in different forms in the writings of John Locke, the French Physiocrats, Thomas Jefferson, Adam Smith, Thomas Paine, James Mill (John Stuart Mill's father), David Ricardo, John Stuart Mill, Herbert Spencer and Thomas Spence. Perhaps the best summary of geolibertarianism is Thomas Paine's assertion that "Men did not make the earth. It is the value of the improvements only, and not the earth itself, that is individual property. Every proprietor owes to the community a ground rent for the land which he holds." On the other hand, Locke wrote that private land ownership should be praised, as long as its product was not left to spoil and there was "enough, and as good left in common for others"; when this Lockean proviso is violated, the land earns rental value.

Contents

[edit] Property rights

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Geolibertarians consider land to be the common property of all mankind. They say that private property is derived from an individual's right to the fruits of their labor. Since land was not created by anyone's labor, it cannot be rightfully owned. Thus, geolibertarians recognize a right to secure possession of land (land tenure), on the condition that the full rental value be paid to the community. This, they say, has the effect of both giving back the value that belongs to the community and encouraging landholders to only use as much land as they need, leaving plenty for others.

This strict definition of property as all fruits of labor makes geolibertarians fervent advocates of free markets.

[edit] Poverty and welfare

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According to the Law of Rent (one of the most important and firmly established principles of economics) the guiding parameter behind wages is what is called the margin of production. Roughly speaking, the margin of production is the amount of wealth that a person could produce working on land that is free of rent (marginal land):[6] when anyone chooses to work for someone else instead of working for himself on the free land, it is because he gets a higher wage. Thus, the margin of production represents an absolute floor on wage level in any society, under free market circumstances.

The differences between geolibertarians and other libertarians arise at this point. Geolibertarians believe that the rule of law, protection of private property and creation of public goods are undoubtedly public benefits, but the greatest gain from these go to land owners. And because of this benefit, geolibertarians theorize that it becomes economically feasible for many to hold economically valuable land out of use and still gain benefits from the general rise of rents. This is in contrast to most capital goods, that can benefit their owner only if they're put into the service of others, that is, if they're used for production rather than withheld from production. Thus, this continued retention of land without usage (or in sub-optimal use) causes those who actually desire to use land to settle for lower and lower quality of land. This pushes the margin of production downwards resulting in lower wages.

Elimination of the incentive to hold land out of use, along with higher employment (because of more land going to usage) and lower prices of land (resulting in lesser need of financial capital for going into business) is expected to result in a high level of prosperity and substantially reduce the need for welfare.

Pure libertarians dispute the geolibertarian's theory on the economics of private property and note that a property owner would need to own a significant portion of all available land in order to be able to affect rent prices by refusing to allow that land to be put to use, and that this scenario is unrealistic.

[edit] The land value tax and the citizen's dividend

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A supply and demand diagram showing the effects of taxation on a good with a perfectly inelastic supply, such as land. Note that the burden of the tax falls entirely on the producer, and there is no deadweight loss.

Geolibertarians advocate the land value tax for a number of reasons. As explained already, it is seen as a means of upholding the equal right to land. It is also the tax most compatible with the free market. It does not distort the price of goods, nor does it discourage productivity, since it does not affect the cost of production.

Geolibertarians argue that, since public utilities and services increase land value, they could essentially fund themselves through the land value tax. In this way, the tax can fund the functions of government so long as it contributes to the community. Some geolibertarians believe that all tax revenues beyond these functions should go towards a citizen's dividend, an equal payment to the whole community. Some others have argued that the citizens' dividend should come first, and then individuals can arrange by contract to have portions of it go to fund specified services.

[edit] Criticisms

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One criticism of geolibertarianism is economic: that their analysis of fallow land as the major cause of poverty is wrong. Critics point out that in many places, such as Bolivia, poverty endures despite an abundance of idle land. Geolibertarians counter that the very idleness of land leads to poverty; they point out that the government of Bolivia does not keep good records of land tenure (arguably the most important function of government), which makes secure production impossible.

Most neoclassical economists do not deal with land as a separate factor of production, but rather treat it as capital.

A criticism of the geolibertarian view of property is that scarcity determines the necessity of property rights. Thus, the fact that land is scarce is seen as all the more reason to make it private property. However, geolibertarians draw a distinction between land ownership and land tenure (see above).

Some consider the term Geolibertarianism to be misleading because the root libertarian implies that the application of force to individuals would not be used, while a centralized authority excising a tax or fee implies the opposite meaning.

[edit] Notes

  1. ^ Foldvary, Fred E. Geoism and Libertarianism. The Progress Report. [1]
  2. ^ Karen DeCoster, Henry George and the Tariff Question, LewRockwell.com, April 19, 2006.
  3. ^ Foldvary, Fred E. Geoism and Libertarianism. The Progress Report. [2]
  4. ^ May/June 1981, pp. 53-55.
  5. ^ Foldvary, Fred E. (2001-07-15), Geoanarchism, anti-state.com, http://www.anti-state.com/geo/foldvary1.html, retrieved on 2009-04-15 
  6. ^ More precisely, this is known as the extensive margin of production. Equivalence between this extensive margin and the intensive margin entailed in modern marginal productivity theory of wages is easily established by an arbitrage argument.

[edit] See also

[edit] External links

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