The Crime of Poverty

Malachi:

Land as private property predates the existence of the state by thousands of years. We have only had government in the form of states (the legal fiction that exercises a monopoly on law and violence) for like 350 years or so.

I've read this elsewhere, and wouldn't at all be surprise if this is the case, but would you post proof?

Gero:

The Crime of Poverty by Henry George disputes the rising living standards attributed to the late 1800s.

Any tax at all must necessarily reduce living standards by implication of what it means to tax. 

Implied in the concept of action are values, costs, causality, profits, losses and time. When one acts, he is necessarily pursuing the goal he values most at that time, under those conditions, and with those scarce means he has. Because he values this goal most, he must value all else less. By valuing an end, to the extent that an actor means to acquire this end, the actor must have an understanding of causality (e.g. Means A leads to Means B, Means B leads to end C). An actor doesn't always and at every time drink water merely to drink water, but may drink water as a means to drink water (or to quench thirst, or to rehydrate, or to make his urine not so yellow, or to seem fashionable to his friends, et cetera). And so, because actors understand the concept of causality, to whatever rudimentary or sophisticated degree, actors value means less than ends, not the other way around as means would have no value without ends and means couldn't even be means without the presence of ends.

In the course of action, there are costs, benefits, profits, and losses as in economics (which is a subset of the category of action, elaborated in praxeology) present to actors. An actor's valuations and perceptions can change and ends could gain or lose value accordingly. The cost of any action is always the deference of another end to this end. End A has a greater value to End B, but given scarce resources which have alternative uses, End B must be foregone in order to entertain End A (Even in the most superabundant situation that could possibly manifest itself, a Garden of Eden, there would still be scarce resources which have alternative uses and there would still thus be praxeological action; these three resources would be our bodies, physical space, and time).

While actors are always rational (that is to say, they always attempt to acheive ends through means) by definition, they are not infallible; actors can err and are liable to reassess courses of action, ex poste, when values change (as must always be the case; my values at Time T without End A are necessarily different from my values at Time T2 with/without End A at my possession after action [costs/production] has taken place). Taxes, properly understood as increased costs, necessarily affect the course of action by producers relative to terms in which these taxes are not present. A situation in which taxes would be present would be earning income from labor, production, sale, or consumption but these activities are taxed. Consequently, relative to activities in which these taxes are not administered, these activities must be more costly. Because this is the case, actors must now change their subjective valuations of these activities and act to what courses they perceive as incurring the least costs or accruing to themselves the most benefits.

Living standards, properly understood (if what George said is true, then it is doubtful that he understands what living standards are) are the average acquisition of economic goods in a population (there are various measurements which try to quantify this, but they are useless; the question that must be asked is a living standard relative to what?). Land ownership is one of the most fundamental factors of economic means (apart from labor) available (fundamental even to justifiably argue that it is fundamental!). Considering that the costs of owning land, under the Georgist position, would cost more than otherwise, we can conclude that certain activities would be deferred more than they otherwise would have been absent a land tax (or any tax, for that matter). The necessary results of this would be: reduced consumption and reduced production and a reduced standard of living, as a result of the reduction of the prior two categories (which are mirrors of each other) relative to a situation in which no such tax, or any tax, was placed. 

Taxes aren't merely abstract costs; they are a negation of property rights: they are an aggressive, noncontractual exchange of property between producers and non-producers. Taxes are property aggressively seized from producer A and are redistributed to non-producers B, C, and so on either directly or indirectly. An actor contemplating taking part in production will consider all costs that he is capable of comprehending and choose whether to produce, or not produce, through land investment as a primary factor. Given this added cost, and that a cost allows an actor to value an action less than another action in which a cost to as great a degree, as this actor perceives costs, is not taken, it is not unlikely that this actor is more liable to prefer not-producing to producing relative to an imagined situation where this added cost is not incurred. 

Should this continue, it may be the case that population A2 (which is taxed) places less investment in production and becomes more present oriented (higher time preference) relative to population A1 (which is not taxed) in which, because of not so high costs incurred during production, there are more producers and is more future oriented (lower time preference). This increased investment allows for less costly production which allows for greater production and greater consumption. In natural conditions (I use here to refer to a theoretical situation in which there is an absence of aggression, e.g. tax), living standards are necessarily maximized.

Hope this helps.

Malachi:

I would like to find some sort of inescapable performative contradiction inherent in warfare.

An aggressive war, a war that is waged not as a means of defending legitimately (through either original appropriation, production or contract) acquired property, would be an example of such a performative contradiction. One cannot justifiably argue with another the aggressive negation of property rights as argument presupposes the legitimacy of the NAP and property rights.

A war of self-defense, a war waged to defend legitimately acquired property in response to an aggression on such property, is justifiable in that it is within the category of property rights. Any limitation on this right may be legitimately self imposed for reasons of morality, but this doesn't negate the fact that defending oneself through violence is within one's rights as it can be done naturally (through the use of legitimately acquired property) against one who tries to assert ownership of property (illegitimately and through aggressive means). 

This is consistent with the NAP, and therefore property rights, insofar as one does not aggress against the property rights of another person beyond what the aggressor has done. For example:

Situation 1

Aggressive action: An intruder standing on my front lawn and refusing to leave.

Aggressive action: Me shooting him in the face and killing him.

By standing on my lawn and refusing to leave, the intruder in question disturbs my right to enjoy my property and thus curtails me rights. By murdering him, in "self-defense", I eliminate all of his property rights, which is inconsistent with the NAP.

Situation 2

Aggressive action: An intruder standing on my front lawn and refusing to leave.

Defensive action: Asking the intruder to leave and, if he refuses but still does no further aggression than to verbally refuse, I may move him off of my property.

By first using the most gentle means of removing the tresspasser, by asserting my rights and disqualifying his assumed "rights", I act within the confines of the NAP.

That's the gist of what I've found defended by Rothbard, and Hoppe whereas Block differs a tad. I'd like to read more about the NAP as it relates to NAP (are there quantitative limits to what one may do in self defense or lists of justifiable actions for ad hoc situations?) myself.

Hope this helps.

dsyddall:

Why doesn't LVT distort prices? Because the quantity of land available is fixed, so supply and demand are unaffected.

It's often suggested by Georgists that land is different because it has a fixed supply. This analysis is flawed on a number of levels. First of all, the supply is not fixed; as with any other commodity, its utility is a factor in the supply. The supply of oil, to use a consistent example, is subject to the technology available to extract it. The supply of oil has vastly increased over several decades as new sources were discovered and new extraction technologies were employed. This would be true even if the physical presence of oil had changed not in the slightest. A road, for example, can specifically increase the supply of land -- and roads can be built privately and completely without action of a "social" nature. Likewise, beyond the constant bombardment from space increasing the earth's mass (about 270 tons per day) and the eventuality of living space on other planets/moons (thanks to the great "anarcho-capitalist" Newt Gingrich!), the supply of land can be increased by building islands, et cetera. The response to this is usually the fallacious definition of land discussed earlier -- that building an island (land) comes at the expense of sea (land). From an economic perspective supply never includes that which has no utility because it is inaccessible or unavailable, so until airspace, for example, is made accessible by building, it is not part of the supply. 

Moreover, there are countless other goods that actually are in fixed supply: masterpieces; collectibles; tickets to a given event. These goods are fixed, but do the laws of supply and demand somehow not apply to these scarce goods, which have alternative uses?

dsyddall:

And the unfortunate fact of the matter is that if you don't have LVT you will have something far worse, such as an income tax or sales tax. Why is an income tax or sales tax worse? Because it distorts prices, causing deadweight loss. How? Because prices are a function of supply and demand and by increasing the cost to produce the particular good or service, the quantity supplied is reduced.

This is begging the question and a value input, not an argument.

dsyddall:

Secondly, the rental value of land is not a function of the labour, capital investment, entrepreneurial ingenuity or other such human input into the process of production. Instead, the rental value of land is solely a function of the margin of production.

Value theory has been basic to economic thought for as long as there have been discussions of political economy. A number of theories, mostly input related, were explored and rejected going all the way back to the ancient Greeks. The physiocrats were among the first to consider a departure from input based valuations nearly a generation before Adam Smith published "An Inquiry into the Nature and Causes of the Wealth of Nations". Smith, himself, struggled with value understanding that simple monetary assessments were inadequate. He proposed that either corn or labor might be better measures of value not in the input sense, but in the sense of what one must give up to obtain something of value. This latter suggestion was distorted by Ricardo and then distorted still further by Marx, who misread the concept entirely to return to the failed input-based valuation theories of the past.  

Today, economists are pretty much unanimous in their acceptance that value is entirely subjective and expressed via marginal utility. It matters not whether you are talking to a Keynesian or a Chicagoan or an Austrian or a Neo-Classicalist, it is recognized that value (as opposed to price; except when it is exactly equal to market equilibrium) is based on the wants and needs of the individual members of the society rather than being inherent in any given object and is expressed through marginal rates of substitution/transformation as determined by the subjective determinations of actors in the marketplace.  

The move to the marginal theory of value was so overwhelming that it became known as the 19th century's "Marginal Revolution." Only the Marxists, uninterested in economics, chose to cling to labor and other similar input based valuation theories that, ultimately, do not survive logical scrutiny. Marginal utility valuations are universal. That is, they explain the valuations of any and all commodities in the marketplace and determine how market values come into being as those individual valuations influence the supply and demand functions for any given commodity in the economy. 

dsyddall:

Thirdly, the assessment of land values is much simpler, cheaper and less invasive of privacy than that required by any other form of taxation.

While this may or may not be a valid historical fact, either assessment says nothing of the justification of such a tax. All taxes are argumentatively unjustifiable.

Contradictions in this manner are not the formal contradictions of logic (where one argues both P and not P, for example) but are made performatively. Statements such as "No one ever does anything", "I don't breathe", "I never argue", "There is no truth" et al would thus be logically absurd if one were ever to propose them in the course of argument because, performatively, these propositions must be assumed to be valid. On the other hand, these arguments could qualify as formal contradictions if one were to write down all the minutiae of what is to be assumed in the course of argument (as in, stating "two perpendicular lines constitute a right angle" is "assumed" as in a geometrical proof).

In arguing, one must assume the private property rights that one has in himself as well as the private property rights the other person has in himself- otherwise, such activity cannot be recognized as argument. As long as there is argument, there is respect for property rights as a matter of ethics irrespective of what one says in their argument (the ability to agree that there is a disagreement is present). So, argument presupposes:

1) the NAP to be valid;

2) the natural (first use, first owned) theory of property rights to be valid. [Any argument to the contrary (one that favors the inititiation of violence- e.g. rape, murder, theft, assault, et cetera) must be unjustifiable since these propositions are contradictory to the ethic by which they are proposed.]

Furthermore, the very concept of justifying one's arguments implies persuading others to accept the plausibility of one's argument without resorting to initiating violence. It is not only contradictory as a matter of action, to assert aggression, but it is also contrary to the science of justifying arguments.

dsyddall:

Fourthly, LVT encourages land owners to put land to the best possible use. As I mentioned above, the costs are low and the rewards are high for owning land. The individual incentive to maximise profits does not necessarily result in land being put to best use since above a certain threshold there are diminishing returns to productive investment and one's available capital is more profitably invested in further land acquisition (which in itself is a non-productive activity). This is one of the reasons why we see what to most folks is perplexing (though I don't deny that there have been attempts to rationalise the phenomenon) - homes and shops that remain vacant and boarded up for years while others struggle to afford to pay rent on properties they need to start a business or family, or what Jefferson referred to as "uncultivated lands and unemployed poor". But such uncultivated yet productive lands do not merely represent an opportunity cost: they also present the problem of urban sprawl. Urban sprawl is economically costly as a result of many factors: additional commuting time, additional infrastructure costs, reduced synergistic effects, lower efficiency of public transport, increased environmental pollution and more.

The part in bold is contrary to what economic laws and the laws of human action tell us. I've addressed this claim above, in an earlier post of mine, but will readdress it as an application to your specific response to the OP. Taxes are always and everywhere an added cost to production that otherwise would not be present in the absence of the tax. Costs, implied in action, are economic resources that are used up in production and redistribute economic production to what they would not be in conditions absent the costs. Costs are, at the most basic levels, a reflection of scarcity. So costs, and therefore taxes, necessarily affect economic action. Whether this affects production in a postive manner or a negative manner is purely a value judgement and says nothing of the justifiabilty of taxes (which I addressed in critique of your third contention).

The individual incentive to maximize profits necessarily leads to the most economical use of scarce resources, which have alternative uses, provided that such production and distribution is consistent with property rights. Intrinsic in human action is the desire remove felt uneasiness (this cannot be denied without a performative contradiction being made). Also implied in human action is the concept of values, which is to say that people have values and act based on them (my pausing this typing to drink a glass of water shows that, at one time and in this place, I valued drinking water more than typing). So one cannot claim that humans do not act based on values without encountering a performative contradiction. Values can either be negative (cost) or positive (profit) and, while cost and profit also apply to economic transactions, values are manifested psychology. By drinking a glass of water in the midst of my typing, many inferences can be drawn:

1) I had a felt uneasiness- thirst.

2) I imagined conditions without uneasiness- not-thirst.

3) I imagined the means to relieve this uneasiness- a glass of water.

4) I imagined the costs that would be incurred in order to relieve this uneasiness- finding a glass, walking to the sink, time, patience, et cetera.

5) I determined that the benefits outweighed the costs.

6) I acted- I got the glass of water and drank it.

Now, while I may have used this means (glass of water) to the end of removing a felt uneasiness (thirst), in no way can we infer that I benefitted from taking this course of action. It may be that there was some variable of cost for which I didn't calculate (e.g. dirty water, more time than anticipated, still thirsty after this glass et cetera). This, however, in no way, shape or form proves that I am irrational. Action is always rational as it is always rational to use means to acheive ends; however, this flatly does not imply that actors are infallible. Actors can, and often, err in forming causal relations. Similarly, land may sometimes not be put to best use by an underestimation of potential costs incurred, an overestimation of potential profits, or some other mitigating psychic factor. This does not call for a rectification by adding taxes (costs) to the operation in question, as doing so would only further overestimate potential profits, further underestimate potential costs, than would otherwise be prevalent in natural conditions (a theoretical base denoting a situation in which the NAP, and therefore property rights, are adhered; I use this condition in comparison to the theoretical one you use in which neither are adhered due to the imposition of an LVT). Given the added cost that an LVT poses to a prospective producer, it is not unlikely that producers will produce less in favor different action- but what action?

Taxes are not arbitrary costs. If I pay a tax, it is not as if the money is being burned when the tax is due. The tax, in the form of produced means of further production or economic goods, is seized from me and given to someone who has no rights to it- a nonproducer or noncontractor. I've established the necessity of values in human action, and given that there are greater costs in production and greater benefits in nonproduction, there is more incentive to act in nonproduction than there would be in natural conditions. Since production is hindered, consumption is hindered as well as one cannot take place in the absence of the other, by definition.

Diminishing marginal returns don't refute the concept of value maximization but are instead derived from profit maximization even under ideal conditions. It can be deduced praxeologically: because actions are directed at one's most urgent ends, the means used in the process of relieving an end are necessarily valued highest initially and lower in additional quantities. Let's say from above, I finished my glass of water (it wasn't dirty or anything) above and am still thirsty. Assuming that the causal relation I perceived before acting is correct, that water reduces thirst, I may still be thirsty, but it is less than it was before using these means. As a result of diminished felt uneasiness (thirst) I value the means of remedying this felt uneasiness less (additional glasses of water). While the perceived value has declined, the costs have increased (spending more time at the sink, greater exertion of myself physically, et cetera). At a certain point, psychological profit and psychological cost will intersect and cost will be greater than profit. At this point, I will stop drinking water. And since this realization is implied by action, the concept of dimishing returns is valid a priori. This point is where total profits are maximized which further proves that the profit motive is at the very pith of all human action and that diminishing marginal returns, also implied by human action, are in no way a refutation of the profit motive.

Investment and capitalization are flatly not non-productive activities; on the contrary, they are at the very starting point of acquiring economic goods. Acquiring economic goods and concepts such as living standards cannot be imagined without production, which in turn cannot be imagined without investment.

There is nothing inefficient in urban sprawl, so long as property rights are observed. On the contrary, if property rights are observed, then sprawl demonstrates the most valued use of economic resources by consumers concerned at given times. All other examples could be traced to inefficient "zoning laws," and public property that aggress against natural conditions and impose undesired effects to producers. Opportunity costs are inherent in all economic transactions are not unique in the case of urban sprawl. Pollution is the effect of a poor enforcement of property rights.

Hope this helps.

@ThatOldGuy Thanks for your contribution - I do not have time to respond to every point in your post here but I will try to respond to what I think are the most substantial objections.