Demolishing common georgist talking points

A common thread that will follow through most of this post is the fact that the non-harmful georgist goals are best fulfilled with a tax rate of zero. Amusingly, this is implied in the very name of the Land Value Tax. After all, value is something’s evaluated usefulness, and thus a tax would reduce the value of land, giving us a scenario where the only possible LVT would be zero, as a non-zero would have Value=Value-Tax, which is obviously impossible for any tax rate other than zero.

Most georgists have some other explanation of what “value” is (this is partly why actually debunking georgism itself is a waste of time, most georgists don’t even understand their own positions)

A great example of this is how most georgists claim to be adherents of the subjective theory of value, yet base their ethical claims on something heavily resembling a labor theory of value, then implicitly assume that the labor theory of value has some weight (“if you make profits without doing labor you are stealing from the community” is a common formulation) then build a lot of their arguments, especially about how land speculation is bad, on the idea that labor has some inherent value.

I shall now debunk or address the following common georgist talking points.

1. “Land speculators leech off their communities and get money without creating value, and an LVT would ensure that only people using land productively would be able to profit off owning land”

This argument is very common and extremely weak, though it looks very strong. All you have to do to debunk this is understand the subjective theory of value, and then realize why someone would make a profit by holding land. Contrary to georgist dogma, the value of land is not tied to any intrinsic property of the land itself, but is rather a reflection of the potential profit that individual purchasers believe they can generate by using said land.

Because of this, the profit motive for landowners to hold on to land rather than to sell it quickly ensures that the land in question is not wasted willy-nilly.

Imagine the alternative. Land is never held, but is rather sold immediately. There would be an insane amount of waste.

The idea of land owners as parasites is pure labor theory of value BS and is the opposite of true. Without land owners holding on to land, massive opportunity costs would be incurred. Land owners make a profit by providing a valuable service.

The goal of the LVT in this scenario is (ideally) to do what the market pricing system already does, yet we can see clearly that any actual effect the LVT has will be to induce waste.

Eliminating profits in this field, just like everywhere else in the economy, will not improve the situation. Profits are necessary to do economic calculation.

1. “Material progress does not merely fail to relieve poverty, it actually produces it. This association of progress with poverty is the great enigma of our times. It is the riddle that the sphinx of fate puts to our civilization. And which NOT to answer is to be destroyed.”

This is pretty simple to debunk. Just look at any graph of global poverty and compare it to material progress from the time of Henry George to now.

L take

1. “Land is used inefficiently and thus wasted. An LVT would encourage capital-intensive means being used to achieve any given end instead of land-intensive means”

This is describing a problem which is already solved by the market. Nothing (other than regulations) is preventing someone who thinks they can make tons of money with a piece of land buying that land, unless the owner of that land thinks it can be used for an even more valuable use in the future. If you have a parking lot in a city center, either the government is involved or the owner of that parking lot thinks that anyone who has offered to buy and replace that parking lot would be causing a net loss of value. If land were made harder still to use, many valuable uses that land could be put to would never be completed. That’s not a good thing.

1. “A land tax would not be passed on to renters, it would only eliminate the (illegitimate part of the) profits of owners”

This argument seemingly assumes that land owners are incapable of raising their prices, as their clients would just leave, as all competition is apparently unaffected. If you think that is the case, apply the logic of that point to an industry facing increased costs due to tariffs. This argument assumes ceteris paribus holds on literally everything other than the individual’s tax rate and profits, which is absurd.

Also this is usually accompanied by some labor theory of value BS

1. “The government functionally subsidizes suburbs, which are inefficient. This causes waste”

This is actually an argument for privatization, as any and all government services which are not profitable are functionally subsidies. If what they really cared about was the subsidies, they would just advocate for privatization, which is the only reliable way to eliminate subsidies. This is just a trojan horse for georgism. It isn’t a serious argument.

1. “Zoning laws are causing lots of problems and making housing more expensive”

This is true. No caveats. It is true.

One last thing:

I expect to see georgists go after what I described as profit as being “land rent,” this is labor theory of value bs. Land rent is not a meaningful term.