[Discussion continued from RVW--Frey on Laurent, ed., _Henry George's Legacy in Economic
Thought_ HB]
James suggests that many advocates of the land value
(or rental) tax simply want a redistribution of
income. I agree. But, prejudice aside, I would blame
Marshallian microeconomics for most of this, not
Marxism. If you ask people what they learned from
their university economics classes, ninety-nine per
cent of those who remember anything will tell you
demand and supply. It is in classes that teach this
where the damage is done. "We" teach about markets as
if they can exist without the nature of the "thing"
traded, the demand for it, and the opportunity cost of
supply having to be discovered and communicated. Yet
mere reflection makes it impossible to deny that some
human agent must perform such actions before a market
can exist. Are we and our professional descendants
brainwashed?
This Marshallian microeconomics, believe it or not, is
mainly classical economics (Davenport 1935:
Introduction). As such, it shares some of the
characteristics of George's classical economics. Most
of us in the US have Samuelson and his copying
popularizers to thank for our predispositions, along
with now-discredited break-budget, inflationary
Keynesian economics. Those of my generation had this
micro ingrained in them and they have been teaching it
as if it is gospel.
I'm sure that Roger will correct me if I am wrong, but
it seems to me that the reason he keeps writing about
land rent without discussing entrepreneurship is that
he simply has not learned to think about price
determination in any other way than by assuming that
markets and prices already exist. In his thinking,
entrepreneurship (as I have been using the term) helps
one understand why prices including land rent change,
but it is not relevant to understanding why prices,
including land rent, exist in the first place.
Davenport, Herbert J. (1935) The Economics of Alfred
Marshall. Ithaca, New York: Cornell University Press.
Pat Gunning
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