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From:
[log in to unmask] (Larry Moss)
Date:
Tue May 30 16:42:28 2006
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Yuri Tulupenko said:  
> Although, according to Mark Blaug, it is spectrum rent which is perhaps the  
> perfect Georgist rent for us today, it is not my intention to divert  
> attention from the discussion of LVT. However, any replies offlist are  
> welcome.  
>   
  
  
  
I think Yuri Tulupenko is on to something that is helpful to clarify the issue at hand
about Georgists rents.  I think a distinction can be made between
Georgist rents and other types of rents that are "artificially created" by  
the work (or misdeeds) of man.  
  
The issue with the spectrum rent as I understand it, has to do with technology more than
economics.  One engineer that I once met insisted that there is no inherent scarcity in
the spectrum because signals can be piggybacked on the same number (for example, 104.5 FM
) can have hundreds of stations broadcasting on 104.5 in the format of 104.5 (a), 104.5
(b), and so on.  The radio receiving the signals would be programmed to unscramble them so
that each station can be heard without interference.  (Someday we could have out own HET
station broadcasting the lastest archival findings!)
  
This means that the limited number of radio broadcasting licenses that some of us have
grown up with and still decorate the dashboard of our cars, is a creature of monopoly and
springs from no natural monopoly or anything like that. If my engineer source were
correct, then this would not be Georgist rent since the rent itself is unnecessary to
produce an efficient (even rational)allocation of resources and is more likely the result
of rent seeking or the licensing limitation an atavistic institution that has not been
adjusted to the new technological realities.
  
Of course my engineer source may have told me the wrong information.  My  
engineer friend may have misinformed me about the state of the arts.  I certain do not
pretend to know much about this technology.  Perhaps others on this network can clarify
the true origin of the rent on the broadcasting spectrum.
  
In Henry George, some rents must be paid to produce an efficient allocation of resources.
Here George followed David Ricardo and even von Wieser and the Austrians about the nature
and necessity of land rent.  Still, the fact that certain types of rents must be paid to
Joe (in the first instance) doesn't mean that they have to stay with Joe, they could be
redistributed to Sam (in America that is "Uncle Sam") without seriously impeding
incentives.  That is the insight behind the "single tax" and LVT.
  
Also, in America to own a radio station means the right to broadcast on a particular
frequency. The value of a radio station is far in excess of the value of the tiny building
on a postage stamp of land with a broadcasting tower projecting upwards.  That scarcity of
broadcasting frequencies is what is driving the value of the broadcasting license).
  
If my engineer friend were correct about what is technologically possible, then like
liquour licenses and zoning regulations, many station owners would fight not to reform the
licensing system in broadcasting.  It would be ironic if Georgist theorists ended up
defending a monopoly entitlement system by mislabeling those payments as "Georgist rents"
when they are "rent-seeking rents" instead.
  
A thoroughgoing Georgist needs to maintain and keep a sharp distinction between these two
sorts of rents.
  
Laurence Moss  
  

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