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From:
[log in to unmask] (Pat Gunning)
Date:
Fri Jun 2 08:26:14 2006
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[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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