[Below, James says he mistakenly sent a message to the HES list. I block quite a few
private messages, but I missed that one. I'm sorry about that, James.  On most email
software, if you hit Reply to a message from the HES list, the To: line will show
[log in to unmask] It's always good to check the To: line before clicking Send. Also, many
messages have personal salutations, I often remove them, but sometimes they seem to be
part of the message so I leave them. I don't use a personal salutation as a litmus test
for whether a message is private. I will try to be more sensitive. HB]
  
  
  
Pat Gunning says he "would blame Marshallian microeconomics for most" of   
the advocacy of "land value (or rental) tax" to achieve "a   
redistribution of income."  He justifies this belief thus:  
  
"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?"  
  
I'd like to point out that Pat's blame is not properly placed.  Marshall   
in the Principles discusses the operation of markets from the   
perspective of real actors, not structures.  As I have in some time past   
referred some of my Austrian friends, who argue as if only they   
understand competition as a discovery process in the marketplace, to   
note, Marshall follows the classics, including Adam Smith, to define   
competition as rivalrous behavior, involving acting agents or   
individuals.  Check, for example, the index to the Principles under   
"risk" in relation to profits.  I'm sure you'll be impressed with   
Marshall's treatment of entrepreneurial behavior, although he doesn't   
use the term.  
  
Marshall in the Principles also refers to Henry George's *Progress and   
Poverty* but doesn't take such a dim view of private ownership of land   
as being the cause of poverty.  As a matter of fact, there is hardly any   
truth to George's claim.  Were the people in Hong Kong (before   
unification) more wealthy than those in mainland China because there   
were more private landowners in the latter than in Hong Kong?  How about   
  people in America, compared with people in Russia?  
  
Now for those who have been offended by my previous post, I'm sorry they   
saw what I'd intended as a private communication.  Pat wrote a "Dear   
James" communication, which I thought was private and I responded with a   
"Hi Pat."  Thus my words were directed to him directly, if any one cares   
to re-read the post.  This was a case of the "open-mic syndrome."  
  
Now people know what I thought (and still think) of the pursuit of a   
single-tax regime, namely, an action that would achieve what Marx and   
Marxists aim to accomplish, although only partially.  I don't know why   
some people think my describing that pursuit as the equivalence of   
Marxism to be name-calling.  Worse, why they think I meant it as a   
substitute for reasoned argument.  I might point out that I'd made my   
argument in response to previous posts on the land-rent tax, but which   
no one had responded to besides Pat's affirmation of my point.  
  
It was in the spirit of that private communication that I referred to   
Roger Sandilands's come-back response to Pat as preventable, had Pat   
boiled his previous responses down to people seeking to take a free-ride   
on the backs of landlords instead of sharing in the burden of providing   
for financing public goods.  I also mentioned that I get tired of   
interminable debate, and that was why I had to make the argument myself   
-- still speaking to Pat.  I had in mind the following concluding   
comments from Roger:  
  
"Essentially this debate boils down to whether we follow (i)   
neo-classical marginal productivity theory (what we get is what we   
contribute to GDP, and this includes land rental income), or instead   
(ii) the classical view that what is true of the individual (land is a   
cost; payments reflect contributions to the enterprise) is not also true   
of the whole. In the social viewpoint land rents are transfer payments   
from producers to owners; and what the owners of labour, capital and   
land get is a matter of the relative degrees of competition and   
mobility. Labour and capital are mobile and elastic in supply, so their   
rewards are relatively competitive; land is fixed in supply and   
immobile, so it gets what its market will bear, a monopoly price."  
  
"Return these community values to the community, and get labour and   
capital taxes off our backs.  
  
"(And don't distract from this message by suggesting that just because   
we don't deny top footballers their due (so-called quasi-rents), so too   
must we leave landowners with whatever they can get from us.)"  
  
Clear enough?  
  
(Warren Samuels also came back with a reference to Marxian analysis.)  
  
Roger now claims that "It is precisely James's failure to appreciate the   
distinction between land and capital (in the social viewpoint) that   
leads him to think of Georgists as 'Marxists in disguise'."  I'm not   
sure what Roger has in mind here.  I've been writing (publications)   
about the definition of capital in economics, and how many analysts   
(including Keynes and Hayek) have not carefully distinguished capital as   
funds from capital goods, and thus have produced some muddled   
conclusions in macroeconomics, e.g. HOPE 1990 and JHET 1997.  I'd hope   
Roger would credit me with knowing what land is.  So what else is left   
that he has in mind?  
  
I very much appreciate Sumitra Shah's reproductions of Adam Smith's   
counsel on the art of persuasion.  But as she perhaps would be the first   
also to acknowledge, gentle persuasion does not guarantee conversion of   
minds.  Her last post was to declare that she and I would have to agree   
to disagree on what properly should be in the domain of public funding.   
  This is not to deny that proper decorum is needed in public discourse;   
again my last post was meant for private consumption.  I don't think I   
can persuade Sumitra to changes sides and become a free-market   
adherent, from what I now know of her.  
  
Finally, Mason Gaffney declares: "Shame on you, James: for this you  
got a Ph.D.?"  The University of Toronto doesn't give a Ph.D. for   
name-calling.  I don't know what else I'd be inclined to do with   
another, but if Mason knows of an institution that awards a Ph.D. for   
name calling, maybe I'd like to pick up one.  After all, he already   
thinks I qualify.  Seriously, I wish he would care respond to my post   
before the last one that excited him so much.  
  
James Ahiakpor