Posted by: graemebird | March 14, 2009

Sinclair’s Leftist-Reversal Land-Tax Rope-A-Dope.

Sinclair sez:

“Commenter Boris has complained that he gets lots of reading suggestions, but few actual answers to questions. Sorry. The bottom line is this: government cannot create value out of nothing. There are no free lunches.”

Sinclair is right to be sorry. Sorry he’s part of the problem. Sorry that Boris is asking the wrong people if it is answers that Boris wants.

Sinclair Sez:

“Commenter Boris has complained that he gets lots of reading suggestions, but few actual answers to questions. Sorry. The bottom line is this: government cannot create value out of nothing. There are no free lunches.”

Sinclair can say what he wants but Sincliar nonetheless believes in free lunches or why would Sinclair get before the Senate and not trash the multiplier as a concept.

Sinclair is trying on a rope-a-dope with me and the land tax. But Sinclair lacks the technical understanding of economics to deal with the nuances of land-tax-substitution. So its really just more-free-enterprise-than-thou attempt at the leftist reversal.

Land tax is a complicated subject. And in New South Wales an increase in the land tax would be a crazy thing. Since if sound money were established for the very first time land prices may be likely to drop by (lets say) two-thirds.

We have to judge each region in turn to see how valid the substitution towards land tax would be. In Java a land tax over a sort of threshold, if accompanied by clarification of property-titles, spending and other tax cuts….. well that might be a valid thing if folks weren’t too feverishly utopian about it.

I’m not going to go further into this unless people ask questions. But I cannot make it that Sinclair has added much to the debate.

Boris. Unlike Sinclair I’m capable of answering any question on economics you might have. And you will see that my answers make sense to you.

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Responses

  1. Not only have the kids forgotten how to engage in debate. So have the Professors.

    Sinclair thinks by quoting a critic and not dealing with his arguments he has somehow bested the critic.

    “Dear Sir:
    With respect, your anti-Georgist article in the Age 13-03-09 is quite
    irrational.
    As if there is no finite supply supply of land because its use may be
    reallocated!
    As if the finest intellects & greatest skills can physically live or produce
    without access to land (and its resources)!
    As if there is any government on Earth that really collects the rental-value
    of monopolized sites!
    As if the public, or even “economists”, have a clue about the causes of the
    global mess they have caused (or how to get out of it)!
    The real truth & solution was articulated by Henry George, a truth which
    academics such as you deliberately suppress.
    You should learn what Henry George is about before sprouting such errors.
    You have a professional responsibility, not least to the public, to teach
    truth & sense.
    Maybe you are smart & honest enough to have a conversion on the road to
    Damascus.”

    I could probably make some criticisms of it but they’d have to be nuanced since it is the case that the fellow makes some valid points. Its not a question of supporting the land tax or not supporting it. Its about taking some pride in the subject that is technical economics and being able to understand this sort of gear.

    Sinclair stays silent of this criticism. Perhaps bathing in some sort of idiotic smugness. But the fact is that Sinclair hasn’t laid even a glove on this fellow.

    Some things are a matter of degree. Henry George had a point. He just took it a little far is all.

    There is no question that there is some truth to it. Because we all know that in the past if you bought to worst house on the best street your land price would likely go up. Everyone knows that if you bought land in Hong Kong after the communists took over China then the efforts of the Chinese businessmen would have driven your land price up.

    The point is that the powerful efforts of others are giving you a bit of a free ride. Its not the absolutist thing that either Henry George or Sinclair are talking about. But in Henry’s got an excuse. Because the authentic problems that Henry saw causing all this poverty, came from the growth of fractional reserve money in the 1890’s. And so Henry had a valid point EXACERBATED BY ponzi-money.

    Whats Sinclairs excuse for not seeing that this isn’t an absolutist matter one way or another? Well Sinclairs excuse is that he’s not that smart. And that he doesn’t understand economics.

    In other words he’s an Australian Neoclassical. But since he has no idea about monetary policy this definition collapses and that means he’s basically a Keynesian.

  2. “I am also trying to get my head around this, but I am not sure I know enough to understand. I can see that land tax is not a free lunch. That’s ok, not a big surprise. But isn’t it still preferred in some way to other, more destructive forms of taxation? In what circumstances it amy be preferred?”

    Well of course boris is right. Not without caveats and not up to some sort of unlimited amount for this land tax.

    It has to be that way at least in some circumstances. Because you tax pretty much EVERY OTHER THING you get less of it. But if you tax land you don’t get less of it.

    Well thats a difference. That makes a difference and in some cases thats an important difference because it means less deadweight loss.

    So once again we have the stupid, the naieve, and the evil sides of this argument. And Sinclairs denial of some sort of technical advantage of a land tax, only against other taxes, and only under some cricumstances and up to a point…………

    …….. Well his denial puts him squarely in the stupid, economically-ignorant side of the argument.

  3. Here is the best speech on the meltdown that I’ve heard so far. It shows that disaster of fractional-fiat buggering the capital market. Very funny as well.

    [audio src="http://mises.org/multimedia/mp3/ASC2009/ASC09_Schiff.mp3" /]


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