Today I had the excellent fortune to meet Ron Kitching (left), life member of the Mont Pelerin Society and sponsor of Hayek’s month-long lecture tour to Australia in 1976. Ron is a Rockhampton local, with a lifetime’s experience in the mining industry, where he was a distinguished exploration drilling contractor. He still consults to the industry, but outside of his mining experience, he’s a genuine economic autodidact.
His interest in Hayek’s thought was piqued after his drilling business nearly went broke as a result of H.C Coombs’ 1960 credit squeeze. ‘Coombs’ legacy still pervades Australia,’ he says. ‘He managed to hold every PM he served under in thrall. Even Menzies’.
At first Ron was just irritated with the bureaucracy and regulation - particularly when the ATO was the only body to refuse to enter a deed of company arrangement. After a while, however, his irritation turned to a desire to find out how and why governments could regulate the economy to such an extent that an ostensibly booming industry (like mining) was reduced to penury.
As his business slowly recovered - mainly through work in and around Mt Isa, where he was living - he started talking to local bank managers and economists. ‘The bank Johnnies knew nothing,’ he recalls, ‘while the economists were Keynesians or sometimes even Marxists’. He remembers one young man earnestly telling him that ’socialism was the future - after all, Russia won the war’.
His path to enlightenment started when he read Ayn Rand’s Atlas Shrugged, a gift from an American friend. He was alone at Tennant Creek in the middle of a major drilling project, and had nothing to do in the evenings. One of the best things about Rand’s book, he remembers, was a list of recommended titles in the back. It included several books by Hayek and von Mises. He bought every book on Rand’s list, Mt Isa post office staff wondering at the strange collection of hardbacks that accumulated in Ron’s company box. He spent ten years reading everthing he could find, all the while building his business. He still retains great affection for the work of Henry Hazlitt and Alfred J Nock.
By the time the early 70s rolled around, and now a successful businessman, he came across the work of Roger Randerson, barrister and economist, while visiting a geologist’s office in Sydney. Randerson had studied under Hayek in London. He and Ron met, hit it off, and conducted several speaking tours around Australia. Ron remembers Roger speaking at a Diamond Drillers’ convention in WA on the day Whitlam was dismissed. ‘He cheered when the news came through,’ Ron recalls. ‘But a lot of people in the audience didn’t know what to do. They hated Whitlam, but expressed the view that they shouldn’t criticise him too much, because the media loved him’.
Randerson was Hayek’s closest Australian associate, and when a gap in Hayek’s schedule appeared, it was Roger who heard from him first. This was shortly after Hayek’s Nobel Prize, so it was quite a coup when he accepted an invitation to speak in Australia. Interestingly, he refused to charge a fee, only asking that his expenses be covered.
Ron and Roger figured they had a done deal. ‘We thought we’d raise the money quickly,’ Ron says. ‘But we didn’t get anywhere. I cast around the mining industry, and Roger worked his contacts in the business community. We were told that people supported Hayek’s views, but didn’t want to be seen supporting an extreme right wing economist, lest the media come after them’. Bob Ansett famously threw Randerson out of his office, telling him ‘that’s how we make our money - giving away free tickets’. At this point, Ron resolved to underwrite Hayek’s tour himself.
In time, people got over their fear and money started to trickle in, but Ron never fully covered his costs.
Hayek spoke in every capital city, met the premiers of NSW, Qld and Victoria, as well as Malcolm Fraser (’which achieved nothing’, Ron notes drily). He spoke in a major university in every capital city, and to Chambers of Commerce across the nation. He also spent four days on Ron’s farm in the Atherton Tablelands, and even lectured in Cairns. He was stunned at Ron’s economic library, once commenting, ‘who’d have thought I’d have found all my books in the home of an Australian bushman?’
Ron Kitching also did a lot of other things besides sponsor Hayek’s visit to Australia. He lived in Chile both during the Pinochet regime and afterwards, writing weekly editorials on economic issues for El Mercurio de Antofagasta for some two years. He visited Russia in 1990 as part of a Cato Institute delegation. His enduring recollection from that trip was ’seeing a Russian academic hugging a copy of Human Action to his chest and crying’.
Ron Kitching is a truly remarkable Australian; he is the author of Understanding Personal & Economic Liberty.
149 Comments
I’m not sure if it was Ben Marks or Rafe who teed this up, or both of you. Much, much appreciated.
It must have been Ben!
Good to see the story told again.
what a post !
This gentleman has led a very interesting life. A great post.
Great post Skeptic. Awesome. A dude like that we ought to look on as being the equivalent of a war hero.
The thing is, I had to leave so much out! I’ve got about twenty pages of shorthand full of quips from Hayek, Ron’s incredible mining stories (and his remarkable economic and business insights). I promised Ron I’d get a short piece up straight away, but what I’ll really have to do is a decently long profile in Quadrant.
Ron rocks!
Is this Ben Marks the same Ben Marks that I used to play chess against?
I don’t know. He was at the blogbash. According to Ron, he’s only 20.
Different one, then. The one I knew had no apparent interest in politics and was slightly older than me, and we were both in our early 20s.
We ought to hear less ungratefullness towards Rand. Her books were incredibly important in reviving Austrian economics.
They were books that gave people enough courage not to take the bully-boys too seriously.
Ron is completely uninterested in petty differences between libertarian positions Graeme, and he’s grateful to Rand for getting him started.
He’s a uniter, and his first principle is very simple: get the government off our backs.
As I am a rent-seeking sometime government worker, I wholeheartedly agree with Ron, that we should get the government off our backs (except that my employment, or rather salary, should be maintained).
Skeptic I wasn’t meaning that he was ungrateful.
Dude could come round to my place and practice Karate against the wallpaper with mud on his shoes and I wouldn’t give him a hard time.
What I was thinking more is that most people who got onto libertarianism and the Austrian school in the old days were people who at first read Atlas Shrugged.
That generalisation probably held from about 55-80.
I don’t consider it a cut and dried thing that the civilisation would have pulled through without her unique contribution.
I know you didn’t mean that, Graeme - I was just trying to get across how clear Ron’s thinking is. And I think you’re right about Rand’s fiction getting people into libertarian thinking.
A really interesting post.
I’m looking forward to the Quadrant article.
Whoops. I guess I’ll have to write it now
Actually, just kidding, Don. This guy is so interesting he deserves a whole Quadrant article to himself.
Skepticlawyer, it was I who told Ron about you after we met at the blogbash. He was delighted to hear that there is a libertarian in Rockhampton and asked for your contact details but before I could find ‘em out, he had tracked you down.
Benjamin Marks introduced me to Ron online after I met Ben online following his article on Mises.org called ‘Archipelagos of Educational Chaos’.
http://www.mises.org/studyguide.aspx?action=author&Id=489
It is worth noting that Ben was only 16 when wrote this remarkable article.
My apologies, Justin. Ron actually contacted me at work - everyone in a country town can figure out where the Judge’s Associate is in about 2 seconds flat. I knew it was as a result of my trip to Sydney, but hadn’t been able to put the pieces together. It’s quite possible you told me all this at the blogbash, of course, but I had consumed a fair bit of booze by that point.
Siggh. If I’m going to hang around this blog I’m going to have to catch up on my Economic reading. After “Atlas Shrugged” and Hayek’s “Road to Serfdom” (which I already have), any suggestions for a libertarian primers list?
Some recommendations apart from those you’ve got (we really need to have a dedicated page with recommended reading on it, Jason. Just sayin)
1. Free to Choose & Capitalism and Freedom - Milton & Rose Friedman
2. The Constitution of Liberty F. A Hayek
3. The Fountainhead Ayn Rand (better than Atlas Shrugged IMHO)
4. The Undercover Economist Tim Harford (not libertarian as such, but explains all the economic terms people flick around on this blog in crystal clear prose aided by very funny examples).
That’ll do for a start, then you can get into von Mises etc. You’re into sf, so if you want some idea of what a libertarian society may look like, Snow Crash is a pretty good read (remember that libertarian writers don’t sugar coat their visions, however)
Tim Harford does a column in the Weekend Financial Times which is always good value. The book is brand new so I might have to get the library to buy it.
I thought it was just me who dont understand bank managers, they ask some dumb questions and let the big ones slip away - my accountant was dumbfounded by a couple of oddball queries from our local bag man.
Not only does govt intrude with meaningless paperwork the mountain of obvious and hidden taxes is mind boggling, like land tax and stamp duty (which seems to be applied on every transdaction.) And capital gain tax is outright daylight robbery.
Looks like a splotchy old fart in a dirty white t-shirt to me.
The economist were Marxists?
The business people fearful of being associated with Hayek?
Afraid to criticise Gough ‘cos it might upset the meeja?
Let’s get this sack of lard off the booze and onto the prozac.
I wouldnt be too quick to cast aspersions Munn, you could do with some wardobe advice and this obvious predeliction for little kids….
http://www.geocities.com/steven_g_munn/steven_kids.jpg
“The economist were Marxists?
The business people fearful of being associated with Hayek?
Afraid to criticise Gough ‘cos it might upset the meeja?”
My God man you have no sense of history do you Munn?
All the above propositions might readily be thought to be likely even before we get the eye-witness confirmation.
And I’m not sure I like the way you’re hanging around the kids Michael Jackson.
“any suggestions for a libertarian primers list?”
Go with economics in one lesson by Henry Hazlitt.
Then go to CAPITALISM by George Reisman.
Both of these free on the internet.
After that any writing by Von Mises.
Then later you would go back to CAPITALISM to sort out who was more nearly right in any major controversy.
Money and banking is not a totally different topic then economics.
But it is a topic where more then the usual bullshit momentum has become imbedded.
I’d reccomend Rothbards “The Mystery Of Banking” to get into this topic before you get yourself confused by reading any Keynesian bollocks.
All of this can be fleshed out by going to Mises.org and listening to the various audio.
With the audio I’d start with money first.
But Reisman is so good you want to listen to anything he’s got.
Then you’d go to Salerno for money basics.
Then you might go to Garrison for how this pans out in the business cycles.
Young Dr Hullsman has some more cutting edge stuff going.
After getting money sorted by dudes who aren’t going to just confuse you the rest of economics ought pretty much fall into place.
Whereas the money side of things might force you to have to pull out a pen and a peice of paper the rest of the Austrian economics media archive can be stuff you’d listen to when you were getting boring stuff done around the house.
Coombs was initially a socialist then a promoter of keynesian philosophy, as was Menzies.
Coombs was anti the theory of classical economics and found favour with socialists Curtin and Chifley.
Along with much of his ideology Coombs’ theory of collective living and sharing by aborigines has come under criticism
http://www.cis.org.au/exechigh/Eh2005/EH26105.htm
Ho Ho.
I guess I gave you a strictly ECONOMICS-based primer list.
But I think economics important so you can get to where you can be happy that if things are done right and if the transition to a libertarian society is handled with great dexterity and a bit of flexibility that the consequences wouldn’t be folks starving.
That the consequences won’t be pockets of outrageous poverty combined with a totally exploitive situation with all these fatcats whose money makes money while they sleep sponging of the 50c per hour working skeletons.
In regards to the above you might look into a character called Henry George.
George pushed his case too far I think.
Nonetheless if we wanted a combination of libertarianism and egalitarianism the potential for this probably lies in a monetary system where we got used to consumer prices falling all the time and never got unused to it….
…combined with a minimalist government system where most of the burden of government spending fell on land value tax.
Under this situation where the value of land was likely falling in nominal terms even if it were increasing in real terms……
Then the exploitive situation where all these fatcats did bugger all and the rest of us eat shit and die……
Well that would be just implausible if the above scenario were combined with economic freedom.
Aussies and other sons of sheep-stealers.
Did you know?
Did you know when the Australian labour party first started out it was a Georgist party?
Oh Jerusalem!!!!!
Had the egalitarian instinct only been buried in that way of doing things rather then in spending and excessive thieving!!!
Not everyone who’s a successful businessperson goes around in Armani suits, Steve M. Particularly not in this town, where you’ll get marked out as a tosser quick smart if you do.
You’ve spent enough time in the country to know that.
Well GMB, pleased to hear your partly sympathetic opinion on Henry George. I thought to mention him in an early discussion (but not wishing to expose myself to potential gratuitous insult) kept quiet.
But Georgists have a point I think that is worthy of more consideration that it gets currently.
Mark Hill (ABL) is a Georgist. There’s a few libertarians about with Georgist ideas. I must admit I find them interesting too.
Who wears a suit in summer? People who are forced to wear suits in summer are the real slaves.
Georgism becomes almost mandatory if we have fractional reserve and even moreso if we have fiat-fractional-reserve.
I think in the long-run its the most efficient tax (in some magnitudes. Probably not anywhere near to what Henry was after).
And its the only tax that is both efficient and redistributive.
THE ONLY TAX THAT IS EFFICIENT AND FALLS MORE HEAVILY ON THE WEALTHY.
For that reason alone it appears to be virtually a moral imperative in terms of “social justice”.
But we have to be careful here in the medium term.
Because to increase or to introduce it leads to a massive collapse in peoples CAPITAL VALUE.
But at the same time it affects their CASH-FLOW.
Its a double-whammy. Its a double imposition and likely enough to start a civil war.
And if we want to do this transition business right I suggest we need to find a way to over-compensate current landowners with tax-vouchers,
Overcompensate them for both their loss of capital value and for their loss of cash-flow as well.
For this reason it must NOT be used as a revenue-raiser. But only as a way to pursue a more just society in the longer term.
The current owners ought to be compensated with tax-vouchers to allow them to evade some proportion of their ongoing non-land-tax liability.
To only be cashed-out or tradeable upon severe sickness or the reaching of retirement age.
In most things we might go with undercompensation.
But to increase land tax we ought to go with overcompensation I think. Ok so its a one-off windfall to the already wealthy but in this one case I’d err to the side of overcompensation.
But a FURTHER note of caution.
One of the very few economists that aren’t outright Austrians that are worth listening to is Hernando De Soto.
And before one gets too excited about going too far in the Georgist direction we would want to appreciate what Hernando has to say about the value of clear property-titles.
You want people to meet Henry halfway. But the total Georgist program could actually be a real disaster.
I stick with my program for the best egalitarian/libertarian compromise.
And that would be that after the over-compensation in terms of current land-owners the land tax/monetary policy goes forth in such a way as that average up-front land values increase in REAL terms but reduce in NOMINAL terms over time.
And at the same time you are trying to integrate this with the total volume of spending never reducing but growing as slow as possible (if you are running a fiat currency).
I tell you the truth.
If somebody multiplied their fortune under the above conditions and without tax-payer funding the rest of us ought to just stand around clapping.
Such a person would be no threat to us and would indeed be recognised as an individual who was paying for our defense overhead and showering good things on the community.
“There’s a few libertarians about with Georgist ideas. I must admit I find them interesting too.”
Didn’t Henry George argue that all land should belong to the state? That doesn’t sound very libertarian to me.
http://www.econlib.org/library/YPDBooks/George/grgPP.html
No he didn’t argue that.
But taking Georgism too far might lead to that in a defacto sense.
Not quite, Don. This article has more. Money quote:
The ideas are interesting, but I’m not sure how practical they are.
Milton Friedman supported land tax, and I think that is why several libertarians support it. I don’t understand why it is so popular. I once published an op-ed in the AFR condemning land tax, and got hate mail, and also a letter from some land tax association saying I didn’t really understand the idea at all, and how it’s practiced in Australia is totally inconsistent with Georgist ideas.
Mr Kitching was kind enough to speak to Catallaxy and doesn’t deserve to be abused for it. Just delete Munn’s comment.
Well no taxes are good Sinclair.
But why on earth did you condemn land tax…. As opposed to its alternatives?
Did you just get confused or something?
I’m keeping it there for evidentiary purposes, CL. Next time our Steve has a go at someone else for abuse, I invite Catallaxians and friends to link to that comment.
The ‘advantage’ of land tax is that it is borne by the land-owner (can’t be passed on) and consequently has no adverse distributional effects. This occurs because the supply of land is perfectly inelastic. Okay. But land is only inelastic in a geographic sense. Economically, land doesn’t have to be supply inelastic and the ‘benefit’ of the land tax disappears. I also think that it violates Adam Smiths precept that taxes should be easy to pay. Many individuals have land but no money - taxes have to be paid in money. The other problem I have is in the bureaucratic value assessment. The government tells you what the property is ‘worth’, but are not making an offer to purchase. Land tax could be a sensible affair, if when making the value assessment the owner had the option to sell the land to the government at the price the government says the land is worth.
Sinkers I think it more accurate to say there are a few people who have little income but a valuable piece of real estate.
The rational thing to do is to trade down. You do not drive a Rolls Royce on a Volkswagen budget!
skeptic & GMB - That’s interesting. I hadn’t heard of geolibertarianism before.
But I’m still confused. If “all land is owned in common by society” and anyone who takes possession of land “must pay rent to the community” then who owns the land?
How can someone pay rent for the use of their own property?
When I say to a libertarian that something is “owned in common by society” they usually correct me by saying this means “owned by the state.”
Georgists draw a distinction between secure legal ownership and secure legal possession. Since land was not created by anyone’s labor, it cannot be rightfully owned. Thus, geolibertarians recognize a right to secure possession of land (land tenure), on the condition that the full rental value be paid to the community. This, they say, has the effect of both giving back the value that belongs to the community and encouraging landholders to only use as much land as they need, leaving plenty for others.
Without getting too far into property law concepts, possession at common law is good against the whole world except one who can prove (on the balance of probabilities) superior title.
Ok, I can see where this is heading.
First we say that taxes are a kind of rent. If the state imposes a tax on something it is claiming that that thing is common property.
So if the state taxes my earnings then it is saying that it (or ’society’) owns my labour. Once we concede this principle then we are left with no argument against communism.
A tax on land is consistent with the libertarian principle of self-owndership but a tax on income or capital is not.
Am I on the right track here or am I still confused?
Well, there you have it: The voice of the social engineer. How people choose to use their own property is their own affair.
Don what is your veiled opposition to taxes being transferred to land rather than income? How do you make the gignatic leap that this somehow isn’t truly libertarian?
Tax effects behaviour. Most libertarians are looking for best outcomes. Income and capital taxes are corrosive and harmful to the economic wellbeing of people. The least harm would be caused by higher property taxes rather than other income and capital.
The real issue you have with this it seems to me is that you’re 100% redustributionist looking always looking for that nebulous goal of equality.
My understanding is simply that it’s a distinction between types of ownership - or ‘levels’ of ownership. They’re not arguing that taxes (as we now have them) are a form of rent - at least not as far as I can see.
JC - I’m interested in your opinion on this. Over at Thoughts on Freedom you said "It’s truly shocking how the Australian people actually allow such pathetic land rights. We should demand land rights from the heavens to the core." I’m not sure Henry George would have agreed with you. In Progress and Poverty he complained that:
skeptic - Do you think of property as just a bundle of rights?
Don
There is nothing strange about that comment and favouring land based taxes. If there is I would only be too happy to see it.
The comment you refer to is the limitations we have when one purchaes land in Australia. Land holders just have rights to the surface while the rest is assumed by the government.
This makes things far less effective for best outcome when we see the example of the US and the number of oil wells. Land holders would rather hide their “ownership” rather than exploit the potential when all they may get is assesed value.
There is nothing inconsistent about a georgist system and holding land rights from the core to the heavens….. as I said.
I’d have to think about that for a while, JC, before I came up with any sort of absolute answer. Certainly native title is a bundle of rights - although that was a Ward court finding, it makes sense in the context of native title as, in effect, a weaker form of title.
There is nothing to change in a legal sense by going over to the land tax base. At least i don’t any.
Adding full title from the core to the heavens is actually strengthening title anyway.
Native title is bullshit rights conctocted by a bunch of leftists anyway. It is a reflection how leftists look at ownership and title… limited and the paw of government all over it.
Individuals cannot lay claim and the group or tribe isn’t allowed to take a piss without government approval.
JC - I don’t know a lot about George’s system so I’m having trouble seeing how it fits together with what you’re suggesting.
If you pay the government rent or tax on the value of the land you possess then the government would need to know the value of the mineral deposits.
Maybe I’m confused, but this seems to be inconsistent with a farmer having the right to prevent mineral exploration on the land he or she possesses.
And once minerals were discovered presumably the farmer would then be liable for a tax which covered their value. But the trouble is, you don’t know their value until you mine.
Surely the simplest solution would be to allow farmers, homeowners etc to have surface rights but not mineral rights? Then the miner could pay royalties to the state.
Does anyone know how George dealt with this?
Don
If the farmer owns below surface rights, it is up to him to explore for minerals. No one would have the right to go looking around his property.
The tax question would only arise when that farmer is looking to expolit the wealth below the surface. In other words changes to his tax base would only arise from the point of expoitation. Before that time the minerals below have no value.
It seems you are conflating the present system worth with the Georgist proposal.
“If you pay the government rent or tax on the value of the land you possess then the government would need to know the value of the mineral deposits.”
No. All the government needs to know is the existing zoning for that land. The change in the example you gave would only happen when that land was exploited for minerals.
The core to the heveans argument…..
We have discussed why is important to allow for below surface rights.
The heavens argument would better price the cost of say aircraft going over someones property and allowing people to be compensated for noise polltution.
“How can someone pay rent for the use of their own property?”
In our current system, that would be imputed rent. It’s a while since I looked at this (and no doubt someone will correct me if I’m wrong), in Australia we don’t tax capital gains on the family home. In the US, their system does tax capital gains on the family home but, in the proocess, “imputes” the rent that would be received if it had been rented. It’s kind of like deemed returns on investments for retirement income.
I think it was Don.
RE 59
US CGT is a little complicated but is safe to say that it doesn’t tax the primary residence in all cases.
Don.
What are you on about?
All government spending is bad because its the flipside of stealing.
Now obviously if it is felt that for the time being some taxes must be raised you have to decide how to raise these funds.
Since every other way of raising this money is even worse then a land value tax then it is this tax that stands out in that sense.
sinkers it all about knowing where you can afford to live.
Generally a farmer cant have below ground ownership (unless the land was granted in the 1800’s under the old system of title), the only way that can be done now is by taking out a mining lease (and anybody can do that over anyone elses land). It is only a lease and you have to pay royalties to the Crown as they own the rights to all minerals, ores, gas, petroleum, water, stone, soil etc obtained by mining or quarrying.
Freehold title is also conditional on zoning laws, covenants, greenie restrictions etc etc.
The problem with land tax as a source of State revenue is that it is an additional cost (+ capital gains tax, stamp duty) further increasing the cost of property and putting it out of the reach of low income earners whilst providing a disincentive for investors.
Increased property taxes = reduced return (lower than bank % on IBD) = reduced investment in property = less property in the market = higher rents = higher CPI = increase inflation requiring raising %rates etc etc
If they are going to rely on property as a source of revenue then there should be some relief in income and other taxes otherwise they will kill the goose that lays the golden egg. The govt would be better off stimulating investment by wiping land tax and picking up the extra revenue in the form of stamp duty arising from a more healthy property market, at the moment it is on life support.
“The problem with land tax as a source of State revenue is that it is an additional cost (+ capital gains tax, stamp duty) further increasing the cost of property and putting it out of the reach of low income earners whilst providing a disincentive for investors.”
Here you speak of PROPERTY TAX.
One of the worst taxes there is.
But land value tax up to some level has got to be one of the least bad taxes.
IT DOES NOT ADD TO THE COST OF THE LAND.
It reduces the up-front cost of the land in return for a constant levy.
So instead of paying 5 million for a block of land you might pay 1 million (lets say) and then $100 per day (lets say).
In fact under some conditions it would reduce the real cost of getting hold of land if it means that land is no longer the main store-of-value.
That is to say if the land-tax/monetary policy were set such that the up-front value of land on average fell in nominal terms but increased in real terms then money would be a better store of value then land and land would lose its store-of-value premium.
Land value tax means that the property on the land is not taxed. Or to put it another way the valuer estimates the likely value of the land if everything were bull-dozed flat and taken away and the place was then a vacant lot.
Property tax on the other hand must be resisted wherever it raises its ugly head.
Property tax on the other hand must be resisted wherever it raises its ugly head.
thats because they would be taxing a depreciable item. Which in effect a tax on a building is a tax on a depreciating asset.
GMB - For once I’ve understood everthing you’ve said.
What do you think about JC’s ‘heavens to the core’ argument?
No, Homer (shouldn’t you change your blogname to ‘Pet Rock’?). Land tax is about the government telling you about maximising cashflow from your property in order to pay tax.
Rog
Don’t forget that most of us are propsing that is become the onoy form of tax so low earners wouldn’t be that effected as the price of entrry would be lowered.
The other effect is that by removing height restrictions in cities movmenent would be vertical and not lateral as we do more with less.
The net effect would be that we would leave a lot less footprint which is a good thing. Nothing wrong with living in aprtments, the worlds richest people do, see NYC.
You are just being a land-tax-bigot Sinclair and I’ll show you why.
“Land tax is about the government telling you about maximising cashflow from your property in order to pay tax.”
But we know that the government is a natural thief.
So its the magnitude of the thieving that we worry about.
Which tax is less bad then land tax.
You are hitting a point of intellectual constipation here.
I’m not saying that land tax is good. Just saying it ought to be less bad then some of the alternatives at any low level of depredation.
Hmmmm.
Thinking about it from a natural rights point of view:
You could have it that you owned everything to the core just so long as you didn’t get in the way of folks tunnelling underneath for transport purposes.
And flying above for the same.
But you see if your minimalist govenment is financed primarily by land value tax then a windfall from something lying beneath your property seems far less unfair to the rest of us I think.
The increased property values which that might cause in the surrounding properties and then as a knock-on-effect to your own property is a sort of automatic compensation to the rest of us.
The heavens to the core argument works better when combined with land tax I think.
And doesn’t work so well under current arrangements.
I think if you have that heavens to core arrangement it ought to be provisional as to its use.
Like if you build down ten metres thats cool. But if you haven’t built down and someone, wants to build a tunnel 30 metres below any gold they find might be yours but I don’t think you could obstruct them.
Also I think it would be better if you could build as high as you want and if the nearby airport hasn’t purchased caveats to be put on your property then they can’t stop you from building up.
But if the airport buys caveats to be put on the property off the previous owner and then you buy the property then the caveats are still there and I think this is justice.
GMB - That’s an interesting answer.
I’m starting to see what’s going on here. When you talk about ‘Georgism’ all you’re really talking about a land tax.
As I understand George his argument was that property rights were derived from labour. He argued:
As skeptic says, "Georgists draw a distinction between secure legal ownership and secure legal possession". Possession of land is only allowed if the land’s "full rental value [is] paid to the community".
I can see why some libertarians might favour a land tax but I’m having trouble why they would support George’s argument for it. I’m less interested in the practical effects of a land tax than I am in the rationale for it.
I’m also curious about whether George’s distinction between property and possession holds up.
Sorry - I meant to say
When you talk about ‘Georgism’ all you’re really talking about is a land tax.
Smart parasites don’t kill off their hosts. Land tax does just that.
Yes, Don by Georgists we mean land tax (but in lieu of an income tax or any other type of tax). I will respond to your email, I haven’t forgotten.
This is bigotry.
Total Government expenditure in Australia could be covered by a Georgist tax (levied against unimproved land values) of no more than 7% ( a fairly conservative estimate too - it could be lowered to 6%).
Considering how wasteful Government spending is, what kind of theory, empirical evidence or comparisons can you show to prove that a Georgist tax is less optimal than other alternatives?
Very little deadweight loss. Real incomes and output would increase permamently.
Right.
But its a matter of degree.
Others apply natural law to say that the land ownership begins with the homesteading of the land. The mixing of the land with the labour.
And thats a pretty good argument too but it was first made by Scotish Calvinists during the mini-ice-age when it was probably quite hard to get some drunken Celts to go up their and work a lot of abandoned land.
There ought to be a bit of a compromise position under natural law.
I think Henry goes too far one way.
And I think Hoppe goes too far the other way.
But here’s a bit of a compromise position:
http://geolib.pair.com/essays/sullivan.dan/royallib.html
“Smart parasites don’t kill off their hosts. Land tax does just that.”
No you see you are totally stuck in intellectual constipation.
And not only are you being bigoted you are being evasive in your bigotry.
If the government is going to eat up 5% of GDP in its depredation how is it more just to raise that money off payroll, income-tax or even GST.
I’m afraid you are just being an anti-intellectual idiot on this matter so far Sinclair.
Don , so far no one is proposing that the legal rights to the land ought to be removed and a whole new set brought in.
ABL is right, adopting a lan based tax would immediately spur an increase in the economic wellbeing of the nation.
I am really unsure what you have against the suggestion. You may want to explain the difficulty here.
JC - My difficulty? I was having trouble understanding why GMB or any other libertarian would endorse Henry George’s ideas about land. But that was my misunderstanding. What we’re talking about is a moderate tax on land — not what I would call Georgism at all.
When I think about Georgism I’m thinking of the kind of approach groups like Earthsharing Australia are promoting. Here’s what they hope will happen when their single tax comes in:
I’ve also read Murray Rothbard’s critique of Georgism. While I don’t see the world the way Rothbard does, his position seemed to make sense from a libertarian perspective.
The thing with his critique is he only critiques the 100% plan.
He shies away from it as financing a minimalist government or part of it.
So while I agree with Rothbard on that extremist Georgist position I find him to be a bit evasive on this point.
Actaully Don, if were a Greenie and may God strike me down for ever making such a suggestion the comment you posted would be about the only policy I would need to take care of things.
Libertarians like land taxes because
1) for natural rights libertarians, taxing land minus value added (which comes from the individual’s effort or foresight) is a much lesser evil
2) for utilitarians, taxing land involves less deadweight loss than other taxes.
GBH - you seem to have finally gotten thru to Don. Maybe you can cure him of his kleptomania?
I don’t know.
I think he’s beginning to drool at the prospect of another form of yet more thieving.
What I want to do is to convince people that a slowly increasing land-tax and a tight monetary policy…..
Wherein you are trying to get the up-front cost of land to increase in real terms and reduce in nominal terms is likely to be the most egalitarian setup consistent with liberty that there is.
But I also want to stress that the current land-owners ought to be compensated by various measures.
Jason - You’re a fan of the Chicago approach aren’t you?
How would someone like Becker or Posner decide between different tax regimes?
George Stigler said that if you are going to become a land tax advocate his advise is to get yourself a wealthy wife and make sure you hold on to her.
Actually his phrase was different and much better but it escapes my memory.
Its one of these wall of silence matters.
But then again it would be a very scary tax to overuse. That would be really tempting fate.
Don’t get any thieving ideas Mr Arthur.
In his Economic Analysis of Law, Posner is basically sceptical of the idea of relying more on land taxation for the same reasons as Sinclair and also because he thinks land taxation won’t raise enough for current expenditures.Of course he is not writing from the perspective of a libertarian advocate here. I’m not aware that Becker has had much to say on the topic.
But from the perspective of reducing the inefficiencies of funding current or even reduced revenue bases, land tax would have a role to play, in my view a greater role to play, though I don’t think it has to be an either or decision. Realistically all current taxes will still be with us for a long time.
It can only be in the context of a vastly reduced government depredation.
Since you’ll need to compensate current landowners with tax vouchers to make it fly.
You’ll have to give them a voucher which allows them to get out of a proportion of their taxes up to a certain amount. And only have the remainder cashed out on retirement.
Don’t be giving Don any theiving ideas Jason.
Maintaining current revenues is an unacceptable level of thieving. Land tax cannot be used to maintain it.
Thats most imprudent and impolitic.
Plus its theft.
“Realistically all current taxes will still be with us for a long time.”
Don’t be piss-weak and defeatest.
Jason - I was flicking through one of Posner’s books today. He was criticising the idea that property rights were ‘prepolitical.’ I guess that’s an attack on natural rights libertarians and conservatives.
As I understand it, Posner thinks of property as a bundle of rights. The form that bundle should take is determined by efficiency considerations. Is that right?
Anyone with any acquaintance with the common law will realise that even simple property rights in land have never been as simple or straightforward as Lockean/natural rights thinkers make them out to be. Their boundaries have been subjected to revision or qualification (e.g. easements) through time according to considerations of technology and social circumstances. Whether this case by case adjustment is to be made by a court interpreting precedent or periodically through statute law doesn’t eliminate the complexity of elaborating on these rights. This libertarian fantasy of somehow defining these rights once and for all and enforcing them accordingly is just that, a fantasy.
This is why natural rights libertarians get so het up about things like intellectual property, antitrust, access regimes and defamation - all these various qualifications to the simple Lockean vision which are embodied in these laws will have to be made by one authority or another in any society.
So yes, I agree.
What’s this argument?
That property rights were subject to depredation in the past and so ho ho its down with John Locke then?
The key thing is to clarify and strengthen property rights.
If that isn’t done no amount of free enterprise in terms of the trading of goods can get capital accumulation going.
Natural rights libertarians have not been bested by the Hume-nuke Jason.
You failed in every encounter you’ve had with me here.
Arguments that live by the Hume-nuke die by the Hume-nuke and so Humes level of skepticism in not the least bit relevant here.
This is such a stupid argument you are trying on here.
It basically says that past depredation justifies future depredation.
This is a silly argument and doesn’t lay a glove on Locke or anyone else.
What issues do you have with Hume, GB? Can you please explain it as i don’t know enough about the man’s thoughts.
GMB - You’ve lost me again.
What are you talking about?
Humes always good when he’s talking about real problems.
But somewhere along the line he went in for a bunch of skeptical arguments which included an attack on inductive arguments and on aspects of natural law.
None of Humes sketicism can be taken seriously.
Since it sets such a high bar for any proposition whatsoever that nothing passes.
But trickster Philosophy-Boy 101 types can use this patented “Godless Theologian” Hume-nuke to say your ideas have not foundation….
Then what they’ll do is turn around and say “look over there” and start putting all this other crap forward which itself would survive no level of skepticism and clear no bars.
For convenience I’ve called this inconsistent use of a ridiculously high proof-bar… The Hume-Nuke.
Jason appears to think he’s marshalled some sort of case against Natural Law.
But he has not done so. And consequentialist arguments would fear no better when one rose the bar sky-high like that.
Don. I was having a go at Jason this time.
JC: Hume’s most famous argument is that you cannot infer a value from a fact. He was not mounting an argument against induction, which is as much about sharpening definitions as anything. My post on Hume is here.
The great natural lawyer John Finnis (more here) argues that certain values are self-evident, and don’t require inference in order to be established.
GBH
My argument had nothing to do with Hume or with past depredation justifying current depredation.
Jason - Are you sure?
Let’s try something different. You’re a consequentialist and a utilitarian. But what’s GMB? Have a go at reconstructing his justification of property rights.
I’m sure he’ll let us know if you get it wrong.
Three arguments against land taxes:
1. Libertarians “can’t” have something in common with the muddle headed geoists…more of a conceptual problem for the critics than anyone else.
2. They violate private property…trivial and only partly true. They only violate the right to land (partly true), and considering the reduction of the tax burden and the small rate which would be levied to support a Government run on a utilitarian basis (strict cost-benefit tests), the argument is trivial.
3. So called “practical” considerations over the revenue base. The base for a Gerogist tax in Australia was valued at 2.1 trillion AUD in 1991 dollars as of FY 90/91 end. A rate of 7% back then was sufficient to cover all levels of Governemnt spending. An actual increase in wealth (ability to generate incomes) and expansion of the base (granting of rights over crown land and sea lanes and sea beds) would see the base practically double in nominal current terms to close to 4 trillion (assuming 3% inflation and 1/3 of all land is held as crown land…the sea rights aren’t factored in).
So a rate of about 6% would conservatively cover the entire budgets of all levels of Governemnt. Considering how wasteful our Government is, being run on non-utilitarian lines and the benefit to reduce unemployment as the deadweight losses of other taxes is eliminated along with the waste of administering the current tax system, it is not absurd to see the rate drop to 5 or even 4%.
Is that right, ABL? A 7% rate would actaully cover all levels of government? Wow.
Valued by whom?
I’ll dig it up, but why do you hold such a high standard for evidence on this, but not for Posner etc?
Here is a far more conservative estimate, which would support more utilitarian Government action than our current waste:
See pp.39-40
http://www.lvrg.org.au/Text/1124864122358-5260/uploadedFiles/1125217371937-4327.pdf
I can’t find the other estimates, which were very detailed.
“GBH
My argument had nothing to do with Hume or with past depredation justifying current depredation.”
Fella.
You take that out what is your argument?
What argument do you have?
Lets go over just what your argument is again.
You were having a go at Locke. And you were being scornful about natural rights theorising.
On what basis?
I’m very embarressed - while I own Posner’s book, I haven’t read the chapter on taxation. I’m holding a high level of proof because I don’t belive the advantages of the Georgist land tax.
(1) It is predicated on the notion that land has an inelastic supply curve. This is wrong. John Bates Clark is quite damning of this idea. (True in geography, but not on the market).
(2) It violates Adam Smith’s second maxim of taxation. This tax is arbitrary - bureaucractic assessment of value is not entrepreneurial assessment and cannot represent market value. It also violates Smith’s third maxim of taxation in that it isn’t convenient to pay (this, I think, is Posner’s point).
Thanks for Terry’s article in pdf - I’ve never been able to track it down.
Come on Sinclair.
Lets take a minimalist setup of 1% of GDP for each level of government for non-security spending.
So thats 3% GDP.
And then you have security spending that goes from (lets say)
2% most of the time up to 10% averaging for about 9 months every five years.
So you have about 5% of GDP going to govenment most of the time.
If that 5% was coming from land tax…..
And the extra was coming from GST……
Now you Sinclair come in and say
“No NO you guys are doing things all wrong… this land tax is inefficient and unjust and violates the words of Adam Smith”
Now on what basis would you say this sort of thing? What taxes would you rather have them have?
Actually Adam Smith advocated a land tax. But thats neither here nor there. We try to not hide behind others if we are serious.