What’s New in Economics
Georgism in Today’s Economic News
Henry George Rocks Twitter
Bloomberg Opinion writer, Noah Smith, gives the twittersphere a quick lesson on why Henry George’s teachings are exactly what’s needed in today’s economic discourse!
1/Here's a quick thread about Georgism, which I think is a severely underrated, deeply misunderstood, and quintessentially American alternative to standard capitalism. https://t.co/Ffvv5xKzvG
— Noah Smith (@Noahpinion) December 5, 2018
2/Why is Georgism such a niche thing?
— Noah Smith (@Noahpinion) December 5, 2018
My guess: It focuses on land, which is not a thing most Americans think about a lot, especially these days.
And this is a shame, because really, Georgism is about so much more than land.
3/Georgism is really about what humans produce versus what nature produces.
— Noah Smith (@Noahpinion) December 5, 2018
"Land" should be read as a stand-in for all the things that humans merely seize and divide up among themselves.
4/"Capital" is really a combination of things.
— Noah Smith (@Noahpinion) December 5, 2018
Every machine, every building, every vehicle requires some input of human labor and ingenuity to create.
But it also requires natural resources, which humans seize and divide up instead of working to create.
5/Standard economics has no easy way of separating out nature's bounty from the product of human effort and ingenuity.
— Noah Smith (@Noahpinion) December 5, 2018
But this division matters, because human effort and ingenuity are things we want to reward, while nature's bounty is something we want to divide equitably.
6/Georgists love the Land Value Tax because it seizes on one clear-cut case where you can easily identify the dividing line between nature's bounty (a plot of land) and human effort and ingenuity (the structures built on that land).https://t.co/nTqkvvmJyh
— Noah Smith (@Noahpinion) December 5, 2018
7/But Georgism should be about much more than this one policy.
— Noah Smith (@Noahpinion) December 5, 2018
It should be about a general approach to constructing an economy: "Reward human input, divide nature's bounty equitably."
8/My favorite Georgist was the economist Wolf Ladejinsky, who designed the land reform programs in Japan and Taiwan: https://t.co/br4OxonXvF
— Noah Smith (@Noahpinion) December 5, 2018
9/Ladejinsky's policies were not focused on land taxes. Instead, he focused on seizing land from landlords and giving it to small hard-working farmers.
— Noah Smith (@Noahpinion) December 5, 2018
This policy was Georgist in the general sense because it rewarded the farmers' hard work, while dividing land equitably.
10/Some believe that Ladejinsky's land reforms were a crucial reason for the stunning economic success of Japan, Taiwan, and other countries that copied the policy.https://t.co/Iq2c3ildya
— Noah Smith (@Noahpinion) December 5, 2018
11/Similar policies have probably been effective in other countries, like India.https://t.co/XvdEucPPdF
— Noah Smith (@Noahpinion) December 5, 2018
12/Some also credit Ladejinsky's policies with preventing Japan/Taiwan/Korea from becoming communist.
— Noah Smith (@Noahpinion) December 5, 2018
Ladejinsky was derided as a communist by American conservatives, who (disastrously) opposed land reforms in Latin America. But in fact Georgism was a vaccine against communism.
13/Land reform, though, is a policy for a poor agrarian country with lots of surplus rural labor. What would Georgist policies look like in a rich country like America, aside from land value taxes?
— Noah Smith (@Noahpinion) December 5, 2018
14/Housing reform, of course, is pretty Georgist:https://t.co/m8jnqbTZUg
— Noah Smith (@Noahpinion) December 5, 2018
15/I also think inheritance taxes can be viewed as Georgist, since they take wealth away from people who didn't do anything to build that wealth: https://t.co/SKKtr6DxLe
— Noah Smith (@Noahpinion) December 5, 2018
16/Place-based policies strike me as Georgist too: https://t.co/MR2AHOIr9F
— Noah Smith (@Noahpinion) December 5, 2018
17/Progressive income/wealth taxation can be seen as Georgist as well.
— Noah Smith (@Noahpinion) December 5, 2018
Some of rich people's riches comes from hard work and ingenuity; some comes from luck. Luck is like a natural resource - it's something humans receive instead of creating. So try to divide it equally.
18/Broadly, standard capitalism strikes me as a system that rewards both effort/ingenuity AND luck/plunder, while communism rewards neither.
— Noah Smith (@Noahpinion) December 5, 2018
If we define Georgism as a system that rewards effort/ingenuity but not luck/plunder, then call me a Georgist!
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BONUS TWEET:
Also, Georgism seems like it needs a new name that doesn't tie the idea to one specific dude.
— Noah Smith (@Noahpinion) December 5, 2018
Any suggestion I could make ("humanism"?) would be cheesy, which is why it'll take a manifesto to really make a name stick. Someone needs to write a book...
