Chris, We cannot survive without access to land -- one of the three Factors of Production.
The principal characteristic of all land is location. Locations are by their nature monopolies. Necessary to the efficient operation of the market price mechanism is no restriction on the production of goods, and no restriction on movement of goods. Yet, no more land can be produced -- as said Will Rogers "They ain't making no more dirt." Also land cannot be moved. We cannot move some Mojave desert land into downtown Los Angeles to compete with high priced sites. So the market cannot control land prices as it does with eggs and bacon and other goods. Further land is all taken up. If you found a little bit of apparently useless land and decided to put up the cabin it is likely that before long someone would come running up waving a piece of paper. When land rents and prices rise, the market price mechanism cannot bring them down by drawing land to the market so the prices keep rising. They continue to rise until they can go no further. This occurs when any further increase would leave a wage too small for Labor's survival. At that point, according to classical theory, the wages of those at the bottom of the wage pyramid have descended to subsistence level. Further, as a society progresses and the economy advances, rents and prices rise to absorb the advance. This is why the poor are always with us. As land prices move upward year by year, landowners frequently do not bother to sell or rent out their land. The increase in land value receives better tax treatment then income and if capital gains taxes can be ended, the income is not taxed to all. (The capital gains tax does not really tax capital, it taxes land value but that is a further discussion.) This leads to a situation where land cost makes production difficult. It also leads to empty areas in cities that cause sprawl into the boondocks. It also deters slum clearance. Landholders with blighted buildings on valuable land spend as little as possible on them because it would be wasted if they can make a land sale killing. The economy moves merrily along, but in fact it is in a continual state of tension, waiting for a trigger to send it over the brink. Anything might be a trigger which is why there are so many "causes" of depression. There is an argument that the land crash occurs every 18 years or so. I do not altogether agree with it. The particular problems with the banks are all based on land values. If you are interested, I will be happy to say a little more about it. Also, how the fatcats (or your Predators) cash in on it. Harry ******************************** Henry George School of Los Angeles Box 655 Tujunga CA 9104 818 352-4141 ******************************** -----Original Message----- From: [email protected] [mailto:[email protected]] On Behalf Of Christoph Reuss Sent: Monday, August 16, 2010 2:05 PM To: [email protected] Subject: Re: [Futurework] FW: paper on technology manias and gullibility Harry Pollard wrote: > The crash wasn't a contrivance of your Predators - whomsoever they may be. > It was an inevitability, apparently happening every 18 years or so. Within a boom-bust cycle system, the crash may be "an inevitability" (and even a cyclic one). But the boom-bust cycle system is not inevitable at all -- it is made and perpetuated by those who gain from it in every cycle. Key components of that system are growth bubbles, fiat money and compound interest. > About the only policy that would help is to allow land prices to crash. No. The boom-bust cycle system must be abolished, with its key components. > There are so many government policies ranging from the potty to the > disastrous that one cannot easily grasp their damaging consequences. Depends on one's intelligence... Chris ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ SpamWall: Mail to this addy is deleted unread unless it contains the keyword "igve". _______________________________________________ Futurework mailing list [email protected] https://lists.uwaterloo.ca/mailman/listinfo/futurework _______________________________________________ Futurework mailing list [email protected] https://lists.uwaterloo.ca/mailman/listinfo/futurework
