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Re: [LandCafe] Re: Software companies etc would pay little tax with lvt

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  • Harry Pollard
    John, You ll recall I define rack-rent as The highest amount that can be extracted from a tenant while maintaining production. If you aren t keen on my
    Message 1 of 142 , Dec 7, 2012

      You'll recall I define rack-rent as "The highest amount that can be extracted from a tenant while maintaining production." If you aren't keen on my modern use of rack-rent call it something else - perhaps "Rumpelstiltskin". However. the term fits in well, I think, with our need to get over to people the debilitating effect of monopoly rent demands.

      Any higher demand and lowest paid labors' wages will drop below subsistence - as George put it there will be a "cessation of life".

      Of course, many demands do exceed this amount which accounts for the large amount of vacant land in all our cities. The rent demand - or its corollary, price - is too high.

      Unlike other production where the object is throughput -emptying the factory so it can be refilled - land is always a one off deal. A landholder who sells is no longer a landholder. Further, so long as there is no imperative such as the pressure of a land-value tax, he can find good reasons not to sell - or rent out for significant use.

      I suspect that most land sales are stimulated by outside circumstances. The old man dies and the sons want to cash out his property. Or, perhaps serious health expenses, or the need to raise money for the kids' colleges forces the sale. 

      Otherwise, as the value of his land rises every year (and the tax payment is low) might as wll keep it. Also, collectibility prices come into play raising his appreciation of its value still more.

      Location rents are not freely established in a free market. Necessary to the proper action of the free market's price mechanism is the so-called 'Law of Demand".

      You know it. When demand rises, prices increase. This stimulates fresh production which arrives in the market and lowers prices. When rents rise in response to demand no more land can be produced and the rents continue to rise until they reach rack-rents. 

      I like Will Roger's remark - "They ain't makin' no more dirt."

      You should know something about locations. They are not cheaper or dearer. A location in a city with a rent of $1,000 a year competes equally with another lot nearby with a rent of $5,000 a year. "Corner influence" will ensure that a corner lot will have a higher rent than the lots on each side of it. But the adjacent lots are not 'cheaper'. You pay less but you get less. 

      Getting what the market will bear is fine in a free market. In a monopoly market it depends on the desperation of the demanders!


      The Alumni Group 
      The Henry George School
      of Los Angeles
      Tujunga   CA   90243

      On Thu, Dec 6, 2012 at 1:42 AM, John <burns-john@...> wrote:

      --- In LandCafe@yahoogroups.com, Harry Pollard <harrypollard0@...> wrote:
      > John,

      > Remember that what we are inclined to call
      > rent now is actually monopoly rack-rent - the
      > result of continual demand but reluctant sales.

      Harry, rack-rent as opposed to rent is when a landlord has a "rigged" monopoly and is charging "over" what the market rent would normally be. A landlord charging as much as the market will bare is not rack-renting. Irrespective of location charging what the market dictates is not rack-rent. A monopoly on a location? If I have an acre in a remote desert with no one around for 100 miles, I still monopolize that acre and rental value is about zero. OK that is marginal land and land at the centre is worth a lot more, Ricardo's laws comes in here, but rents in the centre of course will be the highest, because they are in the centre de not mean tat is rack-rent.

      > The important result of a full collection
      > will be much land dumped on the
      > market. This will have the effect of ending
      > the ability to charge rack-rents and rents
      > will return - that is the non-monopoly values of
      > locations.

      > There should also be movement in the
      > cities toward the centers - central
      > sites are where the highest production
      > and greatest returns take place.

      Not always. there are exceptions. The most productive part of Swindon is the Honda factory on the edges of town.

      > As the centers fill up total rent will increase.

      That is an important point.

      > We should note that the
      > marginal land in this context is
      > likely to be quite productive - lots of
      > opportunity for people to earn wages rather
      > than take welfare.

      Cheap to buy and rent marginal land will encourage small businesses and hence wages for employees.

    • roy_langston
      ... So you are in fact being paid multiple times for the same work, just as Shaw said. ... No, it is being produced by a publisher and sold by booksellers.
      Message 142 of 142 , Dec 10, 2012
        --- In LandCafe@yahoogroups.com, "John" <burns-john@...> wrote:

        > --- In LandCafe@yahoogroups.com, "roy_langston" <roy_langston@> wrote:
        > >
        > > --- In LandCafe@yahoogroups.com, "John" <burns-john@> wrote:
        > >
        > > > --- In LandCafe@yahoogroups.com, "roy_langston" <roy_langston@> wrote:
        > > > > > If I write a book and it sells well for
        > > > > > 5 years, where am I being paid many times?
        > > > >
        > > > > You are being paid each time someone buys one.
        > > > > Surely this is obvious.
        > > >
        > > > I am not. Over 5 years if the book
        > > > makes say £100,000 and then publication halts,
        > > > then I have been paid once for that book run.
        > >
        > > No. If you had been paid a flat fee,
        > > that would be one payment.
        > Roy, so what!

        So you are in fact being paid multiple times for the same work, just as Shaw said.

        > If I get paid one fee at the end of a book run or drip fed each time a book is sold, it doesn't matter. One thing that is clear, it is MY book and MY work.

        No, it is being produced by a publisher and sold by booksellers. For whose work YOU are being paid multiple times.

        > The most recorded song in history, by countless artists, is "Yesterday" written by Paul McCartney. He gets a royalty for each record sold, or played on air, by those who copy.

        Getting paid millions of times for the same work, just as Shaw said.

        > Those who copy still make money as well.

        Some do, some don't. How would that be relevant?

        > I see nothing wrong with that. Paul McCartney has never stopped any of them recording his song.

        Then why would they pay him for doing nothing?

        > All the proceeds of his original go to him and rightly so..

        No, it is not just "his original," but all the other arrangements and versions as well.

        > > > He took someone else's effort.
        > >
        > > What do you mean, "took"? He made his
        > > OWN effort, creating a new product which
        > > others did not create.
        > He did not.

        He indisputably did.

        > He took the efforts of other authors R&D and rolled it into one book.

        No, he did his own R&D, making one better book using ideas from worse books.

        > I have always thought of doing the same myself. Within a few weeks a "new" book can be knocked up by using other people's efforts. I am sure it happens all the time.

        And there is nothing wrong with it.

        > > > > > What about the case of a large company
        > > > > > making millions using your work and you get nothing?
        > > > >
        > > > > Good for them: it means they are more productive
        > > > > and efficient than their competitors, who have
        > > > > access to the same knowledge and ideas. If you
        > > > > want to get paid for your work, make an arrangement
        > > > > to get paid before it enters the public domain.
        > > >
        > > > That is pure naivety.
        > >
        > > It is fact.
        > Many Socialists claim all the free market does is allow most money to gather with a few percent of the population.

        Because they refuse to know the facts about how land titles and other privileges, which are no part of a free market, steal from the productive and give to the privileged.

        > They claim a free for all does this so control, or state ownership is needed. We see it now with powerful corporations.

        I see powerful corporations enriching themselves through privilege, not the free market.

        > The right never thought through their ideal - the repercussions of when the free-market is rigged or monopolized.

        The right thinks freedom consists in the privileged being free to remove others' freedom with government's help.

        > Roy, you have this ideal of a free for all re: patents and copyright. I agree with it in principle. But when thought through it falls apart.

        No, it does not.

        > The money will rise to the top.

        <sigh> How much money do Paul McCartney, DisneyCorp, etc. have under the CURRENT system, John?

        > I know it is not right. I do not know the solution to the problem - because I have never thought it through.

        That's OK. I have.

        -- Roy Langston
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