Jock's Place - Revolutionary Liberalism - Comments

The Effect of Introducing LVT

David Chester — Wed, 13 Aug 2008 13:13:55 +0100

Much as I appreciate all the comments in support of this inovation, I always find it strange how much people can comment about a subject which they don't really understand. To properly understand how any change is going to affect the macroeconomy at large, one needs to first understand how such a system actually functions. This involves a simulation of the complete system. All of us can find out what macroeconomics is, but there are very few explanations about how it works and in particular the effects on making a change to the method of burdening the population by taxation.

As a researcher who has been examining this problem over many years, I have managed to develop such a means of providing a true explanation. It is essential to model the closed system as a set of functional entities (which allows for a lot of simplification due to collection of various operations into groups), connected by all of the kinds of macroeconomic activities. I find that but 6 entities are needed with 19 mutual money/goods connections only.

As a semi-retired engineer, I use this presentation within an extremely logical and scientific approach (which incidentally allows macroeconomics to now be regarded as an exact science), and I find that the short-terms effect of introducing LVT compared to that of increasing income tax by the same total amount, is to stimulate the economy. The income tax also stimulates the economy but when LVT replaces it, the amount of stimulation is 3 times as much. This is a discovery that is provable by theory and analysis, using George's two axioms, some high-school mathematics (no computing) and a Leontief type of model for the whole of the macroeconomic system.

Over the long-term other factors come into the picture including the reduction of landed monopolies and the greater opportunities available to entrepreneurs. My model has not yet been applied here.

On-communications

Jock — Thu, 24 Jul 2008 11:35:47 +0100

Very interesting, thanks Anon. Nobody here seems to know anything about them! But Wireless Oxford is rather hoping not to have to build out a system ourselves, so a supplier aiming at a different part of the market could be a very welcome partner. I will be in touch with them!

WiMAX

Anonymous — Thu, 24 Jul 2008 11:20:43 +0100

On-communications currenltly supply a WiMAX service in the Oxford area. Check out their website.

Tim - thanks for those

Jock — Thu, 24 Jul 2008 10:36:59 +0100

Tim - thanks for those comments. I think that deserves another post, so will maybe have to reply more fully when I get home this evening if that's okay!

Richard - I kind of agree that the position we are currently in is not the place to start "living off the financial assets" partly because even if they were sound they are not well enough distributed. I think what I am saying in this post is that we need to rebuild that as you say.

LPUK

Richard Allan — Thu, 24 Jul 2008 10:14:43 +0100

"Do I have to make that leap into the unknown of the Libertarian Party in order to have some hope for change?"

Yes. The others will never listen to you until you show them you're ready to "throw your vote away" in order to hurt them!

Very nice, but...

Richard Allan — Thu, 24 Jul 2008 10:11:15 +0100

I agree with almost all of this, but:

"It is not just their approach to benefits that is backwards in vision, but the whole assumption that "full employment" is the thing we should be aiming for. Such a policy actually highlights even more starkly the difference between being independently wealthy on the one hand and having to work for the basics of life on the other. In an era in which more and more of our tasks can be automated or even exported we should be aiming more to live off the financial assets that past productivity has created."

I would say that trying to "live off the financial assets..." is part of the problem, for now. The gov't is busy liquidating all of the nation's assets to pay for current consumption, and they won't last forever! I would say that realising people need to start working for money again instead of borrowing from the past/mortgaging the future is more the issue. Of course, once people are working and producing again we'll want them to save as much as possible so that

1) Capital stock will increase, allowing people to produce the same amount with less labour and therefore take more leisure time (possibly - I gather the jury's still out on this, economically)
2) Stock of "financial capital" will increase; ie. by exporting goods to other countries we can import more from them later and allow them to do the work for us.

Of course this is predicated on the re-allocation of ground rents from landlords to the community as you attest.

Land snatching... land land land...see "Snatch".

Tim Carpenter — Thu, 24 Jul 2008 09:31:42 +0100

LVT can seem fine and dandy at the first off, but over time who decides the future value of your land? It is fraught with risks, opportunities for corruption and chaos. If you think compulsory purchase was bad...

If CBI is only half what is needed to live on, then surely we will still need welfare. Removing the minimum wage is fine but be under no illusion, the CBI will be factored into that wage (or lack of). It will be no solution to poverty AFAICT and your assertion that it would eradicate x y or x is not explained. I think parish provision is an interesting one, but frankly, look at places like S Wales and you will find that parishes will have little or no wealth creation so no money to spend on their army of dependants - central funding will be needed in precisely the places where people say it causes problems of unconditionality - for once the parish is spending other peoples' money the problems are right back with you again.

As another person has mentioned, the mutualist company can occur NOW. What is to change here? The fact that it does not happen now should either make you ask what stops it legally/financially or regulatory OR that it is actually a factor of how humans are socially, in that it takes certain individuals the gumption to kick start a company (and that is NEVER to be underetimated) and once they do so, why would they then let a whole load of strangers take just as much out of it as he/she does?

Monetary reform and changes to fiat issuance will not happen by itself. The problem is coming up with something to replace it that actually works. I have seen many attempts and none appear to work or are just a cover operation for hatstand ideas like "social credit".

Backed by - well nothing

Jock — Thu, 24 Jul 2008 08:56:41 +0100

Backed by - well nothing fixed necessarily. I am of course aware of moves towards hard currency in several parts of the world - the Qatari gold dinar for example. But in practice, currency is just a token of trust which at the moment happens usually to be "backed" by governments. But it's not really, it's really backed by the trust of its users.

In a globally interconnected trading world, I could see the large scale equivalent of, say, eBay where people built up very public credit scores based on trading feedback and so on. That in itselg may be all the trust that's needed.

Thanks for that info IanPJ -

Jock — Thu, 24 Jul 2008 08:54:13 +0100

Thanks for that info IanPJ - one of my current "good causes" is trying to get a group going to develop a social enterprise operated city-wide wirless system for Oxford and we are really now looking at WiMAX so I had only gleaned from WiMAX Forum and places like that that Freedom4 had the whole lot - good to know I might have two people to play off agains each other for spectrum renting! Though I remain a bit pissed off that I have to buy it from somewhere else since it's "already ours" in my opinion!

You said:

Andrew — Thu, 24 Jul 2008 08:19:51 +0100

"truly free trade enabled by tariff eradication will soon create a demand for a common currency of some kind"

Backed by..?

Unconditional benefits - point of order

IanPJ — Thu, 24 Jul 2008 07:41:32 +0100

Freedom4 do not hold an absolute monopoly for WiMax, but it is the only one making use of WiMax to date.

The firm holds one of two national 3.6GHz WiMAX licences issued by Ofcom so far.

The other is owned by Hong Kong-based Pacific Century Cyber Works, which hoovered up 13 UK spectrum licences in 2003, but has failed so far to make use of them.

Yes, the very fact of "free

Jock — Thu, 24 Jul 2008 01:00:09 +0100

Yes, the very fact of "free land" combined with "citizens income" would create an environment where people do not need to settle for a mere wage. This is the key to mutualism from what I can gather. Libertarianism without the rampant anarcho-capitalism.

If you want more John

Bishop Hill — Wed, 23 Jul 2008 20:40:18 +0100

If you want more John Lewis-style collective ownership, how do you intend to bring it about? I mean, it's legal to do this now, but for some reason people don't want to do it (or perhaps they try but it doesn't work). Are there some barriers that need to be brought down?

Deliberate

Jock — Wed, 23 Jul 2008 18:16:14 +0100

I did mention seignorage didn't I? I thought I did! Maybe I cut it out as too much at once. But I am sort of assured by discussions elsewhere that the "free land" and more level playing field will drive forward a sort of automatic monetary reform in that money will be less inflated by debt if land values come out and bank customers more able to survive without their credit. Banking will have to change in other words.

Besides, I have become more agnostic about the best direction for "money" anyway. I think increasing truly free trade enabled by tariff eradication will soon create a demand for a common currency of some kind as exchanging currencies in order to trade is a barrier, of sorts. And developments in global communications and so on will enable more people to deal direct with one another with complementary currenices, even virtual ones.

The choice of "The Single Tax" was deliberate. I was trying to move away from using the word "land" because it tends to create confusion with "location". "The Single Tax" is in theory a charge on all "economic" land. But I also agree that one may want to keep slightly different taxes on certain rsources etc

Bravo!

Anonymous — Wed, 23 Jul 2008 17:57:36 +0100

You missed out monetary reform, although I guess that could qualify as a variant of LVT.
"Single Tax" is a simplistic misnomer as well, as there are many possible charges and/or user/licence fees on the monopolistic "ownership" of all non-human, non-capital resources.
I hereby launch the "Jock for Federal Policy Committee" campaign!