Georgism - Wikipedia
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  • pcalau12i@lemmygrad.ml
    ·
    2 days ago

    I will start with something positive. It's pretty much a form of social democracy, a somewhat more intelligent form because most socdems don't recognize the parasitic nature of landlords to capitalist economies. As population increases, demand for land goes up, but supply can never grow to meet demand as land is an inherently limited resource, so it gains a monopoly price which is extracted by landlords. Not just your landlord as a worker, but businesses also find themselves having to pay money to landlords at times.

    You find that every aspect of the supply chain has an extra cost associated with it due to this ever-increasing land rent, which causes the price of everything to rise, which means less money goes to workers and enterprises, and more and more money is siphoned off to unproductive landlords. This leads to long-term stagnation whereby there is a negative correlation between the size of your economy and the rate your economy grows because a greater and greater percentage of wealth is siphoned off to landlords, which again hurts enterprises and makes it harder for them to grow. It also hurts workers, leading to a cost-of-living crisis, something you see in many countries today like Canada.

    Although, I don't really see the practical difference between nationalizing land where the government leases it out to people who have to pay rent, and just charging everyone a 100% land value tax. In both cases, the land rent would go to the public sector, and in both cases, it would be impossible to be a landlord in the sense of profiting from the land itself, although you could profit from building things on the land and then renting that out. The reason I bring this up is because socialist countries typically do nationalize land in this way, even those that have mixed economies, like China.

    In China, the land is treated in practice like how Georgists want. Individuals have to lease the land from the public sector and so the public sector then charges them the rent. There's no practical difference between this and just saying the land is "privately" owned but it has a 100% land value tax, at least, to my knowledge. Maybe if there is a practical difference you can point it out to me. This land ownership model does have huge benefits, such as, the fact all this money that was originally siphoned off to unproductive landlords now goes to the public sector, that public sector can invest it into things that are productive, such as workers, enterprises, infrastructure, etc. In fact, this paper here estimates that if China had a traditional private land system, then its GDP would be 36% than it currently is.

    However, I will also say something negative. Georgism is basically, again, a form of social democracy, and as a form of social democracy it suffers from the same thing every social democratic society does. You see, economic systems aren't just something implemented on paper. They do not need to merely be logically consistent. They are something implemented in the real, physical world, and so they need to be consistent with the actual material circumstances.

    The problem with social democracy is that it leaves all production in the hands of the private sector, and production is the backbone to everything. It is production that built your house, produces your food, built your car, paved the roads, created your clothes, so on and so forth. Everything is dependent upon and derivative of production, and so naturally whoever controls production has immense control over all society, because they ultimately control actualization, which is the ability to actually transform an idea written on a piece of paper into something real in the real world, by producing what is necessary to achieve it.

    Since the state in a capitalist country lacks control over any productive enterprises, it has no power of actualization, it cannot actually convert its ideas on paper into action. Instead, it just makes peace with the private producers, promising to represent their interests as a whole, and in return the private producers agree to give up some of what they produce to the state (through collecting taxes which are then later used to purchase their products) for the state to actualize its goals. However, due to the fact that the state relies on an agreement with the private producers to achieve this, the state's goals ultimately become aligned with the goals of the private producers and not the public at large, i.e. the state does not act as an independent agent but an agent subservient to the interests of the private producers.

    This is why it is so important that a socialist country has public control over industry, if not in its entirety at least control over the "commanding heights" of the economy, those being the largest producers which most every other enterprise depends upon. This gives the state the power to actualize its goals without the need of input from private producers, and thus allows it to act independently of them. If the state is a democratic state, then this allows it to genuinely represent the interests of the people. Public control over productive enterprises, either in whole or at least in significant part, is a necessary, but not sufficient condition to have a genuinely democratic society.

    Social democracy, because it lacks this public control in the economy, is always an inherently unstable system, because you have a lot of policies beneficial for people at large, but the actual material circumstances on the ground favor the private producers, who will naturally wield that power to influence the state to regress those policies. You always then have a constant struggle between the working class against the bourgeois-oriented state to maintain those policies for as long as possible, and in a lot of countries they have not been succeeding in this struggle and austerity is succeeding. Georgism would also suffer from this.