Thursday, May 19, 2016

The Land Rent Gini Coefficient



People often talk about the "Gini coefficient" for total income.  But some income is earned (wages and capital yields), while some is not (land rent).  Discussing the Gini coefficient as it applies to all of the income in a nation is a distraction from the real issue, which is how fairly people are being compensated for their exclusion from valuable land.

The Land Rent Gini Coefficient (LRGC) is the only objective measure of true fairness and equality of opportunity in a given jurisdiction.

Monday, May 9, 2016

A Geolibertarian Perspective on Immigration

The immigration "problem," like most problems in the modern world, is not in fact a problem; it is the illusion of a problem.  People perceive the need to exclude foreigners from their own nation's land because they themselves have been excluded, without compensation, from their own nation's land.

In a feudalist state, like the modern United States, residents pay the rental value of land -- "land rent" -- to title holders in exchange for permission to exist.  The only guaranteed existence the average American has is on rent-free land, the worst land in use.  This is called the "margin of production" in economics, and to help you imagine what this is, I'll use the example of an acre of prairie in western Nebraska.

Americans, dispossessed of their own country, constantly perceive their own existence in peril and perceive that they themselves might someday need to escape to rent-free western Nebraska to try to extract more wages from the prairie than their current landlords are allowing them to keep.  In this absurd state of affairs, people are tricked into viewing other human beings always as competitors, never collaborators.  Allowing more immigrants into the country will simply increase the amount of people who might be interested in western Nebraska; if this happens, rent will arise there, meaning that the quality of rent-free land falls.  If western Nebraska is no-longer rent-free, the best rent-free land might become central Wyoming, God help us.  This process is called lowering the margin of production.

(Side note: Land rent has sometimes been referred to as "the value of human collaboration," and although I wouldn't use this description to introduce people to the economic concept, it's accurate in many ways.)

The Real Problem: In a feudalist land ownership society, an increase in population lowers the margin of production.  The problem is not the increase in population; it's the feudalism.


In a fair economic system, United States residents would rent their land from each other.  A resident would always be able to afford land of average value.  Given that as of 2014 the national land rent was upwards of 33% of GDP, or $20,000 per person per year, and rising, this means that people could perpetually afford to live in a city if they wanted to.

Because people live in cities today despite seeing only the intangible psychological and social benefits -- and none of the economic benefits, which are absorbed by land title owners via land rent -- it is reasonable to expect that populations would tend to aggregate more densely around urban cores.  This would draw demand away from the countryside, meaning more efficient land use, which would raise the margin of production.

So long as real, per-capita land rent is rising (which it is even now, despite our grossly inefficient use of land), and as long as that land rent is shared instead of used to fund an aristocracy, we can expect that increases in population will raise the general, national quality of life.

The Real Solution: Open all borders and share the rental value of land.  Whether this sharing happens at a local, regional, state or national level matters little.

Economics is all about alternatives.  All else equal (like the land ownership paradigm), people will seek to leave countries with low margins of production and move to countries with higher ones.  Given that the world's land is all claimed and that all modern nation-states are fundamentally feudalist, we have entered a period of history in which all nations have roughly the same, lowest-possible margin of production: subsistence.  There is nowhere left to go -- nowhere left for a landless person to produce without paying most of his labor to a landlord.  With emigration no longer a beneficial option for the average person, the incentive is to do whatever is necessary to try to raise his own country's margin of production.  Without the knowledge of geoism -- land rights -- the only way to do this is to "keep the foreigners out."