Another Immigration Post Because It's So Hot Right Now

The “immigration issue” is a land tenure issue. And people desperately need an education. In short: There is no argument for closed borders.

1. No wall is big or strong enough to protect you from the consequences of fencing off the commons. That's because a nation that fences itself off from the rest of the world has typically already fenced its own people out of the best land within its borders. It has already impoverished its children and begun the path to internal collapse. There is no safety argument for raising fences.


2. Immigrants, as well as your fellow countrymen, are trying to pay you rent for their use of your country. But this value was long ago securitized by your government and sold to private parties: These securities are called freehold land titles. They are held in a closed-end fund (land is fixed in supply) and trade, at the whim of existing owners, at a monopoly price (land is necessary for all life and production). Your economic trouble is caused by your government, not by immigrants; there is thus no economic argument for raising fences. 

There are very few terrorists in this world who can inflict more damage on a country than the institution of private, freehold land ownership already has. It's reasonable enough to screen for such terrorists, but any restriction on residence beyond a simple background check is, really, just the act of serfs trying to make other serfs more servile than themselves.

Here's a post I wrote last year that goes into another aspect of the economics.

A Geo-Libertarian Glossary & FAQ

Glossary

in narrative, not alphabetical, order:

1. The Commons -- each individual, equally.
   
   Example: “Land titles should be leaseheld, at market rental value, from the commons.”



2. Privilege -- private law.
   
   We are not using this word lightly, as many do. There is no such thing as “white privilege” or “male privilege,” for example, because there are no laws on the books granting explicit economic advantages to white people or males. We are concerned with actual privilege, the kind written into law and enforced by the state. Privileges steal from the commons; increase real prices and costs of living; and generally make life miserable. Examples include intellectual property (think of pharmaceuticals in the US), zoning laws, building codes and – the mother of all – land titles. Because monopolies result from privilege, the words “privilege” and “monopoly” are virtually interchangeable.



3. Rent -- the economic returns to privilege; unearned economic value.
   
   Some geoists use “rent” to refer exclusively to land rent, the economic returns to land titles, one specific type of privilege. Because of the importance and simplicity of land and its rent, this is totally acceptable and a good way to simplify and build one's understanding of rent.



4. The Law of Rent -- Formalized by David Ricardo circa 1817, this law observes the bargaining power of land and its owners. Understand this law and its implications, and you will understand pretty much everything about the world and how it works … or, rather, why it doesn't.



5. Land Value "Taxation" -- A.k.a., “the single tax.” One method of publicly collecting land rent, which is simply what land users willingly pay to exclude the commons from desirable locations. LVT is not necessary if landowners leasehold their titles at market rental value from a (ideally dividend-issuing) public entity; rather, LVT is one tool a jurisdiction can use after it has made the mistake of enforcing freehold titles to try to transform them back into leasehold ones.



6. Land Monopoly -- A.k.a. Feudalism. An economic system based on freehold land ownership. The mother of all monopolies and also of poverty, war, systemic debt … you name it. It is a system in which the many pay the few for the right to exist.

FAQ

• Is it true that land value taxation doesn't hurt production?
  
  Yes. Anyone who disagrees will typically get this graph as a response.
  
  But you don't need a graph to understand why. When LVT reclaims land rent from landowners, it can't hurt production because landowners, as such, don't produce. They gatekeep. (Land users produce; the extent to which a site's user[s] and owner[s] are the same is a coincidence.) The only thing LVT punishes is gatekeeping, and that's a good thing.
  
  That's why many of us dislike the term Land Value “Taxation.” If we had a truly free market in land – that is, if land titles were leaseheld at market rental value from the commons – nobody would call it a tax. The only reason LV”T” seems to the casual observer an act of force is because of our already entrenched, enforced freehold system. In other words, I've never seen anyone argue against systemic geoism or LVT; I've only seen people argue against the transition to such a system because either (1) They are invested in the current feudal system, or (2) Far more often, they think they are invested in the current feudal system.



• How do we determine a just percentage for land value tax?
  
  100% of the rental value of all locations within a jurisdiction should be collected by its public.



• How exactly would it be distributed to solve the problems associated with inequality of land ownership and injustice of monopolies? Would it be a UBI?
  
  Yes. We prefer to call this a “Residents' Dividend” or “Citizens' Dividend” to distinguish our version of the “UBI” from the less educated ones.



• What about government funding -- that is, public goods and services? Is there room for that in Geo-Libertarianism?
  
  Yes. One can make an efficiency argument in favor of public goods and services. Many goods and services are fairer, more desirable and/or more efficient when funded publicly. Especially when more efficient, an argument can be made to fund such goods and services from the Dividend because the increased efficiency will increase future land rent and therefore future Dividends.
  
  Outside of this, favoring more public goods and services might move you more from the “Geo-Libertarian” side of the scale to the “Geo-Statist” side. But if you know the intricacies of land economics – that the collection of land rent from title holders, not the subsequent spending, is the most important part – you know not to waste time arguing with other geoists. As long as the rent is spent in the service of the public, Geo-Libertarians should be relatively happy. (Although we should always remind others that the Dividend, an individual right, should not be subject to democratic majority tyranny.)



• At what level does land value taxation become theft? Surely 1,000% would be considered theft?
  
  100% public land rent collection is the correct amount. Any more than that will force the site out of production; it is impossible to collect more. Any less than that means that title owners are depriving the commons of their just compensation for land exclusion.
  
  Again, the most robust solution is a market one, with land titles bid on and held at market rental value from a commonly held trust. No need for assessments. No need for the political vulnerability of LVT.



• Would this lower overall prices by getting rid of land speculation?
  
  That and better. It would also eliminate the under-use of good (urban) locations, and the over-use of bad ones (sprawl). It would reduce up-front land prices to $0 because bidders do not bid up-front prices on things they are renting at market rental value.



• If you collect 100% land tax, that's a huge amount of money collected for everyone. If you give out such a high UBI or Citizens' Dividend, won't people work significantly less?
  
  If enough people work little enough, rent (and therefore the Dividend) fall. So the simple answer is that if people stop working, soon enough they will have to return to work to maintain their old standard of living: the Dividend is self-correcting.
  
  But the reality is better. Geolibertarianism (Public Land Rent Collection + Dividend) creates a system in which everyone can continuously live wherever they want, without labor, so long as they're willing to share the location. (And if they can't live where they want because somebody is excluding them, they're being compensated by the Dividend and the person excluding them is having to work for it.)
  
  What is likely is that (1) People will work significantly less, AND (2) Standards of living will stay constant or rise. This is possible because of agglomeration, a.k.a. efficient land use, and all of the efficiencies that follow. No more sprawl. No more land monopolists artificially keeping people apart. No more commutes. No more labor spent just to be allowed to exist. No more deadweight loss of taxation. Lower blood pressure. More sex.



• What is the best way for Geoists or Geo-Libertarians to gain political ground?
  
  The most success I've had in spreading geoist ideas is with two core groups of people: (1) Extremely intelligent, rational people, and (2) Poor people. These groups are not mutually exclusive, but FOCUS ON THE LATTER.
  
  My easiest sell ever was when I attended a Basic Income event in Los Angeles. Surprise, surprise: There were economically scared and desperate people there looking for answers. When I explained that anyone benefiting from a normal Basic Income would simply see their rents rise, THEY UNDERSTOOD THIS IMMEDIATELY. When I told them there's an entire economic philosophy dedicated to getting them such a basic income without that effect as a matter of natural rights, I didn't have to go farther than that because they were hooked enough to go home and do the intellectual legwork themselves.
  
  I'm as guilty of staying in my Internet bubble as the next geoist, but this is a mistake. While it's true that 90% of home “owners” (mortgagors, actually) would benefit from geoism, we must abandon them as a target audience. For some reason, as soon as people own a few thousand dollars of land value, their brains turn to mush and they fathom themselves gentry. Probably about half of the United States are renters who have ZERO stake in the current system. Those are our people. It's simply more efficient to focus on the people who can most easily be won.
  
  One last piece of advice: Even if you don't like the Residents' Dividend for some weird reason, do not abandon it as a political tool. It makes geoism so much easier to sell. Here's an example:
  
  Q: If you tax land value, won't rents rise?
  A: No. But if they did, who cares? You'd get those rents right back in your Dividend. When rents rise now, you get nothing.
  
  Case. Fucking. Closed. Land has the first and last word in every economy. We as geoists understand this, and that is our advantage.

The Law of Rent is Easy

Intro

(Skip the intro and formulate the Law of Rent!)

If I had to recommend someone a course of study to help them understand life on Earth, I would recommend two fields: Biology and Economics. In the field of Biology, there is perhaps no theory more important than the Theory of Evolution by Natural Selection. And in the field of Economics, there is no law more important than the Law of Rent.

The very word “economics” turns many people off, and understandably so. Over the last century the field has devolved so markedly that anyone who calls it a “science” is right to be laughed out of the room. Do you, like most, get frustrated at the thought of economics – at the thought of old men trying to explain why you should work harder for less, and at your sense – or perhaps conviction – that no policy they recommend will ever change things for the better? Or, simultaneously, at your own inability to offer an alternative?

Imagine that frustration turned in reverse. Imagine you knew exactly where hardship comes from and how to fix it; that you could explain every real-world human behavior you saw; that not a single economic phenomena were any longer a mystery to you. And then imagine that everyone you tried to enlighten ignored you and just kept nodding at the old, suited men on TV, debating which pint of poison – austerity or labor taxes – will taste better jammed three feet up everyone's asses.

That's what the Law of Rent will do for you once you understand it. It will take you, the casual observer, and make you more qualified to run a country than anyone currently attempting it. And that feeling of frustration as you watch everyone else fail at it? Well, welcome to being a geoist. (There's a chance that knowing the Law of Rent could also turn you into a geo-snob like me.)

Let's Formulate!

The most beautiful aspect of the Law of Rent, given how foundational it is to economics – and how critical its implications are for the fates of civilizations – is its simplicity. There is perhaps no simpler law of bargaining power in all of economics. I'm convinced that anyone, presented with a little bit of context, can formulate it for themselves.

Ready to give it a try? Put on your thinking caps, little Ricardos.

1. Assume that land cannot be produced. (In the real world, this is true. It's the First Law of Thermodynamics.)


2. Assume that land is necessary for all life and production. (Also true.)


3. Imagine you are a living thing – say, a human – who therefore needs to use land. (If this isn't true, contact me about my Imaginary Persons Tea and Cupcake Social.)


4. Now let's say you have two choices: (a) Live and work in the city at Parcel A where your work can get you $60,000 per year, or (b) Live and work at Parcel B in the remote countryside – where nobody else lives, works or wants to – and where your same line of work can get you $10,000 per year.

Question: What is Parcel A's market rental value? Hint: This is not a trick question.

Answer: As you probably intuited, the rent for Parcel A will be the extra earning power it grants you: $50,000 per year.


Did you get it right? Congratulations! You've formulated the Law of Rent*. You now know more about economics than 99% of the population. Would you like to increase that percentage? Consider the implications of this law. You can start with the following considerations:

• Did we mention the word "landowner" anywhere above? No. The rental value of a parcel of land has nothing to do with the name on a title to it. It is determined by users alone.


• What might happen on a large scale if landowners could arbitrarily keep you and other land users off Parcel A?


• What might happen on a large scale if landowners allowed the use of Parcel A but by inefficient users?


• "Good" or "bad," in describing land, refers to its productivity. What allows a user to produce more at a good location than a bad one?


• As more land comes into artificial use -- due to people's arbitrary exclusion from the good land -- what happens to the earnings available on the best unused land? How low can they go? Remember that this is important because it determines what landless workers throughout the economy will be able to keep after paying rent.


• To whom should the rent rightfully go? If it doesn't go to its rightful recipients, what kind of activity is being incentivized? What kind of social and economic diseases might arise?

*Disclaimer: Admittedly, there's a little more going on here. Example: We're assuming that you're the best user for Parcel A -- in other words, that nobody would be able to earn more at the location than you. I wanted to simplify things a little. Sue me.

Hong Kong, Singapore, Geoism & Income Inequality

Geoists, or anyone who has an idea of the magnitude of land rent in modern economies, know that sharing the full rental value of land -- and therefore having an "geonomic" system based on equal land rights -- would result in significantly lower income disparities.  We know this because we know that a third or more of developed economies' GDP is land rent -- value that is collected by a relative few, and value that is unearned because it is collected, imputed or otherwise realized for monopoly control of something costless.

I consider Hong Kong and Singapore the "most geoist" places on Earth; they collect a much higher-than-average amount of land rent publicly and tax wages and capital at much lower rates than average.

A skeptic of geoism might point to the overall income inequality in these jurisdictions (Hong Kong's overall Gini coefficient is 0.54; Singapore's is 0.46) and say that geoism has failed, if that skeptic is looking to geoism as an answer to income inequality.

First, it should be noted that income equality is not the goal of geoism; economic justice is.

Second, it is severely flawed logic to read much into these numbers. Geoism implemented on a widespread scale will likely (1) Raise the economic floor, and (2) Reduce income inequality.  When implemented locally, however, in a greater world of feudalism, it is only capable of the first point: raising that local jurisdiction's floor.


1. Raising the floor

In a feudal system (one of land privilege), the average landless worker will be left with the margin of production after he works and then pays his landlord.  Geoism raises the floor by (a) raising the margin of production itself by effectively prohibiting the inefficient use of land, and (b) making every resident share equally in the jurisdiction's land rent -- either directly via Residents' Dividend, or in-kind through government goods and services.


2. Reducing Income Inequality

While local geoism will evenly distribute income from local land (land rent gini coefficient), it will not necessarily lower overall income inequality.  It isn't difficult to figure out why.  Our example cities, Hong Kong and Singapore (HK&S), have prohibited their locally-produced rents -- a fair amount of them, anyway -- from being claimed by outside rent-seekers, but the rest of the world has not.  There is no law in HK&S saying, "Thou shalt not steal land rent from outside jurisdictions."  Bankers, hedge fund managers and real estate investment vehicles are free to set up shop in HK&S and do what they would do in any other global financial center; they are free to rake in the resulting, lop-sided salaries, and there is simply no reason to expect that HK&S would have income inequality any lower than in New York or London.

New York's gini coefficient is 0.55.  Published figures for London are based on a methodology that includes only wage earners.  This methodology leads to an artificially low gini, so I'm simply not going to reference any of those figures here.  The point is that HK&S have overall gini figures consistent with other global financial centers, and that's the best it's reasonable to expect of them.  Only as more and more of the world's land rent is made common property can we expect greater overall income equality.

And that's fine.  It would be pointless for HK&S to try to force more equal incomes by, for example, imposing a very high income tax on the top bracket.  It would simply drive these global rent-seekers to outside locations.  Keep them in town and there is at least a chance that some of their takings will trickle into local businesses and, eventually, publicly collected rents.


Evidence of Singapore's Higher Floor

Singapore is sometimes lambasted for "relying on" outside labor forces to perform undesirable construction work in the city.  Of course, this is loaded language: Singapore doesn't "rely on" outside workers.  The fact is that Singaporean construction companies simply seek them out because they will accept lower wages than Singaporean residents; Singaporean residents, having a cut of the local surplus (land rent), can simply refuse to do shit work for shit wages.  Without cheap external labor, the construction would still happen; it would simply happen with higher wages being paid to Singaporeans who have accepted them.

Singapore is far from perfect, of course, but anybody who criticizes its employers for "exploiting foreign labor" in this case is focusing his energy in the wrong place.  It is these workers' home cities and countries, through land dispossession, that have forced them to look for shit work at shit wages in a place that actually has employment.  Tell the country of Bangladesh, for example, to mimic Singapore's economic policies, and your effort will be much more likely to help Bangladeshi nationals.

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.

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."

Links on Geoism and Land Economics

(to be expanded and organized with HTML at a later date)


Introductory Stuff

Georgism in 300 Words
Why is the Rent So High? (Video)
Geoism FAQ

Land Economics*

The Law of Rent
All Taxes Come Out of Rents (ATCOR)
The Henry George Theorem

*The latter two concepts follow logically from The Law of Rent.  The Law of Rent simply points out the bargaining power of land -- that title owners can suck up all the economy's extra wealth (beyond the margin of production).  In the macroeconomic short-run, taxes simply reduce the amount of wealth available for landlords to take (ATCOR).

The Henry George theorem states that, per the Wiki page, "...under certain conditions, beneficial investments in public goods will increase aggregate land rents by at least as much as the investments cost."  In my opinion, this has little to do with "beneficial investments in public goods"; rather, it is simply the fact that government is spending wealth back into the economy, where wealth beyond the margin of production will go either to (1) Government in taxes, to be looped into future cycles, or (2) Landlords in rents, to disappear.  In other words, ATCOR describes the short-term, single-cycle action of taxes' diverting wealth from capture by landlords, and the Henry George Theorem describes the long-term action of the taxed wealth being spent and becoming subject once again to the Law of Rent, flowing to its inevitable resting place: the pockets of landlords.

It is important to note that these laws pertain to macroeconomic averages and should not be used to justify taxation (except land value taxation, of course).  Production taxes in rural areas do not come out of rents because in rural areas there are no rents.  In rural areas, only wages exist to be stolen.  Taxes on people using marginal land only make those people simultaneously slaves to and wards of the State.  When you start to understand land economics, you'll start to understand ... well, pretty much everything, but namely, maps like this:

Funny coincidence (not): People tolerate higher taxation
where land rents are higher.

That's a cartogram of the 2012 presidential election returns at the county level, but it may as well be a cartogram of 2012 land values, high and low.


Recessions and Depressions

The 18-year Boom-Bust (Land) Cycle

Although monetary policy can exacerbate it, this cycle is due to the real economics of land.  If you understand that a land price is just the estimated, capitalized value of future rents, then you'll understand the cycle so: (1) The economy chugs along, boosting land values, (2) Because land rent collection is always a free ride, land speculation becomes the only game in town, diverting wealth from wages and capital, (3) Land prices soon reflect more capitalized rents than the dispossessed, underpaid, unemployed producers of the area are capable of producing and paying in the future, especially now that they have no access to highly-priced land, and of course (4) Land prices crash.