One thought on “Sandpit

  1. I think one reason we don’t get started with reforms is that we don’t really take stock of how long the transition period will be for major reforms. Or the need to think very hard about transitional issues.

    So for example take the problem of the high asset value of taxi licenses. Now because we have let this problem fester, we have given a foreign company (Uber) a free ride and a lot of monopoly power. Yet the problems with transitioning down to more taxi licenses and low-priced taxi licenses are very serious.

    And the problem is world-wide??? It just seems natural that we let asset value accumulate to items in such a way as to restrain trade. Otherwise how could this tax license debacle be such a ubiquitous world-wide phenomenon?

    My basic principle is that during transition we don’t want to destroy the incumbents asset value and their cash flow AT THE SAME TIME. So we need these Stalinist sounding “5-year plans” or in this case it might take ten years.

    But if it takes ten years and all sorts of tax exemptions, interest free loans and other measures, to get taxi licenses down to about ten thousand dollars in value (enough to pay for background checks and things), then just imagine how long it would take to transition to a Georgist Land tax situation? I think maybe 100 years?

    Really economists know that Henry George was substantially right. George Stigler said that if you want to be a Georgist and you are an economist, you better get yourself a rich wife and treat her very well. You hear all these back-handed and subtle complements to Henry Georges ideas by prominent economists but they are very careful not to allow themselves to be misconstrued as being fully in favour of his ideas. I actually am not sure I’m fully in favour but I think we all have to meet him halfway. Von Mises, in my view a great economist, fell down heavily in my eyes when he just summarily dismissed George without even using his full name. His Rockefeller sponsors would be finished under Georgism but I don’t want to allege a link here.

    Rothbard dismissed George in a different way … By arguing against an extremist view of Georgism only. By not allowing himself to consider partial Georgism. Rothbard to me is one of the most brilliant people who ever lived, but his tendentiousness here is pretty obvious. Rothbard is trying always to prove that we don’t need or want government. But if you believe we can tax economic rent, as I do, that means that we get a substantial amount of government as a free gift. Which is a massive blow to Rothbards anarcho-capitalist vision. Its better than that. In fact you make a loss every time you fail to tax economic rent.

    But I wanted to talk about how long the transition to better economics might take if we are not flippant about incumbents. I don’t want to ruin the life of everyone who has worked like demons for maybe 40 years and has a dozen investment properties. I think we can increase such a persons cash flow, help them get out of interest-bearing debt, and make the transition to heavy land tax very easy for such people. Of course eventually they’ll lose all their asset value. For me the rich people under perfect policy are middling businessmen that have slaved away for decades to make their small business bigger, high-tech, and awesomely productive. In my view the rich guys under perfect policy are able to undercut competitors partly by paying HIGHER wages then everyone else.

    So I want put out how long I think transitional policies will take. Just to give some food for thought.

    1. Taxi licenses … 10 years 2. Sound money, banking and low debt ….. 20 years 3. Transition to taxing economic rent ….. 100 years 4. Transition to renewable energy not being exclusive but being ubiquitous …… 300 years. 5. Transition to dirigibles handling a great deal of cargo transport …. 100 years 6. Transition to saturation canals ……. 5000 years 7. Transition to saturation tunnels …. 1000 years.

    If one understands anything about exponential growth we can see that projects of these sorts cannot be debt-funded. They ought not be rushed. If we take it slowly we can get these things done cost-effectively. The idea is just to get the financing norms right and start now. Start yesterday. So many things it such a crying shame that we didn’t start slowly, start cheaply and start decades ago. “Make Haste Slowly” said Caesar.

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