By listener request, Bob reviews a proposal to implement Henry George's land value tax (LVT), in order to reduce taxes on labor and capital. Among other problems, the Georgists ignore the social function of land speculators.
In episode 157, Bob Murphy takes on the growing push for Georgism — the idea that we should stop taxing labor and capital and instead tax only the raw, unimproved value of land. Bob walks through the Georgist case fairly, then dismantles it.
What you'll learn in this episode:
What Henry George actually argued in Progress and Poverty — tax location value, exempt buildings and improvements
The Lars Doucet essay "Does Georgism Work Five Years Later?" (Astral Codex Ten) and the Center for Land Economics model brochure "The Problem with Land Speculation"
Why a revenue-neutral swap — lower income taxes, higher tax on ground rent — still distorts the economy (the tax interaction effect)
Why vacant lots, surface parking, and even untouched nature preserves are NOT proof of market failure
Why vacancy is healthy: the housing market has a natural vacancy rate just like the labor market has a natural unemployment rate
The social function of speculators: how holding land vacant over time is the same as ranchers holding cattle, oil storers holding crude, and workers searching for the right job
How private call options on real estate could fund public goods — and why a 100% land value tax would sabotage that solution
If you've heard that Henry George proved land speculation is parasitic and the single tax is painless, this is the Austrian rebuttal.
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