Well according Stiglitz, Zucman, and Josh Ryan-Collins, housing is the dominant aspect. Land is the main explanation for both inequality, housing unaffordability, recurring recessions, stagnating growth and urban sprawl - all of which Henry George (the first big advocate of land value taxes) predicted. The rest is what plays a smaller role according to the data they present on wealth. Housing makes up more than half of all wealth (it used to be more like 20%). Land is worth more than 25% of GDP. Housing makes 30-40% of people’s budgets and this is increasing rapidly. Every cohort is less about to buy a house.
Kuznets argued that inequality wouldn’t rise based on some very fundamental economic laws. These include Kaldor’s stylized facts. One of them says that the share of growth accruing to capital is expected to remain constant.
Piketty said that this is no longer true. Capital share of gdp is rising. His argument was initially that this is happening because the return to capital is rising above the general growth rate.
However the discussion has shifted in light of new data. Rognlie found that if you exclude housing from the equation, capital share is no longer rising. Meaning capitalists in general terms are not getting richer, property owners are. Or to be more exact, landowners are. Knoll found that 80% of changes in house prices are due to land scarcity. Keep in mind how much of company assets are tied to land wealth.
Stiglitz concludes from this discussion and his own analysis that wealth-to-income ratios rising is not because capital is increasing, but because we are including types of wealth in the term “capital” that are not actually capital. Land is not capital. He says that the main cause of the rise in inequality and stagnating growth is the rise in the capitalized value of rents, and that the majority of these rents come from land. But he says they also come from market power rents, political rents, patent rents and information asymmetry rents and other researchers focus on these rents.
This is what is meant by rentier capitalism. Without rents, capital wouldn’t accumulate. What you’re essentially arguing is that capitalism is bound to be rentier capitalism - there’s nothing we can do to stop it so, we should go a different route. Im happy to go on that route, I just don’t think it means the same as you. I’m a bit more optimistic if we manage to get society to target this rent-seeking behavior and create strong institutions against rent seeking.
An important aspect of your argument is that land is not capital. I suspect that differing definitions of capital between you and Cowbee is leading to you both largely talking past each other. I wouldn’t be surprised if the Georgist conception of capital has some fundamental differences with the Marxist one.
The georgist definition capital is the same as the classical economic one. The only school that doesn’t see it that way is the neoclassical one. And the only reason they don’t is because they made simplified assumptions in the marginalist revolution. Marx made similar simplifications in other ways.
Your fundamental argument relies on it even being possible to peacefully go against the ruling class and bend the state in the favor of the Proletariat. This assumption leaves your analysis dead in the water. Combining that with a failure to analyze Capital to any meaningful degree, and the failure of analysis as regards the ever-increasing complexity of production and the benefits of central planning, means you’re left with the equivalent of universal healthcare in a Capitalist economy.
A good idea, no doubt, but will always be undermined by the ruling class, and thus is both incomplete and not a real solution.
It is true. What I’m saying does assume that we can democratically win against this ruling class. But lets say we do rise against them. Violently or not. And we then Implement a change in the system. I don’t think it’s necessary to seize all means of production in order to achieve that. I think it’s all about balance.
Why ia “balance” a good thing? It wouldn’t make sense to jump straight to a fully publicly owned economy over night, but gradually fold in more sectors and firms as they develop, starting with all of the large firms and key industries. If you don’t take control of those, then you won’t have actually risen above the Capitalists.
Yes a balance found with the trade-off between the minimization of rent-seeking/market power and the idea that market companies tend to perform better by having stronger incentives to innovate and understanding consumer needs better. This of course relies on competition. So where there are only one or few market actors, the trade-off will be in favor of public ownership.
Sometimes it’s the lack of laws or institutions that prevent competition. For example, social media companies have huge market power because every user that wants to switch has to convince their friends to switch too. This is because these companies have made it difficult to switch out of their ecosystem. Europe is trying to build laws that means that friends can be automatically transferred or that you can chat to WhatsApp users from another app. We need to think better about how we can promote competition. Look at YouTube. If the government had a website where you could upload your videos and check off every YouTube alternative you wanted to upload it to, then it would be much more likely that the same videos could be found on for example PeerTube, making it a more competitive alternative.
With other companies like rail, ports, power, water, and other utilities, you cannot promote competition without losing economies of scale. And these are also not areas with a lot of benefits of privatization (innovation, consumer understanding), so these have a big benefit of being public.
Capital is not going to get unchecked increasing power as long as there is enough competition.
Competition kills itself over time, by the mechanisms you describe, and government can’t truly be a meaningful check on business unless it’s a proletarian government, which requires proletarian control of the base. Competition cannot exist forever.
Well according Stiglitz, Zucman, and Josh Ryan-Collins, housing is the dominant aspect. Land is the main explanation for both inequality, housing unaffordability, recurring recessions, stagnating growth and urban sprawl - all of which Henry George (the first big advocate of land value taxes) predicted. The rest is what plays a smaller role according to the data they present on wealth. Housing makes up more than half of all wealth (it used to be more like 20%). Land is worth more than 25% of GDP. Housing makes 30-40% of people’s budgets and this is increasing rapidly. Every cohort is less about to buy a house.
Kuznets argued that inequality wouldn’t rise based on some very fundamental economic laws. These include Kaldor’s stylized facts. One of them says that the share of growth accruing to capital is expected to remain constant.
Piketty said that this is no longer true. Capital share of gdp is rising. His argument was initially that this is happening because the return to capital is rising above the general growth rate.
However the discussion has shifted in light of new data. Rognlie found that if you exclude housing from the equation, capital share is no longer rising. Meaning capitalists in general terms are not getting richer, property owners are. Or to be more exact, landowners are. Knoll found that 80% of changes in house prices are due to land scarcity. Keep in mind how much of company assets are tied to land wealth.
Stiglitz concludes from this discussion and his own analysis that wealth-to-income ratios rising is not because capital is increasing, but because we are including types of wealth in the term “capital” that are not actually capital. Land is not capital. He says that the main cause of the rise in inequality and stagnating growth is the rise in the capitalized value of rents, and that the majority of these rents come from land. But he says they also come from market power rents, political rents, patent rents and information asymmetry rents and other researchers focus on these rents.
This is what is meant by rentier capitalism. Without rents, capital wouldn’t accumulate. What you’re essentially arguing is that capitalism is bound to be rentier capitalism - there’s nothing we can do to stop it so, we should go a different route. Im happy to go on that route, I just don’t think it means the same as you. I’m a bit more optimistic if we manage to get society to target this rent-seeking behavior and create strong institutions against rent seeking.
An important aspect of your argument is that land is not capital. I suspect that differing definitions of capital between you and Cowbee is leading to you both largely talking past each other. I wouldn’t be surprised if the Georgist conception of capital has some fundamental differences with the Marxist one.
The georgist definition capital is the same as the classical economic one. The only school that doesn’t see it that way is the neoclassical one. And the only reason they don’t is because they made simplified assumptions in the marginalist revolution. Marx made similar simplifications in other ways.
Your fundamental argument relies on it even being possible to peacefully go against the ruling class and bend the state in the favor of the Proletariat. This assumption leaves your analysis dead in the water. Combining that with a failure to analyze Capital to any meaningful degree, and the failure of analysis as regards the ever-increasing complexity of production and the benefits of central planning, means you’re left with the equivalent of universal healthcare in a Capitalist economy.
A good idea, no doubt, but will always be undermined by the ruling class, and thus is both incomplete and not a real solution.
It is true. What I’m saying does assume that we can democratically win against this ruling class. But lets say we do rise against them. Violently or not. And we then Implement a change in the system. I don’t think it’s necessary to seize all means of production in order to achieve that. I think it’s all about balance.
Why ia “balance” a good thing? It wouldn’t make sense to jump straight to a fully publicly owned economy over night, but gradually fold in more sectors and firms as they develop, starting with all of the large firms and key industries. If you don’t take control of those, then you won’t have actually risen above the Capitalists.
Yes a balance found with the trade-off between the minimization of rent-seeking/market power and the idea that market companies tend to perform better by having stronger incentives to innovate and understanding consumer needs better. This of course relies on competition. So where there are only one or few market actors, the trade-off will be in favor of public ownership.
Sometimes it’s the lack of laws or institutions that prevent competition. For example, social media companies have huge market power because every user that wants to switch has to convince their friends to switch too. This is because these companies have made it difficult to switch out of their ecosystem. Europe is trying to build laws that means that friends can be automatically transferred or that you can chat to WhatsApp users from another app. We need to think better about how we can promote competition. Look at YouTube. If the government had a website where you could upload your videos and check off every YouTube alternative you wanted to upload it to, then it would be much more likely that the same videos could be found on for example PeerTube, making it a more competitive alternative.
With other companies like rail, ports, power, water, and other utilities, you cannot promote competition without losing economies of scale. And these are also not areas with a lot of benefits of privatization (innovation, consumer understanding), so these have a big benefit of being public.
Capital is not going to get unchecked increasing power as long as there is enough competition.
Competition kills itself over time, by the mechanisms you describe, and government can’t truly be a meaningful check on business unless it’s a proletarian government, which requires proletarian control of the base. Competition cannot exist forever.