Geoism, Statism,
and Market Anarchism

by Brad Edmonds

First, it is agreed that anything that reduces the size and power of the state is laudable. Geoism, unfortunately, provides no mechanism for doing that. Within the state paradigm, all geoism offers is a redistribution of the tax burden from everyone to landowners. The desirability of this redistribution is disputed on moral grounds below; and the desirability of geoism as an alternative to market anarchism is debunked on both moral and practical grounds.

As to moral grounds, Prof. Foldvary argues that natural advantages owing to the very location of a plot of land are responsible for differences in land rent – "not to any effort by the title holder." This is incorrect on several counts. As people who become attorneys make more money than people who become history professors, so do some people who choose a plot of land to purchase realize better returns than people who choose other plots of land. Some choose better than others, and some choose for reasons having nothing to do with remuneration. The quality of our decisions determines much about our outcomes in every walk of life, and people do invest a great deal of effort into making good choices; there are no moral grounds for selecting land ownership as the only thing to tax.

Further, location is only part of land's value – what you do with that land is more important. As a handy example, consider Las Vegas, once a desert wasteland and now a resort, due entirely to the effort of entrepreneurs. In the natural state, land and resources are completely without economic value (save as scenery), and it is purely human effort that gives them value. Any argument that land rent is more just than sales or labor (income) taxes is smoke and mirrors, as all land and resource values owe to human labor.

The observation that land is not created by man is true and irrelevant. No matter is created by man. To tax the miner who extracts the ore, and not the automaker who uses it, is arbitrary and without merit, whether applied within a statist context or a market anarchist context.

It has been argued that within the statist context, allowing businesses to benefit from land holdings and public infrastructure while employees are taxed amounts to a transfer of wealth from the workers to the landowners. Whether, and to what extent, this is would be different in every case, as many large businesses are given tax and infrastructure incentives to locate in certain states or near certain cities. But in cases where employers are given incentives, it is the entire tax base, including all preexisting workers and landowners, footing the bill; and rents are again due to human action rather than to the land: When municipalities court employers, the land finally chosen by the employer will be different for each alternative, and the employer is indifferent to it; it is the value-creating human action that is being courted and which will not vary.

Moral arguments aside, there are practical problems with geoism as compared to market anarchism (in the context of the state, geoism isn't more or less practical or efficient than what we already have). First, note the hint from Prof. Foldvary: "Therefore, the land rent due to nature ideally should belong to all humanity in equal shares." This would require an administrative infrastructure with authority to collect and distribute rent worldwide. This would be a single authority with enforcement powers, because the process of estimating, then collecting, rents provides an incentive on the part of the landowner to be dishonest in reporting the returns he's earning.

The incentive to cheat is exacerbated in the clause "due to nature." It would have to be determined in each case how much of the land rent is due to nature, and how much is due to human action, even granting the absurd contention that any land rent is due to anything other than human action. Las Vegas was built on bare, worthless desert, so the human component would be high; and what of the case where two neighboring businesses realize differing returns due to differing quality of customer service? The rent owing to nature in each case would be the same, so the resulting tax would be regressive. Regardless of business success, in every assessment landowners would be motivated to influence assessors, whether through rhetoric or bribery, and there would be assessors who would succumb. And this natural incentive to corruption, along with the worldwide bureaucracy to support rent collection and distribution, would be more efficient than market anarchism?

In short, while it appears romantic on the surface to redistribute wealth to all the world's population, there is nothing in geoism, morally or practically, in a statist or libertarian context, to recommend it.

July 17, 2002

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