Author and economist Michael Munger of Duke University talks with EconTalk host Russ Roberts about the virtues–and the flaws–of free markets. Munger says the best argument for a free market approach is not that it’s perfect but that it’s better than anything else we’ve been able to come up with over the centuries. Better at bringing people out of poverty, better at promoting wealth creation, and better at pushing up the standard of living for most of the people, most of the time. Topics include what exactly is a free market, why specialization is so important, the case for case-by-case intervention, and the challenge of picking the prettiest pig. (0 COMMENTS)

Author and economist Michael Munger of Duke University talks with EconTalk host Russ Roberts about the virtues–and the flaws–of free markets. Munger says the best argument for a free market approach is not that it’s perfect but that it’s better than anything else we’ve been able to come up with over the centuries. Better at […] The post Michael Munger on Free Markets appeared first on Econlib.

There’s a sort of boomlet in authoritarian nationalism, with some prominent conservative leaders touting the Orban regime in Hungary, or even the earlier Salazar regime in Portugal.  But what is authoritarian nationalism? This term has been applied to regimes as dissimilar as the governments of Hungary, Poland, Turkey, Russia, India, China, and Brazil. Some of these countries are democracies, some are dictatorships, and some fall in between those two extremes.  So what do they have in common?  I see a few patterns, although the following traits don’t fit all the aforementioned countries: Nationalism: Nationalists focus on unifying around a given ethnic group, rather than people who happen to be living in a particular political entity.  Thus to the Chinese leadership, Han people in Taiwan (or even Singapore) are far more “Chinese” than Uyghurs living in western China.  To the Hungarian leadership, an ethnic Hungarian living in Romania is more Hungarian that a Roma individual living within Hungary.  Nationalism is not patriotism!  A French patriot roots for their Olympic basketball team; a French nationalist grumbles that almost all the players are black. Nationalism has both a geographical and a temporal aspect.  Minority groups are viewed with suspicion, as they are seen as weakening tribal identity.  Note that “identity politics” is not an inherently left or right wing idea.  Where it favors minority groups, it is typically framed as left wing.  When it favors the majority ethnic group (or more precisely the group in power–recall South Africa before 1994), it’s typically viewed as right wing.  Thus nationalists tend to oppose immigration, which threatens to dilute the dominant ethnic group. This desire to preserve the tribe also leads to resistance to cultural change over time.  Nationalists oppose globalization, as it threatens to upend traditional ways of life.  Similarly, nationalists oppose cultural liberalism, viewing ideas such as women’s rights and gay rights with a high degree of skepticism.  Universities are viewed with distrust, as they often embrace cosmopolitan ideas.  Nationalists favor an approach to teaching history that whitewashes any past atrocities committed by their nation.  If the dominant tribe is not viewed as being morally superior, then the argument against cosmopolitanism is weakened. Authoritarianism: In many cases, a nationalist government attempts to consolidate power by exerting control over alternative branches of government and alternative sources of information.  The primary targets are the executive, legislative, and judicial branches, as well as the media and the universities.  The goal is to eliminate any sort of “checks and balances” that might restrict the ability of outside forces to constrain the power of the regime. Why is nationalism often combined with authoritarianism?  Perhaps because they know that if the government were to alternate between nationalist and cosmopolitan regimes, then the nationalists would lose in the long run.  What good does it do to restrict immigration if the next government allows a massive inflow of refugees from the Middle East? The term “authoritarian” usually connotes non-democratic.  And yet there is no reason to assume that a democratically elected government cannot become authoritarian.  Often there are constitutional provisions or informal norms that limit the power of a government, but those restraints can be changed, particularly if the government wins a large enough number of seats to change the constitution. Authoritarian nationalism is by far the most important political development of the 21st century—nothing else even comes close.  This is not because authoritarian nationalists have control in most countries; rather it is because this is where all the energy is. Support for Biden is wide but not very intense, whereas support for Trump is consistently below 50%, but quite passionate.  (Because of its diversity, the US is not fertile ground for nationalism, but is fertile ground for a left wing version of identity politics.) As someone who came of age in the 20th century, I’ve been disappointed by the weakness of classical liberal parties all over the world (albeit pleasantly surprised by the weakness of socialist parties.) Because the authoritarian nationalists have all the energy, the prospects for liberalism are not bright.  Laurent Pech points out that the EU has been rather toothless in trying to prevent an erosion of liberty in Hungary and Poland: To begin with, simply publishing an annual report will not help contain and address rule of law backsliding in countries such as Hungary and Poland. Indeed, an annual reporting cycle will not, in and of itself, help prevent deliberate/systemic violations of the rule of law or deter legal hooligans, as the Report is a mere after-the-event reporting mechanism making no concrete recommendations. After all, there have been 13 years of reports regarding the rule of law situation in Bulgaria and Romania and nobody would seriously claim that the “cooperation and verification” monitoring mechanism made any difference. Worse, in Bulgaria, the exercise was used, at times, to whitewash inconvenient developments. . . . As observed by Professor Bárd, by failing to make clear “how authoritarian regimes are qualitatively different from resilient democracies”, the annual report cycle risks normalising the abnormal; facilitating whataboutism and praising features (e.g. the adequate funding of a captured Media Authority) which only serve to consolidate autocracy in practice. It is particularly irresponsible to claim, for instance, that “nobody’s perfect” when it comes to the rule of law, as this rhetoric only ends up normalising the systemic, deliberate and deceitful annihilation of checks and balances in both Poland and Hungary. When I look at the EU today, it’s hard not to think of that famous line by Yeats: The best lack all conviction, while the worst Are full of passionate intensity. (0 COMMENTS)

On Tuesday, in a previous post titled “Presuppositions,” I shared this picture:   and wrote: Four cards are shown, each card showing a character on the side shown, namely A, B, 2, and 3, respectively. Consider the following proposition: Proposition P: If one side of a card has a vowel, then on the other it has an even number. To establish that none of these four cards falsify Proposition P, which cards must one turn over?   At the original post, several people graciously shared their thoughts in the comment field. Thanks to you all for your valuable contributions! I encountered the picture at the home of Per Skedinger, who presented us with the puzzle. Different answers were suggested by members of our dinner group. Proposition P would be falsified by a card that on one side had a vowel and on the other side did not have an even number. The question is, which of the four cards may falsify Proposition P? At the dinner, one member of our group included the “2” card in his answer, I think because he took “If one side of a card has a vowel” to mean “If and only if one side of a card has a vowel.” But Proposition P does not say if and only if. So that reason for including the “2” card is faulty. At the dinner, I—like some of the commenters at the first post—suggested, the “A” card and the “3” card. But discussion made me realize that I was presupposing a condition that I didn’t have great grounds for, namely, that all cards have a letter on one side and a number on the other. Once we drop that condition, we see that we need to turn over the “B” card, for it may have a vowel on the other side. (Kudos to commenters Joel, Capt. J, robc, and Francisco.) Our formulations always involve inarticulate assumptions or presuppositions. Among the commenters at the first post, almost all operate on the assumption that we might read the card-side “data” as showing that one card has only an A on it, one only a B, one only a 2, and one only a 3. But are we certain that the “2” card-side has only a 2 on it? We do not see the entire side. Maybe there is a vowel or an odd number in the unshown portion of the “2” card-side. And you could go further, and wonder about teeny-weeny characters (“the fine print”). And Capt. J came up with some other creative responses to the problem. If you keep digging you can always argue that “the facts” are theory-laden. Suppose we turn over all four cards and find that none falsifies Proposition P. Does that mean that Proposition P has been verified? If Proposition P refers, not just to the four cards, but to some larger set of cards of which the four are but elements, then Proposition P has been confirmed for those four cards but has not been fully verified. I take this opportunity to excurse a bit. My thinking in philosophy of science tends toward Thomas Kuhn, Michael Polanyi, and Deirdre McCloskey, and I read David Hume along such lines. The tendency is skeptical about claims of a strict logic of science, a principle for demarcating between science and non-science, or a definite scientific method. (If I am not mistaken, the Kuhn work most relevant to these matters is his 1970 piece quoted here.)   Elsewhere, I have written: A sect might tailor its language so as to ensure the analyticity of the any of the following sentences: “The triangle has three sides.” “The child was born of a mother.” “The sum of the assets equals liabilities plus equity.” “Y = C + I + G + NX.” “The person maximized his utility.” “If transaction costs were negligible and parties were aware of the relevant opportunities, those parties achieved an efficient outcome.” “The moral sentiment relates to a sympathy.” For such a language community, the analytic statement in question would be non-falsifiable. Does that mean it’s not scientific? Here I think of something Thomas Schelling wrote: “It is sometimes said, in textbooks and in learned volumes, that these accounting statements, being unfalsifiable, do not count as science. I don’t care.” Here, someone might respond: Well, the falsifiability criterion is about demarcating between science and non-science for empirical statements, and those analytic statements are not empirical. So, by themselves, they don’t speak to the merit of the falsifiability criterion. I then say: A language community maintaining one of those analytic sentences may be taken to be saying, tacitly: Maintaining the analytic sentence is good. (Didn’t Gary Becker say that about one of them? Didn’t Adam Smith say it about another?) That statement, though vague, would seem to be empirical, and falsifiable, in principle. The big challenge then is in providing falsifying evidence. The challenging researcher must show that maintaining the analytic sentence is not good. Here we see why the philosophy of science merges with the history and sociology of science: Did the way in which the sociology of judgment actually unfolded conduce to the good? Was it perverted by certain forces, as in Soviet science or the governmentalization of science generally? Michael Polanyi wrote about the conditions under which the sociology of judgment conduced to the good. Like grammar, strict logic and the hunt for falsifying evidence have their place, but they leave important things underdetermined. It’s fine to call foul on errors in strict logic, and it’s fine to present purportedly falsifying evidence, but it’s misguided to think that strict logic and the hunt for falsifying evidence alone can establish important claims. Science is a moral activity. It is purposeful, interpretive, even aesthetic, and the rules of aesthetics are rather different from the rules of grammar (the differentness is presented in Figure 6.3 here). A blank page contains neither violations of grammar nor errors in logic, but it does not satisfy the standards of good science. Saying that science is interpretive is not saying that science is arbitrary. It is not saying that no interpretation is better than another. I have often wondered about the following proposition: Proposition R: No half-way serious, reputable thinker has ever said that no interpretation is better than another. I don’t know whether Proposition R is true. (Of course, “half-way serious, reputable thinker” is vague, but we have to draw a line somewhere.) Comments are open. In particular, if you can falsify Proposition R, please provide the falsifying evidence in the comment section. (0 COMMENTS)

The Biden administration just extended the moratorium on evictions until October (first implemented by the Trump administration). And yet when I look at the economic data, it’s hard for me to understand the motivation for this policy.  What emergency requires such an extreme infringement on property right? Personal incomes have been pretty high throughout the pandemic, so that doesn’t seem to be the issue. There really was a severe unemployment problem last year, but now the unemployment rate is down to 5.4%, which is below average for the past 50 years: Yes, 5.4% is far from ideal (3.5% would be better), but since when is below average unemployment the criterion for emergency legislation that disrupts the normal functioning of the rental market?  It’s not like 2009, when jobs were extremely difficult to find. Indeed we see lots of other government programs that might have made sense in 2020 but make no sense at all today, such as the supplemental unemployment insurance program.  The child tax credit might make sense as a permanent program (there are good arguments both ways), but I fail to see any argument for it as a temporary program.  What’s the purpose? It might be argued that the eviction moratorium is aimed at slowing the spread of Covid.  But how would it do this?  It’s not as if the people who avoid eviction are self-quarantining at home. Many of the Covid restrictions that might have made sense before the vaccine was widely available no longer make any sense at all.  If we aren’t going to get back to normal now, when will we ever be ready to do so?  It’s not like there won’t always be people losing jobs.  It’s not as if Covid will magically go away. Full disclosure:  I used to be a landlord (one of the worst decisions I ever made.)  In my case, my tenants were often as well off as I was. (0 COMMENTS)

Whether New York Governor Andrew Cuomo is guilty as charged, the statement he made in his defense illustrates what public choice theory has taught economists: as James Buchanan wrote, we must study “politics without romance.” At about 12:50 in the video (well worth watching), Cuomo declared: My job is not about me. My job is about you. What matters to me at the end of the day is getting the most done I can for you. And that is what I do every day. Perhaps we can find politicians genuinely devoted to doing good for their electors, who selflessly sacrifice themselves to that task, and who don’t realize that the benefits they provide to some (“you”) are at the cost of harming others (those who don’t agree or see their own opportunities reduced). Perhaps we can even find the rare politician who tries hard not to hurt some in order to give privileges to others but, instead, to do only what he thinks is unanimously wanted by all his constituents—that is, in conformity with the rules presumably meeting everyone‘s consent in an implicit social contract. But it is the contention of classical liberalism in general and public-choice economics in particular that it is unrealistic and perilous to found a political system on the assumption that the typical politician is or can be such a saint. John Stuart Mill wrote: The very principle of constitutional government requires it to be assumed that political power will be abused to promote the particular purposes of the holder; not because it is always so, but because such is the natural tendency of things, to guard against which is the special use of free institutions. This also applies to New York Attorney General Letitia James. (0 COMMENTS)

The questions we ask or the passing comments we make depend on the explicit or implicit theories we hold about the world, including normative theories and values. This is not to say that anything is as true as anything else or that any value is as defensible as any other, but that one’s theories and values should be examined. What one says can also be motivated by virtue signaling, that is, showing one’s good standing with the group one wants to endear or persuade. Unexamined passing comments are often influenced by the intelligentsia’s intellectual fetishes. I found a few examples in a book that is otherwise serious and challenging: Daron Acemoglu and James A. Robinson, The Narrow Corridor: Sates, Society, and the Fate of Liberty (Penguin, 2019). I will have a review of the book in the forthcoming (Fall) issue of Regulation. One example is about guns in the hands of ordinary citizens. The book tells us, as if it were obvious: The original wording of the Second Amendment … has left a long trail of violence and its wake. The well-known fact that 60% of gun deaths in America are suicides has some bearing on the evaluation of this sort of statement. And why do the authors, who are fond of “social mobilization” and (some) democratic resistance to Leviathan, criticize the National Rifle Association which, whatever one thinks of it (and the grave mistakes it has made over the past several years), is a major grass-root and anti-elite force in America? One would think that they would normally celebrate the private ownership of guns. George Orwell, the author of Nineteen-Eighty-Four, wrote in an article (quoted in Michael Shelden, Orwell: The Authorized Biography [HarperCollins Publishers, 1991], p. 328): That rifle hanging on the wall of the working-class flat or labourer’s cottage is the symbol of democracy. It is our job to see that it stays there. Totemic ideas are often dangerous. Could we similarly hypothesize that the First Amendment has “left a long trail of violence in its wake” because certain instances of free speech—say, about the meaningless of life or publicizing suicides—cannot be repressed? Have the automobile industry or the swimming pool manufacturers left a long trail of deaths in America? These trails of death were absent from the former Soviet Union and its satellite countries: with few cars and swimming pools, automobile deaths and children drowning were necessarily low. Only public guns, not private ones, left a trail of violence. Another example: Is it so obvious that, as Acemoglu and Robinson suggest, Sweden is a model country compared to the United States? Not all facts concur. Just as an example (I give others in my Regulation review), consider that the age-standardized suicide rate of women is 16% higher in Sweden (7.4 per 100,000) than in the United States (6.4). If we take the raw rates (without adjustment for differences in population age structure), the comparison is more impressive: the suicide rate of women is 46% higher in Sweden (10.5) than in the United States (7.2). (See World Health Organization, Suicide in the World: Global Health Estimates, 2019.) Does this mean that social democracy is tough on the fair sex? (Unfair to the fair sex—pardon the pun.) Okay, this fact may have no particular significance, but shouldn’t it give pause to the typical defender of the Swedish model? Incidentally, Sweden seems to have reached the highest rate of homicide by shooting in Europe. The Economist notes (“Sweden Is Being Shot Up,” July 24, 2021): Such violence is invariably fuelled by illegal drugs and ill-feeling between jobless, marginalised young men and the police. … In 1980 Gothenburg’s police solved 80% of all murders. Nowadays the figure is a dismal 20%. It’s not because the Swedes have a Second Amendment, far from that. Handguns are forbidden to peaceful private citizens. Only cops and thugs carry them. Immigration and gangs are apparently a big part of the problem, but it is worth asking to which extent important features of the Swedish model could play a role. In short, one must be prudent with the intelligentsia’s fetishes. (0 COMMENTS)

Scott Alexander has a new post on our highly dysfunctional FDA. He starts with the debate over the new Alzheimers drug, and then explains how FDA errors led to needless delays of Covid testing and vaccines, which caused thousands of unnecessary deaths. While that discussion is well worth reading, Alexander was just warming up: I worry that people are going to come away from this with some conclusion like “wow, the FDA seemed really unprepared to handle COVID.” No. It’s not that specific. Every single thing the FDA does is like this. Every single hour of every single day the FDA does things exactly this stupid and destructive, and the only reason you never hear about the others is because they’re about some disease with a name like Schmoe’s Syndrome and a few hundred cases nationwide instead of something big and media-worthy like coronavirus. I am a doctor and sometimes I have to deal with the Schmoe’s Syndromes of the world and every f@$king time there is some story about the FDA doing something exactly this awful and counterproductive. For example, there are only a few hundred cases nationwide of Infant Short Bowel Syndrome, a condition where some babies cannot digest food effectively. You can save their lives by using an IV line to direct nutrients directly into their veins, but you need to use the right nutrient fluid. The FDA approved an early draft of the nutrient fluid, but it didn’t have enough fish oil, which is necessary for development, so a lot of the babies still died or ended up with permanent neurological damage. In the 1990s, researchers figured out what was going on and recommended adding fish oil to the IV fluid. The FDA responded that they had only approved the non-fish-oil version, it would take them a while to approve the new version, and until they did that adding fish oil was illegal. A bunch of babies kept dying and getting permanent neurological damage, and everyone knew exactly how to stop it, but if anyone did the FDA would take away their licenses and shut them down. Around 2010, Boston Children’s Hospital found some loophole that let them add fish oil to their nutrient fluid on site, and infants with short bowel syndrome at that one hospital stopped dying or ending up permanently disabled, and the FDA grudgingly agreed to permit it but banned them from distributing their formulation or letting it cross state lines, so for a while if you wanted your baby not to die you had to have them spend their infancy in one specific hospital in Massachusetts. Around 2015 the FDA said that if your doctor applied for a special exemption, they would let you import the correct nutritional fluid from Europe (where, lacking the FDA, they had just added fish oil to the fluid as soon as researchers discovered it was necessary), but you were only able to apply after your baby had already sustained serious damage, and the FDA might just say no. Finally in 2018 the FDA got around to approving the corrected nutritional fluid and now babies with short bowel syndrome do fine, after twenty years of easily preventable state-mandated deaths. I CANNOT STRESS ENOUGH HOW EVERY SINGLE THING THE FDA DOES IS LIKE THIS ALL THE TIME. Obviously there’s a bit of hyperbole there at the end, but later on he has a nice explanation of why the problem is not the specific people that work at the FDA, rather it’s the incentive structure: I want to stress that, despite my feelings about the FDA, I don’t think individual FDA bureaucrats, or even necessarily the FDA director, consistently make stupid mistakes. I think that given their mandate – approve drugs that definitely work, reject ones that are unsafe/ineffective, expect people to freak out and demand your head if any unsafe/ineffective drug gets through, nobody will at all no matter how many lifesaving treatments you delay or stifle outright – they’re doing the best they can. . . . And it’s hard to even blame the people who set the FDA’s mandate. They’re also doing the best they can given what kind of country / what kind of people we are. If some politician ever stopped fighting the Global War On Terror, then eventually some Saudi with a fertilizer bomb would slip through and kill ~5 people. And then everyone would tar and feather the politician who dared relax our vigilance, and we would all restart the Global War On Terror twice as hard, and drone strike twice as many weddings. This is true even if the War on Terror itself has an arbitrary cost in people killed / money spent / freedoms lost. The FDA mandate is set the same way – we’re open to paying limitless costs, as long as it lets us avoid a very specific kind of scandal which the media will turn into 24-7 humiliation of whoever let it happen. If I were a politician operating under these constraints, I’m not sure I could do any better. If you are confused by Alexander’s reference to media irresponsibility, look at how the media is hyping a few cases of vaccinated people getting Covid. As with Matt Yglesias’s posts on passenger rail and Razib Khan’s posts on woke excesses, one ends up feeling a sense of almost complete hopelessness after reading Alexander.  And that’s why Alexander, Yglesias and Khan are the three Substacks that I read—I don’t want my information sugar coated. (0 COMMENTS)

On my vacation in Canada, I’m enjoying Gore Vidal’s novel Burr immensely. Of course it’s a novel and so it’s not necessarily accurate. Vidal admits in an Afterword that he attributes motives and makes up dialogue. But he also points out that he uses known phrases from various speakers. I’m becoming quite impressed with Aaron Burr, or should I say “aaon buhr.” Two U.S. historian friends tell me that the novel is right in many particulars. Here’s a short monologue in which Burr explains the various political parties in 1834 and how they had morphed: Van Buren will be nominated and he will defeat Clay or any other National Republican—no, no, Whig. I must get used to calling them that. How topsy-turvy it is! Those of us who were for the Revolution were Whigs. Those for Britain were Tories. Then there was the fight over the federal Constitution. In our state [New York] Governor Clinton wanted a weak federal government. So some of the Whigs became anti-Federalist and some like Hamilton became Federalist. Then the Tory-Federalists became Republican. Now Tory-Federalist-Republicans call themselves Whig though they are anti-Whig while the anti-Federalist Republicans are now Jacksonian Democrats. I posted about a non-fiction book on Burr here.   (0 COMMENTS)

In my Knowledge, Reality, and Value Book Club, I focus on my disagreements with Huemer, even though I agree with the vast majority of what the book says.  Recently, however, he wrote a separate piece that I disagree with almost entirely, entitled “Two Taxes that Aren’t Theft.”  Using Huemer’s common-sense approach to ethics, I say that he’s deeply mistaken on both counts. He starts by making reasonable points about pollution taxes: Pollution. Whenever you drive your car, you release a little bit of pollution into the air, which imposes a tiny expected harm on a huge number of other people and animals, including future generations. I bet you don’t get their consent, either. On some absolute deontological views, you always need consent before imposing (certain kinds of) harm on others. But that’s impractical. You can’t get the consent of everyone in the world, including the future generations who will be affected by your pollution. So we’d have to say either (a) “You can’t pollute at all.” This requires shutting down modern civilization. Or (b) “Pollution isn’t the right kind of harm” (it’s not aggressive, people don’t have rights against pollution, or something like that). But this would mean that it would be fine to completely destroy the atmosphere with pollution (if someone had the ability to do that). (a) and (b) are both bad. We shouldn’t completely prohibit all pollution, nor should we take no action at all against pollution. While complete destruction of the atmosphere may not be on the table (yet), we would surely have too much pollution if we didn’t do anything at all to polluters. […] Wait — you can see what the utilitarian rationale is for Pigouvian taxes, but why isn’t it still theft (even if a beneficial theft)? My thinking is that the person creating the negative externality actually owes compensation for doing so. Extracting owed compensation from someone isn’t theft. So this form of taxation isn’t theft. I’ve actually made a similar argument myself, so what’s my objection?  He seems to endorse Pigovian taxes not just on physical damage to person and property, but against negative externalities in general: This point of course applies to other kinds of externalities. If people get to impose negative externalities for free, there will be too many negative externalities. Lots of activities will get done that impose greater total costs than their total benefits. And almost everyone is going to lose out overall from all the negative externalities. Solution: Pigouvian taxes. These are taxes on externality-producing activities. They’re supposed to be set so that the tax is about equal to the amount of external harm produced by the activity. This deters people from doing the activity, if and only if the total cost created by it exceeds the total benefit. The problem: Anything can be a negative externality.  Saying things people dislike is a negative externality.  Painting your house an objectionable color is a negative externality.  Having an unpopular religion is a negative externality.  And yet common-sense says that human beings have a right to create such externalities, and those who object cannot legitimately use violence to prevent their creation.  (Of course, as The Problem of Political Authority explains, people appeal to the notion of authority to rationalize government’s use of violence in such cases; what common sense says is that private individuals must tolerate most negative externalities).  A society where all negative externalities were taxed might be economically efficient, but it would definitely be a tyranny.  In a deep sense, freedom is the freedom to create negative externalities with impunity as long as you don’t non-consensually use other people’s bodies or property in the process. To put this in the form of a common-sense moral dialogue:   A: Hail Satan! B: You just created a serious negative externality. A: How? B: Christians don’t like you saying, “Hail Satan!” A: So I’m not allowed to say that? B: You can, but there’s a $20 tax for doing so.  Pay up.   Huemer also seems to endorse Georgist land taxes: This one is more interesting and controversial. I think Henry George may be right. Henry George thought that (a) everyone is entitled to the value that they themselves produce, but (b) they’re not entitled in the same way to value produced by nature. If you happen to be the first person to claim some valuable natural object, that doesn’t really give you a greater claim to its value than other people who arrived later… Solution: A land tax. The first person to find some unused land gets to claim it, but also, the person who owns a particular piece of land at any given time has to pay a tax approximately equal to the intrinsic value of that land (the value not due to human labor). The tax money should then be distributed evenly among society. This implements the idea that everyone should get an equal portion of the unimproved value of land and natural resources. Unlike other taxes, it doesn’t discourage productive activity, but it does discourage inefficient uses of land. First, this directly contradicts common-sense.  If you’re the second person to arrive on an island, and the first-person has already farmed the best land, it seems very odd to claim that you’re “entitled” to half the surplus value of his land. Second, raw human talent is also a “valuable natural object.”  So by Georgist reasoning, everyone should be entitled to an equal share of the value of human talent.  Which is, in common-sense terms, slavery. To put this in the form of a common-sense moral dialogue:   A: Welcome to the island! B: Thanks.  Now hand over half the surplus value of your land.  You owe it to me. A: This is my land.  I’m the one who farmed it.  I was going to give you some to help you out, but you’re scaring me. B: You’re entitled to your value-added, sure.  But you have to share the raw productivity of nature with me. A: Seems unfair. B: Well, let me point out that you seem to have an inborn knack for farming. A: True, I’ve always had a green thumb. B: Interesting.  I wasn’t born with this talent, so you also owe me half the value of your inborn green thumb.  I think I’m going to like this island!   I say this is crazy.  Political authority might trick people into thinking that Georgist taxes are legitimate, but in Crusoe scenarios we can readily see them as theft.   P.S. My paper with Zac Gochenour argues that the category of “unimproved land” is much narrower than most Georgists suppose.  Whether we’re right or wrong, however, Georgist taxes are indeed theft. (1 COMMENTS)