Wednesday, November 22, 2006

They probably didn't mourn Friedman either 

Two members of ISAIAH, a left-wing religious group in the Twin Cities (that works with a local group in St. Cloud as well) have launched a tirade against Ford's use of the land on which its closing plant in St. Paul sit. Ford would move it from a use for which it wastes resources -- the value of the cars built on the property were insufficient to pay for the resources used to build the cars -- to a use that will make someone money. It might be worth more when public infrastructure is built up to provide better roads around the property. By accepting the delay in receiving monies from the sale of land, the Ford owners keep the land available for possibly more productive use later. That will not do, say the ISAIAH writers, who wish to expropriate the land. Their fundamental misunderstanding of economics comes in a steady buildup to this concluding paragraph:
The value of land is created not by individuals, but by the growth in population and wealth of the surrounding community and by the community's investments in public services and infrastructure. Land value taxation recaptures community-created value for the needs of the community while providing an incentive to put sites to their highest and best use. With the right incentives in place, we won't have to worry so much about how long it will take for the site of the next closed manufacturing plant to come back to life.
Dave Downing (who brought this article to my attention) refers to these people as American Taliban Communist but the Taliban or American parts aren't needed. Marx' letter to Engels in 1851 argued that
Every payment of rent for the use of a piece of real estate will make the farmer part-proprietor of it and will count as a mortgage payment by him. When the property has been entirely paid for it will be immediately taken over by the commune, which will take the place of the former owner and will share with the farmer the ownership and the net product.
Is there any difference between that and ISAIAH's call for "land value taxation"?

Hostility to speculators is a common Marxist theme -- and their close cousins.