Comment by theseus7 | Hacker News Reader

Comment by theseus7 | Hacker News Reader

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> How about a party for workers?

Possible principles for a workers party:

- maximize after-rent and after-tax disposable income of workers

- shift all taxes off of wages from labor and onto ground rent from private enclosures of land and natural resources

- support a universal public savings account for all citizen residents over 20

- democratically divide and deposit all surplus natural resource rents directly into the universal savings accounts

- have the Federal Reserve conduct monetary policy by setting the interest rate on the universal citizen savings accounts, rather than by buying up assets from investors

This should increase the disposable income for a super-majority of workers by decreasing rent, making acquiring a house more affordable, making land for new small farms and businesses near competitive markets easier to obtain, increasing private savings to ensure workers have access to a large-runway of cash and high bargaining power while in between jobs, reducing the severity of economic depressions and recessions created by idle land speculation, and by directing capital flows away from mortgages and mortgage-backed assets and into productive businesses which will actually increase the demand for labor and raise wages.

>- support a universal public savings account for all citizen residents over 20

Thiss could not possibly be more wrong. Experience has shown that if a "public savings account" can be raided by its controllers to support some more powerful constituency (shareholders, current voters and taxpayers, etc.) it will. We've seen with this corporate pensions, state government pensions, and Social Security. A workers' party would immediately and forcefully end all "public savings account" schemes which are really wealth transfers away from workers in disguise, and (at most) force workers to save in accounts for which they are the custodians.

- Seize the means of production

wait no, you aren't suggesting communism.

I don't think switching to a property tax system is the way to go. Wouldn't it end up hurting people as you just see rents rise?

I am advocating a land value tax, not a property tax. This is the most progressive tax possible as the incidence of the tax does not fall upon labor at all.

> Wouldn't it end up hurting people as you just see rents rise?

No, rents would not rise in proportion to the tax. Adding a tax as a carrying cost on a good of fixed supply such as land produces the opposite effect of a tax of goods and services. It increases the supply of available land and decreases prices because the tax makes land less attractive as a speculative investment and store of wealth. It encourages land holders to sell off any underutilized land being held for speculative purposes, thus increasing the supply of land available for actual use and improvement by workers, and lowering its price.

The 'ground rent' collected by landholders is the surplus profit above what is necessary to bring the land into use. If no one paid ground rent to private landholders, the supply of land would still remain the same, and there would still be just as much land available for everyone to use. Confiscating private ground rent simply shifts this payment from private parties to the state, and the tax cannot be passed on to renters through higher prices at all.

This increases the disposable income of a super-majority, because once all private ground is instead paid to the government for the provision of essential goods and services, all other taxes which fall upon the labor of workers, such as payroll and consumption taxes, can be eliminated.

So I buy some land. I plop an apartment building down on it. I pay "land tax" on the land.

Why would I not just raise rents to preserve my profits?

You will still be competing against everyone else who does the same, and your competition will be vastly increased. It will no longer be profitable for other nearby land holders to hold on to idle, vacant, or under-utilized land. For instance, if someone is holding on to a vacant building, a parking lot, or low density commercial development such as a strip mall, it may no longer be profitable to hold on to these under a land value tax.

The vacant building may be replaced with several small town houses, the low density commercial buildings may be replaced with multi-story mixed used buildings with additional housing built-in, as property owners seek to increase the value of their buildings relative to surrounding buildings in order to acquire a profit larger than the land value tax. They would pay the same tax regardless of whether they left the land vacant or put it to use, so there is a strong incentive for them to put it to the best use possible.

When land is actually improved and put to use, this increases the demand for labor and raises wages so that wages increase faster than rent. When land is held idle for speculative purposes, rent increases faster than wages and the average worker becomes poorer even if the output of the economy is increasing. Nominal prices may change in reaction to market condition, but what is important is wages relative to rent.

Communism is anti-worker because it leads to rampant rent-seeking by political organizers responsible for coordinating the provision of collectively owned capital goods, which is a necessarily a complex problem, since a capital good could refer to any manufactured good which is 'durable' and not immediately consumed.

However the base means of production for any economy as recognized by the Physiocrats and all classical economists is land and natural resources, which are non-produced resources of fixed supply that are a wholly distinct factor of production than capital.

While it is not necessary or desirable for the state to seize capital or private interest payments paid for the use of capital, it should sieze the 'ground rent' which is acquired from private enclosures of natural resources, as unlike interest on capital the surplus ground rent paid to landholders does nothing to increase the supply of land, and is collected even if the land were to remain idle and the landholder invested nothing in its actual improvement.

>Communism is anti-worker because it leads to rampant rent-seeking by political organizers responsible for coordinating the provision of collectively owned capital goods

Can you expand on what you mean by this, please? If I understand it correctly, you're saying that organisers of the means of production would draw benefit which is not distributed to the collective of people who "own" the means of production. How would they do this?

I think it is important also to note that capital requires circulation, as in M-C-M', which not only requires money but also the value-form - these two things are what the Communists desire to render useless through the collective control of means of production.

There are strong currents in Communism which are anti-bureaucracy, and insist on models which do not place the economic organisers of a lower-stage Communist society to be above others in terms of access to goods. As I understand it, within Communist society a line is drawn between end goods and goods which will be used for further production.

What is the justification for separating natural resources from other forms of capital? They require labour to extract, transport and refine so in my view they are as much capital as outputs from previous industrial processes.

It's an issue of central planning and information arbitrage I guess. Unless the entire society is equally involved in economic central planning (which is absurd), a small group of people will be doing it, thus having access to more information, which is power.

Which is not to say that is not a problem in capitalist society or something that strong democratic foundations cannot alleviate.

Of course not everyone can be directly involved with the allocation of resources, however as with all scarce resources decisions need to be made from time to time on which usage would best benefit society; in this case, I'm an advocate for democratic management of such resources. I don't think that power only comes with information, the power comes when people are given extra abilities to deal with that information (such as using personal preference to dictate allocation) so I think that protections are needed.

I think the problem with central planning stretches further; the goal of the Communists is to avoid alienation from one's labour, the non-commodity of labour-power, however having labour being externally imposed (whether by the capitalist and the "market" within capitalist society, or by the central planner within Socialist society) is alienation by definition. Therefore some change in the method of planning is required. Marx wrote that there are four forms of alienation, one which I think is important here is alienation of the worker from the act of production; the Communist movement aims to reject this alienation through making the whole productive capacity of society available to all such that the worker can in almost all cases direct his own labour, all production is social therefore, as all workers contribute.

So the kind of planning in higher stage Communism is much past the idea of a government planning, rather, as Marx wrote (to what some consider a contradiction), society regulates general production. To quote,

>For as soon as the distribution of labour comes into being, each man has a particular, exclusive sphere of activity, which is forced upon him and from which he cannot escape. He is a hunter, a fisherman, a herdsman, or a critical critic, and must remain so if he does not want to lose his means of livelihood; while in communist society, where nobody has one exclusive sphere of activity but each can become accomplished in any branch he wishes, society regulates the general production and thus makes it possible for me to do one thing today and another tomorrow, to hunt in the morning, fish in the afternoon, rear cattle in the evening, criticise after dinner, just as I have a mind, without ever becoming hunter, fisherman, herdsman or critic.

Sure, Marx was smart and all, but practically, what it comes down to, is a few options.

- Capitalist markets

- USSR style central planning

- Anarchist-leaning gift economy, not scaleable beyond n=1000 or so

- Market socialism strains like mutualism or ParEcon, both of which have major issues of their own

- Any mix of the above, e.g. "Socialism with Chinese characteristics", which has been the best economic performer of the last 30 years or so.

In other words, at some point you need to come down from pie in the sky Marx quotes and make physical implementations, which is always more difficult than theory.

So if central planning is problematic, what do you choose then?

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