over the last century we've had this huge conflict all the oxygen has been sucked up by capitalism and socialism duking it out we have this assumption that you either have to be pro-worker or pro-business that you can't be both I have noticed a lot of crypto people get into georgiaism not the least of which is vitalik buter and you endorse my book if you earn a hundred thousand
dollars in San Francisco as a family of four you are below the poverty line let's start with just taxing the things nobody has made and that people are gatekeeping access to Let's tax essentially
monopolies and rent seeking the income tax needs to do this full anal probe on everyone in the country and then audits the poor at a higher rate than the rich and it's just this horrible burden we have okay today I have the pleasure of speaking with Dolores Doucet who developed the
highly acclaimed uh Defenders quest game and part two is coming out next year but now he's working on a new startup but the reason we're talking is that he wrote a review of Henry George's progress in poverty that won Scott Alexander's book review contest and now it has been turned into and expanded into this book land is a big deal so Lars welcome to the podcast great to be
here dwarkash okay so let's just get into it what is georgism okay so the book is based off of the philosophy of a 19th century American Economist by the name of Henry George from once we get
georgeism and basically George's thesis is kind of the title of my book that land is a big deal um georgism is often reduced to its main policy prescription that um we should have a land value tax which is a tax on the unimproved value of land but not um attacks on any buildings or
infrastructure on top of the land anything humans add um but the basic Insight of it is that um it's it's kind of reflected in the aphorisms you hear from real estate agents when they say things like the three laws of real estate or location location location and by land it's the one thing they're not making any more of it's basically this Insight that um land has this hidden role
in the economy that is really underrated but if you look at history through the right lens um control over land is the oldest struggle of human history it goes beyond human history animals
have been fighting over land forever um that's what they're fighting over in Ukraine and Russia right now right and um basically the fundamental Insight of georgism is that over the last century we've had this huge conflict all the oxygen has been sucked up by capitalism and socialism
duking it out we have this assumption that you either have to be pro-worker or pro-business that you can't be both and georgiaism is genuinely Pro pro-worker and pro-business um but what it's against is is land speculation and if we can find a way to share the Earth then
we can solve the Paradox that is the title of George's book progress and poverty why does poverty Advance even when progress advances why do we have all this industrialized technology
and new methods and you know in Georgia's time it was industrial technology in our time it's computers and everything else we have all this good stuff we can make more than we've ever made before there's enough wealth for everybody and yet we still have inequality where does it come from and George answers that question in his book and I you know expand on it in mine yep yep okay so yeah
I'm excited to get into the theory of all of it second but first I'm curious um how much of your interest in the subject has been inspired with the fact that as a game developer you're constantly dealing with decentralized Ren Seekers like steam or IOS app store is that part of the inspiration behind your interest in georgiaism or is that separate it's interesting I wouldn't say that's
what clued me into it in the first place but I have become very interested in um all forms of rent seeking right um in this General category of things we call land-like assets that come to First
mover advantages in these in these large platform economies I I've started to think a lot about it basically but the essence of land speculation is you have this entire class of people who are able to basically gatekeep access to a scarce resource that everybody needs which is land right
that you can't opt out of needing and because of that everyone basically has to pay them rent and those people don't necessarily do anything you know they just they just got there first and tell everyone else it's like well if you want to participate in the world you need to pay me and so um where I actually were the actual connection with game development actually clued me into
georgeism is I'd heard about georgiaism before I'd read about it I thought it was interesting but then I started noticing this weird phenomenon in online multiplayer games going back 30 years
repeatedly a virtual housing crisis which is the most bizarre Concept in the world to me like basically a housing crisis in the metaverse and and predecessors to the metaverse on as early as Ultima Online when I was 19. you know this is this online game that you could play and
um you could you could build houses in the game and put them down somewhere and so um what I found was that houses were actually like fairly cheap like you could work you know long enough in a game to be afford to like buy blueprints for a house which will you put it somewhere but there was no land to put it on and I at the time I thought oh well I guess the server filled up you know
I didn't really think much about it I was like this stinks I didn't join the game early enough you know I'm kind of screwed out of Housing and then I kind of forgot about it and then like 20 years later I checked back in and that housing crisis has still gone going in that game that
game is still running you know a good 25 years later and that housing crisis remains unsolved and um you have this entire black market for housing you know and then I noticed that that Trend was
repeated in other online games like Final Fantasy 14 and then recently in 2022 with all this huge wave of crypto games like axi Infinity and that's the central land and the sandbox and then Yuga Labs is uh board ape Yacht Club the other side had all these big land sales
and at the time I was working as an analyst for um a video game consulting firm called novik um and I told my employers it's like we are going to see all the same problems happen we're gonna see
virtual land speculation they're going to hit a virtual they're going to reproduce the conditions of housing crises in the real world and it's gonna be a disaster and I I called it and it turns out I was right and we've now seen that whole cycle kind of work itself out and it's just it just kind of blew my mind that we could reproduce the problems of the real world so articulately in the
virtual world without anyone trying to do it it just happened and that that is kind of the actual connection between my background and game design and and kind of getting George pilled as the the internet kids call it these days um there's a hilarious clip uh some comedian was on uh Joe Rogan's podcast I think it was like Tim Dillon and they're talking about I think the
central ad where if you want to be Snoop Dogg's neighbor in the metaverse it costs like a couple million dollars or something and uh Joe Rogan was like so you think you can afford to live there
and then the Tim Dylan's like no but I'm gonna start another meta version I'm gonna work hard um but okay so let's go into uh georgiaism itself so Tyler Calvin had a blog post a long time ago he was comparing taxing land to taxing unimproved labor or unimproved Capital
um and you know it's an interesting concept right like should I so I have a CS degree right should I be taxed at the same level as an entry-level software engineer uh instead of a podcaster because I'm not using my time as efficiently as possible um and it so leisure in another way is
the um labor equivalent of having an unimproved parking lot in the middle of uh in the middle of San Francisco or Capital if I'm just keeping my Capital out of the economy and therefore making it
not useful maybe I should have that Capital taxed at the rate uh of like the capital gains on T bill um and this way you're not punishing people for having profitable Investments which you're kind of doing with the capital gains right um what would you think of that comparison yeah so it really before you can even answer that question you got to go back to ground moral principles
you're operating on like is your moral operating principle like we just on increase efficiency so we're going to tax everyone in a way to like basically account for the wasted opportunity cost which brings up a lot of other questions of like well who decides what that is
um but um I think the georgest argument is a little different we're not necessarily like it is efficient the tax we propose but it actually stems kind of from a more from from a different
place a more kind of fundamental aspect of Justice you know um and from our perspective if you work and you produce value your work produced that value right and if you save money and accumulate capital in order to put that Capital to work to receive a return you've also produ you've also provided something valuable to society you know you save money so a factory could
exist right you saved money so that a shipping company could could get off off the ground you know those are valuable contributive things but nobody made the earth the earth pre-exists all of us and so someone who provides land actually does the opposite of providing land they unprovide land and then they charge you for opening the gate and so the argument for um charging people on the unimproved value of land is that
we want to tax unproductive rent seeking we want to attacks non-produced assets because we think we want to encourage people to produce assets we want to encourage people to produce labor to produce Capital we want more of those things and there's that aphorism that if you want less
of something you should tax it so I mean maybe there is a case for some kind of Galaxy brain take of you know taxing unrealized opportunity costs or whatever but I'm less interested in that and
my moral principles are more about let's start with just taxing the things nobody has made and that people are gatekeeping access to Let's tax essentially monopolies and rent seeking and then
if we still need to raise more taxes we can talk about that later but let's start with let's start with just taxing the worst things in society and then stop taxing things we actually want more of because we have this mentality right now where everything's a
trade-off and we have to accept the downsides of income taxes of sales taxes of capital taxes um because we just need the revenue and it has to come from somewhere and my argument is it's like it can come from a much better somewhere so let's start with that yeah yeah so I guess um if it was the case that we've implemented a land value tax and we're still having a revenue shortfall uh and
we need another kind of tax and we're going to have to keep income taxes or capital gains taxes would you in that situation prefer a sort of tax where you're basically taxed on the opportunity cost of your time rather than the actual income you generated or the returns of Interest you've generated on your Capital no I I think I think probably not I think you would probably want to go
with some other just like simpler tax for the sake of it because there's too many degrees of freedom in there and it's like we can talk about why I will defend the Georgia's case for for property
tax assessments you know for land value tax but I think it gets different when you start like judging what is the most valuable use of your time because that's a much more subjective question like you're a pot like okay are you providing more value to society as being a podcaster or
being a CS you know per a computer science person or creating a startup it's like that may not be evident for some time you know what I mean like I can't think of an example but like think of people who are never successful during their lifetimes if the guy you invented all uh what was it um FM radio right he threw himself out a window because um he never got it really adopted during
his lifetime but it went on to change everything you know um so if we were taxing him during his lifetime based off of what he was doing of being a failure like if Van Gogh was taxed of his like
wasting his life as an artist as he thought he was which ultimately led to his suicide you know a lot of these things are not necessarily realized at the time and and so I think that's um and you know it would need a much bigger kind of bureaucracy to like figure that all
out so I think you should go with a more modest I mean I think after land value tax you should do things like Severance tax on natural resources and other taxes on other monopolies and rents
and so I think the next move after land value tax is not immediately to Capital and income taxes and sales taxes but to other taxes on other rent seeking and other landlike assets that aren't literally physically land and then only after you've done all of those if you still
you know absolutely then then move on to you know the bad taxes what is the severance tax Severance tax is a tax on the extraction of Natural Resources is what Norway does with their oil with their oil industry that has been massively successful and the key reason that Norway has avoided the resource curse yeah basically it's George's purists will say it's essentially a land
value tax but of a different kind um a land value tax like you can't normally like extract just like land like on this in this house you're living on you're like you're not using up this land but non-renewable resources you can use up yeah you know and so um a severance tax is basically Nestle should be charged a severance tax for the water they're using for instance you know because all
they're doing is enclosing a pre-existing natural resource that used to belong to the people that they've essentially enclosed and now they're just putting it in bottles and selling it to people you know they should be able to realize the value of the value add they give to that water but not to just taking that resource away no that makes sense um okay so let's let's go deep into the actual
Theory and logic of georgiaism okay um one thing I was confused by is why property owners who have land in places that are really desirable are not already incentivized to make the most productive
use of that land so it even without a property or sorry a land tax if you have some property in San Francisco why are you not incentivized to construct it to the fullest extent possible by the law to you know get collect rents anyways um you know what I mean like why are you keeping it
that as a parking lot right right right so there's there's a lot of reasons um and one of them has to do with um there's a there's an image in the book that um this guy um put together for me I'll show it to you later um but what it does is that it shows uh the rate of return what a land Speculator is actually optimizing for is their rate of return right and so if land appreciates by 10 a year
you know you're actually incentivized to invest in vacant land or a teardown property because the building of a teardown property is like worth negative value so the Lane's cheaper because there's garbage on it you know um then you are to necessarily invest in a property and you're
basically your marginal dollar is better spent on more land than it is on building up but eventually shouldn't this be priced into the uh the price of land so that uh the returns are no longer 10
or they're just like basically what you could get for any other asset and at that point then um then the rate of return is similar for building things on top of your existing land then buying new land because like the new Landes like the you know the the that that return has been priced into other land well I mean arguably empirically we just don't see that you know we see rising land
prices as long as productivity and population increases um those productivity and population gains get soaked into the price of the land it's it's because of this phenomenon called Ricardo's law of rent and it's it's been pretty empirically demonstrated um that basically it has to do with the negotiation power but like why um some people do of course build and invest you know there's a
lot of local laws that restrict people's ability to build but another reason is just like it also has to do with the existing um part of it it part of the effect is partially the existing property
tax regime actively incentivizes empty lots because you have a higher tax burden if you build right so what actually happens is a phenomena that's similar to oil wells right um You have it's not just because of property taxes those do encourage you to keep it empty but there's
this like there's this phenomenon called land banking and waiting for the land to ripen right sure I could build it now but I might have a lot of land Parcels I've got and I don't need to build
it now because I think the prices might go up later and it would be better to build on it later than it is now and it's not costing me anything to keep it vacant now if I build now I'm gonna have to pay a little bit more property taxes and I know in three years that the price is going to
be even better so maybe I'll wait to incur those construction costs then and right now I'm going to focus more on building over here and like I've got a lot of things to do you know so I'm just going to squat on it here it's the same way like I have I'm squatting like you know I I to my shame like about 30 domain names you know most of them bought before I kind of got onto georgism and it's like
yeah I'll pay 15 bucks a year to just hold it why not you know what I mean I might use that someday right and it's like I should probably release all the ones I have no intent of using because I was looking for a domain for my startup the other day and every single2word.com is taken right right and has been for like 10 years you know and it's a similar phenomenon I was just it's like some of
it is economic rational following of incentives and some of it is just it's like well this is a good asset I'm just going to hold on to it because why not and um and no one is is and I don't have
any pressure to build right now and this happens on the upswing and on the downswing of cities um so while the population is growing and while the population is declining people will just buy a lot of land and hold it out of use because it's also just a great place to park money
um because it's an asset that you know if the population ever starts growing it's going to keep its value better than almost any other hard asset you have yeah yeah I I guess another like broader criticism of this way of thinking is listen this is all and sorry for using these like uh podcast lingo of scarcity mindset but this is all like scarcity mindset of uh you know land is limited
but why don't we just focus on the possibility of expanding uh the amount of usable land I mean there's like not really a shortage of uh land in the US maybe there's a shortage of land in urban
areas um but you know but only like expand into the Seas it might be expanded the air and space why are we thinking in this sort of scarce mindset right okay so I love this question because actually our current status quo mindset is a scarcity mindset and georgism is the abundance
mindset right and we can have that abundance if we learn to share the land because right now um you know why don't why don't we expand and the answer is we we've tried that we've done it twice and it's the story of America's Frontier right and so like right now there's plenty of empty Landing but nobody wants it and you have to ask why right you also have to ask the question of
how did we have virtual housing crises in the metaverse where they could infinitely expend all they want like how is that even possible you know and the answer has to do with what we call the urban agglomeration effect what's really valuable is Human Relationships proximity to other human beings those dense networks of human beings and so um the idea is not necessarily that like in in a certain sense the um the issue is that land
is not an indistinguishable fungible commodity location really matters or America has a finite amount of land but it might as well be an infinite plane we're not we're not going to fill up every square inch of America for probably thousands of years if we ever do yep right but what is scarce is specific locations they're non-fungible you know and um to a certain extent it's like okay
if you don't want to live in New York you live in San Francisco or any other like big city but what makes New York New York is non-fungible what makes San Francisco San Francisco is non-fungible
that particular cluster of VCS in San Francisco until or unless that City completely explodes and that moved somewhere else to Austin or whatever you know at which point Austin will be non-fungible I mean Austin is non-fungible right now and so the point is that the way georgiaism
unlocks the abundance mindset let me talk about the frontier we have done Frontier expansion that is why immigrants came over from Europe you know and then eventually the rest of the world um to America to you know settle the frontier and The Losers of that equation were of course the Indians who were already here and got kicked out um but that was the original idea of America and
I I like to say that America's tragedy America's problem is that America is a country that has the mindset of being a frontier state but is in fact a state which has lost its Frontier and
that is why you have these conversations with people like Boomers who are like why can't the Next Generation just pull itself off by its bootstraps because America has had at least um I would say two major periods of Frontier expansion the first was the actual Frontier
the West the Oregon Trail the covered wagons you know the displacement of the Indians and so that was a massive that was the time in which Henry George was writing was right when that Frontier was closing right when all that land that free land was being taken and the advantages of that
land was now being fully priced in that is what it means for a frontier to close is that now the good productive land the value of it is fully priced in before when the frontier is open you can just go
out there and take it and you can get productive land and realize the gains of that and the second Frontier expansion was after Henry George's death was the invention of the automobile the ability to have a job in the city but not have to live in the city the fact that you could quickly travel in like I commuted in to visit you here right that is because of the automobile Frontier opening that
has allowed me to live in some other city but be able to do productive work like this podcast by driving in but the problem is sprawl can only take you so far before that Frontier as well closes and by closes I don't mean Suburban expansion stops what I mean is that now suburban homes you fully price in the value of the benefits you're able to accrue by having that proximity to
a city but still being able to live over here through of course Ricardo's lot rent yeah but I feel like this is still compatible with the story of we should just focus on increased ink
technology and abundance uh rather than trying to estimate how much rent is available now given current status quo Technologies I mean um the car is a great example of this but imagine if they were like flying cars right like there's a well you know where's my flying car there's
like a whole analysis in that book about you know if you could uh if if people are still commuting like 20 minutes a day you know a lot more land is actually in the same travel distance as was before
and then now all this land would be worth as much even in terms of relationships that you could um you could like accommodate right so so why not just build like flying cars instead of uh focusing on a land rent well because these things have a cost right the cost of the frontier
expansion was murdering all the Indians and the cost of automobile expansion was climate change you know there has to be a price for that and then eventually the problem is you eventually when you get to the end of that Frontier expansion you wind up with the same problem you had in the first place eventually the problem is the first generation will make out like gangbusters if we
ever invent flying cars even better like Star Trek matter teleporters yeah you know that'll really do it then you can really live in Nevada and have a job in New York yeah there are some people who claim that Zoom is this but it's not you know we've seen the the empirical effects of that and it's like it's the weakest like semi-frontier we've had and it's already closed because because
of Zoom houses like this over in Austin have gone up in value because there is demand for them um there's demand for people to telecommute and so anyone who has so so the ability so the increased
demand for living out in the suburbs is now basically priced in because of the zoom economy and so the thing is the first people who did that who got there really quick the first people to log into the Ultima Online server were able to claim that pace of the frontier and capture
that value but the Next Generation has to pay more in rent and More in home prices to get that actually that raises another interesting criticism of Georgia Zoom this is actually a paper from
um Zachary gautenar um and Brian Kaplan where it was titled the search theoretic critique of georgiaism and the point they made was um one of these like one way of thinking about the Improvement to land is actually identifying that this land is valuable maybe because you realize
it has like an oil well in it maybe you realize that it's like the perfect proximity to these like Chinese restaurants and the small and whatever and then just finding which land is valuable is actually something that takes uh capital and also takes you know like you deciding to append your life and go somewhere you know like all kinds of effort and that is not factored into the way uh
you would conventionally think of the improvements to land that would not be taxed right so in some sense you're getting that land is like a subsidy for you identifying that the land is valuable can be used to productive ends right yeah I know so I've read that paper so first of all um the first author that Zachary gouchner yeah I'm I've not been able to pin him down on what exactly
meant on this but he's made some public statements where he's revised his opinion since writing that paper and that he's much more friendly to the to the arguments of georgeism now than when he first wrote that paper so I'd like I'd like to pin him down and see exactly what he meant by
that because it was just a passing comment um but as regards um kaplan's critique kaplan's critique only applies to a 100 lvt where you fully capture all of the land value tax and the most extreme
georgius I know are only advocating for like an 85 land value tax right that would still leave and Kaplan doesn't account at all for the negative effects of speculation he's making a speculation as good actually argument and even if we Grant his argument he still needs to Grapple with all the absolutely empirically observed problems of land speculation and if we want to make some kind of
compromise between maybe speculation could have this good Discovery effect there's two really good answers to that first first just don't do 100 lvt which we probably can't practically do anyway
because of natural limitations just empirically you know in the signal it's like you don't want to you don't want to do 115 land value tax that drives people off the land so we want to make sure that we like have a high land value tax but make sure not to go over and so that would leave
a sliver of land rent that would still presumably incentivize this sort of thing there's no argument for why you know a hundred percent of the land rent is necessary to incentivize the good things that Kaplan is talking about the second argument is when he talks about oil um well we have the empirical evidence from the Norwegian massively successful petroleum model that shows um in the
case of Natural Resources how you should um deal with this and what Norway does is that they have a massive massively huge Severance tax on oil extraction and according to kaplan's argument
this should massively destroy the incentive for companies to go out there and discover the oil and um empirically it doesn't now what Norway does is that they figured out okay so the oil companies their argument is that we need the oil rents right we need these oil rents or we will not
be incentivized for the massive Capital cost of offshore oil drilling well Norway's like well if you just need to cover the cost of offshore oil drill drilling we'll subsidize that we'll just pay you we'll just pay you to discover the oil but when you find the oil that oil belongs to
the Norwegian people now you may keep some of the rents but most of it goes to Norwegian people but hey it all your r d is free all your Discovery is free if the problem is Discovery we just subsidize
Discovery and then the oil companies are like okay that sounds like a great deal we don't have to because without that what the oil companies do is that they're like okay we're taking all these risks so I'm gonna sit on all these oil wells like people sitting on domain names because I might use them later and the price might go up later but now because there's a huge Severance tax you're forced
to drill now and you're actually your actual costs of Discovery and r d and all those Capital costs are just taken care of but isn't there a flip side to that where I mean one of the economic benefits of speculation um obviously there's drawbacks but one of the benefits is that it um it gets rid of the volatility in prices where our Speculator will buy when it's cheap and sell
when the price is high and in doing so they're kind of making the asset less volatile over time and if if you're basically going to tell people who have oil on their land like we're going to
keep taxing you if you don't take it out you're going to get you're going to keep getting taxed you're encouraging this massive glut of a finite resource to be produced immediately which is bad if you think we might need that Reserve in the ground 20 years from now or 30 years
from now uh you know when World reserves were laying running low necessarily you know and so the problem is that speculation in the sense you're talking about of like encouraging people to do Arbitrage is good for Capital because we can make more Capital but we can't make
more land we can't make more uh non-renewable natural resources and the issue empirical and I just think the evidence just doesn't support that empirically because if anything land speculation
has causes land values to just constantly increase not to find some natural part especially with how easy it is to finance two-thirds of bank loans just Chase real estate up and that's just like if you just look at the history of the prices of you know of residential real estate in America it's it's it's it's like it's not the cyclical graph where it like keeps going back down it keeps
going back down but it keeps going up and up and up just on a straight line along with productivity and it underlines an undergirds major issue um everything that's driving our housing crisis which then undergirds so much of inequality and pollution and climate change issues and so with
regards to speculations like even if I just bite that bullet it's like okay speculation is good actually I don't think anyone's made the case that speculators need to capture 100 of the rants to be
properly incentivized to do anything good that comes out of speculation I think it's some small reasonable percentage you know five to ten percent of the rents maybe 15 if I'm feeling generous um but I don't think anyone's empirically made the case that it should be 100 which is more or less the status quo I mean with regards to that pattern of the fact that the values tend to keep going up
implies that there's nothing cyclical that the speculators are dampening well there are Cycles to be sure but it's not like it's something that resets to zero yeah but that's also true of like the stock market right over over time that goes up but speculators are still have like an economic role to play in the stock market of um making sure prices are I mean the difference is that people
are now paying an ever increasing portion of their incomes to the land sector and that didn't used to be the case and if it keeps going it's going to be I mean you have people who are now paying 50 of their income just for rent and that's not sustainable in the long term you're going to have the cycle you have there is Revolution you know no I'm serious like what happens is like you look
through history you either have land reform or you have Revolution and you know it's it's either like either you have a never-ending cycle of um of of transfers of income from the unlanded to the landed and eventually the the unlanded will not put up with that you know there was a real chance in the 19th century at the end of the 19th century of America going full-on socialist or communist
and the only thing that saved us well and George's argument was like it's either georgism or communism and if you want to save capitalism and not go to totalitarian we need georgiaism and then
what George failed to anticipate was of course the automobile and the automobile kicked the can down another generation another couple Generations right and it came at the cost of sprawl and um that made everyone feel like we had solved the issue but basically we just and the cost of sprawl
are enormous in terms of pollution and poor land use um just look at Houston right now right but um now we've come at the end of that Frontier and now we're at the same question it's like you see this resurge and interest in leftism in America and that's not a coincidence right because the rent is too damn high and poor people and poor people and young people feel really really shoved
out of the promise and social contract that was given to their parents and they're jealous of it and they're wondering where it went yeah yeah actually you just mentioned that a lot of bank loans are given basically so you can like get a mortgage and get a house it's like towards land
um there is an interesting question on Twitter um that I I thought was actually pretty interesting about this uh I can't find the name of the person who asked it um so sorry I can't give you credit
but they basically asked uh if that's the case and if most bank loans are going towards you know helping you buy land that's like artificially more expensive but now you implement the land value tax and all these property values crash oh yeah but when we see just a and then all then all
these mortgages are you know obviously they can't pay them back right are we going to destroy the banking sector right exactly because we'll have like a great Great Depression well I mean if you
okay so like that this is this is kind of like I mean I'm not I'm not trying to compare landlords to slave owners or something but it's like it's like the South had an entire Economy based off of slavery this thing that like we now agree was bad right and it's like we shouldn't have kept slavery because the the South like it really disrupted the Southern economy when we got rid of slavery but
it was still the right thing to do and so I mean there is no magic button I could push as much as I might like to do so that will give us 100 land value tax everywhere in America tomorrow so I think think in the actual path towards a George's future is going to have to be incremental there'll be enough time to unwind all those Investments and get to a more sane banking sector um so I
mean like if we were to go overnight yeah I think there would be some shocks in the banking sector and I can't predict what those would be but I also don't think that's a risk that's actually going to happen because like we just we just cannot make a radical change like that on all levels overnight um okay so let's get back to some of these um theoretical questions uh one I had was I I guess I
don't fully understand the theoretical reason for thinking that you can collect arbitrarily large rents um why doesn't the same economic principle of competition I get that there's not infinite
landowners but there are multiple landowners in any region right so if uh for the same reason the profit is completed away in any other Enterprise you know if one landowner is extracting like fifty dollars a profit a month and another landowner is extracting you know like whatever right like
a similar amount uh fifty dollars one of them and they're both competing for the same tenant one of them will decrease their rent so that the tenant will come to them and the other one will be the same and the bidding process continues until all the profits are you know bidded away right so this is Ricardo's law rent right and it's and there's there's a there's a section on in the book with a
bunch of illustrations you can show and so the issue is that um we can't make more land right and so you might be like well there's plenty of land in Nevada but the point is there's only so much land in Manhattan but but the people who have landed Manhattan why aren't they competing against themselves or each other right well what they do is because the nature of the scarcity of there's
only so many locations in Manhattan and there's so many people who want to live there right and so all the people who want to live there have to outbid each other and so basically so like let
me give a simple agricultural exam model and then I will explain how the agriculture model translates to a residential model basically when you are paying to live in an urban area or any even a suburban area like here in Austin where you're actually paying for is the right to have
proximity to realize the productive capacity of that location I.E uh like I want to live in Austin because I can have access to a good job you know what I mean or whatever's cool about Austin a good school those amenities and um the problem is you have to pay for those and you have
to outbid other people who are willing to pay for those and Ricardo's Rob rent says that the value of the amenities and the productivity of an area as it goes up that gets soaked into the land
prices and the mechanism by that is that it's like okay say I want to buy a watermelon right there's only one watermelon we'll have to outbid that guy but the watermelon Growers can be like oh a lot of people want watermelon so next season there's going to be more watermelons because he's going to produce more watermelons but because there's so many so many locations in Austin
you know within the natural limits of our transportation Network basically it forces the competition on the side of the people who are uh of essentially the tenants right it forces us into one-sided competition with each other and that um and so there's an example of like a simple
agricultural example is like okay say there is a common field that anyone can work on and you can make a hundred units of wealth if you work on it right so um and there's another field that you can
also earn 100 units of wealth in but it's owned by a landowner why would you why would you go and work on the landowners when you're gonna have to pay them rent you wouldn't pay him any rent at all you would work on the field that's free but if the landowner buys that field and now your best opportunity is a field that's only worth tenu a free field that will produce 10 units of wealth
now he can charge you 90 units of wealth because you have no opportunity to go anywhere else and so basically as more land gets bought and um subject to private ownership in an area landowners over time get to increase the rent not to a maximum level there are limits to it and the limits is What's called the margin of production which is basically you can charge up to and this is
where the competition comes in the best basic like free alternative you know and and that's usually you can realize that geographically like out on the margins of Austin there's marginal land that
basically is is available for quite cheap you know and it might be quite far away and it used to be not so quite far away 20 30 years ago you know and so as that margin slowly gets privatized um landowners can charge up to that margin the other limit is subsistence they can't charge
more than you're actually able to pay but um the basic example is that so this is why this is how Frontier expansion works when the entire continent is free the first settler comes in strikes a
pick in the ground keeps all of their wealth but as more and more of it gets consolidated then landowners are able to charge proportionately more until they're charging essentially up to subsistence yeah does that explain property values in San Francisco I mean they're obviously very
high but I don't feel like they're that High where the software Engineers were working at Google are living at subsistence levels neither are they at like the margin of production where it's like this is what it would cost to live out in the middle of California and then commute with like three hours to work or something right well so it has to do with two things so first of all it's over
the long run and so it's like when you've had a lot of productivity booms in San Francisco right and so it takes some time for that to be priced in you know and it can be overwhile but given a long enough time period it'll eventually get there and then when we're talking about stuff it's also based off of the average productivity the average resident of San Francisco is maybe not as
productive as a high like basically doesn't earn as high in income necessarily as a high income productive worker and so this means that if you are a higher than productive higher than average
productivity person it's worth it to live in the expensive town because you're being paid more than the average productivity that's captured in rent right but if you're a low if you're lower than average productivity you flee High productive areas you go to more marginal
areas because those are the only places you can basically afford to make a living okay that's very interesting that's actually one of the questions I was really curious about so I'm glad to hear an answer on that another one is so yeah the idea is you know Capital
land is soaking up the profits that capitalists and laborers are entitled to um in the form of rent but when I look at the wealthiest people in America uh they're yeah there's people who own a
lot of land but they bought that land after they became wealthy from doing things that were capital or labor depending on how you define starting a company like sure Bill Gates owns a lot of land in Montana or whatever but like the reason he has all that wealth to begin with is because he started a company you know that's like basically labor or Capital however you define it right
um so how do you explain the fact that all the wealthy people are are you know capitalist or laborers well so the thing is one of the big misapprehensions people have is that when they think of billionaires they think of people like Bill Gates and um and Elon Musk and uh Jeff Bezos those are actually the minority billionaires most billionaires are hedge funds are people involved
in hedge funds yeah you know bankers and what are Bankers most what are two-thirds of banks it's real estate you know and so um but more to your point like if it is like point that directly into it it's like I don't necessarily have a problem with the billionaire existing you know
what I mean if someone like genuinely like brings something new into the world and like you know I don't necessarily buy the narrative that like billionaires are solely responsible everything
that good that comes out of their company you know I think they they like to present that image um but I don't necessarily have a problem with a billionaire existing I have a problem with
you know Working Class People not being able to feed their families you know and so like the the greater issue is the fact that the rent is too high rather than that Jeff Bezos is obscenely Rich no no I I guess my point wasn't that um like I'm not complaining that your solution
would not fix the fact that billionaires exist I also like that there's billionaires what I'm uh pointing out is it's weird that if your theory of um like where all the circles in our society is getting you know given away is that it's going to landowners and yet the most wealthiest people in our society are not landowners doesn't that kind of contradictory there are a lot of the wealthy
people in our society are landowners right and it's just like it's not the so the so the thing is is that basically making wealth off land is a way to make wealth without being productive right and so my point is is that so like you said in your interview with Glazer that it's like okay the Googleplex like the value of that real estate is probably not you know compare that to like the
market cap of Google but now compare pair the value of all the real estate in San Francisco to the market caps to some of those companies in there you know um look at the people who are charging rent to people who work for Google that's where the money's actually going is that
and and you know investors talk about this is that it's like I have to like if you earn a hundred thousand dollars in San Francisco as a family of four you are below the poverty line right you
know the money is going to basically upper middle class Americans and upper class Americans who own tons of residential land and are basically ex and also the old and the wealthy especially are essentially this entire class of kind of hidden landed gentry that are extracting wealth from the most productive people in America and young people especially and um and it creates really
weird patterns essentially especially with like service workers who can't afford to live in the cities where their work is demanded yeah okay so what do you think of this take this might be
economically efficient in fact I think it probably is economically efficient but the effect of a land value tax would be to shift um to basically shift our sort of societal subsidy away from upper middle class people who own happen to own land in urban areas and shift that to the super
wealthy and also super productive people who like control the half an acre that Google owns and like Mountain View um so it's kind of like a subsidy not subsidy but it's easing the burden on super productive companies like Google and that they can make even cooler products in the future um but but it is in some in some sense it's a little regressive you're going from an upper middle class
to like you know Tech billionaire right um but but it's still be economically efficient to do that well no I don't quite agree with that because it's like although there are a lot of upper middle class Americans who own a lot of the land wealth it's not the case that they own where
the majority of the land wealth is the majority of the land wealth in urban areas is actually in commercial real estate is the central business district if you and I work in Mass appraisal so
um I've seen this myself in the models we build is that if you look at the transactions in cities and then you plot where the land value is and like a graph it looks like this and this is the city center and that's not a residential district so the residential districts are sucking up a lot of land value and the rent is too damn high but the central business district and this
even holds even in the age of Zoom it's taken a tumble but it's starting from a very high level um that Central residential I'm not residential but commercial real estate is super valuable
like orders like an order of magnitude more valuable than a lot of the other stuff and um a lot of it is very poorly used um in Houston especially it's incredibly poorly used we have all these Central parking lots downtown that is incredibly valuable real estate and just
a couple of speculators are just sitting on it doing nothing with it and that could be housing that could be offices that could be amenities that could be a million sorts of things and so when you're talking about a land value tax those are the people you're going to get hit first and those are people who are neither you know nice you know nice friendly upper middle class Americans
nor are they hard-working industrialists you know making cool stuff they're people who are doing literally nothing now um if you do a full land value tax yeah it's going to shift you know the
burden in society somewhat but I feel that most analyzes of property taxes and land value taxes that conclude that they are regressive um I think that's mostly done on the basis of our current assessments and I feel like our assessments could be massively approved improved and that if we
improve the assessments we can show where most of our land values actually concentrated and then we one of the things uh I think Joseph studwell was go out there what are the things he talks about is so he's trying to explain why some um Asian economies grew gangbusters in the last Saturday 20th century and one of the things he points to is that these economies implemented Land Reform
um where basically I guess they were distributed land away from I guess the um existing aristocracy and gentry towards you know the people who are like working the land and while I was reading the book at the time I was kind of confused because you know we've like there's something
called like the kosian um the coaching rate like I forget the name of the argument basically the idea is regardless of who initially starts off with a resource the incentive of that person will be to
um for to suffer for him to like give that researcher lend out that resource to be worked by the person who can make most productive use of it and said was pointing out that these like small uh far you know like these peasant Farmers basically they will pay attention to detail of crop rotation and making the maximum use of this land to get like the maximum produce whereas if
you're like a big landowner you you will just say try to do something mechanized that's not nearly as effective and in a poor country what you have is a ton of laborer so you want something that's
like labor intensive anyways um backing up a bit I was confused while I was reading the book because I was like what wouldn't it wouldn't the wouldn't what you would expect to happen in the market that basically the peasants get a loan from the bank to work uh to I guess rent out
that land and then they're able to make that land work more productively than the original landowner therefore they're able to like make a profit um and everybody benefits basically why isn't there costing solution to that because any Improvement that the peasants make to the land
will be a signal to the landowner to increase the rent because of Ricardo's law of rent yep okay and that's exactly what happened in Ireland when um and George talks about this in progress
and poverty is that a lot of people were like why was there feminine in Ireland it's because the Irish are you know bad people you know why didn't they they're lazy why didn't they improve It's like because if you improve the land all that happens is you still are forced into one side of competition and the rent goes out yep okay that makes sense um is the goal that the taxes you
would collect with the land value tax are they meant to replace existing taxes or are they meant to give us more services like Ubi because I they probably can't do both right like you either had to choose getting rid of existing taxes or well it depends how much Ubi you want you know what I mean it's like you can you know it's a sliding skill it's like how many taxes do you want to replace
versus how much like I mean you can have a budget there it's like if you can raise you know a show in the book the exact figures of how much I think a land value tax could raise and I forget the exact figures but like you can pull up a graph and overlay it here of you know whether you're talking about the federal level or federal local and state you know there's 44 trillion dollars of land value
in America and I believe we can raise about 4 trillion in land rents annually with 100 land value tax and we probably do less than that in practice but um even on the low end and I forget what figure I quote for the low end like you could fully pay for any one of Social Security um Medicare plus Medicaid together so the second one is health care or defense entirely with the lowest
estimate of what I think land rents could States and then I think you can actually raise more than that um because I think and I give an argument in the book for why I think it's closer to like 4
trillion and that could pay for all three and have room over for a little bit of extra and so I mean it's up to you like that's a policy decision of whether you want to spend it on spending whether you want to spend it on offsetting taxes or whether you want to spend it on Ubi
I think the the best political solution because like if I bite the bullet that there might be some regressivity issues left over you want to do what's called a Ubi or what you know in Georgia's time was called a Citizens dividend right you know this will smooth over any remaining regressivity issues and then um but I very much am in favor of getting rid of some of these worse taxes you know
um not just because they have dead weight loss and land value tax doesn't but also because um there's this tantalizing Theory called at core all taxes come out of rent which suggests that if
you reduce other taxes it increases land values which means that if it's true in the strongest sense it means the single tax right land value tax replace all taxes yeah yeah would always work um and I'm not sure if I buy that I want to see some empirical evidence
but I think at least some weak form of it holds so that when you offset other worse taxes not only do you get rid of the deadweight loss from those um but you also wind up raising at least a little bit more in land value tax revenue yes yeah um I mean as a Libertarian or I guess somebody who has like libertarian Tendencies my concern would basically be like this obviously seems better than our current regime of taxing things that
are good basically capital and income but my concern is the way I'm guessing something like this would be implemented is it would be added on top of rather than repealing those taxes and then um so yeah I guess like we would want to get this one a lot yeah no and so I I have you know I've been a Libertarian my past and I have a soft spot for libertarianism I used to be a Ron Paul guy
and went back in the day for for a hot minute um and so I think the thing to assuage your concerns there is what is land value tax it's property tax without a tax on buildings yeah so the natural path to actually getting land value tax comes from reforming existing property tax regimes right by reducing an entire category of Taxation sure yeah yeah which is the tax on buildings and so that's
that's what I think is the most plausible way to get a land value tax like in Houston like in Texas here if we were to start by just capture the same like what I actually proposed for a first step is
not 100 land value tax federally I don't know even know how you get to there I think what you actually do is you start in places like Texas and like here legalize split Rate Property Tax thus retax buildings and land at separate rates set the rate on buildings to zero collect the
same dollar amount of taxes let's start there there's proposals to do this in various cities around the nation right now I think there's one in Virginia there's a proposal to do it in Detroit um I think there's some talk of it in Pennsylvania in some places and I'd like to see those
experiments run and and observe what happens there I think we should do it in Texas and that would be something that I think would be very friendly to the libertarian mindset because very clearly we're
no new Revenue right and we're exempting an entire category of Taxation most people are going to see um a savings on their tax bill and the people who own those parking lots downtown in Houston are going to be paying most of the bill yeah by the way what do you make of is there like a Georgia's critique of government itself in the sense that uh government is basically the original you know land uh squatter and it's basically
charging the rest of us rents or you know staying on rent that it's neither productively improving as much as at least it's like getting rents from us for like if you think about um you know even your landlord usually is not charging you 40 which is like what the income
tax rate is in America right and it's like almost you can like view the America as like the landlord of America well I mean it's like I mean I mean if you want to take the full like if you're asking is
George is some you know compatible with bull and Arco capitalist libertarianism probably not 100 um I think you know we can have a little government as a treat um but I I think you know I think it's not a coincidence that if you look throughout America's founding I don't think it's a coincidence that originally like people talk about it's like oh it used to be only white men who
could vote white land owning men could vote like a government by the landowners for the landowners of the landowners right and um that's very much kind of the traditional English system of government um you know just neofutalism right and so I think georgiaism certainly has a critique of that that it's like government is often instituted to protect the interests of landowners but what's interesting is that if you look throughout history
you know I'm very much a fan of democracy you know rule of the people and it's like I think we you know I I kind of sympathize with um with Milton Friedman here where he's like you know he might want to have less government than we have now but he doesn't believe we can have no government and then he goes on to endorse you know the land value taxes the least worst tax because
um income tax especially I feel like is a gateway drug to the surveillance State you know um one of the advantages of land value taxes you don't even care necessarily who owns the land you're just like hey 4732 Apple Street make sure the check shows up in the mail I don't care
how many shell companies in the Bahamas you've like obscured your identity with just put the check in the mail Mr address you know whereas the income tax needs to do this full anal probe
on everyone in the country and then audits the poor at a higher rate than the rich and it's it's it's just this horrible burden we have and then it'll allow it gives the government this kind of Presumed right to know what you're doing about everything you're doing this massive invasion of privacy yeah I know that that's that's fascinating speaking of shell companies in the Bahamas by the
way yes uh uh there's a interesting speculation about what would happen if crypto really managed to divorce and private I guess make private your log of transactions or whatever and then um I guess the idea is the only legible thing left to the government is land right so it would like force the government to Institute a land value tax because like you can't tax income or capital gains
anymore that's all on like the blockchain and like right it's cured in some way and yeah yeah so that I mean it's like crypto the gateway drug to georgiaism because it'll just move uh income and
capital to the other room yeah it's just so weird you know I've gone on record as being a pretty big crypto skeptic you know what I mean but I have noticed a lot of crypto people get into Georgia some I mean not the least of which is vitalik buter and you endorse my book um you know who's a
huge fan of georgiaism it's like I mean I'll I'll take fans from anywhere even even from people I've had sparring contests with you know I'm generally pretty skeptical that crypto can fulfill all its promises I am excited by those promises and if they can prove me wrong that would be great um and I think there's some logic to what you're saying is that if we literally couldn't track
transactions then I mean I guess we don't have much to tax except land I don't think that'll actually come to pass just based off of recent events um you know um and that's basically my
position on it but I have noticed a lot of um crypto people just they're some of the easiest people to convince about georgeism which was completely surprising to me um but I've learned a lot by talking to them it's it's very interesting and weird yeah yeah so there are some
other interesting questions from Twitter uh Ramon Dario Iglesias asks how do you transition from a world today where many Americans have homes or at least are aspiring to have homes to a world where um I mean obviously it would be like a different regime they might still have homes but who knows like I I like their property will be just be like they thought of in a completely different way how
do you transition to that like what would that transition look like right for most Americans right so there's this issue called that I have to Grapple with which is called Gordon tolex
transitional gains trap right so if you think about taxi medallions in like New York City right you know it's like it's this artificially scarce asset that allows you to operate a taxi right and um the first generation that got their taxi medallions basically got in cheap and then
afterwards like made out like gangbusters but the second generation had to buy those taxi medallions at the fully priced in value and now when you come in you're like okay we're gonna abolish
taxi medallions if like say you were gonna do that you would screw over that entire second generation who bought in in good faith after the value of the acid had been fully priced in even if you admit that the system is now unfair removing that unfairness screws over the people
who played by the quote-unquote unfair rules you know so how do you grapple with that and I think it's something that Georgia need to Grapple with because we can't just imagine a future Utopia without accounting for being fair to people who play by the rules including people like myself like I'm a homeowner right um am I intending to screw over myself and everyone like me and so I
think this is where it's really important to do the math of knowing exactly Who's Gonna Be A Winner who's gonna be a loser who's gonna pay more he's going to pay less I think it's really Salient that a lot of the value of land is commercial downtown real estate and I think that um a revenue neutral property tax shift to land where we exempt the taxation of all buildings
but collect the same amount in property taxes as we're doing now but just from the land and then a modest citizens dividend is a really good first step and then over the years you can raise
the land value rate as you also decrease things like income tax and sales tax I think that's a transition that gets us there without really screwing anyone over and for any Edge case like a poor sympathetic Widow who has no income and but has a high value home you just make
it so she doesn't have to pay the land value tax until she dies or sells the estate yeah yeah yeah um and like I guess even in there the worst case scenario is the status quo where they don't have to play a land value taxes which is already the case now right right I mean nobody cares about the people who are being evicted and displaced by the status quo one like I guess snafu in terms of
like figuring out how to price the land is by the time that a land value detector has passed it'll have been like years after there's political talk of having a land value tax and that talk will in turn affect the prices of homes that are sold in that time absolutely
um and so then you'll look at the land selling value and be like oh wow this is this house on like the outskirts of San Francisco only sold for 200 000 um and does that mean that like the
unimproved land there is only worth a hundred thousand dollars um and so what would that just um wouldn't that really conflate the data when you actually go about implementing this of like what the actual unimproved land is worth right well so it's important to remember that land selling value is derived from Land rental value not the other way around so land selling values the net present
value of the future flow of income that can be generated from the property so the properties inherent productivity is kind of inherent to it and the selling price of it is based off of you
know the capitalization of that value minus the expectation of any taxes right right and so a 100 land value tax will theoretically reduce the selling price to zero but the land will still be as productive as it always was it's just that the flow of those rents are being redirected
right and so that's the thing is that and also in Mass appraisal one of the things you do is you de-capitalize the effect of um of the tax no but I'm saying how do you even figure out you don't know in the mind of the property owner or the property seller like what is a what do what do they think the probability is of attacks and that um since you don't know that it's like hard to
estimate what is the actual like capitalization about you know so are you concerned about like this the societal effects of the depreciation of land prices are you more concerned about
just the calculation issue the calculation issue so one here's the thing empirically um if the land value if the land value um basically if the land selling price has dropped to zero then you are fully capturing all of the land rents and if it's above zero you have
not captured all the all of the land rents oh okay so like maybe even in the first year you implement this it's like not you know maybe you'll only implemented like it you're you're like basically in the first few years you implement this you would like be trying to mess with the rate if it's like it's like I mean it's more complicated than this but if there's any vacant Lots in the
area and they're selling for anything yeah they're still land rent in that in in that property gotcha but so this is not something you would be able to figure out day one you would have to like
over a course of years of uh fudging the numbers property tax assessments right now you know we're doing Mass appraisal all the time right now and if you just keep it updated every year I mean you could do it every six months if you had the right technology which is something I'm pushing
for you know and so you can see the prices change in real time as transactions come in and you can use multiple regression and Geographic weighted regression to work out the difference between the improvements and the land prices and um if you had a if you had if you had a rental registry and knew what everyone was paying in rents you'd be able to keep even better track on what's going on with
that yeah this might be actually a good point to talk about uh your new startup this is actually something I don't know about either so yeah what what is the what is the idea what are you up to
right so my new startup is you know so so um I'm transitioning out of video games and into um Mass appraised Municipal property tax assessment Mass appraisal and so um my new startup it's called glan solutions for now we'll probably have a new name for it by the time that
um this podcast airs but the idea is that you know I think the best criticism to georgism is you know well how are you actually going to separate land value from improvement from building value right
you know how like we can't do a land value tax till we put a price on every parcel of land right so how are you going to do that and I thought that was the best most good faith you know criticism remained and it seemed like it's like well we gotta get good at that right and so
um I looked into it and I realized that there's a lot of research papers that have been posted in the last 15 years about how to practically do this and then I went and I started interviewing a bunch of assessors and I realized that the state of the practice is pretty far behind only 15 of um most um property tax assessment offices even use uh even use multiple regression a lot of them
are using the cost approach which is basically where you uh it's what Ed Glazer talked about in your interview with him where you estimate the cost of building and you applied depreciation and you subtract it from The observed selling price to get you know the assumed land price and that works okay but a lot of assessment is not only using essentially only that method but also
um uh another issue is that just um a lot of those cost tables are very out of date um assessments themselves are not always done every year in some it's not unheard of to find places that haven't
done reassessments in you know more than 10 years um most places it's like you know one to five um but even that I think we should be doing everything we can to get all the latest Mass appraisal technology and research and so we've hired some people who have like I basically one of
our first hires was one of the guys who was just first author on all these papers we were reading and um we're just here to update um Municipal property tax assessors on the latest methods um
so that we can accurately know what all the land in America is worth you know and then this will solve a lot of regressivity issues too because we know that a lot of um landlords are actually under assessed relative to homeowners believe it or not because um because they're more likely to
protest their property taxes and minorities tend to be over assessed um and um poor people tend to be over assessed that's why property taxes are sometimes called regressive is the assessments um need to be fixed I see um I I guess because if you have more property getting your rate changed from like one percent to one point uh point eight percent is like a worth thousands of dollars
rather than like a hundreds of dollars right and there's there's a lot of other issues too is this is like there's more there's more value in like the more there's all sorts of reasons that you can have these things you know often from no Mal intent whatsoever right you know but just like
just out of date assessments can can also cause all sorts of issues yeah yeah I guess one worry that people might have is listen income taxing is like um you know obviously very inefficient but is
there I think you in the book you're talking about the the percentage of income uh that uh of taxed income that is literally to spend on figuring out how much income tax to collect and how whether people are paid or whatever so I get that but at least it has this nice property of there is like it feels like there's this hard figure that ought to existed like I made this much income this year
whereas figuring out how much land is worth you know just like I I get that it's basically like yeah if you you know figure out like the rent value that's like the value of the land but it just feels much more murky and therefore it might potentially enable corruption in the level of like um uh you know like whoever's doing the assessment or however that method of assessment is happening
um they'll just like use these fancy algorithms to nudge it one way or another that benefits big corporations or you know whoever they want so that's a really that's a good argument but the
reply to that is that we did need to move towards more transparency right because land value follows certain rules that should logically make sense right we know some things that drive locational value first of all we should move towards open source models right which is something that we
want to do and open data whenever possible a lot of these cities will post open data portals like my mission in life is to be able to like Advance the state of the art of this technology and make it so anyone can kind of check on stuff you should be able to in any city in America some cities have this but not enough you should be able to look up your property tax assessment on a map and compare
it to your neighbor and what you shouldn't see is a Christmas tree effect where your neighborhood looks like Christmas tree lights of like green and red of people whose property tax assessments like massively differ that's the case in a lot of cities like if the value like if the land values have been correctly assessed in this neighborhood most of these Parcels should be about the same
like probably the cul-de-sac's worth a little bit more you know but like your prop your neighbor's land shouldn't be worth 20 more than yours and if it is it'll stick out on a map like a sore thumb and if the data and the algorithms are all open source and open data you should be able to check anyone's math and you should be able to use that to then protest your taxes if they seem off and
um that's kind of the argument for land value taxes is that I mean you can hide all kinds of stuff in income taxes and capital taxes I mean that's what the Caymans and the Bahamas are for
um but if you want to I mean it's very easy to find people who are getting a break on their property taxes like all this corruption I'm not saying it won't happen but it'll be very easy to see because you'll be able to see just this mansion that suddenly has this discontinuity
on the land value map it's like well someone gave this person a break and um maybe maybe we should maybe we should write an article in the local newspaper about this yeah it'll be way better than how income taxes work none of it's like open to potentially even the government itself right
um but okay so another concern is uh that's fine for things that are like above ground and legible but what about um you find out through like yeah I don't know like some sort of surveying or whatever
that this land has a lot of oil under it and then you buy it but obviously you're not gonna tell the government hey I just found like however many oh so this is your search theoretic critique and no no not even that it's literally like you won't declare it um so in a sense you're still being a Speculator but in fact you're incentivized even more to be Speculator in the sense that as soon
as you declare that there's oil underneath this ground then the government is going to like start taxing you for it so you just want to like hang on to that right for uh you know you forever as long as like you can like you know right so we need to talk about mineral policy in
America because especially in the state of Texas like mineral rights and land rights are totally different right usually when you buy land in in Texas in in America like you actually don't have
the mineral rights oh really okay like those are those are very several like a lot of people are very interested in in getting those mineral rights and so usually like if you're not paying attention generally speaking you're not getting the mineral rights when you're buying land and if you are you're paying more for them and um so I mean I think a good example of this is probably like
um you know you want to create some I think with the case of minerals you can't just have a full um I think as kind of an acknowledgment of kaplan's like search theoretic thing like you have something more like the Norwegian model where you need to basically give some incentive to someone to produce or to not withhold that resource right um a good example would be the
treasure um the treasure law in England because England has all this ancient like Anglo-Saxon treasure and Roman treasure and so before what they would have someone would find it and like
go like hide it or melt it down because they didn't want the government to tax them and so they pass this treasure law which is not perfect but it's okay but they're like we this is our heritage right yeah we want that in a museum so here's the deal if you find treasure
you're gonna get paid and the landowner's gonna get paid so there's an incentive for people to go out with metal detectors and there's an incentive for a landowner to let people do that
and then the government's going to put it in a museum yeah you know you're gonna you're gonna be rewarded for the discovery of that thing but that thing is itself its value is going to be captured because it's the heritage of the British people the opposite of this is
the Spanish government whenever someone finds a ship full of a galleon full of gold doubloons on the bottom of the ocean if you go and you invest the capital bring that up to the surface you know and you're in Spanish Waters or the Spanish government finds you or you like take it not to Spain a Spanish admiralty court is going to try to get its claws on that gold in the
view of the Spanish government like basically the incentives they're producing is to make sure that nobody ever ever recovers a ship yeah and they do it just ends up in some sort of like uh you
know Foundry in uh in another country right we're right right the Spanish government's approach the sunken treasure basically incentivizes people never to go after yeah yeah yeah um I guess a general critique of Georgia gym in general or implementing it would be listen and
the reason America is wealthy in other developed countries are wealthy is because they are very strong in terms of honoring contracts especially honoring people with property rights um and you know if we get to a scenario where the government is saying okay but in this like case we're going to I mean I I guess it depends how you think about the contract of property but in some sense it's
a contractor of the government that's like hey I have this property and once you don't honor that like the the people will get too concerned to want to invest in America or in American assets and that will just have like all kinds of academic repercussions where people are like oh I guess like my property is not mine maybe like other things I thought I was investing in like my stocks
are not mine so why should I buy these stocks this is a this is a this is a fully General argument against change and it also is like I I don't agree with all the assumptions like you know if
America doesn't honor its agreements what are they worth well we've violated all kinds of treaties um not like with the Indians especially but also like all sorts of international treaties um and you know I mean for like um we we've made all kinds of times where we've like changed
rules on things and changed asset classes you know we had an entire period where we just banned all sales of alcohol and then we had a time where we completely undid that and brought it all back you know there's been times where we've like made major major changes to the rules um of what kind of asset classes we have I mean this this is kind of like brought up with like you know any kind of like labor protections and things is
you know is is it's like well we have these rules and therefore we can never change them and I think um I think the best answer to this is that you need to acknowledge Gordon tallick's transitional gain strap and if there's someone who's going to be you know put out then you make
sure that there's some compensation in the system to smooth over the transition but the rule of law doesn't imply that any change to the status quo is going to undermine trust in it and I
don't think that um and I think it's important to remember that George is not interested in seizing land that's a very big distinction from the maoist position which is murder the landlords or or the more like modest Asian reforms Asian reforms it's like we're just gonna so first of all when you're talking about how Asia works like they took the land away from the big landowners
gave it to the peasants and it made those countries way more productive right and like I don't think anyone would like look at those Asian countries now and compare them to where they
were and be like well the rule of law is weaker now than it used to be yeah but George isn't even advocating for that he's just advocating for raising taxes on land and exempting all of the building taxes so I don't think it amounts the seizure of land and I think for those reasons
but even if it did amount to that I think you know sometimes it's worth buying some bullets yeah yeah um okay let's move on to the dessert let's move on to like some some more fun interpretations and um applications of georgiaism sure so um one I think burn Hobart had this blog post on the diff I don't know if you follow anyways but he's like a great finance writer uh and he was talking about how
if you have a Facebook account or a YouTube channel with like millions of subscribers you're in some sense like you were like very early to YouTube or Facebook and now you have this land and Facebook punishes you if you're have a bank account but are not posting frequently or
not getting enough engagement It'll like in the future you'll have a harder time reaching people and you know bernhoboth had this like George George's interpretation of that where it's
like you have this productive um asset of you know people's attention like this uh this initial sort of profile that you're available to build in the early days of Facebook if you're not like posting on it we're not gonna give you the advantage of having millions of buyers um but anyway so there's all kinds of like ways you can apply Georgia them too you can think of like the App Store as this
sort of like uh rent seeking from Apple where they charge you a 30 tithe um um and yeah there's all kinds of other places in the digital world where you can think of this like what is your sort of
like how do you think about tourism in the context of those kinds of things right so I've actually written a a policy paper on how to apply the theories of land value tax to Virtual Worlds um and and so the question is virtual real estate is when does something actually operate like a
land like asset and then to what extent does Georgia's principles apply right and it that doesn't necessarily mean just do lvt it means that you know so first of all let me Define what I mean
by a land-like asset a landlike asset has three properties it is scarce and Supply it is necessary for production and it obtains locational value by virtue of its position in some kind of graph right um and so as an example I create like a fictional MMO and I give the example of a
unicorn a permit and a plot of land the Unicorn is scarce but it's not necessary for production any value you could get from the Unicorn you could get some other way it's just really nice to have and there's only like 10 000 on the server a permit is like a permit to brew potions you're part of the witch's Guild you can brew potions so like my Apprentice witch she has to pay rent to me
to gain access to my permit to be allowed to brew potions but all permits are fungible so there's no locational value and then a plot of land right like we've talked about where you can also and so this becomes a real speculative asset domain names are probably the closest thing to this and vitalik buterin has actually written a post about how to apply George's Theory to domain names and
also all the wrinkles that are involved because we did this on your blog right as a guest post um well it progress in poverty.substock.com is not technically my blog it's a group blog where a lot
of us Georgia's post um but so yeah so so my blog in the sense of our blog sure and he cross-posted it he posted it also on his own blog and so but there's other considerations to remember when we go away from literal land is like so for instance in domain names you know especially
with the ethereum name system you have issues of identity right that don't apply like if someone buys this house from you um probably people aren't gonna be like maybe the next person who lives here is going to get some of your mail for like a week or two but like No One's Gonna think that they're you necessarily but if I buy vitilic.e yeah like there might be some confusion like I might be able
to get some transactions that were meant for him and so there's these other considerations to like and he deals with all of that and so I wrote a policy paper about how to apply lvt in Virtual Worlds and stuff um that was more in these more kind of literal simulacra of the real world in these like Virtual Worlds than kind of the things you're talking about of like YouTube accounts and
and charts um in in like um and basically uh app stores and stuff which are user generated content platforms but um I haven't fully analyzed user generated content platforms but I do think chart positions are a sort of virtual land you know and you do if essentially they do essentially
charge rent for that um not just to the platform in their flat 30 fee across everything but also um in the kind of advertising red Queens race you have to do to stay on those charts you essentially
have to buy that position and then keep it you know and so basically like the fir there's this huge first mover advantage that turns into rent seeking and um I haven't fully analyzed exactly how you applied George's Theory there but I do think there's something to it I also think there's something too extremely long of copyrights and patents uh it's a little undercooked at the moment
I don't have a fully fledged theory of it but um certainly cases like other Monopoly assets like um orbital real estate um radio spectrum any kind of like being able to capture the right of the possibility space like uh especially like you know how like John Carmack had a lot of algorithms like some of which were patented and he wasn't even allowed to use them in his own games because
someone else said speculative patented like oh really that sucks yeah you know it was like the um like CarMax reverse was like this particular algorithm that they weren't allowed to use in
like Quake 3 or something because someone had speculatively patented it and there's like no other way to do that thing so Quake three this one particular subroutine had to be like 25 slower because they because someone had patented like essentially like like imagine if you could
like patent that Pythagorean theorem you know yeah yeah so like that kind of nonsense and you can just rent seek off that for 20 years Jesus oh that's funny anyway I guess we're gonna move on to another juicy um implication that you were just talking about which is space there is like this idea I mean eventually hopefully Humanity Will Conquer um space and like the rest of the Galaxy
so and this is where like georgeism will be really interesting and applicable because we obviously want to we want to encourage and incentivize people to like go to new worlds and make use of
like stars and planets but we obviously don't want it to be the case that if you got to Mars a year earlier like if musk gets to Mars a year before Bezos he has you know like forever rights to right everything on Mars and all the resources right so yeah George is up in space would be I think
um I think it's like actually a place uh that makes a lot of sense but I mean have you put much thought into like uh you know Interstellar georgism Interstellar georgism is actually current international law through the outer space treaty the outer space treaty currently said and I think the outer space treaty will last for about five minutes once the interplanetary Space Race gets
gets going in Earnest but the the current law the law of the international order of the outer space treaty basically says that nobody's allowed to claim Interstellar bodies like the moon or Mars
for China or the us like we have a flag there but it's not American territory yeah right it's it's basically international waters so to speak right and once the actual possibility of having permanent bases shows up then we will have to Hash that out but so basically I think we should take
that and run with it and basically be if you are going to you know take possession of interstellar bodies you know it will become a question of who exactly becomes the government in that scenario is it like some International Coalition is it the U.N I'm not a huge fan of the UN you know um or is it just like it turns out to be like whatever Sovereign government gets there first
just gets to claim it but can you have georgism within those confines I think we certainly should yeah you know because otherwise what you're going to get is that the for you're going to
get under investment you know you're going to get so much under investment because the first people to get there are going to basically charge rent to all the people who come next yeah yeah um and then I just remembered the other question I wanted to ask about copyright
which is that's a really interesting and complicated area because it's hard to think of what is the intrinsic sort of value of the land of the idea and what is the Improvement you've made right and so like what are you going to call like the Improvement on like the song You discovered
maybe like the melody is like the melody would have existed anyways but like specific lyrics to came up with I don't know well copyright it's not clear to me exactly what the implication of
georgism is it's like georgeism if you zoom out it's not exactly just about land right that's where people a lot of people like kind of like why are you so obsessed about land it's mostly about enclosure of enclosure of natural monopolies right and and and and and and and create and economies just based entirely around brand seeking and it's clear we have this with like Eternal copyright if
we had Eternal if we had the copyright laws we had today when Disney was first getting started like the brothers Grim would still be under copyright and they would not have been able to get off the ground with a lot of their early properties and then they pulled the ladder up right behind them it's clear they're rent seeking in a lot of ways and refusing to give back to the
commons from which they first enriched themselves and the question then becomes like you know can you easily parse copyright as land I mean it's a very undercooked Theory but there's something
there of like probably what it cashes out to is just copyright terms should be shorter you know like at some point when an idea has become part of the cultural Consciousness for like so long it should become part of just the background Collective Commons you know because all ideas
are essentially remixed and built on top of other ideas but we want to incentivize people to create new ideas in the first place it's not a perfect analogy to land but there is something there
about rent seeking that needs to be addressed yeah and it probably just cashes out to just reducing copyright terms yep yep uh let's talk about the political feasibility of this idea so um uh I mean I just means land value tax in general do you think it'll be something that
will get passed in a democracy I you know there's like you know a lot of people have homes or want to have homes but on the other hand if you like just redistribute if you don't have like I don't know many acres in the middle of San Francisco you would probably still come out net ahead uh but would you could you be able to explain that to people and obviously there's like tenants who
would definitely benefit from this anyways uh in general what is what is your thought and like how politically feasible this is now it or would be in the future I think it's more politically feasible than we think I think it just right now has a low salience and if more people start talking about it I think it's going to make a lot of sense especially if it's pitched as property tax reform
like right now in Texas you know you have uh people like Huffines who are trying to abolish property tax which will turn the state into California like that why huh why how come how will
why does he want to abolish property tax why would it turn it into California because California has some of the lowest property taxes in the nation yeah and Proposition 13 and it creates a a um entire um layer of landed gentry and really really expensive housing
like housing's already getting expensive in Austin and property taxes have an effect of lowering property prices property taxes are an imperfect land value tax and so basically I it will just reproduce the economic conditions that empirically exist in California yeah yeah you know
um there's like there's this like funny saying that the Texas Constitution is not a government document but either an anti-government document um but one of the I guess the positive byproducts of
your Georgia dust is since it makes taxing income so hard governments or Forest attacks uh property and hopefully eventually land and therefore phone to pick with the Texas Constitution because Houston had a had a single tax mayor in 1911 and had an active Georgia's land value tax and it would have still had it today if it wasn't for the state cons for for a state judge who basically
shut them down why what was the reason because there's a clause in the state constitution of Texas that says all property taxation has to be uniform and that's interpreted as uniform across both the buildings and the land you can't tax them at separate rates yeah wait so does that
mean that constitutionally you could just couldn't do it in a Texas Senate it's up to inter patient there's some people interpreted that it's like it what that that Clause was written to mean you
can't tax this guy at a higher rate than that guy you have to tax them based on the value of their property and then you could claim that it's still being uniform or just taxing land and we have all these exemptions and categorizations already this is just another one of those why you know we tax agricultural land at a different rate you know what I mean like if you put a bunch of cows on
a property Suddenly It's like it's magically less valuable yeah you know um so why can't we you know like Target just the land and so if you have the right judge maybe you could get away with that um but anyway to go go towards political feasibility I think it could be more feasible than we think especially pitch this property tax reform because people are like property taxes are too
high hey everyone let's exempt all your buildings I think you could build a coalition that's excited about that and especially if you do the math and show who like like what the change in your taxable rate is going to be I think you know you know just a revenue neutral property tax shift to land can be quite popular there's a lot of cities around the us right now where this this is being floated
you know organizations like strong towns and the center for property tax reform are working on a lot and Lincoln Land Institute are like talking to places about it Detroit is talking about it right now and they could desperately use it and I think it could pass you know and then in terms of I think Henry George's aliens is coming back like and especially in Norway like the ruling Center
party Coalition just passed a um you know they're very successful Resource Management policy with oil they also have one from the early 1900s in hydropower which was set up by Norwegian georgists
and so the ruling Center party Coalition just put one in for salmon farming aquaculture locations um a new Severance tax on that and they name checked Henry George when they implemented it in the speech and so I think if they are willing to you know stand up to the landowners in Oslo and
pass a land value tax that would be the next step I'm not sure if if they're brave enough to do that um but we're starting to see this kind of Bubble Up and so I think a revenue neutral property tax shift to land is is the politically popular way to do it um because it can be done on the local level without having to change a whole bunch of laws you know um it's a little complicated in Texas because that's stupid uh State constitutional
provision but in other states they don't have those there's other states that any municipality could do it right now if they want it um and I guess another part of this question then um or the dinosaurs well one of the things you talked about in the book is you know in some sense the value of your land is caused by the other people around you up other properties of like other amenities and
companies or whatever that are in so it's kind of like a publicly contributed but if you think about it that way doesn't it make sense that your land taxes should go to that Community which is the one that's creating all this value rather than being say distributed federally so maybe we should have land value taxes on local levels but then it goes to pay towards local amenities so it's like if you
live right next to the subway and the reason your property is so valuable is because like you're right next to the subway then that goes towards making the New York subway better but it doesn't go towards like you know I don't know like some sort of the city's Hall in Kentucky or something right I mean it's like if you wanted to create a model for uh you know bottom-up decentralized
America like I would take that bargain we still gotta like fund the federal government somehow you know and so like I would like to repeal you know the federal income tax and have that funded by
land value tax but it's like I mean if that's like as far as I could ever get I'd shake your hand and take that deal right now you know sound sounds good uh yeah fair enough uh one more question this was actually from Twitter from Craig fratric which uh the question is basically if um I mean
one of the reasons why we think of land as being sort of like a public thing is because it's your land value is contributed by people around you but what if you own so much land that really you are the one that's contributing to the value of all your land right if you're thinking like something like Disney World they could like they basically own like half of Orlando or something and they're
the ones that are creating nearby amenities which are making the rest of Disney World valuable so in that case aren't they entitled to all the proceeds and what's funny is like in a way yes and so what's interesting is like this is often like posed as a gotcha question for georgists
um but we actually like internally like this is called the Disneyland or the Disney World question you know um and it's actually a really interesting case and the thing you have to realize now is who
is Disney World in this situation Disney World is the government in that case in point Disney World is the community Disney World is the city it's a private City and then there's all these questions of who is the citizen of Disney World and is it an equitable democracy or whatever which will leave aside for the moment but the point is is that Disney World has fully internalized the
positive externalities of Their Own own building right and so the incentive structure has changed we fully acknowledge that we just bite that bullet so the question then becomes you know
um what do you do about it it's a really interesting situation essentially a private City you know and so there can be certainly issues with company towns especially when they you know enforce local monopolies essentially like bad local laws where it's like you have to
buy from the company store or whatever you know which is mostly an issue of governance but in terms of like land use actually if an entire landowner owns an entirely large enough area to internalize all of their positive building things that actually you know they are actually you know that does change the situation and then you need to see them less as the private owner of
a parcel and more as a private operator of a city right and that changes the governance question and it becomes a completely different category of problem and so then there's questions of it's like you know what what is the right mix of taxes and subsidies and do you even want to have
these sort of entities in the first place and what is the governance question looks like but the important thing to realize is that you are no longer dealing with a private landowner you were
dealing with a private City wait okay so is maybe one way to think about georgiaism that somebody has to be collecting the rent and what George's are saying is we want the rents collected by the government and not by the person who is like a private landowner um presumably because the government will do more public-facing things with it but like rents have to be collected we just
have we're just trying to decide who will kind of collect right rents will be collected one way or another and if we leave it to the status quo private actors free writing off their neighbors
will collect them and make everything worse they will cause mat they will cause less investment and they will hold the best land out of use and there will be less building than there should be and the rent will be too damn High yeah and the rent has to be collected one way or another so
it might as well be collected on behalf of the community yeah right because not only will this fix the incentives but then it also shares the wealth with the people actually produce the wealth and if the community is itself this giant private City then that kind of changes the equation a bit and I have not like fully delved into the Disney World issue and the Disney World question and that
that's a little separate academically from actually existing Disney World and how anyone feels about that institution in particular um but the important thing to realize is that we're now dealing with a different domain you know because then the question is it's like you know who is a citizen of Disneyland who's a tenant of Disneyland who what is the governance of Disneyland it's like
you realize that now Disneyland essentially is the government and I think that's actually like kind of literally true in actually existing Disney World because they have their own like special district that operates essentially as a private government and that's just um it's just its own
its own kind of question but the point is very much yes the rents have to be collected one way or the other so they might as well be collected on behalf of the community one way to implement that
is through a government right you know because we have this nice little democracy we can use but you can all there's also this movement you know there's this whole Charter cities movement and
then a movement I like even better called starter cities Which is less like let's find some you know third world country to like hope our sovereignty doesn't get revoked in five years like but let's like build City he's somewhere in America where zoning is pretty loose you know um you
could have everyone who lives there basically be a shareholder of a private entity and share out the land rents that way another way to implement it would just be ground leases rather than land value tax within a private City and then everyone who lives there is de facto a shareholder of the city and there's some people who are trying to build stuff like that which I'm very much interested in
awesome awesome okay final question what is next for you so what is next for me so I'm I'm still a game developer and you know so nights and weekends I'm overseeing a project that will release next year Defenders Quest 2 after a good decade of development I'm happy for that to be finished um but then Additionally you know I am working on a startup which is uh called geoland solutions
for now the name Will almost certainly have changed by the time of um time this podcast airs but if you go to geolandsolutions.com it'll redirect whatever a new website is and
um that is a municipal Mass appraisal company we're going to partner with local municipalities we've already got a couple of customers are interested in what we're doing and um we're gonna massively update the state of the practice of Municipal Mass appraisal in America
to be more accurate more efficient and um more and more up to date with the latest models and more transparent you know leaning into open source and open Data Solutions wherever possible yep and um I think that can be the Practical step towards georgism not just to implement georgeism but even to advocate for it because you know in the Edward Glazer interview you know one of the pretty I'm
super happy to have Glazer's endorsement even if he thinks georgeism is in a Panacea yeah one of the things about his critique of it not being a Panacea and I think you know it's a policia even if it's not a Panacea you know I'll settle for curing multiple diseases
even if I'm not curing literally all of them is that um is that I think he's under the impression that land isn't a big deal and how important you think georgiaism is depends on how much the land
is worth and to do that we have to measure it and we're not super good at measuring it right now um and I think we need to get super good at measuring it and I've decided you know when I was talking about this originally you know basically someone you know challenged me it's like if you really think you can do this then the reason I don't think you can do this is because if if you really
could then people would give you millions of dollars to go do it and well we just closed around um led by led by Sam Altman you know and that's exactly what happened and now we're gonna do it
so I'm really grateful to that commenter for challenging me in that way because I'm like okay well I really see my life's work as like making George's impossible and practical and I think the way to do that is to measure the value of the land and to put those tools out
there for anybody to be able to pick up yep yep awesome okay so the book is land is a big deal um and where else can people find you yeah so you can find me at a couple of places um one the
website land is a big deal.com you can find me on Twitter at larcs Prime Lars i-u-s-p-r-i-m-e and I um the book is based on a series of articles that you can find at gameofrent.com and um what else we have another website yeah well geolandsolutions.com which will redirect you to
whatever whatever the new name is and that that's that's uh that's everything I do yeah and this is one of those books um I mean it's like there's books you read where like oh that's interesting you know like I guess I should drive prior slightly and there's books like oh [ __ ] why did I not think about it that way that's like wow that's like changes everything about like how I
think about in this case you know economics and um it really is one of those things where I'm I I'm look I think you're the metaphor in the book about like observing the cat in a picture yeah
seeing the cat yeah exactly so yeah anyways I I do highly recommend the book it's one of those books you'll read where you'll just have a completely new perspective on an entire field awesome okay uh thanks Lars thanks for coming on today and thanks for making all your way
all the way over here to do this interview live yeah well thanks for grilling me thanks for all the hard questions you know it's like I I really I really I really like to be challenged in that way and like really engage with the best faith you know hard-hitting critiques you know to like make sure we like really understand what we're talking about here because it none of this matters unless
it works yeah right and so it's like I'm not here to like defend Henry George's on I'm here to like really explore whether this can actually be a solution of our problem yes yeah awesome hey thanks for listening if you enjoyed that episode I would really really really
appreciate it if you could share it this is still a pretty small podcast so it is a huge help when any one of you shares an episode that you like post it on Twitter send it to friends who you
think might like it put it in your group chats just let the word go for it it helps out a ton many thanks to my amazing editor Graham besselu for producing this podcast and to Mia Ayanna for creating the amazing transcripts that accompany each episode uh which have helpful links and you can find them at the link in the description below remember to subscribe on YouTube and your favorite podcast platforms cheers see you next time [Music]