Note: There are two significantly different variants of Georgism (along a particular dimension; there are also two or more significantly different variants along some other dimensions).
One variant would tax land, including city land, according to the agricultural value it would have, or rather some sort of "natural" value that depends as…
Note: There are two significantly different variants of Georgism (along a particular dimension; there are also two or more significantly different variants along some other dimensions).
One variant would tax land, including city land, according to the agricultural value it would have, or rather some sort of "natural" value that depends as little as possible on human activity, especially local human activity such as nearby city infrastructure. IMO this variant is more compatible with libertarianism, more clearly non-distortionary, and perhaps it's also easier to determine land value in this sense; however, it would yield relatively little revenue in a modern economy. Perhaps is this the variant Henry George intended, at a time when agricultural land was more valuable in a relative sense?
Another variant, which was promoted by Lars Doucet on Astral Codex Ten, and also this Swedish fellow, would tax land according to its local market value. This would tax city land much more heavily than the other variant.
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The latter variant has sub-variants along various dimensions, each with different issues:
- If a property developer buys a large plot of agricultural land, and builds a city on it, would it pay less tax in total than residents of an existing city, since the value of the land under the new city is determined as if the whole city didn't exist, while the value of a small plot in an existing city is determined as if the house on it didn't exist, but the rest of the city did? How about if the developer divides its city into small plots and sells them individually?
- Would the extra tax on city land, beyond the tax on its agricultural value, go to the city, or to a higher (e.g. national) level of government? If the former, would a new city be required to implement it? If the tax would go to a higher level of government, it would disincentivize building new cities; if it would go to the city, it would cause spiralling rents and taxes, as I discussed here:
As a minarchist, I don't agree there is a moral problem with (the first variant of) Georgism: I don't treat the government, the ostensible representative of the people, as equivalent to private actors. In some ways, I hold it to stronger expectations: for example, it's wrong for the government to deny you access to land it owns because you've criticized it, while it's acceptable for a private actor to do so. In other ways, I hold it to weaker expectations: for example, I consider it acceptable for the government to decide (within some limits) who is allowed to use what land, while a private actor may only do so with respect to land the government has previously agreed that it owns.
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Is VPI the Virginia Polytechnic Institute, as I guess it? The other, initially promising search result was The Vibraphone Project Inc., which has awarded a vibraphonist called David Friedman. https://www.thevibraphoneproject.org/legacyawards.html
VPI is Virginia Polytechnic Institute, specifically, in my case, the Public Choice Center where I started my career as an economics professor.
The argument for your second version is that the value of my land due to it being in the city was not created by me. On the other hand it was created by other people choosing to live nearby, which is an argument for not applying the higher rate to a city created by a single actor. We are left with the problem of how to give people the right incentive to do things that raise the value of other people's property, which I believe Nic Tideman has written on, and probably others.
Once you accept the state's claim to special rights the moral problem vanishes, but I don't.
Re the choice between your two variants, I think it depends on why land tax is justified in the first place. If you think—as I do—that it represents compensation to others for excluding them from something (land) that is not "really" yours (since you did not make it), then the appropriate level of tax will be determined by how worse off you made others by excluding them, which will be influence by how much they demand use of that land—thus the second, market-based, alternative. By contrast, on the first, agrarian, alternative, I want to ask why farmers have more right to the land than miners? You have some questions of your own:
Re the developer with their (private?) city, and homeowners in a pre-existing (public?) city—I take it the objection here is that they may end up paying different amounts of tax, and they shouldn't since it is the same land (and so should have the same value), but why would that be an objection to a market-based approach, since there are different market conditions in the two cases you describe?
Re "Would the extra tax on city land, beyond the tax on its agricultural value, go to the city, or to a higher (e.g. national) level of government?"—in my view, it would properly be owed to those who are made worse off by being excluded from the land. The government, any government, would be entitled to the money only as an agent for these people.
Is your "worse off due to being excluded from the land" how much worse off they are from not being permitted to trespass or how much worse off they are for not being able to treat the land as theirs, which would include excluding others? The latter is likely to be much larger.
Well, being excluded from land implies that one can neither use nor appropriate it, both of which might benefit one, so I guess the second. Yes, the latter is likely to be larger, but since I think that appropriation of un-owned land requires compensation to those excluded, the cost of no longer being able to appropriate the land may be lower than you are thinking.
When I appropriate land I don't just keep you from appropriating it I keep everyone else from appropriating it. Do I owe each of them the full value to him of being able to appropriate it?
Thinking about it, no, I do not owe each of them the full value to them of being able to appropriate it. There are three points.
First, a minor point. If it turns out you would /not/ appropriate the land even if I left it, then my taking it would represent the "loss" to you of an opportunity to do something you don't actually want to do, and that deserves zero compensation, in my view. So I prefer to talk about the value to the others of their actually appropriating it.
Second, supposing there are only two of us, then I do not owe the /full/ value to you of appropriating the land, where I understand this as the /gross/ value. For, if I were not to appropriate it, then you would (we shall suppose, taking account of the first point), but in that case you would owe me compensation for my no longer be able to appropriate as I wanted, and so the net benefit you would receive is actually the full value /less the compensation you would have to pay me/. [Actually, I reckon it is less than half of the value to you of the difference between your owning the land and my doing so.] I don't see a problem here. There is rich farming land atop hordes of minerals. The would-be miner can easily compensate the would-be farmer for not be able to engage in her (less profitable) activity, and so will be justified in appropriating. The farmer will not be able to compensate the miner, and so will not be justified in appropriating the land—which, in my view, is the right answer. And, when things are more equal, it will be easy for me to secure ownership of my plot in the state of nature by (eg) renouncing all claims over an equal plot elsewhere, for you to take.
Third, supposing there are many more of us, I do not owe /each/ of other the amount indicated under the second point. Rather everyone else has to split that amount amongst themselves. I have argued that elsewhere in these comments.
Yes, good question, to which I do not currently have an answer. I need to think about it, and maybe it has to so with my claim that "the cost of no longer being able to appropriate the land may be lower than you are thinking".
When discussing who is made worse off, and how much, we have to specify "compared to what?" IMO the relevant comparison is if they didn't interact with anyone in any way, and didn't use whatever natural resources they are using; and/or any other choice on their part that would be legal. Moreover, IMO it's wrong to punish a set of people (not just a single person), or tax them higher, for behavior that doesn't leave anyone worse off than if they took a different course of action that would be legal.
In the case of the existing city, an individual landowner then can't complain about the high land tax, but the landowners in the city can band together—and, if the tax isn't left with the city, have an interest to do so—, and have a legitimate claim against being forced to pay more tax than if they all used the land they own for agricultural purposes.
In the case of the private city, the market conditions are different from public cities as long as the city is owned by a single proprietor, but not once the developer partitions it into plots and sells them individually. And it would be highly distortionary if the owner(s) of the city paid widely different taxes depending on whether it's owned by one entity or many. It would also be unjustified: even in the latter case, the developer and the new homeowners aren't leaving the rest of the country worse off in a way that would justify the high tax than if the land had remained in agricultural use.
Re: the extra tax going to whoever is left worse off: again, the question is "compared to what". No one is being left significantly worse off than if the city didn't exist.
Yes, I agree it is important to specify the baseline. In my view, the relevant baseline is given by imagining away the exclusion, so that the degree to which A's exclusion of others from a certain plot of land makes others worse off is determined relative to how others would have fared had A not excluded them. I sense that this is a lot narrower than yours, which would refer to A's not interacting with others in any way and their not using any natural resources. But why suppose that /that/ is an appropriate baseline for a specific act of exclusion? It does not even seem possible.
Re private vs public cities. I take it the key point relates to if "the owner(s) of the city paid widely different taxes [compensation] depending on whether it's owned by one entity or many", the idea being that if it is the same land then the tax on it should be the same, no matter how many owners. Not sure my view implies any different, so long as one understands "taxes" as "compensation". Before the developer let anyone into her private city, she owed everyone compensation for excluding them. When some of them pay to own plots in the city, that compensation will be factored into the price (as will any compensation the new homeowners owe to everyone else who is now excluded from that plot, this latter compensation perhaps being channeled thru the developer), and compensation will still be owing to everyone else still excluded from the city. So the "taxes" payable by the developer for the land /will/ be lower (since there are fewer people now excluded from it), but the total "compensation" she owes everyone remains the same (and has partly been paid out to the new occupants of her city).
If the baseline is how well off others would be if no land was appropriated than almost everyone gets his compensation automatically, since a society where all land is unowned would be much poorer.
If there no appropriation at all, then, yes, things would be pretty dire. But I was thinking about single acts of (original) appropriation, and imagining how well others would fare if that single plot was not appropriated. If farmer Jones did not appropriate the mineral-rich land to breed llamas, it would be appropriated instead by miner Smith, and things would not be so dire after all.
If Jones does appropriate it Smith can still buy it from him, or buy the mineral rights while leaving Jones with the surface rights.
Following out the Lockian argument, there are two different effects on B of A's appropriation. One is that B can no longer use the land in ways that don't require appropriation, gather acorns and firewood, cut across the land on his way somewhere else. That is arguably an effect on multiple B's, all of whom could be doing that, although B5 might find that B1-4 had collected all the deadwood.
The other is that B can no longer appropriate the land. Locke's response is that B can appropriate some other land instead, but that breaks down once all the good land has been appropriated.
My preferred response, offered in the chapter I linked to, is that no land is ever appropriated. You achieve the equivalent by doing things with the land such that other people can't use it without violating your rights — not in the land but in wheat plants you planted or in the house and door that you built. It's a kludgy solution and I don't like it very much but it does solve the problem of "how did you get the right to exclude people."
Actually, now that I think about it, you may be able to develop your Second Try in a different way.
Agreed, you have the (temporary) right to the land upon which you are standing. Hence, if someone invades that space, you have the right to /punish/ them proportionally—eg, to do things to them (eg assault them), that would otherwise violate their rights, to nullify that infraction (I ignore deterrence and retribution). Further, if you know that they /will/ invade that space, you have the right to /constrain/ them proportionately—ie, to do things to them (eg block their access to you), that would otherwise violate their rights, to prevent that infraction. Of course, you may not be certain about this. If the chance is 95%, then you may constraint them, but not if it is only 5%. So, if the chance they will invade your space is /higher/ than some number in between—X% let us say—then you have the right to constrain them so as to reduce their probability of invading to X%, but no further.
Now this might justify ownership of a plot around a house, but probably not a fallow field on a farm. For you might reasonably believe that, in the state of nature, there is a sufficiently high risk that people who come near your house are up to no good (the chance need not be high, but the outcome may be very bad indeed). If so, you have the right to constrain them proportionally, and so you can build a fence. However, while this might also justify a fence around your growing crops, it will not justify that fence when the ground is fallow, and you had better not hinder people using the land at that time.
I don't like this justification, since it depends on assuming that people will not sufficiently respect rights in the state of nature, and I would like a justification for land ownership that applies to more respectful folks, but it may be much more realistic.
Or we could imagine that by gathering acorns but not claiming ownership, one has evidence for creation of an easement. Then the acquirer would need to allow them access for the purpose of acorn gathering, or buy back the easement if they wished to exclude this.
In principle it seems potentially very confusing. In practice, it seems unlikely that non-owners would value such easements very highly. I suppose someone could try to hold property owners for ransom by naming an unreasonable price. I think a solution exists.
You say the baseline is how others would fare if the owner did not exclude them. But that doesn't fully specify the baseline. We also have to specify what else, if anything, is different in the baseline from the real world. If the baseline is that the owner doesn't exclude others, but all else is equal, including what man-made buildings, products exist, that would justify not just taxing the market value of the city land, but also the full value of the house itself, and all other man-made goods. That's neither just, nor workable.
IMO the baseline has to be how others would fare if they were excluded from the land, but also they hadn't produced the man-made goods (buildings etc.) they did produce in the real world.
The remaining question is whether a group of people (such as the landowners of a city) are entitled to have the baseline, compared to which they are taxed, be determined based on how people outside the set would fare if the people in the set didn't exclude anyone from any natural resources, but also none of them had produced anything. IMO yes.
I don't fully follow your second paragraph, but are you saying that the total tax owed by the occupants of the city and the developer should be the same after it's divided into plots as when it's all owned by the developer, which is in turn the same as the tax on the land when it was a ranch? That's what I argue would be reasonable. The people who aren't in the city are excluded either way, but they are no better or worse off whether there is a ranch or a city on that land.
But that's not what would happen if the tax is based on market value. Chances are, after a city is built on the land, the value of plots in the city goes way up, per area, compared to when it was agricultural land. If you tax on the basis of market value, the tax the owners of the land collectively pay would go up (either when the city is built, or when it's subdivided into plots, depending on how the tax is assessed).
Well, in a libertarian world, where anyone can build on what was previously agricultural land, and regulations don't artificially limit the supply of residential buildings, perhaps city land wouldn't be much more valuable than agricultural land, at least after there is time for the supply to expand to the demand. Though I guess it would still be somewhat more expensive, even if not as much as it's today in the NIMBYist areas. But then again, if it turns out that city land wouldn't be more expensive than agricultural land, then we're both right: taxing based on market value and agricultural value would be the same.
>"If the baseline is that the owner doesn't exclude others, but all else is equal, including what man-made buildings, products exist, that would justify not just taxing the market value of the city land, but also the full value of the house itself, and all other man-made goods"
There may well be more detail in the baseline, but I want it to follow from my definition, for otherwise the extra details are ad hoc. But I do have a problem. I take it your point is that, if a homeowner were to NOT to exclude others from the land on which their house stands, then, houses being immovable, it would because they no longer exclude others from the house itself. In sum, if others were not excluded, then they would have access to land /and house/, and so need to be compensated for being excluded from that larger package, and so "also the full value of the house itself". Which, as you say, is the wrong answer.
Tricky, but maybe there is a simple fix. True, others need to be compensated for being excluded from house-land package. But how much is that? Now, even if he were not /actually/ to exclude others from the house, it would remain that he /may/ do so (since he built the house), so that others are never owed compensation for being excluded /from the house/. So the compensation for the house-land package actually relates only to the land component, and to determine that, yes, you need to imagine away the house. And that's the right answer.
>are you saying that the total tax owed by the occupants of the city and the developer should be the same after it's divided into plots as when it's all owned by the developer, which is in turn the same as the tax on the land when it was a ranch
Re first equality, I think I want to say that the net /compensation/ should be the same, if the same numbers of people are being excluded to the same amount of land. Re the second equality, I certainly want to deny that land values are to be determined independently of demand, eg by some agrarian measure.
>Chances are, after a city is built on the land, the value of plots in the city goes way up, per area, compared to when it was agricultural land.
Yes, that seems plausible. But why do you care so much about the comparative value of city and agricultural land? Why should they be equal? IS it because you think that the value of land has to relate to some intrinsic property of the land, and so cannot vary with varying demand for that land? And even if so, why is agricultural land the standard?
I care about the question of land value as city land vs. agricultural land because if there is a difference, that implies that there are two significantly different variants of Georgism, which would tax city land differently and, at least in some situations, have different consequences w.r.t. incentives.
One of the selling points of Georgism, more specifically the version where, as much as possible, the tax doesn't depend on human actions, it's non-distortionary, unlike most other taxes. If the tax on any given land doesn't depend on what people do, then it can't disincentivize otherwise useful human activity. But this is less clear if the tax does depend on human actions (such building nearby city infrastructure, which drives up the market value of the land).
Note: There are two significantly different variants of Georgism (along a particular dimension; there are also two or more significantly different variants along some other dimensions).
One variant would tax land, including city land, according to the agricultural value it would have, or rather some sort of "natural" value that depends as little as possible on human activity, especially local human activity such as nearby city infrastructure. IMO this variant is more compatible with libertarianism, more clearly non-distortionary, and perhaps it's also easier to determine land value in this sense; however, it would yield relatively little revenue in a modern economy. Perhaps is this the variant Henry George intended, at a time when agricultural land was more valuable in a relative sense?
Another variant, which was promoted by Lars Doucet on Astral Codex Ten, and also this Swedish fellow, would tax land according to its local market value. This would tax city land much more heavily than the other variant.
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The latter variant has sub-variants along various dimensions, each with different issues:
- If a property developer buys a large plot of agricultural land, and builds a city on it, would it pay less tax in total than residents of an existing city, since the value of the land under the new city is determined as if the whole city didn't exist, while the value of a small plot in an existing city is determined as if the house on it didn't exist, but the rest of the city did? How about if the developer divides its city into small plots and sells them individually?
- Would the extra tax on city land, beyond the tax on its agricultural value, go to the city, or to a higher (e.g. national) level of government? If the former, would a new city be required to implement it? If the tax would go to a higher level of government, it would disincentivize building new cities; if it would go to the city, it would cause spiralling rents and taxes, as I discussed here:
https://www.astralcodexten.com/p/does-georgism-work-part-3-can-unimproved/comment/3996594
https://www.astralcodexten.com/p/does-georgism-work-part-3-can-unimproved/comment/3984715
https://www.astralcodexten.com/p/does-georgism-work-part-2-can-landlords/comment/4010307
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As a minarchist, I don't agree there is a moral problem with (the first variant of) Georgism: I don't treat the government, the ostensible representative of the people, as equivalent to private actors. In some ways, I hold it to stronger expectations: for example, it's wrong for the government to deny you access to land it owns because you've criticized it, while it's acceptable for a private actor to do so. In other ways, I hold it to weaker expectations: for example, I consider it acceptable for the government to decide (within some limits) who is allowed to use what land, while a private actor may only do so with respect to land the government has previously agreed that it owns.
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Is VPI the Virginia Polytechnic Institute, as I guess it? The other, initially promising search result was The Vibraphone Project Inc., which has awarded a vibraphonist called David Friedman. https://www.thevibraphoneproject.org/legacyawards.html
VPI is Virginia Polytechnic Institute, specifically, in my case, the Public Choice Center where I started my career as an economics professor.
The argument for your second version is that the value of my land due to it being in the city was not created by me. On the other hand it was created by other people choosing to live nearby, which is an argument for not applying the higher rate to a city created by a single actor. We are left with the problem of how to give people the right incentive to do things that raise the value of other people's property, which I believe Nic Tideman has written on, and probably others.
Once you accept the state's claim to special rights the moral problem vanishes, but I don't.
Re the choice between your two variants, I think it depends on why land tax is justified in the first place. If you think—as I do—that it represents compensation to others for excluding them from something (land) that is not "really" yours (since you did not make it), then the appropriate level of tax will be determined by how worse off you made others by excluding them, which will be influence by how much they demand use of that land—thus the second, market-based, alternative. By contrast, on the first, agrarian, alternative, I want to ask why farmers have more right to the land than miners? You have some questions of your own:
Re the developer with their (private?) city, and homeowners in a pre-existing (public?) city—I take it the objection here is that they may end up paying different amounts of tax, and they shouldn't since it is the same land (and so should have the same value), but why would that be an objection to a market-based approach, since there are different market conditions in the two cases you describe?
Re "Would the extra tax on city land, beyond the tax on its agricultural value, go to the city, or to a higher (e.g. national) level of government?"—in my view, it would properly be owed to those who are made worse off by being excluded from the land. The government, any government, would be entitled to the money only as an agent for these people.
Is your "worse off due to being excluded from the land" how much worse off they are from not being permitted to trespass or how much worse off they are for not being able to treat the land as theirs, which would include excluding others? The latter is likely to be much larger.
Well, being excluded from land implies that one can neither use nor appropriate it, both of which might benefit one, so I guess the second. Yes, the latter is likely to be larger, but since I think that appropriation of un-owned land requires compensation to those excluded, the cost of no longer being able to appropriate the land may be lower than you are thinking.
When I appropriate land I don't just keep you from appropriating it I keep everyone else from appropriating it. Do I owe each of them the full value to him of being able to appropriate it?
Thinking about it, no, I do not owe each of them the full value to them of being able to appropriate it. There are three points.
First, a minor point. If it turns out you would /not/ appropriate the land even if I left it, then my taking it would represent the "loss" to you of an opportunity to do something you don't actually want to do, and that deserves zero compensation, in my view. So I prefer to talk about the value to the others of their actually appropriating it.
Second, supposing there are only two of us, then I do not owe the /full/ value to you of appropriating the land, where I understand this as the /gross/ value. For, if I were not to appropriate it, then you would (we shall suppose, taking account of the first point), but in that case you would owe me compensation for my no longer be able to appropriate as I wanted, and so the net benefit you would receive is actually the full value /less the compensation you would have to pay me/. [Actually, I reckon it is less than half of the value to you of the difference between your owning the land and my doing so.] I don't see a problem here. There is rich farming land atop hordes of minerals. The would-be miner can easily compensate the would-be farmer for not be able to engage in her (less profitable) activity, and so will be justified in appropriating. The farmer will not be able to compensate the miner, and so will not be justified in appropriating the land—which, in my view, is the right answer. And, when things are more equal, it will be easy for me to secure ownership of my plot in the state of nature by (eg) renouncing all claims over an equal plot elsewhere, for you to take.
Third, supposing there are many more of us, I do not owe /each/ of other the amount indicated under the second point. Rather everyone else has to split that amount amongst themselves. I have argued that elsewhere in these comments.
Yes, good question, to which I do not currently have an answer. I need to think about it, and maybe it has to so with my claim that "the cost of no longer being able to appropriate the land may be lower than you are thinking".
When discussing who is made worse off, and how much, we have to specify "compared to what?" IMO the relevant comparison is if they didn't interact with anyone in any way, and didn't use whatever natural resources they are using; and/or any other choice on their part that would be legal. Moreover, IMO it's wrong to punish a set of people (not just a single person), or tax them higher, for behavior that doesn't leave anyone worse off than if they took a different course of action that would be legal.
In the case of the existing city, an individual landowner then can't complain about the high land tax, but the landowners in the city can band together—and, if the tax isn't left with the city, have an interest to do so—, and have a legitimate claim against being forced to pay more tax than if they all used the land they own for agricultural purposes.
In the case of the private city, the market conditions are different from public cities as long as the city is owned by a single proprietor, but not once the developer partitions it into plots and sells them individually. And it would be highly distortionary if the owner(s) of the city paid widely different taxes depending on whether it's owned by one entity or many. It would also be unjustified: even in the latter case, the developer and the new homeowners aren't leaving the rest of the country worse off in a way that would justify the high tax than if the land had remained in agricultural use.
Re: the extra tax going to whoever is left worse off: again, the question is "compared to what". No one is being left significantly worse off than if the city didn't exist.
Yes, I agree it is important to specify the baseline. In my view, the relevant baseline is given by imagining away the exclusion, so that the degree to which A's exclusion of others from a certain plot of land makes others worse off is determined relative to how others would have fared had A not excluded them. I sense that this is a lot narrower than yours, which would refer to A's not interacting with others in any way and their not using any natural resources. But why suppose that /that/ is an appropriate baseline for a specific act of exclusion? It does not even seem possible.
Re private vs public cities. I take it the key point relates to if "the owner(s) of the city paid widely different taxes [compensation] depending on whether it's owned by one entity or many", the idea being that if it is the same land then the tax on it should be the same, no matter how many owners. Not sure my view implies any different, so long as one understands "taxes" as "compensation". Before the developer let anyone into her private city, she owed everyone compensation for excluding them. When some of them pay to own plots in the city, that compensation will be factored into the price (as will any compensation the new homeowners owe to everyone else who is now excluded from that plot, this latter compensation perhaps being channeled thru the developer), and compensation will still be owing to everyone else still excluded from the city. So the "taxes" payable by the developer for the land /will/ be lower (since there are fewer people now excluded from it), but the total "compensation" she owes everyone remains the same (and has partly been paid out to the new occupants of her city).
If the baseline is how well off others would be if no land was appropriated than almost everyone gets his compensation automatically, since a society where all land is unowned would be much poorer.
If there no appropriation at all, then, yes, things would be pretty dire. But I was thinking about single acts of (original) appropriation, and imagining how well others would fare if that single plot was not appropriated. If farmer Jones did not appropriate the mineral-rich land to breed llamas, it would be appropriated instead by miner Smith, and things would not be so dire after all.
If Jones does appropriate it Smith can still buy it from him, or buy the mineral rights while leaving Jones with the surface rights.
Following out the Lockian argument, there are two different effects on B of A's appropriation. One is that B can no longer use the land in ways that don't require appropriation, gather acorns and firewood, cut across the land on his way somewhere else. That is arguably an effect on multiple B's, all of whom could be doing that, although B5 might find that B1-4 had collected all the deadwood.
The other is that B can no longer appropriate the land. Locke's response is that B can appropriate some other land instead, but that breaks down once all the good land has been appropriated.
My preferred response, offered in the chapter I linked to, is that no land is ever appropriated. You achieve the equivalent by doing things with the land such that other people can't use it without violating your rights — not in the land but in wheat plants you planted or in the house and door that you built. It's a kludgy solution and I don't like it very much but it does solve the problem of "how did you get the right to exclude people."
Actually, now that I think about it, you may be able to develop your Second Try in a different way.
Agreed, you have the (temporary) right to the land upon which you are standing. Hence, if someone invades that space, you have the right to /punish/ them proportionally—eg, to do things to them (eg assault them), that would otherwise violate their rights, to nullify that infraction (I ignore deterrence and retribution). Further, if you know that they /will/ invade that space, you have the right to /constrain/ them proportionately—ie, to do things to them (eg block their access to you), that would otherwise violate their rights, to prevent that infraction. Of course, you may not be certain about this. If the chance is 95%, then you may constraint them, but not if it is only 5%. So, if the chance they will invade your space is /higher/ than some number in between—X% let us say—then you have the right to constrain them so as to reduce their probability of invading to X%, but no further.
Now this might justify ownership of a plot around a house, but probably not a fallow field on a farm. For you might reasonably believe that, in the state of nature, there is a sufficiently high risk that people who come near your house are up to no good (the chance need not be high, but the outcome may be very bad indeed). If so, you have the right to constrain them proportionally, and so you can build a fence. However, while this might also justify a fence around your growing crops, it will not justify that fence when the ground is fallow, and you had better not hinder people using the land at that time.
I don't like this justification, since it depends on assuming that people will not sufficiently respect rights in the state of nature, and I would like a justification for land ownership that applies to more respectful folks, but it may be much more realistic.
Or we could imagine that by gathering acorns but not claiming ownership, one has evidence for creation of an easement. Then the acquirer would need to allow them access for the purpose of acorn gathering, or buy back the easement if they wished to exclude this.
In principle it seems potentially very confusing. In practice, it seems unlikely that non-owners would value such easements very highly. I suppose someone could try to hold property owners for ransom by naming an unreasonable price. I think a solution exists.
You say the baseline is how others would fare if the owner did not exclude them. But that doesn't fully specify the baseline. We also have to specify what else, if anything, is different in the baseline from the real world. If the baseline is that the owner doesn't exclude others, but all else is equal, including what man-made buildings, products exist, that would justify not just taxing the market value of the city land, but also the full value of the house itself, and all other man-made goods. That's neither just, nor workable.
IMO the baseline has to be how others would fare if they were excluded from the land, but also they hadn't produced the man-made goods (buildings etc.) they did produce in the real world.
The remaining question is whether a group of people (such as the landowners of a city) are entitled to have the baseline, compared to which they are taxed, be determined based on how people outside the set would fare if the people in the set didn't exclude anyone from any natural resources, but also none of them had produced anything. IMO yes.
I don't fully follow your second paragraph, but are you saying that the total tax owed by the occupants of the city and the developer should be the same after it's divided into plots as when it's all owned by the developer, which is in turn the same as the tax on the land when it was a ranch? That's what I argue would be reasonable. The people who aren't in the city are excluded either way, but they are no better or worse off whether there is a ranch or a city on that land.
But that's not what would happen if the tax is based on market value. Chances are, after a city is built on the land, the value of plots in the city goes way up, per area, compared to when it was agricultural land. If you tax on the basis of market value, the tax the owners of the land collectively pay would go up (either when the city is built, or when it's subdivided into plots, depending on how the tax is assessed).
Well, in a libertarian world, where anyone can build on what was previously agricultural land, and regulations don't artificially limit the supply of residential buildings, perhaps city land wouldn't be much more valuable than agricultural land, at least after there is time for the supply to expand to the demand. Though I guess it would still be somewhat more expensive, even if not as much as it's today in the NIMBYist areas. But then again, if it turns out that city land wouldn't be more expensive than agricultural land, then we're both right: taxing based on market value and agricultural value would be the same.
>"If the baseline is that the owner doesn't exclude others, but all else is equal, including what man-made buildings, products exist, that would justify not just taxing the market value of the city land, but also the full value of the house itself, and all other man-made goods"
There may well be more detail in the baseline, but I want it to follow from my definition, for otherwise the extra details are ad hoc. But I do have a problem. I take it your point is that, if a homeowner were to NOT to exclude others from the land on which their house stands, then, houses being immovable, it would because they no longer exclude others from the house itself. In sum, if others were not excluded, then they would have access to land /and house/, and so need to be compensated for being excluded from that larger package, and so "also the full value of the house itself". Which, as you say, is the wrong answer.
Tricky, but maybe there is a simple fix. True, others need to be compensated for being excluded from house-land package. But how much is that? Now, even if he were not /actually/ to exclude others from the house, it would remain that he /may/ do so (since he built the house), so that others are never owed compensation for being excluded /from the house/. So the compensation for the house-land package actually relates only to the land component, and to determine that, yes, you need to imagine away the house. And that's the right answer.
>are you saying that the total tax owed by the occupants of the city and the developer should be the same after it's divided into plots as when it's all owned by the developer, which is in turn the same as the tax on the land when it was a ranch
Re first equality, I think I want to say that the net /compensation/ should be the same, if the same numbers of people are being excluded to the same amount of land. Re the second equality, I certainly want to deny that land values are to be determined independently of demand, eg by some agrarian measure.
>Chances are, after a city is built on the land, the value of plots in the city goes way up, per area, compared to when it was agricultural land.
Yes, that seems plausible. But why do you care so much about the comparative value of city and agricultural land? Why should they be equal? IS it because you think that the value of land has to relate to some intrinsic property of the land, and so cannot vary with varying demand for that land? And even if so, why is agricultural land the standard?
I care about the question of land value as city land vs. agricultural land because if there is a difference, that implies that there are two significantly different variants of Georgism, which would tax city land differently and, at least in some situations, have different consequences w.r.t. incentives.
One of the selling points of Georgism, more specifically the version where, as much as possible, the tax doesn't depend on human actions, it's non-distortionary, unlike most other taxes. If the tax on any given land doesn't depend on what people do, then it can't disincentivize otherwise useful human activity. But this is less clear if the tax does depend on human actions (such building nearby city infrastructure, which drives up the market value of the land).