[larsiusprime]

Just want to point out two things:

1) Rognlie[1] pointed out that Piketty's central premise -- that the returns to capital are growing faster than the overall growth rate of the economy -- falls apart when you properly account for asset class and depreciation. The accelerating returns are specifically to real estate, while the returns to capital (excluding real estate) are flat.

2) Tyler Cowen pointed this out on his interview [2] with Piketty and Piketty essentially conceded the point.

Tyler implied therefore that the natural conclusion is Georgism[3]

[1] https://www.brookings.edu/bpea-articles/deciphering-the-fall...

[2] https://conversationswithtyler.com/episodes/thomas-piketty/

[3] http://gameofrent.com/content/is-land-a-big-deal#a-brief-rec...

[whakim]

Actually, Piketty doesn't concede this point and makes the extremely important distinction between aggregate wealth and wealth distribution. What Rognlie does point out is the incredible importance of real estate in the growth of capital income - far more than Piketty originally credited it with in Capital in the Twenty-First Century. As Piketty points out in the interview, an explanation based around real estate literally cannot explain the growth in wealth share of the top 1% or top 0.1% or top 0.01%, because the wealthier you are, the smaller a percentage of your wealth consists of real estate. Which then naturally leads to the conclusion that Georgism/land value taxes are an insufficient tool for combating extreme inequality.

Also, non sequitur: while I enjoyed A Brief History of Equality, I feel that it tried to stuff too much historical detail into so short a work - it reads a bit like a condensed version of Capital and Ideology. I found the most enlightening parts of Piketty's previous works involved the tracing of political and economic minutiae across time and space, and I'm not sure I would have actually enjoyed A Brief History of Equality if I didn't already have that background.

[bb88]

More importantly, Piketty studied this and wrote a paper on it. This is the quote from Piketty on [2] from OP:

"PIKETTY: If you look at the top of the wealth distribution, I don’t see a lot of real estate. I don’t think Matt Rognlie or anyone is saying that the huge rise in billionaire wealth in the US has anything to do with real estate. As far as I know, nobody has ever tried to put this theory on the table.

"I’m not saying real estate is not important. I think for middle-class assets and lower-middle-class and upper-middle-class assets — for the middle of the distribution — real estate is, of course, very important. The movement in real estate prices explains a lot of what’s going on, both in terms of aggregate value and distribution. I’m not saying it’s not important. It is very important.

"If you go back to our paper with Gabriel Zucman, which was published, now, almost 10 years ago in the Quarterly Journal of Economics in 2014, called “Capital is Back: Wealth-Income Ratios in Rich Countries, 1700–2010,” you will see, we have complete decomposition about the role of real estate in aggregate wealth accumulation, and it’s absolutely central for many countries over many periods of time."

[colinmhayes]

Georgism just makes more and more sense the more you think about it. The idea that people should be allowed to profit off unimproved land is so clearly immoral, and that’s not to say anything for the efficiency Georgism brings and the amount it would help lower rental costs.

[endisneigh]

I don't see how Georgism solves anything. You need a government to enforce taxation - said government is profiting off unimproved land. Said governments colonize and take others land with force.

[pydry]

Governments that tax unimproved land can reduce taxes on income and spending.

Point being that society loses nothing by increasing taxes on unimproved land except an opportunity for parasitic wealth extraction whereas by taxing spending you lose valuable and productive economic activity.

For the greatest political impact the money from a land value tax should initially be given to poverty stricken pensioners.

[endisneigh]

Let's say you taxed unimproved land at 1000%. What's the result? No one will hold it. OK, great you say. The government won't develop it. It'll sit there, owned by the government, unimproved.

Great. What has been accomplished exactly? Georgism is not the solution. Relaxing zoning laws and bureaucracy is. Private money already wants to develop their unimproved land if it's economical to do so. If it's not, taxing them more won't accomplish anything other than result in the land going back to the government, who will do nothing (historically) with it.

[pydry]

I dont believe anybody has ever suggested taxing it above 100%.

100% is the level whereby 100% of the profit a landlord makes will be due to the quality of the improvements and 0% will be due to land speculation.

A landlord owning a shitty building in a hot location will lose money. Hopefully a lot. That is by design. They sell up, somebody demolishes it and builds something better and denser and therefore makes a profit.

>Private money already wants to develop their unimproved land

All the private money in the world isnt enough to convince land owners in San Francisco to demolish their low density housing and build high density housing to accomodate all the people who want to live there.

Tax them on the land and not only will they stop NIMBYing private money at every opportunity theyll sell up gladly to property developers to avoid paying their eye watering LVT bill.

[endisneigh]

> All the private money in the world isnt convincing land owners in San Francisco to demolish and build apartment blocks to accomodate demand.

This has nothing to do with tax. Just change the laws. smh.

Plenty of people want to develop their land in San Francisco. Here's one example: https://reason.com/2018/02/21/san-francisco-man-has-spent-4-...

Again, private money already wants to develop. Taxation is not necessary. Remove the red tape. Government involvement is the problem not the solution.

[twblalock]

The government is always the biggest obstacle to improving land. People try very hard to improve their land and the government puts up tons of red tape. We need less government involvement, not more, and certainly not more in the form of a harebrained utopian scheme like Georgism.

[colinmhayes]

The government is the people. The government puts up restrictions to building because that's what people want. NIMBYism is hyperlocal politics backfiring by incentivizing people to prop up their land value at the expense of everyone who wants to move there. LVT incentivizes landholders to densify, so they will stop lobbying the government to ban building.

[whenUacct]

I, like Rognlie, can make the lines say what I want to dissuade change to status quo.

He’s still just one man. There’s no need to listen to him.

I’d rather listen to the majority who are being fleeced by thought ending men like Rognlie. “Oh but don’t think to change things; see look here is other math!”

Humans don’t exist in a vacuum of externalities; Rognlies advice makes it seem so. Fidgeting with the numbers doing nothing real for the people in need is no different than “thoughts and prayers”.

Story mode still rules, as we keep setting aside work of value to people for the story of how some people earned their status. I don’t care what Rognlies credentials are; he’s one of seven billion.

I applied my masters in elastic structures to design power distribution equipment for people. Rognlie sits and pontificates. Screw him.

[cee_el123]

I'm with you

although the language of that Brookings article is obscure ( possibly deliberately )

it seems like he's nitpicking rather than acknowledging something's deeply wrong.

plus it's strange the way he quotes himself in 3rd person in the article he himself wrote