Different industries and sectors gradually scale differently, but all move towards concentration. This is consistent and graduated. Every Capitalist country has regularly seen this gradual concentration over time, even if temporary shifts against this trend happen.
Again, without an analysis of political power and taking an agnostic attitude towards production, you have what can sound to liberals as a good idea but is ultimately not a real answer. If the Proletariat cannot wrest control, all regulations and taxes will be enacted in a manner that suits the Capitalists in control if you get far enough in the first place. Wealth will continue to accumulate, as the entire M-C-M’ circuit is based on growth in scale of profit, not steady cashflow.
The Marxist position isn’t that moving towards full public ownership immediately is a practical solution, but that this is a gradual process that starts with the proletariat siezing control. I recommend you actually engage with Marxist theory.
I already know these theoretical arguments you’re presenting, but they are not worth as much when there’s no empirical proof. You didn’t answer my more empirical questions, which are the main source of the counter arguments. Why are there capitalist countries that don’t see a rise in inequality? Where is housing in your analysis, which makes up more than 50% of all wealth (up from 15-20% 100 years ago). Why is the capital to income ratio not rising when housing is taken out of the equation? Why is every productivity gain in society accompanied by equally rising housing rents?
There’s absolutely empirical proof of steady monopolization and concentration of production in fewer and fewer hands, it happens in all countries as industry develops. Growing larger and more complex is a necessary aspect of lowering supply chain costs, and thus chasing profits. As for your specific questions:
Why are there capitalist countries that don’t see a rise in inequality?
These don’t exist. There are countries where large influxes of concessions from Capitalists have lowered inequality temporarily, but there is still rising inequality over time.
Where is housing in your analysis, which makes up more than 50% of all wealth (up from 15-20% 100 years ago).
I don’t even agree with your numbers, if you could source them that would be great, but even if we take them at face value as true, rent and land are key aspects of Marxist analysis. Land is finite, as population grows and supply is constrained, monopoly prices can be extracted. It’s usury, landlordism is parasitic. The land factories are on also plays a part in the cost of finished goods, rent is tied to commodity pricing.
Georgists seem to think they are the only ones to have noticed the problems with private land ownership, but the truth is that Marxists have a more comprehensive understanding of it. See China, Cuba, and other countries run by Marxists to see what Land Reform under Marxists looks like. I think you’ll probably like the PRC’s model.
Why is the capital to income ratio not rising when housing is taken out of the equation?
Citation needed, and you need to narrow the scope. You need to take Imperialism into account as well, workers in the Global North are paid “bribes” won by international plundering.
Why is every productivity gain in society accompanied by equally rising housing rents?
It’s not always equal, but often is. Worker wages are largely depressed to the cost to reproduce them, and rents rise accordingly. Productivity isn’t coupled with wages in Capitalist countries as a rule, the landlords and Capitalists swallow all of the gains up.
Overall, you seem to think you have a grand insight into land. You’re certainly above the average liberal, who sees no real problem with it, but Marxists have a more multi-sided understanding of land, and have regularly enacted successful land reform. Georgists also have no real way to implement their policies without adopting a revolutionary stance, where they are far outnumbered by the Marxists and Anarchists.
Georgism is more correct than standard liberalism, but is too focused on one aspect of the failures of Capitalism, too one-sided, too insufficient even if it were enacted, and has no path to actually be enacted. Marxism has none of those faults.
There’s proof of it happening but not falsifiable. What I mean is that, I believe it is not happening in Scandinavia for example, but I could be wrong! I mean I feel like Scandinavia has enough “people power” to counteract that force - but it’s only based on some inequality stats. Not actual deep dive into market concentration.
In piketty’s capital in the twenty first century you see that income inequality has decreased in France, Germany, Sweden, Japan, Italy, Denmark and Spain from 1910 to 2010 without a subsequent increase. But of course you have to look at a capital/income ratio (even this is flawed because capitalists and workers are not two distinct groups). And then there is this graph (figure 4) from https://cepr.org/voxeu/columns/wealth-and-history-reappraisal showing that top 1% wealth share in France, Germany, Spain, Sweden, and the UK has only gone dow from 1896-2019.
Then, if capitalists are winning, you would see the capital share of GDP increasing. Matthew Rognlie examined this: https://www.brookings.edu/wp-content/uploads/2016/07/2015a_rognlie.pdf
He found that if you take housing out of the “capital” equation, capital share is not increasing. He concludes “these results suggest that concern about inequality should be shifted away from the overall split between capital and labor”.
I’m not a Georgist, if you show me evidence that suggests otherwise, I will reconsider my belief that land is the most important component in explaining rising inequality, but you would have to show me a lot, because I’ve found quite a lot of valid evidence so far that it is a big part of the problem.
Why is all this happening? Because land is scarce and has ricardian rents. People hoard land and don’t give up part of their land as more people arrive to the world or the city. There is not mechanism for that without a land value tax (or public ownership of land for which you would charge a rent for people to use, which is the same as a land value tax). You just reap the benefits of increased land values from its scarcity as more people move in. As a result every new birth cohort owns less housing than the previous. A pattern that has not changed according to OECD’s “the squeezed middle class”.
It’s not monopoly rents that happen from land ownership, it’s called economic rent and Ricardian rent. There might also be monopoly rents if one landlord owns a whole neighborhood, but that’s rarely the case. Economic rents come from the scarcity and ricardian rents come from the differences in land values due to natural features, public investments and private amenities.
Capitalists only swallow up productivity gains if they have monopoly rents, which is not necessarily the case everywhere as there is still competition, and capital is not inelastic. Land is inherently inelastic and thus swallows up everything. This is explained by Gaffney in https://www.emerald.com/insight/content/doi/10.1108/03068290910947930/full/html
Stiglitz adds to the discussion in “inequality and growth” http://link.springer.com/10.1057/9781137554543
He makes the following conclusions:
“ That is, observed increases in wealth and wealth–income ratios cannot be explained by the steady process of the accumulation of capital. • An important component of the “wealth residual” is associated with an increase in rents: land rents, exploitation rents – including those associated with information asymmetries, monopoly and other forms of market power – and returns on intellectual property. Any theory attempting to explain the evolution of the economy must thus focus on explaining the increase in rents and their capitalized value, which are an increasingly important share of overall wealth.”
I think if I was American, I would be focusing a little more on capital than otherwise because there’s obvious huge concerns in that regard. But still, land seems to be more than half of the problem, so I prefer to focus on the big things - especially since it seems to be underrated in part due to how we measure all land held by businesses as business assets. But I’m from Scandinavia. I don’t see the private market’s influence having a concerning amount of political power, but I will change my stance if I see evidence otherwise. Again, I want to focus on the biggest part first. And as I’ve made clear, I still support public ownership of natural monopolies. I also support antitrust laws. I believe there are huge flaws in our democracies, when the private market can influence the public by owning the news outlets and buy politicians. We need stronger institutions against this.
I think we don’t disagree that much actually. I’m just a little more optimistic that we can inform ourselves enough to create strong enough anti-monopolistic institutions, coming from a country where I at least don’t feel like the government is bought. I’ve already started getting interest in big tech and how to break up these monopolies. I guess most people on this app have that interest. I switched my email, browser, search engine, and will in the future buy a Fairphone with the eOS ecosystem.
I don’t see myself as a Georgist. I don’t think it’s helpful for my scientific openness to label myself with an identity. Then I become too attached to the ideas and fail to look beyond.
Sorry this post became a bit messy and incoherent. I enjoy the conversation though, hope you can follow my point despite the lacking structure.
Different industries and sectors gradually scale differently, but all move towards concentration. This is consistent and graduated. Every Capitalist country has regularly seen this gradual concentration over time, even if temporary shifts against this trend happen.
Again, without an analysis of political power and taking an agnostic attitude towards production, you have what can sound to liberals as a good idea but is ultimately not a real answer. If the Proletariat cannot wrest control, all regulations and taxes will be enacted in a manner that suits the Capitalists in control if you get far enough in the first place. Wealth will continue to accumulate, as the entire M-C-M’ circuit is based on growth in scale of profit, not steady cashflow.
The Marxist position isn’t that moving towards full public ownership immediately is a practical solution, but that this is a gradual process that starts with the proletariat siezing control. I recommend you actually engage with Marxist theory.
I already know these theoretical arguments you’re presenting, but they are not worth as much when there’s no empirical proof. You didn’t answer my more empirical questions, which are the main source of the counter arguments. Why are there capitalist countries that don’t see a rise in inequality? Where is housing in your analysis, which makes up more than 50% of all wealth (up from 15-20% 100 years ago). Why is the capital to income ratio not rising when housing is taken out of the equation? Why is every productivity gain in society accompanied by equally rising housing rents?
There’s absolutely empirical proof of steady monopolization and concentration of production in fewer and fewer hands, it happens in all countries as industry develops. Growing larger and more complex is a necessary aspect of lowering supply chain costs, and thus chasing profits. As for your specific questions:
These don’t exist. There are countries where large influxes of concessions from Capitalists have lowered inequality temporarily, but there is still rising inequality over time.
I don’t even agree with your numbers, if you could source them that would be great, but even if we take them at face value as true, rent and land are key aspects of Marxist analysis. Land is finite, as population grows and supply is constrained, monopoly prices can be extracted. It’s usury, landlordism is parasitic. The land factories are on also plays a part in the cost of finished goods, rent is tied to commodity pricing.
Georgists seem to think they are the only ones to have noticed the problems with private land ownership, but the truth is that Marxists have a more comprehensive understanding of it. See China, Cuba, and other countries run by Marxists to see what Land Reform under Marxists looks like. I think you’ll probably like the PRC’s model.
Citation needed, and you need to narrow the scope. You need to take Imperialism into account as well, workers in the Global North are paid “bribes” won by international plundering.
It’s not always equal, but often is. Worker wages are largely depressed to the cost to reproduce them, and rents rise accordingly. Productivity isn’t coupled with wages in Capitalist countries as a rule, the landlords and Capitalists swallow all of the gains up.
Overall, you seem to think you have a grand insight into land. You’re certainly above the average liberal, who sees no real problem with it, but Marxists have a more multi-sided understanding of land, and have regularly enacted successful land reform. Georgists also have no real way to implement their policies without adopting a revolutionary stance, where they are far outnumbered by the Marxists and Anarchists.
Georgism is more correct than standard liberalism, but is too focused on one aspect of the failures of Capitalism, too one-sided, too insufficient even if it were enacted, and has no path to actually be enacted. Marxism has none of those faults.
There’s proof of it happening but not falsifiable. What I mean is that, I believe it is not happening in Scandinavia for example, but I could be wrong! I mean I feel like Scandinavia has enough “people power” to counteract that force - but it’s only based on some inequality stats. Not actual deep dive into market concentration.
In piketty’s capital in the twenty first century you see that income inequality has decreased in France, Germany, Sweden, Japan, Italy, Denmark and Spain from 1910 to 2010 without a subsequent increase. But of course you have to look at a capital/income ratio (even this is flawed because capitalists and workers are not two distinct groups). And then there is this graph (figure 4) from https://cepr.org/voxeu/columns/wealth-and-history-reappraisal showing that top 1% wealth share in France, Germany, Spain, Sweden, and the UK has only gone dow from 1896-2019.
And from this paper: https://www.sciencedirect.com/science/article/abs/pii/S0014498324000500 - you see how housing wealth makes up more and more wealth. The graph I’m referring to is also seen in https://cepr.org/voxeu/columns/wealth-and-history-reappraisal (Figure 3).
Then, if capitalists are winning, you would see the capital share of GDP increasing. Matthew Rognlie examined this: https://www.brookings.edu/wp-content/uploads/2016/07/2015a_rognlie.pdf He found that if you take housing out of the “capital” equation, capital share is not increasing. He concludes “these results suggest that concern about inequality should be shifted away from the overall split between capital and labor”.
I’m not a Georgist, if you show me evidence that suggests otherwise, I will reconsider my belief that land is the most important component in explaining rising inequality, but you would have to show me a lot, because I’ve found quite a lot of valid evidence so far that it is a big part of the problem.
https://www.aeaweb.org/articles?id=10.1257%2Faer.20150501 Found that 80% of changes in house prices are explained by land.
In https://www.bloomsbury.com/uk/rethinking-the-economics-of-land-and-housing-9781350374270/ they find that 87% of the rise in capital/income ratios can be explained by housing.
Why is all this happening? Because land is scarce and has ricardian rents. People hoard land and don’t give up part of their land as more people arrive to the world or the city. There is not mechanism for that without a land value tax (or public ownership of land for which you would charge a rent for people to use, which is the same as a land value tax). You just reap the benefits of increased land values from its scarcity as more people move in. As a result every new birth cohort owns less housing than the previous. A pattern that has not changed according to OECD’s “the squeezed middle class”.
It’s not monopoly rents that happen from land ownership, it’s called economic rent and Ricardian rent. There might also be monopoly rents if one landlord owns a whole neighborhood, but that’s rarely the case. Economic rents come from the scarcity and ricardian rents come from the differences in land values due to natural features, public investments and private amenities.
Capitalists only swallow up productivity gains if they have monopoly rents, which is not necessarily the case everywhere as there is still competition, and capital is not inelastic. Land is inherently inelastic and thus swallows up everything. This is explained by Gaffney in https://www.emerald.com/insight/content/doi/10.1108/03068290910947930/full/html
Stiglitz adds to the discussion in “inequality and growth” http://link.springer.com/10.1057/9781137554543 He makes the following conclusions: “ That is, observed increases in wealth and wealth–income ratios cannot be explained by the steady process of the accumulation of capital. • An important component of the “wealth residual” is associated with an increase in rents: land rents, exploitation rents – including those associated with information asymmetries, monopoly and other forms of market power – and returns on intellectual property. Any theory attempting to explain the evolution of the economy must thus focus on explaining the increase in rents and their capitalized value, which are an increasingly important share of overall wealth.”
I think if I was American, I would be focusing a little more on capital than otherwise because there’s obvious huge concerns in that regard. But still, land seems to be more than half of the problem, so I prefer to focus on the big things - especially since it seems to be underrated in part due to how we measure all land held by businesses as business assets. But I’m from Scandinavia. I don’t see the private market’s influence having a concerning amount of political power, but I will change my stance if I see evidence otherwise. Again, I want to focus on the biggest part first. And as I’ve made clear, I still support public ownership of natural monopolies. I also support antitrust laws. I believe there are huge flaws in our democracies, when the private market can influence the public by owning the news outlets and buy politicians. We need stronger institutions against this.
I think we don’t disagree that much actually. I’m just a little more optimistic that we can inform ourselves enough to create strong enough anti-monopolistic institutions, coming from a country where I at least don’t feel like the government is bought. I’ve already started getting interest in big tech and how to break up these monopolies. I guess most people on this app have that interest. I switched my email, browser, search engine, and will in the future buy a Fairphone with the eOS ecosystem.
I don’t see myself as a Georgist. I don’t think it’s helpful for my scientific openness to label myself with an identity. Then I become too attached to the ideas and fail to look beyond.
Sorry this post became a bit messy and incoherent. I enjoy the conversation though, hope you can follow my point despite the lacking structure.