Category: Georgist teaching resources

Henry George's remedy for AIDS

No, Henry George didn’t say anything about AIDS,  but…

While safe-sex education has changed sexual behavior in the United States, it’s had little effect in Africa, which [UC Research Associate Emily] Oster ascribes to quality-of-life differences. “How much people care about dying from AIDS 10 years from now depends on how many years they expect to live today and how enjoyable they expect those future years to be,” Oster wrote. “If income and life expectancy in Africa were the same as they are in the United States, we would see the same change in sexual behavior—and the AIDS epidemic would begin to slow.” 

Achieving prosperity and improving the quality of life– that Georgists know how to do.

Source:  Chicago GSB Magazine 

Intro courses found ineffective at teaching economics

Introductory economics courses effectively teach nothing, according to Robert Frank.

Students are given tests six months after they’ve taken the course to see whether they understand basic economic concepts, and students who’ve taken the course don’t score any better on those tests than students who didn’t take the course at all.

His solution involves teaching only a few basic essentials, and emphasizing stories as a way to learn. What it means for the Henry George Schools, I think, is that we probably are more effective than academic economists, and that there was a reason why HG put all those digressions into his books.

It is difficult to tax only the rich…

…because to a large extent they can pass the taxes on. After all, they are rich because they have some sort of market power, something somebody needs. If we increase the cost of providing whatever it is that rich people provide, they will just charge more for it.

Today’s example involves overpaid corporate executives. They get various perks, such as country club memberships or free use of company airplanes by their spouses. They also get extra-generous severance agreements. Congress has passed special taxes on these things. Do corporate executives pay them? No, most companies make additional payments to cover the taxes, and further additional payments to cover the taxes on the additional payments.

Note these executives and corporations aren’t taking advantage of any special loopholes here.

Source: “Rules shine light on ‘gross-up’ gravy train” Chicago Tribune, May 2 2007. If the Tribune puts this AP article behind a paid archive screen in a few days, versions might still be here or here . Earlier, a similar article appeared here , and some time ago here.

Of course there is a tax that mainly hits the rich, and cannot be passed on.

Henry George's proposal in action

Today’s Tribune gives us another example of the community collecting the rent: Chicago Park District harbors.

For many years, boat slips were greatly underpriced, so in order to get one you had to bribe a Park District employee. In 1996, harbor management was contracted out to Westrec Marina Management. Rates were raised and continue to increase. Harbors were improved and the number of spaces increased from 4400 to 5100.

A slip for your 35-foot boat at the popular northside harbors will cost you $3418 if you’re a Chicago resident, with a 25% surcharge for nonresidents. Fees are expected to yield $20.4 million in 2007, against $7.3 million operating costs. Of course there are also capital expenses, but the balance goes into the Park District’s general fund (although part of the cost is municipal tax which presumably goes to the City).

Of course there are people complaining about the cost: “It saddens me to see these prices get to the point where some people have to reconsider whether they can afford to do it anymore. With the way the economy’s going, fewer people will be able to get into boating in the first place,” says one boater.

You will always get people complaining, on behalf of the poor, that their costs should be reduced. It is obvious that boaters are not poor people. If you don’t want to pay to keep your boat in Chicago, there are less expensive harbors at Waukegan, Winthrop Harbor, Michigan City, and elsewhere. There are cans and star docks (which I guess require one to row out to one’s yacht) for as little as $1200/year.

Henry George’s proposal is really this simple.  The community makes land valuable.  That value belongs to the community, who should collect it in the form of a periodic payment for the exclusive right to use a piece of it.  Even when the land is water.

Leasing of urban land remains common

Georgist instructors always need to point out that people are quite willing to develop land taht they do not own, as long as they expect to be able to keep possession of the improvements they make.  So it is not really striking, but useful to note, that Loyola University plans to “sell development rights to about three acres near its North Side lakefront campus.  The school hopes to extend a 75-year ground lease to a developer that will finance the project.” (from the Chicago Tribune, March 7 “Inside Commercial Real Estate”).

Why is Loyola looking to lease rather than sell? No one says, but possibly they want an assured income stream with some sort of escalator to benefit from expected increases in land values.  Or possibly they are planning to try to somehow keep the land exempt from real estate taxes.  Possibly they want to tie their successors’ hands to prevent depletion of their endowment.

Or perhaps they’re thinking very long term.