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Private property rights in natural resources

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Saurabh

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All previous objections apply.

This is like the economist who wanted to open a can without a can-opener, and said "Let's assume a can-opener".

BTW: Your mention of economists like Ricardo is an appeal to authority. Ricardo's focus on the mythology of "rent" was just another rationalism in the long line of rationalizing economists. Indeed, some say he started economics down on this painfully fruitless path.

Well, can you be specific about where you disagree?

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Well, can you be specific about where you disagree?
Fundamentally, Ricardo's major error was to take the focus of economics away from production and toward distribution. The simple fact is that land is not scarce in any practical sense, and definitely not in comparison to other factors of production. I understand that Ricardo lived in a different time, and did not have the entire context that we have today. So, this is not to blame him in the moral sense. Edited by softwareNerd
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The simple fact is that land is not scarce in any practical sense, and definitely not in comparison to other factors of production.

Why do say that land is not scarce? Can you elaborate?

In my country atleast, land is becoming very scarce.

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On 1)

That scarcity creates scarcity rents has been documented enough by Economists. Land is such a scarce source.

Randriod's point does not apply to my debate becuase it is common knowledge that land is useful (has fertile properties), and the Pioneer who discovered these properties thousands years back is no more.

Would you agree that if land has no value to YOU, then it is worthless to YOU? If you answer yes, then you should agree that would mean scarcity does NOT determine the value of anything. Now scarcity (in the sense of having a specific amount of something available) can help determine pricing (i.e. oh we're running out of supplies, we better increase the price so we don't run out as quick), but it doesn't determine what "the" value is since all people value things differently.

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On 1)

That scarcity creates scarcity rents has been documented enough by Economists.

Logical fallacy: Appeal to authority. Try again.

On 1) Randriod's point does not apply to my debate becuase it is common knowledge that land is useful (has fertile properties), and the Pioneer who discovered these properties thousands years back is no more.

Those are actually two different objections. Regarding the former: Fertile farmland is utterly useless and therefore worthless to anyone who is not a farmer. Regarding the latter: The pioneers may be dead, their heirs aren't. My argument still stands.

By the way, it's Randroid, not Randriod. B)

On 2)

Let me replace the term inherent value by the term scarcity rent (let me know if anyone has objections).

Scarcity rent are a fact of life for land. This is becuase, the demand is growing by population, and supply in inelastic. Please see attached ppt slide that shows how scarcity rents arise.

Demand exceeding supply only causes a rise in price, which, as I understand it, is different from "economic rent". You still have not adequately explained how or why landowners (who are on the supply side) are the ones who have to pay the people on the demand side. That's kinda the opposite of how reality works. If you have something that I want, I pay you for it, not the other way 'round.

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Would you agree that if land has no value to YOU, then it is worthless to YOU? If you answer yes, then you should agree that would mean scarcity does NOT determine the value of anything. Now scarcity (in the sense of having a specific amount of something available) can help determine pricing (i.e. oh we're running out of supplies, we better increase the price so we don't run out as quick), but it doesn't determine what "the" value is since all people value things differently.

Let us not get into Value and Price debate.

All I am saying is that scarcity creates scarcity rent. Do you have any disagreement here?

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Randroid,

Logical fallacy: Appeal to authority. Try again.

Just becuase I am appealing to authority does not imply that my argument is necessarily wrong. Show me where it is wrong.

Those are actually two different objections. Regarding the former: Fertile farmland is utterly useless and therefore worthless to anyone who is not a farmer. Regarding the latter: The pioneers may be dead, their heirs aren't. My argument still stands.

Can you put this statement on first objection in the context of the debate? I could not connect it to our argument.

On the second, do you know who those heirs are? I think the discovery of land's basic fertile properties has become so old now that it would be appropriate to assume that now there is no claimant for the reward of that discovery.

Demand exceeding supply only causes a rise in price, which, as I understand it, is different from "economic rent". You still have not adequately explained how or why landowners (who are on the supply side) are the ones who have to pay the people on the demand side. That's kinda the opposite of how reality works. If you have something that I want, I pay you for it, not the other way 'round.

I can't understand your objection clearly. Also, your first statement is incorrect - price rise and economic rent are not mutually exclusive. Please elicit your point of disagreement again and elaborate.

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Let us not get into Value and Price debate.

All I am saying is that scarcity creates scarcity rent. Do you have any disagreement here?

You are specifically arguing about value and price and then you turn around when confronted with a logical argument and say this?

I absolutely disagree. Scarcity rent is a socialist economic construct that does not exist in a free market. Scarcity makes it possible for prices rise, it does not make a demand on producers or owners for the sake of looters and moochers.

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You are specifically arguing about value and price and then you turn around when confronted with a logical argument and say this?

I absolutely disagree. Scarcity rent is a socialist economic construct that does not exist in a free market. Scarcity makes it possible for prices rise, it does not make a demand on producers or owners for the sake of looters and moochers.

Zip and Eiuol,

I am sorry for using complex words like 'value' earlier in the debate. Now, I am continuously refining my terminology so that we can argue over the basic issue only. If I entertain debate on Price vs. Value then the debate will spill over.

Thats is why I replaced 'inherent value' with 'scarcity rent'. And I did that explicitly and asked if anyone has any objections. So, I think I am debating fairly.

Also, can you support your statement about scarcity rent? Why do you think it does not exist in a free maket?

Edited by Saurabh
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Also, can you support your statement about scarcity rent? Why do you think it does not exist in a free maket?

SCARCITY RENT is the marginal opportunity cost imposed on future generations by extracting one more unit of a resource today. Scarcity rent is the cost of "using up" a finite resource because benefits of the extracted resource are unavailable to future generations. Efficiency is achieved when the resource price--the benefit society is willing to pay for the resource today--is equal to the sum of marginal extraction cost and scarcity rent.

FREE MARKET describes a market without economic intervention and regulation by government except to regulate against force or fraud. The terminology is used by economists and in popular culture. A free market requires protection of property rights, but no regulation, no subsidization, no single monetary system, and no governmental monopolies. It is the opposite of a controlled market, where the government regulates prices or how property is used.

That should be clear enough I hope.

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That should be clear enough I hope.

Actually it is not clear. These seem to be definitions of two different concepts. Can you demonstrate the connection betwen the two?

Also, if you are quoting a definition, please provide a source. Thx!

Edited by Saurabh
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Just becuase I am appealing to authority does not imply that my argument is necessarily wrong. Show me where it is wrong.

The burden of proof is still on you. You make the claim that someone using a resource has to pay the people who don't use it a fee for that privilege. You must show why, I don't have to show why not. Saying that a bunch of other people also say so proves nothing, even if they have degrees or are famous or really pretty.

Can you put this statement on first objection in the context of the debate? I could not connect it to our argument.

Okay, when I turn my head to the left and look out of my window, I can see some fertile land. The problem is, I don't know how to cultivate land. I don't know where to get crop seed, when to plant it, when to water and fertilize it, when to harvest it, I don't know how to operate a harvester, etc. So, even if that land was mine, I wouldn't know what to do with it. It's useless and of no value to me.

If someone who does know (or can figure out) all these things and claims the land as his property, I don't lose anything. It imposes zero cost on me. In fact, my life improves significantly: The farmer grows food that I can buy from him and eat. Why should he pay me for that?

"But what about the other farmer, who also knows how to cultivate land and now doesn't get to?", you say. Why the hell didn't he, then? You snooze, you lose. He was sitting on his ass, doing diddly-squat, playing with his toes, and now he says, "Aw, shucks, I coulda/woulda/shoulda thought of that!" and demands some of the money the productive farmer makes by growing and selling food. He demands money for doing nothing - literally.

No wonder I can't get the Dire Straits out of my head. B)

On the second, do you know who those heirs are? I think the discovery of land's basic fertile properties has become so old now that it would be appropriate to assume that now there is no claimant for the reward of that discovery.

You're getting my arguments mixed up again. This has nothing to do with discovering fertile qualities, I was referring to the land itself.

I can't understand your objection clearly. Also, your first statement is incorrect - price rise and economic rent are not mutually exclusive. Please elicit your point of disagreement again and elaborate.

I didn't say they are mutually exclusive, I said that you have only shown that demand exceeding supply can increase the price of a commodity. I agree. You have not shown, however, how or why demand exceeding supply causes inalienable human rights to evaporate.

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Actually it is not clear. These seem to be definitions of two different concepts. Can you demonstrate the connection betwen the two?

Also, if you are quoting a definition, please provide a source. Thx!

What?

Are you having a completely different conversation that the one in which you asked me to

support your statement about scarcity rent? Why do you think it does not exist in a free maket?

My specific statement was...

Scarcity rent is a socialist economic construct that does not exist in a free market.

Of course these seem to be two different concepts they ARE two different concepts. Scarcity rent has, and can have nothing to do with a free market. By definition (which I provided) scarcity rent can not exist in a free market because it relies on something being forced into the market.

You are the person trying to establish that the free market isn't invalidated by the imposition of scarcity rent. You are the one who tried to say the two were not mutually exclusive.

As for requesting the definition I believe that you are being purposefully obtuse. You yourself have defined scarcity value and your definition corresponds with the definition I provided, as for the definition of a free market it is simple, accurate and consise.

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I find it difficult to believe.

How do you know this?

Do others on the forum believe this?

Do you have access to google maps or google earth? Take a look at the land.

Discover the population. Discover the amount of acres. You like to divvy things up, correct? See how much land there is in relation to every man, woman and child in India. (I happen to live with 3 other human beings on less than 1/2 an acre of land... comfortably).

Edited by freestyle
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Randroid,

Thanks for the post.

The burden of proof is still on you. You make the claim that someone using a resource has to pay the people who don't use it a fee for that privilege...

You are right.

However, I thought your response was in context of my first statement: that scarcity rents are a fact of life. I used the reference to Economists in this context - not for the full argument. Any reactions?

"But what about the other farmer, who also knows how to cultivate land and now doesn't get to?", you say. Why the hell didn't he, then? You snooze, you lose. He was sitting on his ass, doing diddly-squat, playing with his toes, and now he says, "Aw, shucks, I coulda/woulda/shoulda thought of that!" and demands some of the money the productive farmer makes by growing and selling food. He demands money for doing nothing - literally.

Thanks for using the example.

Now, if land is scarce and can only be given to one person, what should be appropriate action for the second person?

I didn't say they are mutually exclusive, I said that you have only shown that demand exceeding supply can increase the price of a commodity. I agree. You have not shown, however, how or why demand exceeding supply causes inalienable human rights to evaporate.

I was only trying (in the para selected by you in your post) to show how scarcity rents arise - and I belive you were debating that scarcity rents do not arise by demand exceeding suppy.

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Do you have access to google maps or google earth? Take a look at the land.

Discover the population. Discover the amount of acres. You like to divvy things up, correct? See how much land there is in relation to every man, woman and child in India. (I happen to live with 3 other human beings on less than 1/2 an acre of land... comfortably).

Well, land can still be scarce due to two reasons:

- if it is concentrated in few private hands

- if govt owns it and restritcs public usage

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The answer, using Wikipedia data is... .678 Acres per person living in India today or if you prefer 29,533.68 square feet which I figure is over 7 times the area of the land I own and on which me and my family and our dog and cat live quite comfortably.

I could quite easily live on less land and still have a hell of a good life because I buy my stuff from the people that produce it. I know that I don't have to try to produce it myself and many of the people in my country know that they will work for a large corporation that owns all the stuff they work on every day.

They like me will do their work and go home to their tiny plot of land turn on the big screen TV, (built in Japan by factory workers who effectively don't own land) put their feet up on the ottoman (made in the USA by factory workers who also don't own any land other than their home) and chow down on some corn chips produced thousands of miles away by some huge conglomerate corn farm where the workers only own the land that surrounds their house and we will all be thankful that we aren't tied to some backward concept that says we are owed something for the mere fact that we draw air into our lungs.

But then again I am not trying to create some 19th century agrarian workers paradise.

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However, I thought your response was in context of my first statement: that scarcity rents are a fact of life. I used the reference to Economists in this context - not for the full argument. Any reactions?

Until you can prove that scarcity rents are a valid concept, they are certainly not a fact of life.

Now, if land is scarce and can only be given to one person, what should be appropriate action for the second person?

Whatever is in that person's rational self-interest. They can try to find unclaimed land somewhere else. Or they can buy land. Or they can work for the farmer. Or they can choose a different vocation. They may not, however, initiate force.

I was only trying (in the para selected by you in your post) to show how scarcity rents arise - and I belive you were debating that scarcity rents do not arise by demand exceeding suppy.

No, my position is that scarcity rents are an invalid concept, i.e. not real. An insane fantasy made up by people who know as little about reality as they know about economics.

Edited by Randroid
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Zip,

I am sorry but I still do not get your point.

Can you please again explain to me your statement below? Sorry I could not understand it from your previous post.

Scarcity rent is a socialist economic construct that does not exist in a free market.

I am trying my best to be honest about the debate. However, if you do not believe me, then you have the right to make your own judgement about me and to stop dealing with me if you want.

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Zip,

I am sorry but I still do not get your point.

Can you please again explain to me your statement below? Sorry I could not understand it from your previous post.

I am trying my best to be honest about the debate. However, if you do not believe me, then you have the right to make your own judgement about me and to stop dealing with me if you want.

Alright. Last time.

This is a definition of scarcity rent (used earlier)

SCARCITY RENT is the marginal opportunity cost imposed on future generations by extracting one more unit of a resource today. Scarcity rent is the cost of "using up" a finite resource because benefits of the extracted resource are unavailable to future generations. Efficiency is achieved when the resource price--the benefit society is willing to pay for the resource today--is equal to the sum of marginal extraction cost and scarcity rent.

Notice that central to the definition is the fact that scarcity rent is imposed on future generations.

Now here is the definition of a free market.

FREE MARKET describes a market without economic intervention and regulation by government except to regulate against force or fraud. The terminology is used by economists and in popular culture. A free market requires protection of property rights, but no regulation, no subsidization, no single monetary system, and no governmental monopolies. It is the opposite of a controlled market, where the government regulates prices or how property is used.

Notice how a free market by definition is a system "without economic intervention and regulation by government"

Scarcity Rent as defined demands imposition (someone has to be doing the imposing and that means government) and free markets by definition exclude all such action, therefore scarcity rents can not exist within a free market.

I can't make it any clearer than that.

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Scarcity Rent as defined demands imposition (someone has to be doing the imposing and that means government) and free markets by definition exclude all such action, therefore scarcity rents can not exist within a free market.

I can't make it any clearer than that.

OK. Now I see what you are saying.

Though, your definition of scarcity rent pertains to exhaustible resources (such as oil). But that's is fine.

Now, let us assume for a moment that scarcity rents indeed cannot be determined though a free market. My question to you is: so what?

Is that enough for us to discard the concept? Free market does not exist in defence and judiciary, but these are still thought a proper functions of a govt.

So, even if we agree to your claim, it is not very clear how it implies that we should not collect these rents.

Edited by Saurabh
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My question to you is: so what?

Is that enough for us to discard the concept? Free market does not exist in defence and judiciary, but these are still thought a proper functions of a govt.

So, even if we agree to your claim, it is not very clear how it implies that we should not collect these rents.

So, your argument, as I understand it, is this: You are perfectly aware that economic rent is an invalid and, more importantly, unjust and evil concept, but there is already some evil and injustice in the world, so we might as well go full hog and forget all this useless crap about human rights completely.

Is that about right?

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So, your argument, as I understand it, is this: You are perfectly aware that economic rent is an invalid and, more importantly, unjust and evil concept, but there is already some evil and injustice in the world, so we might as well go full hog and forget all this useless crap about human rights completely.

Is that about right?

No - your understanding is not right. I don't understand how you made that extrapolation.

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