Minimum wages and why there should not be one....

I'd point out that a good percent of businesses inside cities today are doing business on leased property. There is a time limit. And, there is usually a monthly rent.

Under the current system, the owner of the property would decide the rent, would decide and pay for what major capital improvements would be made, would determine whether the lease is renewed, and would determine who would get the next lease.

It sounds to me like under geoism there would be some sort of government agency that would make the decisions that the property owner of today would make.

True?

 

You’re right. But let’s get something else in the table. In our current economy federal minimum wage literally means nothing. Inflation has taken “federal minimum wage” off the table. You are hard pressed to find any job that starts it’s workers at federal minimum wage. State minimum wage in the other hand does play a role because some states minimum wage is quite a bit higher than federal. I also think federal minimum wage is unconstitutional because the constitution does not grant that power to the federal government. Therefore it is as prescribed by the tenth to the state and or people.

 

Proving you wrong.

No, that's just more anti-economic nonsense from you. The rent is set by the market, not the owner. The owner is free to accept less than the market rent, but if he "decides" to charge more, he will be out of luck: prospective tenants will just deal with a less greedy landowner. The landowner has no power whatever to set the rent that tenants are willing to pay. He can accept the high bid from a prospective tenant, or accept a lower bid and forego the difference. That's all.

No, that is not necessary, and only serves to obscure the fundamental relationships. In many cases, tenants decide on and pay for the improvements on leased land. You are merely trying to pretend that the role of the landowner and that of the entrepreneur/land user who invests in fixed improvements to enable productive use of the location are the same. They are not. The fact that it is often the same person or company that does both is irrelevant, merely an artifact of the current land tenure system. In Hong Kong, all the land has been publicly owned for over 170 years, and it has usually been the private tenants, not the public owner, who decided on and paid for the fixed improvements. Same in China since the geoist reforms of Deng Xiaoping created the greatest economic miracle in the history of the world.

Nope. If he gets greedy, there is nothing he can do to force tenants to renew. Of course, he can increase the chances a good tenant will renew by accepting less than the market rent, but that's about it.

Nope. See above. He has no power to do anything but accept the high bid or accept a lower one and forego the difference.

For someone who has stolen a lot of money from the community by owning land, you seem to have very little understanding of how real estate markets work.

No, of course not. You simply made that up. The users would make those decisions, as they do now, and have been doing explicitly in Hong Kong for over 170 years, because they would be paying the community for secure, exclusive tenure.

Under the current system, the productive must pay taxes to government to fund desirable public services and infrastructure, and must then pay idle, parasitic landowners full market value just for their permission to access the exact same desirable services and infrastructure their taxes just paid for. The productive pay for government twice so that landowners can pocket one of the payments in return for doing and contributing exactly nothing. Geoism just eliminates that something-for-nothing payment to the landowner: land users just pay government directly for the benefits its spending on services and infrastructure create, which show up as land rent.

 

The land owner sets the rent for as much as he can get. Other land owners do the same. That is how the market value is set.

 

So just as I told you, he doesn't set it at all, the market does.

They are all price takers, as Ricardo demonstrated in his explanation of the Law of Rent more than 200 years ago. They have no role in setting land rents. The best they can do is accept the high bid from the prospective users. It is therefore the latter who set the rent.

No it isn't. It is set by the Law of Rent, which says land rent is equal to the difference in production between valuable and marginal land, given the same inputs of labor and capital investment, because that is how much the high bidder will be willing to pay for the advantages of the site.

Everything you have said on this subject is reliably wrong.

 

Owners always try to get the most they can get. The price of property goes up and down based on what owners can get. The market is somewhat of an average for what owners have been successful in getting for their property. I think you agree that the market doesn't make decisions of any kind.

The decisions are made by two entities. You can't say that one set the price. The price is set by their agreement. Obviously, other factors are in effect - others who are selling or buying, the cost of money, etc. That is, there is competition, supply and demand.

In the rule of rent you propose covers various significant factors. Buyers must evaluate the land based on their own view of future production, the cost of money, the expense of making the changes necessary to get there, etc.

We see corporations buying a city block of business property and then bulldozing the whole thing in order to make use of the property in the way THEY want. You can't really apply your law of rent to that, because the future production is not based on what the current production is. Instead it is based on the dreams of the corporation, the cost of money, the view of the future success of the neighborhood, the perception of the needs of the city as a whole that could allow for success for the future business (for example, are there enough people to justify a shopping center), etc.

Clearly, buyers would have very different views on production and what land should be considered of marginal value. We see farm land being turned into housing developments, for another example.

The person selling the land is likely to be faced by buyers who have VERY different ideas on evaluating production potential.

Also, I would say that the line "same inputs of labor and capital investment" is NEVER the case in the real world.

 

Nonsense. Many owners accept less than the market rent to avoid the risk and hassle of finding a new tenant who will pay more.

And other factors, most importantly the discount rate, the tax rate, and the expected rent growth rate.

I.e., what buyers have been willing to pay. The owners would have taken more if they could. That means they have no role in setting the price.

determining the market rent is not a decision any more than measuring the temperature with a thermometer is a decision.

So you agree you were just makin' $#!+ up again when you claimed owners set the price. They in fact have no say whatever in the price of land rent.

There are many factors. The high bidder is just the most optimistic bidder.

Of course I can. It applies just the same.

Irrelevant. The rent is still the difference between what the high bidder expects to produce at that location and what he could produce at a marginal location with the same inputs.

How much they can expect to produce at that location vs the best free location. Like I said, and you are so foolishly trying to deny.

So the high bidder's opinion wins.

And you mistakenly believe that could be relevant.

Certainly. The market doesn't care. Only the opinions of the top two bidders matter.

It's hypothetical, and complicated by the fact that there is a hierarchy of potential uses, and most marginal sites won't be suited to a given high-density use. The rent is still determined by the difference between expected production on that site and other sites, given the same inputs.