November Employment Preview
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On Friday at 8:30 AM ET, the BLS will release the employment report for
November. The consensus is for 183,000 jobs added, and for the unemployment
rate to...
2 hours ago
3 comments:
I was getting into a debate on "What is capitalism?" on another site.
As a neo-Georgist it's my general impression that capitalism was corrupted in its crib with the rent-seekers (like Rockefeller) who quietly snuck into the capitalist tent in the late 19th century.
Wikipedia definition of capitalism is good enough:
"private ownership of the means of production and the creation of goods or services for profit"
Key word being "creation". Public or private is actually orthogonal to "capitalism" since the soviet model was Communist Party ownership and control of capital, and state capitalism is capitalism.
Now, capital itself is a very fuzzy concept still. It is a subset of wealth, but we tend to use the two terms interchangeably (without clarity as to what we really mean by either, for that matter).
Capital is money in the bank that a startup got from a VC, but not all money is capital.
Capital is also tooling and machine goods that assist labor in the production of wealth, but not all durable goods are capital.
What clarified it for me was the idea that capital is that which assists wealth production.
Henry George added the specialization that capital is necessarily created by labor -- that natural resources are not by definition capital, but a different class of wealth, "land".
I think this is useful in that it is easier to identify the rent-seekers when one excludes profit from merely digging up (or otherwise making available) natural wealth, since nature is a very zero-sum thing.
Housing is therefore a hybrid entity -- it has a durable good component (the fixed improvements) plus the land wealth -- site value that dependent on everything OUTSIDE the lot lines, oddly enough.
I think Henry George absolutely nailed the core imbalance in the system 100+ years ago -- capitalism cannot prosper in the teeth of rent-seeking in land, since the more capitalism enriches the masses, the more wealth will be parasitically tapped by the rent-seekers.
The numbers today bear this out. 40% of the population under 45% rents, and about half pay more than 30% of their gross income in rent.
Housing rents are the biggest tax people are hit with, currently. At least $600B/yr, probably more.
This is the same scale as the trade deficit, another $600B/yr bleeding out of the paycheck economy.
Troy,
I think Henry George absolutely nailed the core imbalance in the system 100+ years ago -- capitalism cannot prosper in the teeth of rent-seeking in land, since the more capitalism enriches the masses, the more wealth will be parasitically tapped by the rent-seekers.
September 3, 2012
Escaping The Underwater World
Underwater mortgages -- loans on which the amount owed exceeds the property's value -- have posed a serious hardship for many homeowners in recent years. Fortunately, conditions are right for more and more of these loans to emerge from their underwater state.
Conditions are right? Fantastic. Time to change the name of my blog to...
Guaranteed Prosperity
(Or not.)
Troy -
Excellent comment. I would add to the literal rent seeking from land, the financial sector rent seeking in the forms of interest and speculation which raises capital asset values above sensible levels - untill the crash comes and we all feel the pain.
JzB
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