“Futarchy” is my proposed system of governance which approves a policy change when conditional prediction markets give a higher expected outcome, conditional on that change. In a city setting, one might be tempted to use a futarchy where the promoted outcome is the total property value of all land in and near that city. After all, if people don’t like being in this city, and are free to move elsewhere, city land won’t be worth much; the more attractive a city is as a place to be, the more its property will be worth.
"The right to pursue and own property is fundamental." That is just what Harberger taxes challenge. We can have partial socialisation of property while retaining free markets - and in fact, making them freer and more ubiquitous.
The definition and provision of city services via declared negative property value is very interesting. Interesting enough that I would consider moving to a city which has mechanisms like this in place.
Leaving aside the immediate impacts on property and property owners, I really like the idea of having clear mechanisms which can be iterated on to improve government and people's understanding of governance. I realize it doesn't bear repeating with every variation on the theme, but I feel like the benefit of a clearer and more correct understanding of the system for all parties has been consistently undersold.
If we add redistribution, then by maximizing the total value around, we we can improve on any other arrangement, in the sense of giving everyone more of what they want. What I've just said is standard welfare economics.
"the promoted outcome is the total property value of all land"
I don't think that most voters agree with this goal. The problem is that you're doing a kind of utilitarianism of summing up the total value in an area, regardless of who provides that value. But most voters exhibit a kind of NIMBY preference: what they want is their OWN personal value to be maximized -- not necessarily the city's total value.
Your "liquor store" seems like a clear example: it might actually raise the total value of the neighborhood ... but most of that value would go to the store owner, the store customers, and the city (in taxes). The next door neighbors might lose value. But the neighbors are the empowered local voters; perhaps the customers don't even live in town at all.
Similarly, in density: a suburb may prefer a neighborhood of middle-class single family homes. But total value might be slightly increased with skyscraper low-income housing. The town might go from a population of 10,000 middle class to a population of 100,000 low income. The total value might be (slightly) higher. The problem is that the 100,000 future residents are different people than the 10,000 current residents. But it is the 10,000 current residents who have voting power.
I don't think "maximize current property value" is actually a goal that most local voters would support.
All of these cases strengthen the point about the bad political economy of this proposal. Renters' insecurity, as I mentioned before, *actually is* a recurring source of concern and restrictive legislation. Job insecurity sometimes is too-- most of the developed world reacts in horror to the American idea of at-will employment-- and is sustainable in our context only because people don't get too emotionally attached to their jobs. Marriage is different because the power and consent dynamics are totally different and the consequences for the parties much less asymmetrical.
Many cities in the US, and many countries outside the US, severely restrict the conditions under which a landlord can make a tenant move, and specifically exclude conditions that amount to "the landlord has found a higher value use for the apartment". The motivation is that evicting renters without "just cause" is indeed widely seen as brutal and as a crisis, even when the possibility is explicitly written into the rental contract. You may say these restrictions are both inefficient and unjust and I'd agree, but my point is that even for the rental case, it's very easy for these restrictions to be demanded on the basis of a relatively small percentage of emotionally difficult cases.
How concerned are you that renters are not secure in where they live, and that workers are not secure in their job, or the marrired are not secure in their marriages?
Hmm. I'll try to learn why you say that 1st sentence (I'm guessing it's an Econ 101 efficiency thing). Your proposal still seems to me to give unduly short shrift to survival value vs luxury value, and to the ability of people to be secure in their (typically most consequential) property. But maybe in the process I'll learn something about those too.
No, I just don't see any big reduction in cost for govt to buy private property, relative to private purchases. They must pay market price, just like anyone else, and just as before.
Harberger regime would reduce those constraints by an order of magnitude, making something that was rare, common. As in the joke w/ the punchline, '... now we're just haggling over price,' the legal framework enabling gov't purchases would merely leave prices as constraints, but these could easily be adjusted per some general welfare argument for particular use cases.
But...I don't want to seem too harsh. Fun to think about.
You are obsessing about logically possible but in practice rare scenarios. You'd get a period to find a new place, or buy your old place back. Every other property would be on the market all the time, so you could grab any of them.
In practice, they only have to set their value higher than whatever the 2nd highest value anyone else would put on it. I'm sure there'd be lots of apps and agents to help people set their declared values. You are obsessing about logically possible but in practice rare scenarios.
I just added to this post.
"The right to pursue and own property is fundamental." That is just what Harberger taxes challenge. We can have partial socialisation of property while retaining free markets - and in fact, making them freer and more ubiquitous.
The definition and provision of city services via declared negative property value is very interesting. Interesting enough that I would consider moving to a city which has mechanisms like this in place.
Leaving aside the immediate impacts on property and property owners, I really like the idea of having clear mechanisms which can be iterated on to improve government and people's understanding of governance. I realize it doesn't bear repeating with every variation on the theme, but I feel like the benefit of a clearer and more correct understanding of the system for all parties has been consistently undersold.
If we add redistribution, then by maximizing the total value around, we we can improve on any other arrangement, in the sense of giving everyone more of what they want. What I've just said is standard welfare economics.
"the promoted outcome is the total property value of all land"
I don't think that most voters agree with this goal. The problem is that you're doing a kind of utilitarianism of summing up the total value in an area, regardless of who provides that value. But most voters exhibit a kind of NIMBY preference: what they want is their OWN personal value to be maximized -- not necessarily the city's total value.
Your "liquor store" seems like a clear example: it might actually raise the total value of the neighborhood ... but most of that value would go to the store owner, the store customers, and the city (in taxes). The next door neighbors might lose value. But the neighbors are the empowered local voters; perhaps the customers don't even live in town at all.
Similarly, in density: a suburb may prefer a neighborhood of middle-class single family homes. But total value might be slightly increased with skyscraper low-income housing. The town might go from a population of 10,000 middle class to a population of 100,000 low income. The total value might be (slightly) higher. The problem is that the 100,000 future residents are different people than the 10,000 current residents. But it is the 10,000 current residents who have voting power.
I don't think "maximize current property value" is actually a goal that most local voters would support.
I've added to this post.
All of these cases strengthen the point about the bad political economy of this proposal. Renters' insecurity, as I mentioned before, *actually is* a recurring source of concern and restrictive legislation. Job insecurity sometimes is too-- most of the developed world reacts in horror to the American idea of at-will employment-- and is sustainable in our context only because people don't get too emotionally attached to their jobs. Marriage is different because the power and consent dynamics are totally different and the consequences for the parties much less asymmetrical.
Many cities in the US, and many countries outside the US, severely restrict the conditions under which a landlord can make a tenant move, and specifically exclude conditions that amount to "the landlord has found a higher value use for the apartment". The motivation is that evicting renters without "just cause" is indeed widely seen as brutal and as a crisis, even when the possibility is explicitly written into the rental contract. You may say these restrictions are both inefficient and unjust and I'd agree, but my point is that even for the rental case, it's very easy for these restrictions to be demanded on the basis of a relatively small percentage of emotionally difficult cases.
Those are each arrangements where giving one person absolute security severely constrains the other party.
Security in property ownership just constrains others from taking or forcibly buying a person's property, which isn't nearly as severe.
How concerned are you that renters are not secure in where they live, and that workers are not secure in their job, or the marrired are not secure in their marriages?
Hmm. I'll try to learn why you say that 1st sentence (I'm guessing it's an Econ 101 efficiency thing). Your proposal still seems to me to give unduly short shrift to survival value vs luxury value, and to the ability of people to be secure in their (typically most consequential) property. But maybe in the process I'll learn something about those too.
No, I just don't see any big reduction in cost for govt to buy private property, relative to private purchases. They must pay market price, just like anyone else, and just as before.
Harberger regime would reduce those constraints by an order of magnitude, making something that was rare, common. As in the joke w/ the punchline, '... now we're just haggling over price,' the legal framework enabling gov't purchases would merely leave prices as constraints, but these could easily be adjusted per some general welfare argument for particular use cases.
But...I don't want to seem too harsh. Fun to think about.
I'm just not seeing your concern about govt. They are heavily constrained by the cost of buying properties now and that would continue.
You are obsessing about logically possible but in practice rare scenarios. You'd get a period to find a new place, or buy your old place back. Every other property would be on the market all the time, so you could grab any of them.
In practice, they only have to set their value higher than whatever the 2nd highest value anyone else would put on it. I'm sure there'd be lots of apps and agents to help people set their declared values. You are obsessing about logically possible but in practice rare scenarios.