You say that like accumulation of capital is a bad thing. It's good: capital competes with capital to lowers its rates of return. We need more capital.
The real culprit is land: we don't accumulate any more of that, so it's rates of return don't vanish.
Land? You'd think it's machinery that is the means of production and ownership of that becomes more concentrated.
Back then you would give a manuscript to your secretary who would type it, hand it to the typesetter, and it would go to the printer, both skilled tradesman and unionized. Now you yourself submit camera-ready copy to the publisher and pay a subscription for Office 365 year after year. You ask yourself why the price of scientific journals hasn't dropped, but the missing land tax isn't the reason.
Machinery deprecates pretty quickly, and we can produce more of it, eroding any excess returns.
I'm also not quite sure what this American obsession with unions is about.
Actually, the price for reading science has dropped to almost zero. But, of course, not if you restrict yourself to paying for scientific journals.
(The monopolies there that drive high costs are the result of a really weird system---and yes, that one's not got to do much with land rents nor equipment. It's closer to regulatory capture, and entrenched interests.)
Can you expand on what you mean by this, please? Why does there need to be competition?
All of GDP basically gets split between land, labour and capital. As sort-of Georgist libertarian/socialists, we want as much of that to go to labour as possible, but without shrinking the pie. We redirect land's share via an LVT. But we don't want to tax capital: but fortunately, the competition between capital goods will lead to lower rates of return.
The owner of the first factory might make lots of profit. The owner of the second factory less so, and the third might barely break even. The surplus can go to consumers and workers.
capital competes with capital to lowers its rates of return. We need more capital.
Wouldn't lowering rates of return on capital disincentivise investment in new capital? If that was the most important dynamic then presumably the greatest amount of aggregate capital would be obtained through capital redistribution?
Yes, lowering rates of return on capital disincentivise capital investment. But that's alright: on the scale of the whole economy the only reason to invest in capital is to consume more.
A scarcity of capital leads to higher rates of return. A glut of capital leads to lower rates of return. There's an equilibrium in the middle. My "We need more capital." was spoken from the point of view of someone selling their labour for a living: for me as a worker, there can't be enough capital.
Comments
You say that like accumulation of capital is a bad thing. It's good: capital competes with capital to lowers its rates of return. We need more capital.
The real culprit is land: we don't accumulate any more of that, so it's rates of return don't vanish.
Land? You'd think it's machinery that is the means of production and ownership of that becomes more concentrated.
Back then you would give a manuscript to your secretary who would type it, hand it to the typesetter, and it would go to the printer, both skilled tradesman and unionized. Now you yourself submit camera-ready copy to the publisher and pay a subscription for Office 365 year after year. You ask yourself why the price of scientific journals hasn't dropped, but the missing land tax isn't the reason.
Machinery deprecates pretty quickly, and we can produce more of it, eroding any excess returns.
I'm also not quite sure what this American obsession with unions is about.
Actually, the price for reading science has dropped to almost zero. But, of course, not if you restrict yourself to paying for scientific journals.
(The monopolies there that drive high costs are the result of a really weird system---and yes, that one's not got to do much with land rents nor equipment. It's closer to regulatory capture, and entrenched interests.)
An interesting point to this is the land value tax, advocated by Georgists (whom Einstein was sympathetic to).
Can you expand on what you mean by this, please? Why does there need to be competition?
Yes, I was hinting at Georgism myself.
All of GDP basically gets split between land, labour and capital. As sort-of Georgist libertarian/socialists, we want as much of that to go to labour as possible, but without shrinking the pie. We redirect land's share via an LVT. But we don't want to tax capital: but fortunately, the competition between capital goods will lead to lower rates of return.
The owner of the first factory might make lots of profit. The owner of the second factory less so, and the third might barely break even. The surplus can go to consumers and workers.
(Not sure if that was better explained?)
Wouldn't lowering rates of return on capital disincentivise investment in new capital? If that was the most important dynamic then presumably the greatest amount of aggregate capital would be obtained through capital redistribution?
Yes, lowering rates of return on capital disincentivise capital investment. But that's alright: on the scale of the whole economy the only reason to invest in capital is to consume more.
A scarcity of capital leads to higher rates of return. A glut of capital leads to lower rates of return. There's an equilibrium in the middle. My "We need more capital." was spoken from the point of view of someone selling their labour for a living: for me as a worker, there can't be enough capital.