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Ronald Burgess: What can he teach us now?

 
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Richard Glover



Joined: 29 Sep 2008
Posts: 185
Location: Ealing, London, UK

PostPosted: Sun Jun 07, 2009 2:47 pm    Post subject: Ronald Burgess: What can he teach us now? Reply with quote

Ronald Burgess studied and taught Henry George's economic principles; he later attempted to develop economic understanding in such a way for both the analysis and transformation of a modern trading economy such as the UK.

It could help our efforts if we connected with his depth and breadth of understanding, and his significant efforts to formulate an effective remedy.

Burgess presented a paper at the 17th International Conference on Land-Value Taxation and Free Trade, Vancourver, British Columbia, Canada, 1986. It is an easy introduction to his approach, and describes the effect of employment taxation on pay-bargaining and unemployment: http://www.cooperativeindividualism.org/burgess-ronald_towards-the-remedy.html
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Richard Glover



Joined: 29 Sep 2008
Posts: 185
Location: Ealing, London, UK

PostPosted: Sun Jul 04, 2010 9:05 pm    Post subject: Public Revenue Without Taxation - a short review Reply with quote

Burgess wrote this provocative book in 1993. It examines the effects of taxation, in part using Keynesian models. The arguments for alternatives to taxation proposed by the Physiocrats, Henry George and Alfred Marshall are considered and then taken further in his conclusion.

His definition of taxation excludes collections of economic rent; hence the book's title is not without promise.

He considers tax shifting from the formal incidence to the effective incidence; a tax may be imposed on one aspect of the economy, but is generally shifted to another.

Taxation by his definition is shown to always result in increasing prices ie. inflation, perhaps transformed by government action to unemployment. There will be more on this in a posting in the topic "Inflation, its nature and cause".

His careful consideration of what Marshall had to say about the sources of land value is brilliant (p91 onwards). Marshall was very close to the crux of the matter. Burgess unravels Marshall's slight confusion and tekse it further to present the main sources of value for a particular location or site:
    Inherent value (Ricardo's fertility of the soil), claimed to be relatively insignificant.
    Private value - due to direct modification to the location's land to date; he seems to exclude buildings in this.
    Public value - due to all externalities, both publicly financed and privately financed.

He homes in on his title's promise by claiming that a significant part of a particular location's value is due to publicly financed works; this could be infrastructure investment, defense, or law and order. This is therefore publicly created value. A responsible government would collect this, and avoid imposing arbitary and inflationary taxes.

Interestingly, he seems to downplay the extent that private investment in other sites will increase the value of the site under consideration. I would have thought the mere presence of a community would significantly enhances the site's value.

At each transfer of ownership or renegotiation of the rent, the value will be deterined by market forces focussed through the 2 parties involved. Burgess claims it is then a relatively simple matter of determining the component of this value due to externalities and hence arising mainly from public expenditure. This value is the public revenue which can be collected.

He does claim Henry George only addressed a limited case, whereas Burgess claims to address the general case. However, his conclusions do not seem to be that different to those presented by the Economics with Justice courses (http://www.economicswithjustice.org/) or presentations of the Henry George Foundation (http://www.henrygeorgefoundation.org/).

I hope this will encourage some to read or re-read this book, and others to improve or correct this particular posting.
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