Andelson (2000): A Georgist Rejoinder to F.A. Hayek

Overview

"On Separating the Landowner's Earned and Unearned Increment: A Georgist Rejoinder to F. A. Hayek" is an article by philosopher Robert V. Andelson (Auburn University), published in The American Journal of Economics and Sociology, volume 59, issue 1 (January 2000).[1] It responds directly to Nobel laureate economist Friedrich Hayek's objection that the Georgist case for taxing the unearned increment in land value fails because that increment can never, in practice, be cleanly separated from value the owner did create through improvement, foresight, or effort — a version of the broader Austrian "calculation problem" critique of land value taxation.[1]

Andelson disputes Hayek's dismissal on three grounds, stated in his abstract: "1. As Professor Backhaus observed, the degree of certainty in measurement demanded by Hayek is more rigorous than that required in practice for enforceable tax assessment. 2. Under a Georgist-style system, landowners who improve their land would, in any case, get to keep much more of the fruits of their efforts than under any alternative public revenue system. 3. The distinction between value produced by the owner... and that produced by nature and society... remains authoritative as an ideal even if not perfectly realizable in practice."[1] Andelson notes that the defenders of Georgism "seem almost wholly" to have neglected Hayek's objection, partly because it occupies only a single paragraph "in a book of more than 500 pages" (The Constitution of Liberty); yet, correctly disentangled from Hayek's own inaccurate definition of the Georgist model, the argument "seems at first blush compelling on its merits" and so, in Andelson's view, deserves a serious answer rather than dismissal.[1] The piece functions as this wiki's paired scholarly answer to Hayek's objection, and as a case study of how Georgist scholars have engaged the strongest available Austrian-school critique rather than only the more polemical Rothbardian version addressed in the wiki's Austrian critique objection page.

See Also

• Unearned Increment — the concept at the center of the dispute
• Objection: the Austrian critique of LVT — the broader family of Austrian-school objections this rejoinder is a scholarly instance of answering
• Andelson, Land Value Taxation Around the World — Andelson's comparative reference work
• Henry George — originator of the unearned-increment argument Andelson is defending

Sources

1. Robert V. Andelson, "On Separating the Landowner's Earned and Unearned Increment: A Georgist Rejoinder to F. A. Hayek," The American Journal of Economics and Sociology 59(1) (Jan. 2000): 109–117 (JSTOR stable/3487863; DOI 10.1111/1536-7150.00016) — used for the article's framing of Hayek's objection and Andelson's three counter-arguments (the Backhaus assessment-precision point, the "landowners keep more of their improvements anyway" point, and the ideal-versus-practice distinction). Full text read this session via the open-access scan hosted by the School of Cooperative Individualism; quoted passages verified against it (abstract and p. 110).