Vitalik Buterin: On Radical Markets

Summary

In this 2018 essay, Ethereum co-founder Vitalik Buterin reviewed Radical Markets by Posner and Weyl and enthusiastically endorsed its central proposal — the Harberger tax / COST — as an extension of Georgist principles to all property.

Why It Matters

Buterin's endorsement was pivotal in spreading land-value and self-assessment ideas through cryptocurrency and tech communities, where mechanism design and digital property rights are active concerns. He explored applying Harberger-style taxes to domain names, digital assets, and other scarce resources. The essay helped make Georgist-adjacent ideas a live topic among technologists and is part of why the modern revival has strong roots in that world.

Where Buterin Draws the Line

The endorsement is not unqualified. Buterin distinguishes sharply between land — where the Harberger tax / COST trade-off is favourable because "there's no point in building a house in the first" place is not the issue for a fixed factor — and ordinary consumer property, where he thinks a universal self-assessment tax would fail on mental transaction costs. His core objection: forcing people to continuously price everything they own imposes a large cognitive burden and the risk of losing possessions to a mis-set price.

"Harberger taxes, at least to me, seem like they would lead to these exact kinds of issues multipled by ten; people are not experts at property valuation […] and they would complain much more if they accidentally put a value that's too low and suddenly find that their house is gone."

"If Harberger taxes were to be applied to smaller property items as well, people would need to juggle a large amount of mental valuations of everything."

He notes the trade-off between allocative and investment efficiency runs in COST's favour for high-turnover, illiquid assets but concedes the everyday-goods case is where it breaks down — floating that AI pricing agents ("there could even be a public option") might one day resolve it, "and this is where the interesting conversation starts." The essay is thus best read as an enthusiastic endorsement of the land case plus a candid catalogue of the practical limits of extending COST to everything.

See Also

• Radical Markets — the concept page for the Posner & Weyl program this essay reviews
• Harberger Tax (COST)

Sources

1. Vitalik Buterin (2018), "On Radical Markets." vitalik.eth.limo (also mirrored at vitalik.ca) — used for Buterin's endorsement of the Harberger tax/COST mechanism from Radical Markets, and for his "mental transaction costs" critique of extending COST to houses and everyday goods (the "suddenly find that their house is gone" and "juggle a large amount of mental valuations of everything" passages are quoted verbatim from this essay).
2. Eric Posner & Glen Weyl (2018), Radical Markets: Uprooting Capitalism and Democracy for a Just Society, Princeton University Press. Publisher — used for the book this essay reviews; see also wiki summary.