separately, why do communists/socialists and islamists get along so well?

What about intellectual property? Software..eg?
How do the communists propose to collectivize intellectual resources?

And why is the ’state’ the best judge?
Is the collective decision of a group of people the ‘correct’ decision?

The Germans voted the Nazis into power based on their collective wisdom. Collective wisdom and the intellectual capabilities of a group is predicated on the belief that the majority is right -so let us stifle individualism. This is without basis. But it is what commuism or democracy is all about,nevertheless.

Personally I want to live in a real Republic,where the goverment is small and is a servant rather than the guardian of the electors.

Pravin

Is this just a copout?

Where’s the “die-hard defence”? Among other things, I recall Sid using this just a few lines above: “It gets determined by the free market…” Which die-hard defence of communism would include such a statement?

Where are the holes?

This was an interesting discussion. What a pity that it came to an end suddenly because you lost interest in further debate.

I do have a broader question, though. what does it mean to “ban” communism? (Or anything). How does that square with the pursuit of freedom that’s such a precious tenet? How do you “ban” an idea, however repulsive it is?

in that case, the highest rents are earned on urban land. no one pays lakhs to rent a mustard field in some remote village.

i hope sid will agree that the state monopoly on real estate and roads has made urban landowners rich and impoverished the poor.

so once again we come back to the fact that roads should get top priority. and that property rights should be given due respect. this, with free trade, is the only way to better the lives of the poor. “Rural development” and “urbanisation” are two sides of the same coin. “Rural development” without roads and property rights, in a closed economy, all because of leftist thought, has been an unmitigated disaster.

sid’s die-hard defence of communism is so full of holes that there is nothing to gain by discussing his ideas further. i hope he will treat the chapter as closed and join us all in calling for a ban on socialism, communism, hindutva and all collectivist creeds. then we will have achieved the ‘liberalisation’ of politics, and various shades of liberals - and liberals only - can occupy the political space, all unitedly standing up for individual rights, individual liberty, private property and free trade. thereafter, they can have differences on welfare, warfare and other such ‘political’ issues.

Defining Ricardian rent as a particular type of economic rent does not lead to circularity because definition of economic rent does not involve Ricardian rent. Since definitions of various types of rent are irrelevant here, we do not need to go into them. Annual ricardian rent of a plot of land (or any natural resource) is the amount of money that can be earned by renting it for a year. It gets determined by the free market, there is no ambiguity here.

Collection part is a bit more difficult to understand since one has to think without the concept of private property. So first let us consider a toy model. Suppose we have a village with 10 farmers, and one very fertile plot of land, which can be used by only one farmer.

1) Private ownership : One farmer claims the land saying that he has mixed his labour with the land. He rents it to the best farmer, who is willing to pay the maximum. Everybody else starves. However, the maximum efficiency is attained here.

2) Collective ownership : Farmers form a committee to decide the user as well as the distribution of the output. This system will be highly corrupt as well as inefficient (The best farmer might not be the user, or he might not have enough incentive to use his full potential).

3) Land is held in common : Nobody owns the land in the usual sense. The village holds an auction annually, the winner gets exclusive right to the land for a year. The money collected from the auction gets equally distributed among everyone including the highest bidder. It is obvious that this system is efficient and everybody gets what they deserve, which is one-tenth of what he is ready to pay to the community. If you win the auction you are giving 10% to yourself, if somebody else outbids you then you are getting more than that.

If you look at the entire economy and the entire population, a heavy tax on ricardian rent is just a replacement for this auction. A couple of simplifying assumptions are hidden in this example, and the community is being able to get 100% of the ricardian rent. In the general case these two factors will come up but about 80%-90% of the total ricardian rent can still be collected.

Natural resources is equivalent to capital: what is money but an exchange instrument? If a natural resource; say a mine; is worth z dollars, that takes into consideration the rent obtainable from it, because that is the amount that is set by the demand for it.

So how can you say that rent from a natural resource can be taxed but not from investment? It is not logical.

Even if it was; as Sauvik pointed out, it is not practical.

One question that can be asked is the one I posed: can the compounding effect of capital be taxed away?
I should mention that I do not just mean interest from investments here. Investments involve risk and other human resources that should have a reward.

What I’m saying, if I should say it one sentence, is that the reward of sweat equity is not as much as the reward of capital equity. There seems to be a lack of moral validity in this.

i must add that sid’s definition of ‘ricardian rent’ is circular. He says: “Ricardian rent simply means the economic rent generated by natural resources. It is just a definition, nothing more.”

He uses the term ‘rent’ to define ‘rent’???

what kind of nonsense is that?

Underlying philosophy here is “keep what you make, give what you take”. So there is nothing wrong in having an unequal share of capital which is man-made. Such capitals come from savings, and the interest comes from what others are willing to pay for it’s temporary use. So your right to earn interest directly follows from your right to keep, save and exchange fruits of your labour.

Important thing to note is that wealth is produced by a combination of human effort (which includes labour, skill, knowledge, entrepreneurship) and material universe (which includes resources like land, locations, oil, minerals in their unimproved state). A free market distributes the wealth among various resources according to the law of supply and demand. Your salary, profit or interest is basically what others are willing to pay for your service. It can be unequally distributed, but it is completely justified as soon as you have the right to own yourself.

Part of the wealth that is generated by material universe is very different. Since you did not produce the material universe, why should you get an unequal share of the wealth generated by it ? If nobody has the right to get an unequal share, it logically follows that it should be equally distributed among everyone. Putting a heavy tax on this wealth, followed by an equal distribution is perhaps the best way to do it.