NIMBYs in the twenty-first century • Hacker News Board

Re: NIMBYs in the twenty-first century

#21

Post by ForHackernews » Wed, Mar 25, 2015, 3:28 PM UTC

matwood wrote: post #19

nwah1 wrote: post #18

Housing is a euphemism for land. The value of locations is determined by the quality of the surrounding community and the environment. This value winds up in land because it is claimed for exclusive use by individuals, enforced by government. Yet, claiming ownership over any part of the surface of this ball of space rock is arbitrary, and no principle of justice can truly legitimize it. Instead of Piketty's blunt "we…

Who isn't paying taxes on their land value? Maybe there are some states that do not, but every year I pay a pretty large tax bill based on the value of my land/house.

Arguably, we should be taxing based on the value of only the land itself, and not considering improvements (buildings, etc.) made to the land, in order to not (mildly) disincentivize making improvements to land one owns.

Re: NIMBYs in the twenty-first century

#22

Post by mikeash » Wed, Mar 25, 2015, 3:32 PM UTC

venomsnake wrote: post #14

> Modern forms of capital, such as software, depreciate faster in value than equipment did in the past: a giant metal press might have a working life of decades while a new piece of database-management software will be obsolete in a few years at most. Those rotting bits ... outside of consumer software, the life of software is easily measured in decades.

I think it's tremendous confusion on their part about what "obsolete" means.

If people upgrade software every few years it's because the new software is much better (or at the very least perceived as such). Even most consumer software keeps on working almost forever (although this is starting to change now that so many things depend on external services).

Imagine if the giant metal press had a new version come out a few years later than was twice as efficient. You could keep operating the old one as long as you wanted, but paying for a new one would be well worth it. The old one is "obsolete." But the value of the old one, in terms of what it does for your business, is unchanged! If you wanted to sell it, the price on the secondary market will take a big hit, but that's less important.

Rather than demonstrating that return from capital is declining, the rapid obsolescence of software demonstrates that return from capital is increasing! If businesses were buying new giant metal presses every few years even though the old ones worked fine, would you say "oh, the return must be decreasing," or would you say, "wow, those new presses must be a huge improvement to be worth such a quick turnaround"?

Re: NIMBYs in the twenty-first century

#23

Post by ForHackernews » Wed, Mar 25, 2015, 3:32 PM UTC

eldavido wrote: post #7

ForHackernews wrote: post #4

> Modern forms of capital, such as software, depreciate faster in value than equipment did in the past: a giant metal press might have a working life of decades while a new piece of database-management software will be obsolete in a few years at most. Is software even capital? Isn't this part of why we've been arguing against software patents for years now? Obviously software and other forms of intellectual property…

The economist is taking the position of the buyer (not maker) of software -- the prototypical business that buys a CRM tool to manage its customer relationships. Seen as a good that increases the productive capacity of a company or the economy more generally, it seems software very much is capital.

Do they buy a CRM tool, or do they just license the use of one? My understanding is that it's almost impossible to really "buy" and "own" commercial software, you can only acquire a license to use it.

Re: NIMBYs in the twenty-first century

#24

Post by timclark » Wed, Mar 25, 2015, 3:32 PM UTC

matwood wrote: post #19

nwah1 wrote: post #18

Housing is a euphemism for land. The value of locations is determined by the quality of the surrounding community and the environment. This value winds up in land because it is claimed for exclusive use by individuals, enforced by government. Yet, claiming ownership over any part of the surface of this ball of space rock is arbitrary, and no principle of justice can truly legitimize it. Instead of Piketty's blunt "we…

Who isn't paying taxes on their land value? Maybe there are some states that do not, but every year I pay a pretty large tax bill based on the value of my land/house.

Not every country taxes land in that way. I own no land but pay tax for occupying a property, my landlord pays no tax on this property - he may pay some tax on his rental income and will be taxed if the property is sold.

Re: NIMBYs in the twenty-first century

#25

Post by nwah1 » Wed, Mar 25, 2015, 3:33 PM UTC

ForHackernews wrote: post #21

matwood wrote: post #19

Earlier quoted context omitted.

Who isn't paying taxes on their land value? Maybe there are some states that do not, but every year I pay a pretty large tax bill based on the value of my land/house.

Arguably, we should be taxing based on the value of only the land itself, and not considering improvements (buildings, etc.) made to the land, in order to not (mildly) disincentivize making improvements to land one owns.

Yes, and since raw land can have a hefty unearned price tag, we already know that most of the value is left to the titleholders.

It is very much like the patent debates, except even worse. At least a patentholder, in theory, might have had something to do with thinking up the idea. And at least the patent doesn't last forever

Land titles are permanent, yet the titleholder had nothing whatsoever to do with the manifestation of the space and matter contained at the location.

Re: NIMBYs in the twenty-first century

#26

Post by Spooky23 » Wed, Mar 25, 2015, 3:34 PM UTC

sun_machine wrote: post #13

I am confused by the way the Economist phrased Mr. Rognlie's argument. The crux of Piketty's argument is that when global returns on wealth (r) is more than global economy growth (g), capital will start snowballing into the hands of the few very quickly. The mechanism of r getting bigger than g is not an increase in r, but a decrease in g. The increase of the global economy is dominated not by increasing technologica…

Wealth is different than growth.

I think the point is that if you move towards rent-seeking vs. value creation, people with a critical mass just hoover up capital and get richer. Even if the economy contracts, you can still take more chips off the table.

We have historical examples of this as populations start bumping against local ceilings that illustrate that this scenario is very possible. The Roman aristocracy was living it up, while the plebeians in many cases were subsisting on bread and circuses.

Re: NIMBYs in the twenty-first century

#27

Post by michaelochurch » Wed, Mar 25, 2015, 3:35 PM UTC

The weak point of democracy is the phenomenon of cheap votes. On any high stakes issue, there are still a large number of people who don't give a damn and will sell their vote for $25 if they legally can. This undermines the democratic process, as power accrues to those who bundle cheap votes together and deploy or sell the packages. This leads to a "democracy" (or, in Silicon Valley corporate-speak, a meritocracy) that can readily be used to validate the will of the existing elite, while posing no threat to it or check against its greed.

In elections, we prohibit explicit vote selling. But marketing is also about cheap-vote buying. Pepsi advertises because a large number of people just don't care which cola they get. Wal-Marts destroy small towns, but they're profitable because a large number of people will (with no ill intent, or cognizance of this being what they're doing) "vote" against their own communities to save $25 on Christmas shopping.

In culture, the term for very loud or passionate cheap votes is "useful idiots". Startup cheerleaders and the tech press (regulatory arbitrage! so visionary!) are useful idiots for the venture capitalists. The 22-year-olds who work 12 hours per day because they believe their 0.03% slices are just "teasers" and that they'll be introduced to VCs inside of 6 months are cheap votes.

NIMBY is two problems come together, because it's a cheap-vote dynamic on both sides. Among the renters on the losing side, most people don't get involved in local issues, and not voting is a vote. They're selling their vote for the benefit of not having to put time in, and perhaps because they consider the NIMBY problem helpless. On the other hand, the NIMBYs are also cheap votes. They know what's good for society and the rising generation, yet they push for the opposite because they'd rather jerk up their housing prices and get artificial money they don't need (and can't use unless they sell their houses and move to a cheaper place) than do the right thing. They're easily bought.

The story of the "first world" 21st century, in terms of the breakdown of democracy, capitalism, and meritocracy at the hands of a corporate elite, is the story of cheap vote aggregation. Nowhere is this more evident than in venture capital, where passive capital (cheap votes) from teachers' and firefighters' pension funds from Ohio and Nebraska and Montana is siphoned off to the career benefit of well-connected rich kids in California. The people who should care, don't, because it doesn't affect them enough.

Re: NIMBYs in the twenty-first century

#28

Post by task_queue » Wed, Mar 25, 2015, 3:39 PM UTC

ForHackernews wrote: post #4

> Modern forms of capital, such as software, depreciate faster in value than equipment did in the past: a giant metal press might have a working life of decades while a new piece of database-management software will be obsolete in a few years at most. Is software even capital? Isn't this part of why we've been arguing against software patents for years now? Obviously software and other forms of intellectual property…

In some cases, software allows the rapid accumulation of wealth for owners and that fits the definition of a capital good.

Re: NIMBYs in the twenty-first century

#29

Post by billmalarky » Wed, Mar 25, 2015, 3:46 PM UTC

psaintla wrote: post #11

pcarolan wrote: post #3

Conventional wisdom says that homes are bad investments compared to equities, conventional wisdom looks to be wrong. Maybe loading up your 401k instead of buying a home isn't such a good idea. The right answer is probably to rebalance a bit towards property.

Yes, which is always why I always cringe when I see how many people in their 20s and 30s believe that home ownership is a bad idea. The willingness to rent for life in order to live a high density, urban lifestyle is going to come back to haunt them when they get older. It's good for me as a landlord but I hope people my age start rethinking their position on home ownership.

Cringe? Really? By living in a high density urban area many people are able to invest more per year than they bring home after taxes living in the midwest.

Re: NIMBYs in the twenty-first century

#30

Post by jerf » Wed, Mar 25, 2015, 3:47 PM UTC

timclark wrote: post #24

matwood wrote: post #19

Earlier quoted context omitted.

Who isn't paying taxes on their land value? Maybe there are some states that do not, but every year I pay a pretty large tax bill based on the value of my land/house.

Not every country taxes land in that way. I own no land but pay tax for occupying a property, my landlord pays no tax on this property - he may pay some tax on his rental income and will be taxed if the property is sold.

That's just accounting. In the end, the renter either effectively pays the tax or the property becomes unavailable for renting, because the rental income either covers the taxes and other expenses or it doesn't.

This is important to understand because "well let's just raise taxes on rental properties" can sound really emotionally appealing to stick it to those nasty landlords, but the landlords aren't the ones who end up with the real bill in the real world. Oh, you might also as a side-effect reduce the landlord's wealth by essentially raising transaction costs, but, well, that's a plan firmly from the stupid quadrant: http://harmful.cat-v.org/people/basic-laws-of-human-stupidit...

Unfortunately, rather a lot of plans for addressing inequality strike me as coming from the "stupid" quadrant in practice... which is basically another way of saying this is a really hard problem, not that it isn't a problem. If too many of the golden goose's eggs are going to too few people it is still imperative that the goose not be killed, or, ideally, even all that slowed down by any plan to fix that. And I fear many people grossly overestimate the power of the modern economy to sustain social engineering schemes... the difference between even 1% growth and 1% contraction in a given quarter is very small, pretty much below a Just-Noticable-Difference everywhere, yet over the long term compounds quite frightfully... we have less buffer for playing around than it may initially seem when you first look at trillions here and trillions there.