PRC: The "Something for Nothing" problem:

Georgism, so far as I can tell, begins with the public collection and distribution of rent, by way of a high tax on the rental value of land. How that money is distributed, what is done with it, who makes the decisions as to what shall be done with it, is where the many divisions within Georgism begin, such as Geo-Socialism, Geo-Anarchism, etc.

I have, in the past, discussed the Geo-Libertarian idea of the public collection and distribution of rent. Very simply put, the tax, rather than going to fund the usual functions of today's government, would simply be paid out as a "citizen's dividend" on a per-capita basis. The idea behind this is that individual motivations are superior to political motivations when it comes to deciding how money should be spent. Under a system in which the collecting entity (government, or PRC) simply redistributes land rent, rather than deciding how it should be spent, the benefits of Anarcho-Capitalism would be within reach of not only the upper classes of society (which would be limited by the tax), but rather would be accessible to everybody. Everybody would have the ability to pay for, for example, private police services.

Now, while I have issues with Anarcho-Capitalism in general, my main discomfort with this program has always been the simple fact that this would give to people "something for nothing." Where would be the incentive to work, under this system? What would prevent it from simply collapsing under the weight of masses of moochers? What is the difference between this idea, and massive wealth transfer programs in general? I've been thinking about it lately, and I think I may actually have an answer.

One aspect is the nature of the tax itself. While most taxes act as a punishment for wealth production (income taxes hit those with high labor values, in addition to the idle rich; sales taxes penalize people for distributing goods; excise taxes target the production of specific kinds of wealth; etc.), a tax on Land rental value is a penalty not for production, but on the monopolization of natural potential. One person who is making far better use of a piece of land than his neighbors is taxed no more than the person who is simply allowing his land to lie unused. The only relation between taxation and production would be the case of a highly productive community in which the natural potential of the Land is proximity to highly productive people... A good place to open up a store, for example. In this case, the tax would simply ensure that such valuable land not be held purely for the increasing value of the area, but rather would be continually available for use.

The fact that the dividend is distributed on a per capita basis, rather than in a means-tested fashion, means that, at the very least, the dividend does not act as a disincentive to productivity. I have been personally acquainted with a disabled man who wished to go back to school and earn the credits he needed to start teaching, but feared to leave the public dole, which he would have to do if he attempted to work again. The impact of welfare programs in discouraging people from starting to work again is well documented.

However, even if a large number of people should start mooching off the productivity of a few, those people are likely not busy driving up the value of Land. The effect is that Land value would remain low; therefore, the Land tax would remain low. In the event that, despite the low level of taxes being redistributed on a per capita basis, people still have the ability to live off the dividend alone (or the dividend plus something they enjoy doing, anyway), we would simply have reached an era of Star Trekonomics, the point where technology enables a few to be so productive that they can literally provide for the needs of thousands of others, and do so by choice. (In Star Trek, it is generally assumed that, despite everybody being provided for, The Federation's economy is still productive enough to support, not only a socialist paradise, but also a substantial fleet of starships.)

In the event that we're simply not there yet, a moocher class would still result in declining Land values, followed closely by declining Land taxes, followed by the dividend being unable to support an individual, followed by individuals increasing their productivity to supplement their dividend income, in a potentially increasing cycle. There would be no penalty for working; no portion of the dividend would be lost. However, as productivity increased, land value would increase, thus the dividend would increase. In the meantime, those who remain productive despite the apparent opportunity to live without being so would not be penalized a bit for remaining productive (and, indeed, would pay decreasing taxes until the economy hit the point where productivity could go down no further).

Personally, I think certain types of things would still need to be funded by what I am going to call the Land Corporation (as opposed to government, since its power to tax would be limited to the power to charge rent for the monopolization of land owned by the community via this corporation, and not a general ability to tax anything and everything it can achieve a majority in favor of). The tendency of people to fully utilize land when not discouraged from doing so may necessitate the public support of certain kinds of recreational areas, such as nature preserves. In the situation where there is a fairly continuous threat for a hostile foreign country, a military may be necessary, or at least a publicly funded deterrant nuclear arsenal. (In the situation where international neighbors are either neutral towards us or powerless, a publicly funded military may well be unnecessary.) Publicly funded police organizations may be necessary to keep mafia-like organizations from filling the gap. There may be other things I am not thinking of.

However, my conclusion is that, if all land were owned by a corporation which had all citizens as shareholders (one share per citizen), which distributed its entire profits as a dividend to its shareholders, the result would not be unmitigated economic disaster, or even a general malaise. The result may well be superior to what we have today.