We Urgently Need To Revert To Classical Economics

[EcoWarrier]

Where the problem lay in the current economic system......

By Martin Wolf. Chief economic writer of the Financial Times.

Why were resources expunged from neo-classical economics?

Something strange happened to economics about a century ago. In moving from classical to neo-classical economics — the dominant academic school today — economists expunged land — or natural resources. Neo-classical value theory — based on marginalism and subjective valuation — still makes a great deal of sense. Expunging natural resources from the way economists think about the world does not.

In classical economics, land, labour and capital were the three factors of production. With neo-classical economics, the standard production function had just two factors of production: capital and labour. Land — by which we mean the totality of natural resources — was then incorporated into capital.

All thinking about the world involves a degree of abstraction. Economics has taken this principle further than any other social science. This is a fruitful intellectual procedure. But it is also risky. The necessary process of abstraction may end up leaving essential aspects of the world out of the analysis. That can be intellectually crippling. I believe that that is exactly what has happened, in this case.

The idea that land and capital are the same thing is evidently ludicrous. It requires us to believe that the economic machine is self-sustaining — a sort of perpetual motion machine. Capital is the product of savings and investment. It is the result of human frugality and the invention required to imagine and create new capital goods. Labour is also — and in today’s circumstances, increasingly — a form of capital. Parents, governments and individual people invest in their own skills, so making themselves more productive. Yet there would be no economy — indeed no humanity — without a constant inflow of natural resources into the system: what lies above our heads (the sun and the atmosphere), what lies close to us (the soil, the seas and location itself) and what lies beneath us (fossil fuels, metals and minerals and heat). Humanity does not make these things; it exploits them. Some of these resources are also appropriable and so a source of unearned personal wealth.

Why did this compelling distinction disappear from economics? After all, no economist can believe that the economic system will move without a constant infusion of external resources.

One reason was that the classical world view implies diminishing returns. Since the supply of land was fixed, it would become ever scarcer. Rents — the price of resource scarcity — would rise, profits would fall and growth slow. But the economy did not show signs of diminishing returns. Technical progress seemed to offset any tendency towards diminishing returns. So assuming that land, like capital, could be effectively expanded, without limit, via land-augmenting technical progress, seemed to be the right thing to do.

Another reason may have been political. Henry George argued that resource rents are not a reward for the efforts of the owners, but the fruit of the efforts of others. It would be both just and efficient to socialise rents, he argued, and then use the proceeds to finance the infrastructure that makes resources valuable. But the powerful owners of natural resources wished to protect their unearned gains. In practice, therefore, the tax burden fell on labour and capital. Economics, one might argue, was pushed into supporting this way of organising economic life.

Yet it would seem to me that this way of thinking by economists is no longer sensible, if it ever was. Land must again be treated as separate from labour and capital.

First, resource scarcity is an increasingly pressing issue. It shows up in concerns over pollution (including global warming), in the discussion of “peak oil” and so forth. The idea that diminishing returns will become a more significant factor in the next century than in the past two seems to me to be compelling, now that modern economic growth has spread across the globe. So we need to return to economic models that incorporate resources, as a matter of course.

Second, in a globalised economy, taxing labour and capital will become increasingly difficult. That leaves land. The Australian government is right to want to extract the full rental value of its mineral resources for the benefit of the Australian people. Similarly, the people of the UK should wish to extract the rental value of London for their own use. The benefits of infrastructure investments that make London more productive would automatically be recouped if land rents were heavily taxed. Meanwhile, the taxation of capital and land could be reduced.

I can see the objection that natural resources are necessary for the operation of capital and labour. Thus, the distinction between land, labour and capital is hard to draw. I agree with this. But there are two responses: first, from the point of view of economics, resource scarcity may mean diminishing returns, which are economically important; second, some natural resources are not appropriable and can be treated as free (sunlight, for example), but others are indeed appropriable.

Thus, for both economic and political reasons, we should put natural resources into the heart of economics, thereby remedying a neoclassical mistake.

The old fallacies are skillfully debunked in this long exchange:
http://blogs.ft.com/martin-wolf-exch...mics/#comments

Martin Wolf concludes.........

The essential point is quite simple: the value of resources is created by the economic activity of other factors of production. The owners of these resources can become hugely wealthy and are often untaxed on that increase in wealth: the Duke of Westminster is the richest Englishman simply because he owns a large amount of land in a valuable part of London. So why should he have command over the labour of so many other people?

That wealth is, in the strictest sense, unearned. If that rise in wealth were taxed away, other taxes - those on labour, capital and entrepreneurship - could fall. This would be both efficient (because taxes on rent do not create distortions, as Ricardo showed) and also just, because the wealth was unearned. Now, surprisingly, the UK allows foreign landowners to enjoy the increase in value created by the British economy, entirely tax-free. This is utterly crazy.

Let me add four other points.

First, throughout history, the main source of wealth was land-ownership. The parasitic landowner became wealthy on the efforts of others - peasants, tenants and even developers. Sometimes the parasite was also a farmer or developer, but that does not change the fact that these are two distinct economic roles. The parasite built fine castles and palaces and often sponsored music and culture. But he was still a parasite. The beauty of capitalism is that many of the wealthiest are no longer parasites. This is good. But many of the wealthy still are parasites. Moreover, now everybody wants to get rich by being a mini-landowner. That is a huge diversion of effort.

Second, the financial system's ills are the result of unchecked credit-creation. Yes. But unchecked credit-creation would be impossible without collateral. Land is always the principal form of collateral (buildings are a depreciating asset). That is why financial bubbles that do not create credit booms (like the dotcom bubble) are economically benign, while property bubbles are potentially catastrophic. When the value of collateral collapses, the financial system implodes.

Third, there is really nothing new about this understanding of the role of resource rents. They were central to the classical system, from which modern economics, in its various forms, derives. Ricardo's analysis of rent remains intellectually impeccable.

Finally, as Herman Daly has noted (http://steadystate...zing-henry-george/), today economically valuable resources are much more than just land (and what lies below it). They include all the services of the biosphere - those that are appropriated, those that are appropriable and those that are non-appropriable. If we do not think seriously and intelligently about how to price resources, we are likely to go seriously adrift, perhaps even into disaster. Here land is the least of our problems - it is appropriable and, by and large, appropriated. So, at least, the price mechanism works, even though the distribution of the gain is grossly unjust. But, in other cases, no appropriation is possible, or at least it is not easy. Nobody can appropriate the atmosphere. It is nigh on impossible to appropriate the oceans. How do you own species diversity? These are serious challenges.

So, I conclude where I started: resources matter. It was a great mistake to exclude them from the canonical neo-classical model. It is also a great mistake not to tax their owners to the hilt.

[EcoWarrier]

The Queen Could not be Told the Truth

When the Queen of England visited the London School of Economics. She asked a simple question about the looming economic disaster,

"why did no one notice it coming?".

Professor Garicano replied,

"at every stage everyone was relying on someone else, and all thought they were doing the right thing".

As modern economists use a collection of mangled economics the Queen could not be told the truth.

Economists 100 Years Ago Colluded to Distort Economics

A century ago a group of influential economists: John Bates Clark, Frank Knight, Francis Walker, Edward Seligan and Richard Ely, colluded to manipulate the building blocks of classical economics. They had an ideological agenda. The future they shaped is our reality. Their mission was clear to protect the vital interests of the privileged few. To so they had to conceal the unique qualities of the classical factors of production - LAND.

A century of economic disasters followed that literally messed with our lives. Economics has been a tool for contorting our collective consciousness. The current economic crisis as an example to the pathetic state to which economics has been reduced.

Modern Economists are Confused

We handsomely reward economists to fine tune to the economy to keep it stable. When boom turns to bust they escape into mysticism. They claim,

"occasional slow downs are natural and necessary features of a market economy".

The people we trust to keep the economy on an even keel have no idea what makes an economy explode. Take the central bankers, they pontificated, moving interest rates up and and manipulating the money supply. They didn't know what they were doing - it was all an illusion.

The problem lies in some of the theories invented by encomists. They do not reflect the real world. They are fictions invented to explain an imaginary market economy. When the economy overheats the imaginary equations turn out to be useless.

Economists Admit Their Economic Models Do Not Work

The Daddy of all central bankers was Alan Greenspan, of the US Federal Reserve. He said,

"the models do not forecast recession because the parameters are dominated by what happens in normal times when the economy is growing".

As the economy crumbled, He said to the US congress,

"I discovered a flaw in the model which I perceived as a critical function structure which defines how the world works, I was shocked".

Greenspan's victims are more than shocked, they are traumatised losing their homes and jobs.

In failing to raise the warning flags, Greenspan was not alone, economists at the Bank of England also failed to forecast the end of the business cycle. They confessed their economic models break down when the going gets tough. Rachel Lomax, deputy governor of the Bank of England confessed,

"When it comes to quantifying the changes in credit conditions, our workhorse economic models still cannot help us very much".

If you were caught by surprise when the bottom fell out of the credit market, don't worry, you were in good company. Leading economist at places like the LSE were also shocked. Professor Sir Charles Woodhart, served on the Bank of England monetary policy committee, he now admits that standard forecast economic models are

"effectively pretty useless".

Here is an example of the nonsense that can be produced by economic theory. According to the British governments Property Valuation office in Jan 2008, land values will continue to rise until 2013. Six months later the economy had broken down. The graph has been erased from their web site.

Land Speculators Are the Biggest Gainers

Who gains from this intellectual mess? One groups of people reap spectacular rewards, property developers, land speculators all reap windfall gains from one asset that sustains us all, LAND.

In the good times when people go mad buying and selling properties, we lionise these developers. Yet all they are doing is cashing in the on the land values others create. Take the case of a cluster of flats adjacent to a prime brownfields site. Their presence gives value to the adjacent site, yet the thousands of residents of the flats will not share in the increased values they help create.

Banks Fuelled The Property/Land Bubble

Bankers around the world played their part in the economic crisis pumping up credit to fuel the property bubble. As land values rose bankers even created more money. This was a self inflated bubble of hot air. It had to burst.

Economists Who Know The Answers Are Supressed

For the past century economist have messed with our minds. All is not lost. A few economists have been stewards of the precious knowledge of how the economy works. The Nobel prize winning economist Bill Vickry and the California professor, Mason Gaffney. All voices of reason that have been suppressed.

We Need To Force Through ChangeTo Eliminate Vested Interests

With all the global crisis's converging, mass unemployment, poverty, terrorism. It is time to make up our minds and stop playing the game that was rigged 100 years ago. If we do not challenge the vested interests that exploit people, all of us, the environment and future generations will pay the ultimate price.

We have to oblige our elected leaders to deal with the realities on the ground. In the end it is up to everyone to assume personal responsibility and restore common sense in the way we govern society.

[VoluntaryAmerican]

Land Speculators Are the Biggest Gainers

Who gains from this intellectual mess? One groups of people reap spectacular rewards, property developers, land speculators all reap windfall gains from one asset that sustains us all, LAND.

Sounds like a good job. Where do I sign up?

[EcoWarrier]

[Acala]

I want the job of choosing where the "socialized" rents are to be distributed and, presumably, having my thugs enforce it at gun point. It's good to be the king!.

[Roy L]

I want the job of choosing where the "socialized" rents are to be distributed

You already have that job, dumpling: voting. But you are almost certainly one of the great majority of people who are too stupid, ignorant, greedy, lazy, stubborn, cowardly, and/or dishonest to exercise your franchise in your own best interests.

and, presumably, having my thugs enforce it at gun point.

Your "thugs"?? What a remarkably dishonest bit of filth. It is the landowner who needs government thugs enforcing his land title at gunpoint to enable him to rob the productive. Why else would anyone pay him for what nature provided for free?

It's good to be the king!.

Indeed. And in the absence of responsible, democratic government, that is exactly what landowners are, as feudalism proved.

[EcoWarrier]

I want the job of choosing where the "socialized" rents are to be distributed and, presumably, having my thugs enforce it at gun point. It's good to be the king!.

The same is what happens to the money in government coffers right now.

[PierzStyx]

So you want to be a parasite leaching of the rest of us as well.

Hey, its good to be the king.

[Roy L]

Sounds like a good job. Where do I sign up?

Owning land is not a job. It is simply a way of taking from the productive without contributing anything in return. It is legalized theft:

The Bandit

Suppose there is a bandit who lurks in the mountain pass between two countries. He robs the merchant caravans as they pass through, but is careful to take only as much as the merchants can afford to lose, so that they will keep using the pass and he will keep getting the loot.

A thief, right?

Now, suppose he has a license to charge tolls of those who use the pass, a license issued by the government of one of the countries -- or even both of them. The tolls are by coincidence equal to what he formerly took by force. How has the nature of his enterprise changed, simply through being made legal? He is still just a thief. He is still just demanding payment and not contributing anything in return. How can the mere existence of that piece of paper entitling him to rob the caravans alter the fact that what he is doing is in fact robbing them?

But now suppose instead of a license to steal, he has a land title to the pass. He now charges the caravans the exact same amount in "rent" for using the pass, and has become quite a respectable gentleman. But how has the nature of his business really changed? It's all legal now, and he can even pretend that his profits come from his "property rights," not just a special government-issued license. But in fact, he is still just taking money from those who use what nature provided for free, and contributing nothing whatever in return, just as he did when he was a lowly bandit. How is his "business" any different now that he is a landowner?

And for that matter, how is any other landowner charging rent for what nature provided for free any different?

Do the merchants, by using the pass when they know the bandit is there, agree to be robbed? Does their "free choice" to use the pass make it a consensual transaction?

If there were two, or three, or 300, or 3 million passes, each with its own resident bandit, would the merchants' being at "liberty" to choose which bandit robs them somehow make the bandits' enterprises a competitive industry in a free market?

[erowe1]

Owning land is not a job. It is simply a way of taking from the productive without contributing anything in return. It is legalized theft:

I would be more inclined to give this part of the argument a chance if I didn't know that the next part of the argument went:
"Therefore, we ought to let one particular gang of thieves anoint itself as the owner of all the land and charge us rent to use it."

[Adrock]

I would be more inclined to give this part of the argument a chance if I didn't know that the next part of the argument went:
"Therefore, we ought to let one particular gang of thieves anoint itself as the owner of all the land and charge us rent to use it."

You have it all wrong. "Therefore, we ought to democratically anoint a particular gang of thieves as owners of all the land and charge us rent to use it."

It makes it so much better if 51% of us agree on who the gang of thieves are. What is the worst that could happen?

[Roy L]

I would be more inclined to give this part of the argument a chance if I didn't know that the next part of the argument went:
"Therefore, we ought to let one particular gang of thieves anoint itself as the owner of all the land and charge us rent to use it."

That's not the next part of the argument, so you can relax (and stop lying).

Those of us who are not stupid, ignorant, greedy, evil, lying sacks of $#!+ are aware of the fact that the sun, the oceans, the earth's atmosphere, the alphabet, mathematics, etc. can never rightly be anyone's property. All who refuse to know that fact ARE in fact stupid, ignorant, greedy, evil, lying sacks of $#!+. However, as all have equal liberty rights to use those things, honest people need a way to protect themselves against evil, greedy rent seekers who will never leave off contriving ways to charge others for what nature and their cultural heritage provide for free. To secure these rights, governments are instituted among men, deriving their just powers from the consent of the governed. Calling such a government "one particular gang of thieves" that "anoints itself as the owner of all the land and charges us rent to use it" is just filthy, despicably dishonest "meeza hatesa gubmint" $#!+. We need government to administer use of the land to secure and reconcile the equal rights of all to use it, just as we need government to administer the atmosphere, the oceans, etc. to secure and reconcile the equal rights of all to use them.

There is no way for anyone, or any group, or any government, or any corporation, or any church, or any other legal entity whatsoever rightly to own land. It is impossible, as it inherently removes the liberty rights of others to use the land. The only difference between owning land and owning a slave is that when you own a slave, you remove all of one person's rights. When you own land, you remove one of all persons' rights. The more of the land is owned, the fewer rights remain. In the limit, if all the land is owned by one man, all the rest are in exactly the same position as if they were also all his property. He has absolute power of life and death over them. If two people own the land, or three, or 300, or 3 million, the others are only "free" to choose which master owns them, for whose benefit they will labor rather than their own. They are not free not to be owned: their rights to liberty have been removed by force.

A good man might own land, just as a good man might own slaves. Thomas Jefferson owned slaves, as did most of America's other Founding Fathers. But the fact that a good man might own land does not justify landowning any more than a good man owning slaves justifies slave owning. And landowning is inherently an instrument of theft, oppression and murder that serves the greedy and evil no matter who else participates in it, just as slave owning is. Landowning is like the One Ring of Sauron: it is evil in its inherent, fundamental nature, and so ultimately it can serve only evil.

[FlatIron]

[EcoWarrier]

The difference between a highway robber
and a free rider is that the free rider does
not have to draw a gun to take what belongs to others.

[Austrian Econ Disciple]

The difference between a highway robber
and a free rider is that the free rider does
not have to draw a gun to take what belongs to others.

There's no such thing as a free-rider. It's only a made up fiction by people who simply ignore exclusivity.

[Roy L]

There's no such thing as a free-rider.

Sure there is. The bandit in the pass is indisputably a free rider, as is every landowner who charges others for what government, the community and nature provide. Stop telling such stupid lies.

It's only a made up fiction by people who simply ignore exclusivity.

ROTFL!!! The merchants who hand over their rightful property to the bandit/toll taker/landowner in the pass aren't ignoring "exclusivity," dumpling. He is rubbing their noses in his "exclusivity."

Your claims are just false, stupid, absurd, and dishonest.

[Austrian Econ Disciple]

Sure there is. The bandit in the pass is indisputably a free rider, as is every landowner who charges others for what government, the community and nature provide. Stop telling such stupid lies.

ROTFL!!! The merchants who hand over their rightful property to the bandit/toll taker/landowner in the pass aren't ignoring "exclusivity," dumpling. He is rubbing their noses in his "exclusivity."

Your claims are just false, stupid, absurd, and dishonest.

I don't even think you know what a free-rider is. The most common fallacious argument for this comes about with defense, and the idea that private armies or insurance companies cannot exist because of this problem, again, only if you throw out the perfectly reasonable and moral principle of exclusivity, that is, the company has no obligation to come to your aid. Which means, the raider may target you if you are defenseless (not saying it's right), thereby fixing the so-called free-rider problem.

The other argument is that you gain benefits from say, augments to my property which raise the property values of those around me. (I'm surprised Statists haven't latched onto this one...yet) That you should be compelled to pay for my property enhancements because it has the added effect of helping your property values. This is an absurd argument from the beginning because I've made the conscious decision that what matters to me, is the enhancement of my own property, and the 'benefits' to others is inconsequential to my actions.

If people who believed in the free-rider non sense actually sat for a moment and mapped out chains of logic in the argument they would come to the realization of how absurd it is in the first place, considering if the free-rider issue was actually a problem NOTHING would get done and we would all starve and die and let our property rot and wither, but luckily we can observe reality and see that the free-rider issue is not an issue in the first place, and is only a fictitious Statist absurdity used to justify all sorts of heinous taxes, fees, resource redistribution, etc. etc.

Should I have to pay for women to wear skirts, because I gain benefit of being aroused when they do so? Why not...since that means I'm a free-rider, and should have to pay for that, no?

[givemeliberty2010]

By Martin Wolf. Chief economic writer of the Financial Times.

Why were resources expunged from neo-classical economics?

Something strange happened to economics about a century ago. In moving from classical to neo-classical economics — the dominant academic school today — economists expunged land — or natural resources. Neo-classical value theory — based on marginalism and subjective valuation — still makes a great deal of sense. Expunging natural resources from the way economists think about the world does not.

Isn't marginal and subjective value theory the heart of Ron Paul's Austrian economics?

[Steven Douglas]

FlatIron nailed it.



This thread should be merged with one of the other LVT-polluted threads.

[Roy L]

FlatIron nailed it.

FlatIron only successfully avoided knowing facts that prove his beliefs are false and evil.

This thread should be merged with one of the other LVT-polluted threads.

Land is not just one issue that should all be addressed in one thread any more than the November election is one issue that should all be in one thread.

[redbluepill]

FlatIron nailed it.



This thread should be merged with one of the other LVT-polluted threads.

In that case, I guess we should merge all the Austrian Economics threads.

[Steven Douglas]

In that case, I guess we should merge all the Austrian Economics threads.

Tell you what, let's go to a pro-Obama forum and start trolling for Ron Paul. Start a few endless threads about his positions on various issues, hijack and derail a few others (we're just arguing what we feel is best for the country, after all - isn't that what everyone there is doing? Gosh! duh...). Then, when someone suggests they be merged together, we can say "In that case, I guess we should merge all the Obama related threads too."

So you might have had a point, and what you said might have made sense IF this was a GEORGIST/GEOIST/LVT message board, where it was mostly a bunch of Land Socialists talking about All Things Georgism and LVT related -- and IF this was not specifically the RON PAUL FORUMS, and IF Ron Paul wasn't such a RIGHT-LIBERTARIAN, both Austrian School and anti-tax/anti-spend AND VERY ANTI-LVT.

Ron Paul was a staunch supporter of N.D.'s Measure 2, which would have eliminated all property taxes, including the land value tax component thereof. There is no way in hell that Ron Paul would EVER support a Land Value Tax.

Section 4 of Ron Paul's Liberty Amendment reads: SOURCE

Section 4. Three years after the ratification of this amendment the sixteenth article of amendments to the Constitution of the United States shall stand repealed and thereafter Congress shall not levy taxes on personal incomes, estates, and gifts.’.

And you can rest assured that by "estates", he meant that to include all privately owned wealth, including privately owned land. Ron Paul believes that both land and money are different forms of capital, and would NEVER support any form of Land Socialism or "reclaiming socially created wealth for the collectivist land rental commune".

So yeah, let's pretend that Austrian Economics is just another tangent, another forum off-shoot, like the Land Socialist Tax.

[redbluepill]

Tell you what, let's go to a pro-Obama forum and start trolling for Ron Paul. Start a few endless threads about his positions on various issues, hijack and derail a few others (we're just arguing what we feel is best for the country, after all - isn't that what everyone there is doing? Gosh! duh...). Then, when someone suggests they be merged together, we can say "In that case, I guess we should merge all the Obama related threads too."

So you want one thread that is over 2000 pages long completely devoted to the LVT?

1. There are only a few threads devoted to LVT, each of them quite long. From what I've seen, almost all of them are created by different posters. Granted, there were a couple threads hijacked in the past. It happens.

2. Many Georgists are in fact Ron Paul supporters ( though they obviously don't agree with him on everything). Just read a message today on the LVT facebook group. The poster had a picture with him next to Paul.

So you might have had a point, and what you said might have made sense IF this was a GEORGIST/GEOIST/LVT message board, where it was mostly a bunch of Land Socialists talking about All Things Georgism and LVT related -- and IF this was not specifically the RON PAUL FORUMS, and IF Ron Paul wasn't such a RIGHT-LIBERTARIAN, both Austrian School and anti-tax/anti-spend AND VERY ANTI-LVT.

So we all have to agree with Paul 100% if we are to be posting on this forum? Who's sounding like a cult now? He has pretty statist views on illegal immigration (bring the troops home so we can put them on the Mexican border, THATS a libertarian stance?!).

The LVT has a rich history of support from freedom lovers and libertarians. Hardly socialist. But you should know that by now.

[Roy L]

Ron Paul was a staunch supporter of N.D.'s Measure 2, which would have eliminated all property taxes, including the land value tax component thereof. There is no way in hell that Ron Paul would EVER support a Land Value Tax.

As he is quite intelligent, he might well support LVT if he is more willing to know facts than you are.

Section 4 of Ron Paul's Liberty Amendment reads: SOURCE
And you can rest assured that by "estates", he meant that to include all privately owned wealth, including privately owned land.

No, you are just lying again, as usual. By "estates" he indisputably meant the property of deceased persons under legal administration by executors or other trustees, and you know that fact very well.

Ron Paul believes that both land and money are different forms of capital, and would NEVER support any form of Land Socialism or "reclaiming socially created wealth for the collectivist land rental commune".

Whom are you dishonestly pretending to be quoting when you put a stupid lie like, "collectivist land rental commune" in quotes?

[anaconda]

After all, no economist can believe that the economic system will move without a constant infusion of external resources.

I don't see how lumping land and capital together for purposes of analysis somehow denies the use of natural resources. Over the decades, increases in per capita GDP have been due to massive increases in the productivity of labor. So we may theoretically continue this trend without utilizing any additional land. Maybe we'll just recycle and melt down the worn out capital and reshape it into something new, and with alternate forms of energy.

[Roy L]

I don't see how lumping land and capital together for purposes of analysis somehow denies the use of natural resources.

It denies the fact that natural resources don't have to be produced by labor, while capital does.

Over the decades, increases in per capita GDP have been due to massive increases in the productivity of labor.

Increases that have been appropriated by landowners.

So we may theoretically continue this trend without utilizing any additional land.

In economics, land is all natural resources, so we will definitely be using more land.

Maybe we'll just recycle and melt down the worn out capital and reshape it into something new, and with alternate forms of energy.

And the source of that energy would be....?

[Austrian Econ Disciple]

It denies the fact that natural resources don't have to be produced by labor, while capital does.

Increases that have been appropriated by landowners.

In economics, land is all natural resources, so we will definitely be using more land.

And the source of that energy would be....?

Capital doesn't have to be a product of labor unless you mean in the loosest of terms. A gourd for instance is capital since it allows you to carry more water than you otherwise could, and your labor did not produce that gourd.

[Roy L]

Capital doesn't have to be a product of labor unless you mean in the loosest of terms.

Wrong. Capital is a product of labor by definition.

A gourd for instance is capital since it allows you to carry more water than you otherwise could, and your labor did not produce that gourd.

<yawn> Try carrying water in a gourd that has had no labor applied to it.

Is that sort of stupid, dishonest nonsense really the best you can do?

[anaconda]

It denies the fact that natural resources don't have to be produced by labor, while capital does.

Workers receive a wage for extracting resources and others receive a wage for transforming them into intermediate or final goods. The cost is included in the final goods and counted in GDP. This does not seem like denial to me.

[Roy L]

Workers receive a wage for extracting resources and others receive a wage for transforming them into intermediate or final goods. The cost is included in the final goods and counted in GDP. This does not seem like denial to me.

Then where is the part about where the resources came from, and who was paid for them, and why?

You have just changed the subject completely, and are now talking about labor, not land or capital.

Denial doesn't get much more ambitious than that.