Not Only Land

The Unearned, Part 4

Tax What You Didn’t Make named the levy for the booth on the ground. Land is the clear case. It is not the only one. From Plunder to Justice already said so, in a section most readers will have treated as a coda. Minerals. Oil. Water. Timber. Fisheries. The electromagnetic spectrum. Exclusive use of a finite thing nobody produced. The unearned portion belongs to the common pool. The labored portion belongs to the laborer. This part is that section at working length, because the next enclosure this series has to face is not dirt, and if the line only works on dirt it was never the line.

The principle does not change. Someone occupies a gift. Everyone else is shut out of it. The price of that shutting-out is rent, and rent on a gift is not wages. Charge it. Leave what the charger built.

The blend

The sentence is clean. The world is not.

A mine is worth something for the ore, which no one made, and something more for the shaft, the survey, the road, and the risk run to find and work it, all of which someone did make. Pretend the whole value is a gift and you have just described a confiscation of the shaft. Pretend none of it is a gift and you have handed the ore to whoever filed first, the first-comer aristocracy Enough and As Good already refused. Most real assets are a blend. A port is mostly built. A rail corridor is mostly built. A fishery is a stock nobody planted and a fleet, a harbor, a cold store someone did. Applying the principle honestly means doing the harder work of separating the gift from the labor, charging rent on the first and leaving the second untouched.

That is the same separation the land tax already demands between site and house, restated under a shaft instead of a porch. And it is where Rothbard’s people will plant their flag and say, see, you cannot draw the line, so the whole thing is a planner’s fiction. Hard is not the same as fake. Mining companies, insurers, and governments already put a number on reserves apart from plant. They do it for loans and for depletion and for sale. Rough, again. Rough is the condition of every tax that exists. The question is whether the roughness falls on a gift or on a paycheck.

The right-hand cartoon is that any resource rent is a seizure of extractive industry, a back door to nationalizing the hole in the ground. It is not. The company keeps the shaft, the rig, the mill, every dollar the finding and the working earned. What it pays is the exclusive right to draw on a stock it did not create. The socialist road is to take the title. This road leaves the title and collects the gift. The Last Enclosure will say the same thing about a laboratory. Say it here first, about a mine, so nobody can claim the move was invented for a fashionable target.

The left-hand cartoon is the mirror. Nationalize the resource. Keep it in the ground. Or set the fee so high the point is not compensation but a ban wearing a price tag. That is the planning-office error Tax What You Didn’t Make already killed for land, in a different costume. A use-right fee is compensation to everyone excluded from a common inheritance. Properly set, it leaves productive enterprise free. The logging company, the well, the firm on a shared aquifer: each pays for the natural opportunity it has removed from common access, and keeps in full whatever its own labor and capital add. If the political goal is to forbid the drawing, say so and fight that fight on its own terms. Do not launder a ban through a rent you have no intention of setting honestly.

A band nobody made

The cleanest case that is not dirt is the air. I have written the short version. The longer version is the same booth.

A broadcast license is not a possession a network earned. It is permission to use a slice of spectrum, a finite band no company built and none can make more of. For most of a century the grant was handed out for a nominal fee in exchange for a promise to operate in the public interest. That promise was supposed to be the rent. It was never priced. Renewal became a formality. The string attached decayed into a few late-night spots. A shrinking number of owners now sit on a resource the public still nominally holds, paying close to nothing for it, in money or in the obligation that was supposed to stand in for money. A booth, wearing a tower.

Free access did what unpriced land does. It killed the pressure to put the gift to its best use. A holder who pays the same nominal fee whether he uses the band brilliantly or wastes it has no reason to give it up, or to adopt a technology that would deliver more in a fraction of the slice. Wireless carriers already bid real money for their spectrum. Broadcasters, on the old grant, do not. An unpriced input never has to compete with a better idea for the space it occupies.

And the proviso reaches it. When those licenses were first handed out, enough and as good roughly held. Few applicants wanted any given frequency. Reserving one cost the rest of the country almost nothing. That condition is gone. Wireless data, satellite, a growing list of other uses now compete for every usable band, and a permanent grant made when the air was empty is still administered as if the air were empty. The same test that condemns enclosing the land once the frontier closes condemns freezing a spectrum grant once the air fills up.

Leave the grant unpriced and you get both abuses at once. The holder skates. The regulator keeps a discretionary lever, the power to threaten the license, and sooner or later someone will want that lever swung at a content decision they did not like. Price the band, competitively, in the open, and the leverage shrinks on both ends. A network paying honest rent owes the public the rent, not a kneeling. An administration that does not like a schedule has no lease to dangle. I am not going to rest this essay on one week’s flare-up. The shape recurs. The defect is the unpriced grant, not the editorial call that happened to make someone angry.

Charge the gift. Leave the transmitter, the studio, the programming, every dollar the company actually made. That is the mine, restated in hertz.

What the fee is

The mechanism, where the separation can be made, is a resource rent or a use-right fee. Payment by the private user of a finite natural asset in exchange for the exclusive right to draw on it. Not a penalty. Compensation.

It is the land tax in another unit. Annual where the gift is a site or a band you occupy. A royalty or a bonus on the stock you remove, where the gift is ore or oil or timber, set on the in-ground value and not on the mill. I will not write a schedule. The principle is the schedule: the gift, not the shaft. Get that wrong and you have built an income tax with dirt on it.

Can these rents, stacked with the land, carry a government? The same answer as before. It depends how large a government you mean. The common inheritance is considerable. It is not a blank check. A state that cannot live on it has outgrown the work law is allowed to do.

The aquifer is the same booth, wet. Exclusive draw from a shared stock nobody made. The pumps and the pipes are the shaft. Charge the draw. Leave the pumps. Timber in a natural stand is a stock. The road in and the mill are labor. A fishery is a stock. The boat is labor. Repeat the sentence until it bores you. That is how you know it is the same argument.

The commons that is not a place

Land, ore, water, air: you cannot both stand there. The gift is rival. One person’s exclusive use is everyone else’s loss in the ordinary physical sense, and the rent measures that loss.

There is a commons that does not work that way. One person knowing a thing never stopped another from knowing it. The accumulated writing of the species cost nothing to share, and for most of history nobody had a way to fence it and meter it. That fence now exists. A machine trained on nearly everything we ever wrote, rented back by the token. The gift is the corpus. The shaft is the architecture, the training run, the bill for compute.

That is the last enclosure, and the largest, and it is the next part. The line does not change. You may own what you built. You may not quietly pocket a common inheritance and call the meter yours. If the line only worked on dirt, it was a land tax with a philosophy taped to it. If it works on the ore and the band and the aquifer, it is ready for the mind.

Next: The Last Enclosure