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Adam Smith Institute vs Adam Smith

The Adam Smith Insitute has recently released a report where they argue that the moon should be privitised in order to combat global poverty.

Economic researcher Rebecca Lowe, who compiled the report said: "A clear, morally justified and efficient system for assigning and governing property rights in space would present vast benefits that go beyond financial rewards for people who would become owners. Such a system would incentivise responsible stewardship of space as well as opportunities for new scientific discovery and democratised space exploration."

The Institute's head of research Daniel Pryor said: "Property rights play a key role in boosting living standards, innovation and human dignity here on Earth... The same would be true if we applied this logic to space which presents a unique opportunity to start afresh when designing effective rules of ownership.

"With more countries and companies competing in the space race than ever before it’s vital for us to move past the outdated thinking of the 1960s and tackle the question of extraterrestrial property rights sooner rather than later.’’

The Adam Smith Institute is reminded that Adam Smith advocated maximum land taxes.

"A tax upon ground-rents would not raise the rent of houses. It would fall altogether upon the owner of the ground-rent, who acts always as a monopolist and exacts the greatest rent which can be got for the use of the ground."

"As soon as land becomes private property, the landlord demands a share of almost all the produce which the labourer can either raise, or collect from it. His rent makes the first deduction from the produce of the labour which is employed upon the land."
-- Adam Smith, The Wealth of Nations

Economists since Smith have come to the same conclusion. Following Smith, David Ricardo illustrated how the private appropriation of land values impoverished everyone else:

"... the interest of the landlord is always opposed to the interest of every other class in the community. His situation is never so prosperous as when food is scarce and dear... High rent and low profits, for they invariably accompany each other"
-- David Ricardo, An Essay on the Application of Capital to Land

On could list literally dozens of the most well-respected economists who say the same and it is typically found even in standard textbook economics. For example, the following is from Nordhaus and Samuelson, two Nobel Prize winners in economics, as if they know anything at all.

"Because the supply of land is inelastic, land will always work for whatever it can earn. Thus the value of the land derives entirely from the value of the product, and not vice versa... A tax on fixed land leaves prices paid by users unchanged .. but reduces rent retained by landowners... This provides the rationale for Henry George’s single-tax movement, which aimed to capture for society the increased land values without distorting the allocation of resources.. The striking result is that a tax on rent will lead to no distortions or economic inefficiencies."
-- Nordhaus and Samuelson, Economics (10th edition), McGraw Hill, 2010, p270

I guess the Adam Smith Institute thinks they know better.

Thanks to Ruth Tweedy for the image/alert

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