Talk:Henry George theorem

Ability of landowners to pass the land-value-tax on to those who rent the land or who buy the fruits of the land

Has Henry George (or Stieglitz) made any suggestions how the government can avoid the phenomenon that landowners can simply increase the rent tenants pay if the taxburden on the land increases? Would an ex-post-tax on land be a solution to this? --Koma Kulshan (talk) 16:38, 4 June 2016 (UTC)

George suggested (though I do not have reference) that the fact that supply of land is perfectly inelastic will generally prevent this from happening. I do not feel competent to comment myself. 94.156.237.151 (talk) 10:37, 23 March 2017 (UTC)

He not only suggested as much, he wrote a whole essay addressing the issue: http://www.wealthandwant.com/HG/why_the_landowner_cannot_shift.html Billiam1185 (talk) 23:05, 13 January 2020 (UTC)

Where is the theorem?

There should be a description of what the "special conditions" of the theorem are. This is way too vague. — Preceding unsigned comment added by 47.72.35.197 (talk) 00:38, 11 December 2017 (UTC)

I just added one. The “special conditions” is that the economy must be organized effectively and population must be optimal, among other conditions. Viespe0 (talk) 01:54, 29 August 2024 (UTC)

The Mathematics of the HGT.

I don’t really know how to edit and enter equations on wikipedia, but I do know the “theorem” of the HGT. I’m hoping someone may check the formulation I am about to present, improve upon it if necessary, and then make it official, since this wikipedia page is very vague and of lower quality.

The following derivation follows Stiglitz “The Theory of Local Public Goods,” 1977). Suppose a community with a population size of N laborers. The utility of the representative agent is a function of the capita consumption of private goods “c”, and the consumption of public goods “G”. Hence, the community seeks to maximize the utility function

U = U(c, G)

With the following resource constraint

Y = f(N) = cN + G

It follows that

c = (f(N) - G)/N

Therefore the community’s optimization problem becomes

max U = U((f(N) - G)/N, G)

with first-order conditions

∂U/∂N = ∂U/∂c • (f’(N) - f(N) + G)/N^2

∂U/∂c ≠ 0. Thus,dU/dN = 0 (the optimal population condition) results in the equalities

c = f’(N) = marginal product

G = f(N) - f’(N)N

The value of G when population is optimal is the same as the Ricardian Rent Identity

R = f(N) - f’(N)N

(Cite Luigi Pasinetti’s “A Mathematical Formulation of the Ricardian System,” the equation also shows up on Pasinetti’s wikipedia page under theoretical contributions). Thus

R = G, for dU/dN = 0.

Add concluding remarks and that is where I would like the derivation section of the page to end. I will share some of mine now.

Note that the wikipedia page on Luigi Pasinetti has similar equations. Namely, the production function Y = f(N), marginal productivity f’(N) = dY/dN , and the Ricardian Rent Identity R = f(N) - f’(N)N.

The Ricardian Rent Identity is, of course, rooted in David Ricardo’s theory of rent, or “law of rent,” and distribution.

Joseph Stiglitz studied in Cambridge at a time where Pasinetti and others‘ “Cambridge Keynesianism” was very prevalent in the academic environment, so it is perhaps no surprise that Stiglitz’ local public goods model (1977) whence the HGT was derived, borrows some equations from Cambridge Keynesian models.

Nevertheless, the theorem a very remarkable result.

Viespe0 (talk) 22:31, 13 August 2024 (UTC)