You are confusing “value” with “price.” If each worker is producing more cars, then in theory the price of cars should decline, which is the same as the worker’s wage increasing. You must have one or the other, or you will not be able to dispose of the increased output economically, and will have to rely on the non-economic means of increased gov’t spending or usury.

In the last thirty years, productivity has exploded for each and every category of labor, but the median wage has stagnated. Indeed, it is lower today in real dollars than it was in 1973. Hence, the standard theory is falsified in practice. Clearly, workers are producing more, but they are not getting any of the benefits; the rewards of increased productivity are going to a few people at the top, while the mass of men have seen no improvement.

First, I am uncertain what you mean by “every category of labor,” but it seems to me that one counterfactual might be education labor. Would you say that there has been “increased productivity” from teachers in the last 30 years? If there has not, if productivity has actually declined, then it might make sense, on your terms, that real wages have declined in that sector, no? Sure, it is true that the “product” of the educational “industry” is a bit odd when compared to toy factories, but it should be clear from the example that 1) it is sometimes difficult to measure true productivity, and 2) at any rate not all “industries” have progressed in productivity.

My second criticism of your post, overall which I appreciate and learned much from, is that you’ve neglected another reason why wages may have stagnated: the value of products may not be static.

Here’s an example. Suppose every car maker’s productivity increased by 1,000. Does it immediately follow that just because productivity has increased, the wages should increase as well? Surely not in this case, for the world does not need nor should it pay for 1,000X as many cars as it currently makes. Wages depend not just on productivity, but on the value of the goods produced, and in some cases producing more of an item is simply worse for everybody.

You might reply that I speak of extreme situations and that surely wages should rise a little bit when productivity increases a little bit, but may or may not be true in most cases, but there is yet another factor relating to the dynamic value of goods, namely that the creation of other commodities can render existing commodities less valuable. So the invention of waffles can make pancakes less valuable and so pancake-cook wages might decrease, even if pancake-cook productivity increases! The question is of malinvestment, and the difficulty of being able to ascertain accurately the “true value” of goods, and therefore the “true value” of labor producing those goods, and therefore what your just wages are.

I say this as one who is looking for an alternative to corporate capitalism and would hope that these criticisms would help refine your position.

If its any small consolation Albert J. Nock was a Georgist.

As for Rothbard, critiquing the state is like shooting fish in a barrel: not a particularly challenging sport. The real question is what alternatives one presents. The problem with anarcho-libertarianism is that its anarchism prevents it from having any rational theology of the state, save nihilism. It poses every question in an “all-or-nothing” format, which always works to the benefit of the “all,” since there are not enough nihilists to vote for the nothing.

As for “mechanics,” I am not sure what you mean. That is what I thought I have been doing all along. I have two more parts planned, one on currently operating Distributist systems (never believe any social theory unless you can see how it works in practice) and one on how we can get there from here. If by “mechanics” you mean something like industrial policy, see, http://distributism.blogspot.com/2009/03/chapter-xvi-distributism-and-industrial.html
For a distributist solution to specific and current social issues (health care, in this case) see http://distributism.blogspot.com/2009/04/chapter-xvii-distributism-and-health.html

Your attacks on Rothbard induce gulps ..I always found his trenchant critique of the wooly-headed State very appealing. Garret Garrett, Albert J. Nock…the skeptical remnants I’ve come to enjoy. Your comment about the modern Corporation and its crypto-Stalinist tendencies is hard to dispute.

This is an interesting series of essays Medaille and I’m looking forward to getting beyond the motherhood issues to mechanics but take your time.

Rothbard is pretty heavy handed in his analysis I agree but the question of determining what the ground rent would be is a sticky one absent the price mechanism (Rothbard even notes that this problem is not such a problem in urban areas). I agree that Rothbard’s conclusions on this problem are off base and essentially hyperbolic, I think it is part of the mimetic rivalry between Georgists and Austrians. His critique is, however, important in that it is the only modern critique one is likely to come across in contemporary America.

The Austrian’s get hung up on the question of the price mechanism (Which is, to a degree, understandable). This is why it is really impossable for them to discuss taxation in any terms other than none (As in Rothbard’s anarchism) or less. I think we are agreed that taxes are necessary (no anarchists here) and (at least potentially) destructive to productivity. A Georgist solution to the problem is novel but not to be dismissed out of hand. I look forward to your next essay!

What always amazes me about people like Rothbard is why they never permit themselves a peek at reality. Rather than theorizing about the problems of Georgism, why not look at Georgist states and noting what problems they actually? Why is reality excluded on methodological grounds from Austrian calculation? There are problems with Georgism, or rather with the actual implementations of Georgism that one finds, and these are the problems I noted in my essay.

There are GeoAustrians, like Fred Foldvary and Lindy Davis who would be glad to give you an Austrian perspective on Georgism.

A Georgist solution! I have questions of its applicability outside of an urban setting but find the idea intriguing. Austrian’s have a love hate relationship with George (They love everything he ever wrote, except for his work on the single tax). See Rothbard’s critique here:

http://mises.org/rothbard/georgism.pdf

Not sure if Georgism would be as disastrous as he surmises but certainly raises some serious practice questions that might be helpful in framing your next essay.

Basically, what should be taxed is economic rent, defined as “an amount paid to a factor of production greater than what is necessary to keep that factor in production in its current use.” The greatest single source of ER is ground rent.

How would a distributivist feel about Ralph Nader’s idea of moving taxes away from income and towards wealth? I’m a little rusty on the details but this could be a way of allowing workers to build up capital. I may be one of the Austrian/Neoclassical critics (though hardly an economist) but I see this (Nader’s idea) as a better alternative to the status quo. Perhaps the basis for some common ground?