WEBVTT NOTE Markets in Urban Lands 1 00:00:00.000 --> 00:00:08.000 Well, the paper title is Markets in Umbar lands and the target is answer three questions. 2 00:00:08.800 --> 00:00:13.760 What is the best use for Umbar lands? What factor prevent us from achieve this? 3 00:00:14.640 --> 00:00:20.480 What are the right policies to accomplish this goal? This is the three main questions. 4 00:00:21.360 --> 00:00:29.840 I begin this presentation with a quote of Jorge Luis Borges, one of the best writers of all times. 5 00:00:29.840 --> 00:00:33.840 The quote is, I believe in individual, I don't believe in the state. 6 00:00:33.840 --> 00:00:37.840 Yo creo en el individuo, des creo del estado. 7 00:00:37.840 --> 00:00:40.840 Ok, this is the paper structure. 8 00:00:40.840 --> 00:00:48.840 The first topic is a presentation about the reasons for the deterioration in the Latin America downtown cities. 9 00:00:48.840 --> 00:00:52.840 This is a big problem now. 10 00:00:52.840 --> 00:01:02.840 Now, the second topic is one explication signs the Austrian perspective for the subject of the urban land. 11 00:01:02.840 --> 00:01:12.840 For that proposal, I'm going to use three of the giants of the school, Rothbard, Mises and Hayek. 12 00:01:12.840 --> 00:01:19.840 Finally, I'm going to try to construct an urban land market structure and present some conclusions. 13 00:01:19.840 --> 00:01:37.840 This is an example of the working of the market for urban land. Some research on the subject suggest that the massive migration from the countryside to the cities is the main cause of the problem of the downtown. 14 00:01:37.840 --> 00:01:44.160 The countryside-to-city migration don't answer the question. 15 00:01:44.160 --> 00:01:50.160 Also, the arrival of new population may cause some trauma of a result of its rapid development. 16 00:01:50.160 --> 00:01:56.240 This factor alone don't explain the change in the spatial configuration in Latin American cities, 17 00:01:56.240 --> 00:02:00.800 near the deterioration of this emblematic space. 18 00:02:00.800 --> 00:02:05.840 Migration to the city is a natural phenomenon in the development of the capitalings, 19 00:02:05.840 --> 00:02:12.640 And this should not be reason for the deterioration equality of life of the urban dollars. 20 00:02:12.640 --> 00:02:21.240 Newcomers seem to make a living in the blood market, occupying the central area because the existence of the diversity of consumers. 21 00:02:21.240 --> 00:02:29.440 The result was, downtown areas were converted in a blood market heathens, this is really. 22 00:02:29.440 --> 00:02:36.080 In response, many Latin American government cities have taken action to recover this area. 23 00:02:36.080 --> 00:02:42.880 But, also, these policies may be well-intentioned, the results are a disaster. 24 00:02:42.880 --> 00:02:48.880 The state intervention comes in two ways. 25 00:02:48.880 --> 00:02:58.880 The first way is a high spending on UNBAR infrastructure, and the second way is the tagging of the rule of government land use. 26 00:02:58.880 --> 00:03:06.960 These policies are based on the mistake assumption that only via government intervention through 27 00:03:06.960 --> 00:03:12.520 large investment infrastructure and strict regulation on land use, it will be possible 28 00:03:12.520 --> 00:03:19.320 to guide the market toward a more efficient land distribution. 29 00:03:19.320 --> 00:03:26.240 The investment in physical infrastructure is a distortion to the prime system. 30 00:03:26.240 --> 00:03:33.960 On the other hand, tagging of the rule of government land emphasized in the prohibition of using 31 00:03:33.960 --> 00:03:37.160 historical residence for business proposal. 32 00:03:37.160 --> 00:03:45.680 In other words, the property is now less likely with assets, and therefore its market value 33 00:03:45.680 --> 00:03:47.960 decreases. 34 00:03:47.960 --> 00:03:54.800 This is the two mechanisms, and the two mechanisms break the spontaneous order. 35 00:03:54.800 --> 00:04:03.520 This is a quote of Hayek, the spontaneous order of the city that is to the, the spontaneous 36 00:04:03.520 --> 00:04:10.800 order of the society is to the spontaneous order of the city. Additionally, the situation 37 00:04:10.800 --> 00:04:17.560 is worsened if one takes in account the discretionary action of the government, its power to frequently 38 00:04:17.560 --> 00:04:22.560 The Shinder Rule for the Land Use Ask Mechanism to Enfold His Recovery Plan 39 00:04:22.560 --> 00:04:30.560 We go now to the second part of the paper. The Urban Land Market Sides the Austrian Perspective 40 00:04:30.560 --> 00:04:37.560 The revision of the three authors that I say. The third author is Rothbard. 41 00:04:37.560 --> 00:04:44.560 For the Rothbard revision I begin with a question. Is the land a different good? 42 00:04:44.560 --> 00:04:52.560 This is an important question. We can start as the debate between Henry George and Murray Rothbard. 43 00:04:53.560 --> 00:04:58.560 The Georgians proposed the single-tal program. 44 00:04:59.560 --> 00:05:09.560 The single-tal program begins with the assumption that the land isn't a product of human action, 45 00:05:09.560 --> 00:05:31.760 Being a good that isn't created by the man, property couldn't belong to an individual, 46 00:05:31.760 --> 00:05:51.160 The Georgians say that it is possible to separate the land gross value from the mass improvement. 47 00:05:51.160 --> 00:05:55.700 Thus only the government should own and control the land. 48 00:05:55.700 --> 00:06:01.240 They propose a tax equal to 100% of the revenue produced by the land. 49 00:06:01.240 --> 00:06:05.240 This is the Georgian proposal. 50 00:06:05.240 --> 00:06:09.580 But, contradicting the single-task premise, 51 00:06:09.580 --> 00:06:13.640 Murray Rothbard understood that one of the single-task key 52 00:06:13.640 --> 00:06:18.680 assumptions was that the land's possessor doesn't contribute 53 00:06:18.680 --> 00:06:21.160 to the economy's profit. 54 00:06:21.160 --> 00:06:25.880 This is the point of Rothbard. 55 00:06:25.880 --> 00:06:28.840 Land city owner manages unlimited goods. 56 00:06:28.840 --> 00:06:37.840 Therefore, his function is to designate to the grounds to alternatives more profitable, and it means a big contribution to the society. 57 00:06:37.840 --> 00:06:46.840 With the pressing until now, we could conclude that the ground equals that all goods will have an economic interest. 58 00:06:46.840 --> 00:06:57.840 The land is limited. For that reason, they have an economic problem 59 00:06:57.840 --> 00:07:01.180 because there are scarcity. 60 00:07:03.000 --> 00:07:08.000 The next is, well, the private property is necessary, 61 00:07:11.040 --> 00:07:16.040 but other way of intermination is the task. 62 00:07:17.940 --> 00:07:21.560 We could think that the single-tar proposal is radical, 63 00:07:21.560 --> 00:07:23.440 and that is very difficult, 64 00:07:23.440 --> 00:07:25.680 that one day it will be a reality. 65 00:07:25.680 --> 00:07:32.520 Nevertheless, many economies, especially these inclinate to the state intervention, believe 66 00:07:32.520 --> 00:07:36.360 can be salvaged from the Georgian idea. 67 00:07:36.360 --> 00:07:43.200 That this fiscal policy could elaborate, it could help to a more efficient land use. 68 00:07:43.200 --> 00:07:50.320 This idea is less extreme and basically evolves to a differential land tax, logical inferior 69 00:07:50.320 --> 00:07:54.240 to the 100% of the O.R.N. 70 00:07:54.240 --> 00:07:59.780 If the task must have one impact in the agent's decision, they admit that the price system 71 00:07:59.780 --> 00:08:01.740 should be disturbed. 72 00:08:01.740 --> 00:08:07.400 Ludwig von Mises clearly warned that without price information, the agent can't make the 73 00:08:07.400 --> 00:08:08.880 right decision. 74 00:08:08.880 --> 00:08:13.880 Due to the information that they have isn't the correct. 75 00:08:13.880 --> 00:08:19.680 I want to read one quote of Mises. 76 00:08:19.680 --> 00:08:25.380 The ultimate source of the determination of the price is the value-usement of the consumers. 77 00:08:25.380 --> 00:08:34.880 Human Action, individual transmits information via prices, so when the mechanism has been 78 00:08:34.880 --> 00:08:40.400 damaged it infers the economy's nerf system. 79 00:08:40.400 --> 00:08:43.400 The last author is Hayek. 80 00:08:43.400 --> 00:08:48.200 Well, until this point, we have shown 81 00:08:48.200 --> 00:08:54.680 that neither the tax and the confiscation 82 00:08:54.680 --> 00:08:58.840 is good for the urban land structure. 83 00:08:58.840 --> 00:09:03.920 Now, we're going to present one last argument 84 00:09:03.920 --> 00:09:08.720 for the state intervention that is the regulation. 85 00:09:08.720 --> 00:09:14.920 Nevertheless, one mainstream economist could write that even if he agrees with what was 86 00:09:14.920 --> 00:09:20.720 previously said, the city needs any type of ordering, it is impossible to leave all to 87 00:09:20.720 --> 00:09:22.160 the market. 88 00:09:22.160 --> 00:09:28.720 The argument is that there are superior social profits which is provided by one specific 89 00:09:28.720 --> 00:09:30.720 land distribution. 90 00:09:30.720 --> 00:09:36.480 It is sure that one residential zone will be incovenient with the installation of one 91 00:09:36.480 --> 00:09:53.280 This concept is closely related with that Hayek denominated the society spontaneous order, 92 00:09:53.280 --> 00:09:58.600 what can be interpreted as the city spontaneous order. 93 00:09:58.600 --> 00:10:04.920 The city would order them spontaneously, and they used that they are compatible with in 94 00:10:04.920 --> 00:10:20.720 The Planned Authority, in order to be able to make his job, must be empowered, because 95 00:10:20.720 --> 00:10:25.520 otherwise it could enforce citizens to follow his plan. 96 00:10:25.520 --> 00:10:29.920 That is a private property confiscation. 97 00:10:29.920 --> 00:10:37.440 Because private property violation would be justified by social profile for a profit to 98 00:10:37.440 --> 00:10:44.320 all society. Nevertheless, sub-profit musing considered for all society because it doesn't 99 00:10:44.320 --> 00:10:51.280 reflect all society, but the particular planning authority view is only the view of the authority 100 00:10:51.280 --> 00:10:56.840 planning, not all society. The planning authority not only must have great powers to carry his 101 00:10:56.840 --> 00:11:19.840 The rule of law, the concept of the Hayek. 102 00:11:19.840 --> 00:11:27.840 Finally, I present a market structure, given the other topic. 103 00:11:27.840 --> 00:11:34.840 Ok, this market is integrated initially by the owner, the urbanizing entrepreneur and the consumer. 104 00:11:34.840 --> 00:11:45.840 The entrepreneur is ever looking the possibilities to the best land use, and he tries to develop the construction project with society at present most. 105 00:11:45.840 --> 00:12:04.840 The question that holds the mind in the entrepreneur of this individual are, what is the project that generates the highest rent, what is the market awarding, and what is the right time to begin the project? 106 00:12:04.840 --> 00:12:13.840 Up to here, the structure is very easy. Never the less, it has not only become more complex, but more disturbed when the state appears. 107 00:12:13.840 --> 00:12:21.840 The state's intermination can increase or decrease the lot's value, depending on the urban land distribution share. 108 00:12:21.840 --> 00:12:26.840 This reality is more visible with investment, but occurs with regulation too. 109 00:12:26.840 --> 00:12:37.840 If the government gives to one property a land use that produces a higher rent than the previous, immediately the lot price rises. 110 00:12:37.840 --> 00:12:49.840 In the same way, if the planning authority limits the use of a land to a less rentable than the one of the market would grant to it, the lot price falls. 111 00:12:49.840 --> 00:13:06.840 The government creates rents that aren't products of the human action, it raises the price of the land and falls the price of the land, depending on the case. 112 00:13:06.840 --> 00:13:13.840 In the same way, the other state interventions, the urban land regulation, generate the same expectation. 113 00:13:13.840 --> 00:13:22.840 Therefore, the agent would be motivated to influence the state decision in a way that they more will benefit. 114 00:13:22.840 --> 00:13:30.840 And finally, this situation. When the state takes part, the agent's decision changes immediately, 115 00:13:30.840 --> 00:13:38.840 and his target is not only given the best-used land, but he tries to capture the rent given to the state too. 116 00:13:38.840 --> 00:13:42.840 Therefore, the spatial configuration will be different to the efficient. 117 00:13:42.840 --> 00:13:54.800 This is the conclusion, the political implication I resume in two, helping to define the property 118 00:13:54.800 --> 00:14:07.280 rights that can be helped in the case of the downtown in Latin America and allowing the 119 00:14:07.280 --> 00:14:17.160 Market 12, and finally, Uniform Transhancement Tool, for not disturb the price system. 120 00:14:17.160 --> 00:14:18.560 Thank you for your attention.