scott fitsimones

Announcing - an experiment in Harberger Taxes on the Blockchain

Today I’m launching - a collection of 365 NFTs on Ethereum - one for each Gregorian Calendar day from January 1st to December 31st. The owner of the day gets the special privilege of naming the day, but that ownership is subject to the Harberger Tax.

Inspired by the ideas in Radical Markets, the Common Calendar is an experiment in Partial Common Ownership, meaning every day is always on sale for a price set by the owner (after the initial auction). To ensure the owner doesn't set an absurdly high price, the owner pays a tax on the price they choose.

Economist Henry George proposes that property ownership is a form of monopoly, allowing speculators to indefinitely own assets like land and natural resources that would be in society's best interest to be put to a higher use. His work led to a concept called Partial Common Ownership which is a mechanism designed to ensure goods cannot be monopolized by requiring the owner to pay a tax on a self-assessed value. This tax was named the Harberger Tax by Eric Posner and Glen Weyl in their paper Property Is Only Another Name for Monopoly.

The Calendar days are a great proof of concept for Partial Common Ownership because groups can own and memorialize days together, but a group that disagrees with the current name has a mechanism to express that preference (forcibly buying the day). The fact that each day is subject to the Tax reduces speculation and solves the holdout problem. We ensure allocative efficiency, as the group that values the day most can always own it.

Critics argue that Partial Common Ownership is not true ownership - a day can be taken from its owner at any time for the right price. But Partial Common Ownership confers many benefits to the holder - for example in our case, the tax rate of 1% is low - conferring large upside for the asset owner if the day is purchased. The owner walks away with a large windfall and the new owner is happy they were able to buy the asset.

I hope to see many more experiments with Harberger Taxes. Scarce, zero-sum assets like land are perhaps the best candidates for Harberger Taxation because they ensure allocative efficiency. We built the Calendar because we think mechanism design is a promising yet under-explored way to create prosperity. Inspiration for Common Calendar comes from the California housing crisis, the book Radical Markets, Glen Weyl, Henry George, Vitalik Buterin, and the folks at Radical Xchange.

Recommended Reading:

Property is Just Another Name for Monopoly

Radical Markets