Wealth and Want
... because democracy alone is not enough to produce widely shared prosperity.
Home Essential Documents Themes All Documents Authors Glossary Links Contact Us


Economic Justice

If you want peace, work for justice ...


Bill Batt: The Nexus of Transportation, Economic Rent, and Land Use

What is Land Rent?
John Houseman, an actor perhaps most widely known as Professor Kingsfield in the long-running TV series, The Paper Chase, later became the pitchman for Smith Barney. In that advertisement, his tag line was "We make money the old-fashioned way -- we earn it."

That we should earn our money rather than live off the efforts of others seems a simple enough moral tenet. But it seems to have lost its cogency in contemporary economic thought. More than a century ago John Stuart Mill noted that
Landlords grow richer in their sleep without working, risking or economizing. The increase in the value of land, arising as it does from the efforts of an entire community, should belong to the community and not to the individual who might hold title.(1)

Today, on the other hand, the unearned surplus which classical economists called rent attaches to monopoly titles -- largely the scarce goods and services of nature like locational sites, and has totally disappeared from economic calculus. Yet this is the primary vehicle by which wealth is captured by economic elites. If government recaptured the socially-created economic rent from land sites that comes from the investment of the collective community, we could eliminate other taxes that are both more onerous and create a drag on the economy that makes us all poorer. There are many websites that explain how this can be done, ways that not only beget greater economic efficiency but also bring about economic justice.(2) The surplus economic rent that derives from community effort is its rightful entitlement.

Where does economic rent most tend to lodge? In the center of cities where people are. And also proximate to heavy social investments -- such as railroad and metro stations, public and office buildings, hotels and conference centers, and anywhere there is high traffic in personal or market exchanges. The land value in New York City is higher than all the rest of the New York state combined, even though it is only a minute fraction of the area. One 9-acre site south of the United Nations Building was recently sold to a developer intent on building luxury condominiums facing the East River. That site sold for $680 million, and would have been higher had the existing structure, an obsolete power plant, not have to be razed.(3) Land values in any given area tend to rise and fall together, and tend also to form a contour somewhat comparable to a topographical survey map. In a city's center are the highest value locations, analogous to a mountain peak. Once one departs from that center, land values fall in direct proportion to the value of their use, made more or less attractive by whatever social attributes are provided in the proximate areas. Two illustrations from small and medium sized cities in the United States illustrate the point. ... read the whole article

Bill Batt: The Compatibility of Georgist Economics and Ecological Economics
The Georgist main agenda, as earlier noted, is economic justice. If one searches the term “economic justice” online, the first site that will appear is the Georgist website, progress.org. The starting point is that people are entitled to what they earn, but only to what they earn.50 The fruits of the commons generated in rent might also be distributed to citizens equally if not used to finance the general services of government. In practice this means the abolition of those taxes that represent an unjust capture of one’s personal property — taxes such as income, sales, and other nuisance taxes. It accepts, to be sure, the need to collect user fees, Pigouvian taxes, and perhaps sumptuary (sin) taxes. It argues aggressively for the collection of economic rent in support of government and, for any remaining surplus, its distribution as a citizens’ dividend.  The justification for the collection of rent has several grounds:
  • the first is to preclude the entitlement of windfall gains to those who have unfairly captured monopoly control of parts of what are rightfully the public commons.
  • A second reason is to enhance the efficiency of economic productivity which the failure to collect rent prevents. It is not just that monopoly control of commons sites drives less attractive and less valuable land into production because the primary choices are unavailable; it is also that the use of alternative taxes leads to a deadweight loss in the economy which reduces the wealth of every citizen except the monopoly titleholder.The proper collection of land rent leads to increases in economic efficiency in a way that wages are not artificially depressed and more opportunities arise in the labor market.
The result of these factors leads to a greater equality in the income of each person. ...

The theme of economic justice runs throughout Daly’s work, evident of course in the title For the Common Good.122 But the formulations of justice are not explicit. One looks in vain for a statement of what if any entitlements people should possess by virtue of being human, or what nature or posterity is due in turn. Absent is anything that Harvard Law professor Mary Ann Glendon calls “rights talk.” 123 But it is clear that the ecological economists are struggling mightily with these questions. They are boldly posed elsewhere in the writing of Joan Martinez-Alier, a Spanish scholar who is widely known in the movement not just by his own writing but as editor of the journal Ecological Politica. In one article, he sees an ever-widening standing for environmental claims, as the environmental movement evolves from one based on the efficient and sustainable use of natural resources (the “gospel of eco-efficiency,” in the tradition of Gifford Pinchot), later to the “cult of wilderness” (in the tradition of John Muir and Aldo Leopold).” 124125 As people come to understand their relationship and dependence upon their natural environment, he envisions an unfolding pattern of litigation to preserve the sanctity and protection of peoples dependent upon it. Distant corporate interests will be blocked from exploiting the lands of local populations who are otherwise left with the liabilities of their repair. ...

The focus of Henry George’s inquiry, and of his disciples, is the pursuit of justice. Economic justice is an agenda which ecological economists also subscribe to, even though their immediate focus is concern about the earth’s survival at all, let alone the distribution of its fruits. Here, however, is where the Georgist tradition is able to contribute most to the environmental justice program. There is a broad appreciation, particularly among ecological economists that have worked in poorer nations, that natural resources are endangered every bit as much by the scarcity of basic necessities as by overpopulation. Urban elites usurp high value lands and retain land rents growing out of their production; poor people are marginalized and left to fend for themselves. They often survive by taking what little environmental resources are left on ravaged land sites, further reducing the resiliency of these local ecologies. Collection and redistribution of land rents, either in the form of public services or in the form of a citizens’ dividends, offers a way to restore equity without redistribution of land titles and without all the dislocations this might entail. Many third world leaders at the present time see solutions to poverty and economic inequality in the redistribution of land titles. Georgists argue that this is not necessary; all that is necessary is to recover the land rent and assure its equitable distribution to rightful claimants.  ...

The justice in the Georgist tradition grows out of the premise that one is entitled to what one makes with one’s own hands or mind, but one is not personally entitled to the gains that grow out of communal efforts. Those are owed to and should be returned to the community. The justice inherent in ecological economics, to the extent that it has solidified, involves a recognition that preservation of natural capital is in the interest of everyone. Both recognize and value the preservation of a world commons in nature. Both appreciate the diversity preserved in local community institutions and cultures. Both accept models based on self-regulating assumptions — in one case using the phrase “steady state” economics, in the other case the recovery of land rent in the pursuit of open and stable markets over monopoly control. There is great promise in the confluence of the two perspectives: they offer a solution to the age-old challenge of resolving what in the world ought to be public and common, and what else ought to be individual and private. It remains now for proponents of each perspective to continue exploring commonalities. ... read the whole article They are evident also in the work of Bernardo Aguilar, particularly with reference to north-south trade arrangements which essentially exchange natural resources for developed nations’ currencies.

To share this page with a friend: right click, choose "send," and add your comments.

Red links have not been visited; .
Green links are pages you've seen

Essential Documents pertinent to this theme:

Top of page
Essential Documents
to email this page to a friend: right click, choose "send"
Wealth and Want
... because democracy alone hasn't yet led to a society in which all can prosper