Wealth and Want
... because democracy alone is not enough to produce widely shared prosperity.
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A captious economist planned
to live without access to land. 
He nearly succeeded,
but found that he needed
food, water, and somewhere to stand.

"LAND, n. A part of the earth's surface, considered as property. The theory that land is property subject to private ownership and control is the foundation of modern society, and is eminently worthy of the superstructure. Carried to its logical conclusion, it means that some have the right to prevent others from living; for the right to own implies the right exclusively to occupy; and in fact laws of trespass are enacted wherever property in land is recognised. It follows that if the whole area of terra firma is owned by A, B and C, there will be no place for D, E, F and G to be born, or, born as trespassers, to exist." - Ambrose Bierce, (1842 - 1914), American satirist, The Devil's Dictionary


In George's view, man's dependence on land is universal and endless, "...for land is the indispensible prerequisite to life."  "What is inexplicable, if we lose sight of man's absolute and constant dependence upon land, is clear when we recognize it."

Here then is the main element, the distinctive characteristic, of George's work. In George's view, man's relation to the earth is his primary material relation. All other influences, therefore, must be appraised as to how they affect, or are affected by, this basic relation. It is perhaps this to which Soule refers when he says, of Progress and Poverty, "This book expounded a theory developed with superb logic."

But great as they thus appear, the advantages of a transference of all public burdens to a tax upon the value of land cannot be fully appreciated until we consider the effect upon the distribution of wealth.

Tracing out the cause of the unequal distribution of wealth which appears in all civilized countries, with a constant tendency to greater and greater inequality as material progress goes on, we have found it in the fact that, as civilization advances, the ownership of land, now in private hands, gives a greater and greater power of appropriating the wealth produced by labor and capital.

Thus, to relieve labor and capital from all taxation, direct and indirect, and to throw the burden upon rent, would be, as far as it went, to counteract this tendency to inequality, and, if it went so far as to take in taxation the whole of rent, the cause of inequality would be totally destroyed. Rent, instead of causing inequality, as now, would then promote equality. Labor and capital would then receive the whole produce, minus that portion taken by the state in the taxation of land values, which, being applied to public purposes, would be equally distributed in public benefits.

That is to say, the wealth produced in every community would be divided into two portions.

  • One part would be distributed in wages and interest between individual producers, according to the part each had taken in the work of production;

  • the other part would go to the community as a whole, to be distributed in public benefits to all its members.

In this all would share equally — the weak with the strong, young children and decrepit old men, the maimed, the halt, and the blind, as well as the vigorous. And justly so — for while one part represents the result of individual effort in production, the other represents the increased power with which the community as a whole aids the individual.

Thus, as material progress tends to increase rent, were rent taken by the community for common purposes the very cause which now tends to produce inequality as material progress goes on would then tend to produce greater and greater equality.

Who can say to what infinite powers the wealth-producing capacity of labor may not be raised by social adjustments which will give to the producers of wealth their fair proportion of its advantages and enjoyments! With present processes the gain would be simply incalculable, but just as wages are high, so do the invention and utilization of improved processes and machinery go on with greater rapidity and ease.

But I shall not deny, and do not wish to lose sight of the fact, that while thus preventing waste and thus adding to the efficiency of labor, the equalization in the distribution of wealth that would result from the simple plan of taxation that I propose, must lessen the intensity with which wealth is pursued. It seems to me that in a condition of society in which no one need fear poverty, no one would desire great wealth — at least, no one would take the trouble to strive and to strain for it as men do now. For, certainly, the spectacle of men who have only a few years to live, slaving away their time for the sake of dying rich, is in itself so unnatural and absurd, that in a state of society where the abolition of the fear of want had dissipated the envious admiration with which the masses of men now regard the possession of great riches, whoever would toil to acquire more than he cared to use would be looked upon as we would now look on a man who would thatch his head with half a dozen hats.

And though this incentive to production be withdrawn, can we not spare it? Whatever may have been its office in an earlier stage of development, it is not needed now. The dangers that menace our civilization do not come from the weakness of the springs of production. What it suffers from, and what, if a remedy be not applied, it must die from, is unequal distribution!

Nor would the removal of this incentive, regarded only from the standpoint of production, be an unmixed loss. For, that the aggregate of production is greatly reduced by the greed with which riches are pursued, is one of the most obtrusive facts of modern society. While, were this insane desire to get rich at any cost lessened, mental activities now devoted to scraping together riches would be translated into far higher spheres of usefulness. ... read the whole chapter

Henry George: The Wages of Labor

Man, physically, can live only on and from land, and can use elements such as air, sunshine, and water, only by the use of land. ...  read the whole article

Henry George: Thou Shalt Not Steal  (1887 speech)

We are selling land now in large quantities to certain English lords, who are coming over here and buying greater estates than the greatest in Great Britain or Ireland. We are selling them land; they are buying land. Did it ever occur to you that they do not want that land? They have no use whatever for American land; they do not propose to come over here and live on it. They cannot carry it over there to where they do live.

It is not the land that they want. What they want is the income from it. They are buying it not because they themselves want to use it, but because by and by, as population increases, numbers of American citizens will want to use it, and then they can say to these American citizens: "You can use this land provided you pay us one-half of all you make upon it." What we are selling those foreign lords is not really land; we are selling them the labor of American citizens; we are selling them the privilege of taking, without any return for it, the proceeds of the toil of our children.

So, here in New York, you will read in the papers every day that the price of land is going up. John Jones or Robert Brown has made a hundred thousand dollars within a year in the increase in the value of land in New York. What does that mean? It means he has the power of getting many more coats, many more cigars, dry goods, horses and carriages, houses or much more food and wine. He has gained the power of taking for his own a great number of these products of human labor.

But what has he done? He has not done anything. He may have been off in Europe or out west, or he may have been sitting at home taking it easy. If he has done nothing to get this increased income, where does it come from? The things I speak of are all products of human labor — someone has to work for them. When a man who does no work can get them, necessarily the people who do work to produce them must have less of the products of human labor than they ought to have. ...  read the whole article

Henry George: Causes of Business Depression (1894)
Land is the source of all employment, the natural element indispensable to all work. ... That the monopoly of land -- the exclusion of labor from land by the high price demanded for it -- is the cause of scarcity of employment and business depressions is as clear as the sun at noonday. Wherever you may be that scarcity of employment is felt -- whether in city or village, or mining district or agricultural section -- how far will you have to go to find land that labor is anxious to use (for land has no value until labor will pay a price for the privilege of using it), but from which labor is debarred by the high prices demanded by some non-user? In the very heart of New York City, two minutes' walk from Union Square will bring you to three vacant lots. For permission to use the smallest and least valuable of these a rental of $40,000 a year has been offered and refused.

Henry George: The Crime of Poverty  (1885 speech)

Do you know that I do not think that the average man realises what land is? I know a little girl who has been going to school for some time, studying geography, and all that sort of thing; and one day she said to me: "Here is something about the surface of the earth. I wonder what the surface of the earth looks like?" "Well," I said, "look out into the yard there. That is the surface of the earth." She said, "That the surface of the earth? Our yard the surface of the earth? Why, I never thought of it!" That is very much the case not only with grown men, but with such wise beings as newspaper editors. They seem to think, when you talk of land, that you always refer to farms; to think that the land question is a question that relates entirely to farmers, as though land had no other use than growing crops. Now, I should like to know how a man could even edit a newspaper without having the use of some land. He might swing himself by straps and go up in a balloon, but he could not even then get along without land. What supports the balloon in the air? Land; the surface of the earth. Let the earth drop, and what would become of the balloon? The air that supports the balloon is supported in turn by land. So it is with everything else men can do. Whether a man is working away three thousand feet under the surface of the earth or whether he is working up in the top of one of those immense buildings that they have in New York; whether he is ploughing the soil or sailing across the ocean, he is still using land.

Land! Why, in owning a piece of ground, what do you own ? The lawyers will tell you that you own from the centre of the earth right up to heaven; and, so far as all human purposes go, you do. In New York they are building houses thirteen and fourteen stories high. What are men, living in those upper stories, paying for? There is a friend of mine who has an office in one of them, and he estimates that he pays by the cubic foot for air. Well, the man who owns the surface of the land has the renting of the air up there, and would have if the buildings were carried up for miles.

This land question is the bottom question. Man is a land animal. Suppose you want to build a house; can you build it without a place to put it? What is it built of? Stone, or mortar, or wood, or iron — they all come from the earth. Think of any article of wealth you choose, any of those things which men struggle for, where do they come from? From the land. It is the bottom question. The land question is simply the labour question; and when some men own that element from which all wealth must be drawn, and upon which all must live, then they have the power of living without work, and, therefore, those who do work get less of the products of work. ...

... Men are compelled to compete with each other for the wages of an employer, because they have been robbed of the natural opportunities of employing themselves; because they cannot find a piece of God's world on which to work without paying some other human creature for the privilege.

I do not mean to say that even after you had set right this fundamental injustice, there would not be many things to do; but this I do mean to say, that our treatment of land lies at the bottom of all social questions. This I do mean to say, that, do what you please, reform as you may, you never can get rid of wide-spread poverty so long as the element on which and from which all men must live is made the private property of some men. It is utterly impossible. Reform government — get taxes down to the minimum — build railroads; institute co-operative stores; divide profits, if you choose, between employers and employed-and what will be the result? The result will be that the land will increase in value — that will be the result — that and nothing else. Experience shows this. Do not all improvements simply increase the value of land — the price that some must pay others for the privilege of living? ... read the whole speech

Rev. A. C. Auchmuty: Gems from George, a themed collection of excerpts from the writings of Henry George (with links to sources)

HE term Land in political economy means the natural or passive element in production, and includes the whole external world accessible to man, with all its powers, qualities, and products, except perhaps those portions of it which are for the time included in man's body or in his products, and which therefore temporarily belong to the categories, man and wealth, passing again in their reabsorption by nature into the category, land. — The Science of Political Economy — unabridged: Book III, Chapter 14: The Production of Wealth, Order of the Three Factors of Production abridged: Part III, Chapter 10: Order of the Three Factors of Production

THAT land is only a passive factor in production must be carefully kept in mind. . . . Land cannot act, it can only be acted upon. . . . Nor is this principle changed or avoided when we use the word land as expressive of the people who own land. . . .

That the persons whom we call landowners may contribute their labor or their capital to production is of course true, but that they should contribute to production as landowners, and by virtue of that ownership, is as ridiculously impossible as that the belief of a lunatic in his ownership of the moon should be the cause of her brilliancy. — The Science of Political Economy unabridged: Book III, Chapter 15, The Production of Wealth: The First Factor of Production — Landabridged: Part III, Chapter 10: Order of the Three Factors of Production

I AM writing these pages on the shore of Long Island, where the Bay of New York contracts to what is called the Narrows, nearly opposite the point where our legalized robbers, the Custom-House officers, board incoming steamers to ask strangers to take their first American swear, and where, if false oaths really colored the atmosphere the air would be bluer than is the sky on this gracious day. I turn from my writing-machine to the window, and drink in, with a pleasure that never seems to pall, the glorious panorama.

"What do you see?"  If in ordinary talk I were asked this, I should of course say, "I see land and water and sky, ships and houses, and light clouds, and the sun drawing to its setting over the low green hills of Staten Island and illuminating all."

But if the question refer to the terms of political economy, I should say, "I see land and wealth." Land, which is the natural factor of production; and wealth, which is the natural factor so changed by the exertion of the human factor, labor, as to fit it for the satisfaction of human desires. For water and clouds, sky and sun, and the stars that will appear when the sun is sunk, are, in the terminology of political economy, as much land as is the dry surface of the earth to which we narrow the meaning of the word in ordinary talk. And the window through which I look; the flowers in the garden; the planted trees of the orchard; the cow that is browsing beneath them; the Shore Road under the window; the vessels that lie at anchor near the bank, and the little pier that juts out from it; the trans-Atlantic liner steaming through the channel; the crowded pleasure-steamers passing by; the puffing tug with its line of mud-scows; the fort and dwellings on the opposite side of the Narrows; the lighthouse that will soon begin to cast its far-gleaming eye from Sandy Hook; the big wooden elephant of Coney Island; and the graceful sweep of the Brooklyn Bridge, that may be discovered from a little higher up; all alike fall into the economic term wealth — land modified by labor so as to afford satisfaction to human desires. All in this panorama that was before man came here, and would remain were he to go, belongs to the economic category land; while all that has been produced by labor belongs to the economic category wealth, so long as it retains its quality of ministering to human desire.

But on the hither shore, in view from the window, is a little rectangular piece of dry surface, evidently reclaimed from the line of water by filling in with rocks and earth. What is that? In ordinary speech it is land, as distinguished from water, and I should intelligibly indicate its origin by speaking of it as "made land." But in the categories of political economy there is no place for such a term as "made land." For the term land refers only and exclusively to productive powers derived wholly from nature and not at all from industry, and whatever is, and in so far as it is, derived from land by the exertion of  labor, is wealth. This bit of dry surface raised above the level of the water by filling in stones and soil, is, in the economic category, not land but wealth. It has land below it and around it, and the material of which it is composed has been drawn from land; but in itself it is, in the proper speech of political economy, wealth; just as truly as the ships I behold are not land but wealth, though they too have land below them and around them and are composed of material drawn from land. — The Science of Political Economy unabridged: Book IV, Chapter 6, The Distribution of Wealth: Cause of Confusion as to Propertyabridged ... go to "Gems from George"

Charles B. Fillebrown: A Catechism of Natural Taxation, from Principles of Natural Taxation (1917)

Q59. Is it correct to say that "land" is one thing, and the "rent of land" another and quite different thing, and that to take in taxation the rent of land it is not necessary to take the land itself?
A. Ninety-one professors of political economy have answered "Yes." Twenty-three have answered "No." ... read the whole article

Robert V. Andelson  Henry George and the Reconstruction of Capitalism

I have spoken of land monopoly as a cancer, and so it is. Yet land often cannot be used efficiently unless monopolized. The Georgist remedy does not provide for the excision of land monopoly but rather for its transformation from malignant to benign. For the monopoly of land can be fair and even salutary if the monopolizer pays into the public treasury a sum that reflects substantially the market value of his privilege.

Perhaps this would be a good place to interject that when economists speak of "land," they are talking about nature. The term embraces not only space on the earth's surface but also natural resources -- oil in the ground, virgin timber, wildlife, the oceans and other natural bodies of water, the airwaves, airspace, etc. To capture for the public the value of these natural goods, land-value charges may in some cases need to be supplanted by or combined with other methods such as severance taxes and auctioning of leases. But the principle is the same. Read the whole article

Lindy Davies: Land and Justice

We tend to have a very romantic conception of land, in this day and age. I'm not sure why, but I suspect it has to do with how seldom modern people actually come into contact with the stuff of the earth itself. We deal with burgers... papers... toilets... Without thinking about the many layers of processing between hayfield and burger, between tree and paper, between flush and water table.

We think of dropping out of the modern plastic world to go "back to the land." "The land" is where we go on camping trips.

This romantic conception of land can lead to some dangerously fuzzy thinking. It leads us to think, for example, that perhaps land used to be absolutely vital to human life, back in some halcyon, underpopulated past — but modern technology has long since taken care of that.

Or has it?

Let's think about this question: what is our most valuable natural resource? Is it
— gold, diamonds, precious or strategic minerals? Nope, not even close.
— Oil? Well, it's highly important to industrial civilization, of course, a matter of great political import — but by no means the most valuable.
— Water? Now we're getting closer: necessary for life, to be sure, and thus a potential object of wars — but in terms of cost per cubic foot, not so terribly high, yet.

What is it? Our most valuable natural resource — by leaps and bounds, more valuable than all the others combined — is urban land. Our most valuable natural resource is land whose natural fertility is utterly depleted, it will yield no gems or minerals; its soil is full of toxins. There's nothing worthwhile about it, except for one vital attribute: where it is. ... read the whole speech

Tony Vickers: From Zee to Vee: using property tax assessments to monitor the economic landscape
The ‘real world’ in which human society exists is not confined to natural, physical phenomena. From earliest times, human beings have interacted socially and economically. As they do so, they have specialised and traded in goods and services which are the products of combinations of labour, capital, enterprise and the fourth – often forgotten but distinct – factor of all production: land.

Land comprises all natural resources, not just ‘terra firma.’ It is the universe minus man’s products. Even the simplest of human activities, sleep, requires each of us to occupy exclusively a space, a location, preferably a bed in a home of our own. But that word ‘own’ conjures emotions and political postures. ...

The Nobel-winning economist William Vickrey said that the property tax is actually two different taxes (Vickrey 1991). That is because buildings are capital, not land, in the economic sense – even if, in most legal codes, there is no distinction between land and improvements made to it which are all lumped together as ‘landed property’ or real estate. Buildings and other improvements to land all depreciate over time unless further capital is expended. Eventually the market value of such improvements may become negative, owing to the costs that would need to be incurred by someone wishing to redevelop the site for an alternative use. But that does not necessarily take away the rental value of the site.

Much urban blight is caused by these so-called ‘brown field’ vacant and under-used sites. However they are often in valuable locations, with good transport connections. It may be that owners are speculating that land prices will rise and enable them to sell at greater profit in the future than now, or it may be that there is genuinely no market for sites in a particular location unless the cost of remediation is subsidised as a form of public investment. Such investment, according to Vickrey and other followers of Henry George, can be entirely funded from LVT. In a lecture given in 1991, first published last year, Vickrey claimed:

“Cities have the capacity to be fully self-financing without dependence on either federal assistance or on general taxes that are unrelated to benefits received.”

The proviso, according to Vickrey, is to replace the tax on buildings with a tax on land value alone – LVT:-

“The property tax combines one of the best and one of the worst taxes we have. The portion that falls on sites or land values is the only major tax that is reasonably free of distortionary effects and is not intolerably regressive”.

Taxing buildings and work done to improve them discourages such work. Un-taxing them and taxing land more highly, irrespective of its actual state of development but based upon its highest and best immediate potential use, will encourage owners to maintain their sites and buildings in such a way as to maximise their income. A remote site or one with conservation or other restrictions will have a low site value, hence attract low taxes, whereas a high value city centre derelict site will very soon be redeveloped. The extra property tax revenue from extending the tax base to sites that are currently under-taxed (because the tax is based primarily on building/rental value not site/owner value), ensures public infrastructure projects can be funded without resource to general taxes or excessive borrowing on the financial markets. ...Read the whole article

Nic Tideman: Basic Tenets of the Incentive Taxation Philosophy
Ending Privilege
When the principle that the value of government-assigned opportunities should be received by the public treasury is violated, the result is "privilege," which from its Latin roots means "private law," that is, law that permits one person to do what others are not permitted to do. Thus what we stand for is an end to privilege.

Numerous examples of privilege are incorporated in our institutions.

  • Farm legislation restricts the growing of tobacco to those who have been assigned acreage allotments.
  • For numerous commodities, trade legislation limits shipments from individual countries to specified quotas.
  • In many cities, only persons who have been given permits are allowed to operate taxis, and new permits are not issued.
  • To operate a radio or television station requires a license, and there are no opportunities for new licenses to be issued.
  • In most cities, construction of commercial or multi-family residential structures requires zoning permission that is granted to some and not to others.
  • But the single most important category of privilege is land titles.
This list of examples of privilege, which is by no means exhaustive, contains some privileges, such as acreage allotments and import quotas, that would be best reformed by eliminating restrictions and permitting all to do what now only some may do. For other privileges, such as broadcast licenses and land titles, great productivity results from the social understanding that a specified individual will have the use of a given resource. For these privileges, the best reform is the introduction of the requirement that any person who is assigned such an opportunity must pay to the public treasury an annual fee equal to what the opportunity would be worth to someone else. 

Equal Rights to Land

The component of this perspective that is likely to be most controversial is our belief that the value that individuals receive from the exclusive use of land should be collected publicly. As this idea is reflected in our name and central to our philosophy, we now discuss it in some detail.

It is because land was not created by human effort that land titles are privileges, for which fees are properly collected. A plot of land is a bit of space on the earth, with
  • access to other plots,
  • access to public utilities and other public services, natural resources, and natural soil fertility.
All of these features that give value to a plot of land.

None of them resulted from effort on the part of the person who has title to the plot.

  • The size of the plot, its natural resources and natural fertility are gifts of nature.
  • To the extent that value arises from access to public utilities and other public services, it is governments that give value to land.
  • To the extent that value arises from the intensity of economic activity on nearby sites, it is the users of those nearby sites that give value to land.
The unimproved value of land is in no way attributable to actions of the person who holds title to the land.
Of course, when land is used, people add improvements, and the value resulting from the addition of improvements to land is value to which a user of land can have a respectable claim. Thus the fee that the public can properly require of the user of improved land is the rent that the land would command if it were unimproved. This fee should not be higher for land that is extensively improved than for similarly situated land that is less highly improved. The art of assessment, discussed in a later section, deals with the estimation of such values.  ...  Read the whole article
Nic Tideman:   The Case for Taxing Land
I.  Taxing Land as Ethics and Efficiency
II.  What is Land?
III.  The simple efficiency argument for taxing land
IV.  Taxing Land is Better Than Neutral
V.  Measuring the Economic Gains from Shifting Taxes to Land
VI. The Ethical Case for Taxing Land
VII. Answer to Arguments against Taxing Land

There is a case for taxing land based on ethical principles and a case for taxing land based on efficiency principles.  As a matter of logic, these two cases are separate.  Ethical conclu­sions follow from ethical premises and efficiency conclusions from efficiency principles.  However, it is natural for human minds to conflate the two cases.  It is easier to believe that something is good if one knows that it is efficient, and it is easier to see that something is efficient if one believes that it is good.  Therefore it is important for a discussion of land taxation to address both question of efficiency and questions of ethics.

This monograph will first address the efficiency case for taxing land, because that is the less controversial case.  The efficiency case for taxing land has two main parts. ...

To estimate the magnitudes of the impacts that additional taxes on land would have on an economy, one must have a model of the economy.  I report on estimates of the magnitudes of impacts on the U.S. economy of shifting taxes to land, based on a mathematical model that is outlined in the Appendix.

The ethical case for taxing land is based on two ethical premises:  ...

The ethical case for taxing land ends with a discussion of the reasons why recognition of the equal rights of all to land may be essential for world peace.

After developing the efficiency argument and the ethical argument for taxing land, I consider a variety of counter-arguments that have been offered against taxing land.  For a given level of other taxes, a rise in the rate at which land is taxed causes a fall in the selling price of land.  It is sometimes argued that only modest taxes on land are therefore feasible, because as the rate of taxation on land increases and the selling price of land falls, market transactions become increasingly less reliable as indicators of the value of land.   ...

Another basis on which it is argued that greatly increased taxes on land are infeasible is that if land values were to fall precipitously, the financial system would collapse.   ...

Apart from questions of feasibility, it is sometimes argued that erosion of land values from taxing land would harm economic efficiency, because it would reduce opportunities for entrepreneurs to use land as collateral for loans to finance their ideas.  ...
Another ethical argument that is made against taxing land is that the return to unusual ability is “rent” just as the return to land is rent.  ...

But before developing any of these arguments, I must discuss what land is.

What is Land?

David Ricardo defined land, memorably, as ‘the original and indestructible powers of the soil.’  This definition is overly narrow.  It would exclude from land such valuable and destruc­tible things as minerals and topsoil. Ricardo’s definition even suggests that the value of land arising from urban locations might not be included in ‘land,’ since it would not necessarily qualify as a ‘power of the soil.’

The definition of land that is most useful in economic theory is that land is all scarce factors of production other than people and the products of human effort. Land is the gifts of nature.  Thus land includes both rural and urban territory, mineral resources, water, fish in oceans and rivers, virgin forests, geosynchronous orbits and the frequency spectrum.

While there is some tendency to think of measuring land in ‘stock’ terms (‘What is the value of that piece of land?’), the flow of services from land is more fundamental.  While capital goods have selling prices related to their costs of production, such a calculation does not apply to land since, by definition, land is not produced.  The selling price of land is conceived in economic theory as the present value of the net return after taxes to the future flow of land services, when the land is used in the way that maximizes that present value.  Following David Ricardo, the value of the flow of services from land is sometimes described as the residual after paying other factors their opportunity costs, when land is used efficiently.  But in equilibrium, a similar statement can be made about any other factor.

With some components of land, such as river water flowing into an ocean, the extent to which the land is used in one period has no influence on the extent to which it can be used in other periods.  In other cases, such as mineral deposits, use in one period comes at the expense of use in other periods.  Agricultural land has a capacity to be ‘mined’ of the nutri­ents that make it productive, making it somewhat similar to mineral deposits.

With urban land there is a different type of interdependency between use at one time and the potential flow of services at another.  To be used most productively, urban land must be combined with durable, immobile capital.  Therefore an increase in the intensity of urban land use often requires the destruction of previous capital investments.  This intertemporal dependence means that, in principle, a forecast of all future economic conditions is needed to know what use of land is best today.  Since people make different forecasts, they reach different conclusions about what use of land is best today.  Only with the passage of time, if at all, is it possi­ble to know what use of land would have been best.

The fact that structures are durable and immobile also means that care must be taken in defining the value of the flow of land services.  There is a tendency to think of “the rent of land” as the amount of money that land yields to those who have exclusive use of it.  How­ever, this formulation is not always useful for defining the rent of land over a particular interval of time.  If an investor spends a year and £20 million erecting a building that is expected to last for 30 years, what was the rent of the land under the building during the year of construction?  It is not sensible to say that, if the best possible use of the land produces a negative cash flow over a given interval of time, then land has no rental value over that interval.  If markets were perfect and the decision to construct the structure was optimal, the finished building would have a value that was greater than its cost of construction by the rent of the land it occupied and the accumulated interest on construction costs and land rent.  But if a non-optimal construction decision is made, that does not reduce the rent of land. 

To give a meaning to ‘the rent of land’ that does not depend on when construction hap­pens to occur, it is useful to define ‘the rent of land’ as the opportunity cost of leaving vacant land vacant.  Thus in the case of the year of construction discussed above, one would ask, ‘Suppose that the construction had been postponed for a year.  Perhaps by that time it would be appropriate to invest in a £21 million building rather than a £20 million building.  If one developed the most profitable possible plan for the land, subject to the constraint that the land be left vacant for the first year, how much lower would the present value of net returns be?’  The answer to this question, the loss of the present value of net returns from postponing use of land for a year, would be the rent of the land for the year.  This is the amount of money that one would need to get in net returns from some pre-existing use to justify postponing redevelopment for a year.  Thus the rent of land for any developed site, for any year, is defined to be the answer to the question, ‘If this site were undeveloped, what would be the cost of leaving undeveloped and unused for a year?’

Land also differs from labor and capital in the origin of claims to own it. 
  • Labor can be defined as the factors of production that own themselves. 
  • Ownership of capital is derived originally from organizing its production and paying the various factors that are employed to produce it. 
  • Ownership of land, by contrast, derives from rights of exclusive use and access that are granted by governments.
Ownership of land is thus a form of privilege.  The word ‘privilege’ comes from the Latin prive + legis, meaning ‘private law’.  A private law is a law that has someone’s name it, that is, a law that authorizes one person to do what others are not permitted to do.  In a just world, there would be no privilege.  (Thus no one is underprivileged.)  In a just world, land would not be ‘owned’, but rather ‘held’ or ‘possessed’, subject to a payment that reflected the value given up by others in allowing one person to have exclusive use of a site. Read the whole article

Lindy Davies The Top Ten Reasons Why Land is More Important than Ever
The Georgist economic proposal insists on the primary importance of land as a factor in the economy. Many people dismiss that as a quaint, agrarian notion. "Perhaps," they scoff, "land was that significant back when most people had to work the soil for a living, but modern agriculture has moved far past that! Nowadays we deal with modern issues of technology, global markets, information -- land is no longer a big deal."
10. There's no place to dump your trash for free. ...
9. Scratch a financial crisis, find a real estate bubble. ...
8. Information (like railroads) needs routes. ...
7. Cities can no longer afford to be inefficient. ...
6. Global climate change is too likely to ignore. ...
5. The loss of biological diversity cannot be reversed. ...
4. Two out of every five people lack a safe and dependable source of drinking water. ...
3. The myth of overpopulation causes cultural sickness. ...
2. We have forgotten what nations are. ...
1. "The land shall not be sold forever, for ye are strangers and sojourners with Me." ...

Nic Tideman: Using Tax Policy to Promote Urban Growth
The efficiency that is entailed in using the rent of land to finance public activities applies to certain other sources of public revenue as well:
1. Charges on any publicly granted privileges, such as the exclusive right to use a portion of the frequency spectrum for radio and TV broadcasts.

2. Payments for extractions of natural resources. Such payments should be set at levels that yield the greatest possible revenue of the resources, in present value terms.

3. Taxes on pollution. Every individual or enterprise that pollutes the air, water or ground should be required to pay the estimated cost of the pollution it generates. The effect of pollution on the rental value of surrounding land is one possible measure of its cost.

4. Taxes on any other activities that reduce the rental value of surrounding land.

5. Taxes on activities such as driving or parking in crowded streets, where one person's activities reduce opportunities for others. The administration of such charges may be so expensive that it is not worth implementing them, but if the administration can be handled sufficiently cheaply, these charges are efficient to the extent that they only charge people for costs imposed on others.

6. Taxes on activities, such as the consumption of alcohol, which impose costs on others (e.g., higher traffic fatalities).

7. Charges for local public services, such as water, electricity, sewer connections, etc. It is not generally desirable to make every service completely self-financing. Rather, what is desirable is that each user be required to pay the marginal cost of the service he receives. Extensions of service networks are efficient when they increase publicly collected land rents by enough to cover the costs not covered by user charges.

8. A self-assessed tax on permanent improvements to land, at a very low rate (perhaps 1/10 of 1% per year). With a self-assessed tax, each possessor of land names a price at which he would be willing to part with the land he possesses (and any immovable improvements). He pays a tax proportional to the value he names, and anyone who wishes to may take over possession at that price. The value of such a tax is that it makes it much easier to assemble land for redevelopment, and to identify appropriate compensation when land is taken for public purposes.

All of the above taxes are positively beneficial and should be collected even if the revenue is not needed for public purposes. Any excess can be returned to the population on an equal per capita basis. If these attractive sources of revenue do not suffice to finance necessary public expenditures, then the least damaging additional tax would probably be a "poll tax," a uniform charge on all residents. If some residents are regarded to be incapable of paying such a tax, then the next most efficient tax is a proportional tax on income up to some specified amount. Then there is no disincentive effect for all persons who reach the tax limit. The next most efficient tax is a proportional tax on all income.

It is important not to tax the profits of corporations. Capital moves from where it is taxed to where it is not, until the same rate of return is earned everywhere. If the city refrains from taxing corporations they will invest more...  Read the whole article

Fred Foldvary: Geo-Rent: A Plea to Public Economists
“Land” includes all earthly space, not just solid surfaces. Land includes water areas and the electro-magnetic spectrum, but the most important potential source of public revenue from land is real estate sites.

The characteristics of land are well known.
  • Land has a fixed supply. The space within some boundary can be neither expanded nor contracted.
  • Land is fixed not only in extent but also in mobility, unlike people, who can migrate, or capital goods, which are more or less mobile.
  • Land cannot be imported. Even in the case of buildings and other permanent structures, they differ from land in that they are created by human enterprise, and in that their creators decide where the structure will be located.
  • Finally, land is not something to be discovered. Once people figured out that the earth was a sphere, and its approximate size, they knew that the land was “out there.” Entrepreneurship is vital in discovering the best routes to land areas, it is vital in discovering the potential value of those areas, but it is not vital in discovering that the land is out there. That was known all along.  Read the entire article
Mason Gaffney: Land as a Distinctive Factor of Production
The classical economists treated land as distinct from capital: "land, labor and capital" were the three basic "factors of production."  They were mutually exclusive.  They were comprehensive, including all economic agents. Each was also "limitational," meaning at least some of each was needed for all economic activity (v.  A9, below)1 They made a coherent system, like Humboldt’s Cosmos, in the spirit of The Enlightenment that spawned them both.

Neo-classical economists denied the distinction and undertook to purge land from economese. 
  • Many of them, following John B. Clark and Frank Knight, still deny the distinction as I explain in The Corruption of Economics, a companion volume in this series. 
  • Many treat the matter by seizing on and stressing all similarities of land and capital, while ignoring all differences. 
  • Some invent gray areas that seem to fuse land and capital, present them as typical, and quickly move on. 
  • Many more simply ignore land, which has the effect of accepting the Clark-Knight verdict in practice. 
  • Others uneasily finesse and blur the issue by writing "land" in quotes, or trivializing its value, or referring vaguely to "quasi-rents" to comprehend a broad spectrum of incomes both from land and other factors.
What ever possessed the neo-classicals to leave such a mess?  One needs to know something of their times and politics.  J.B. Clark and E.R.A. Seligman of Columbia University were obsessed with deflecting proposals, strongly supported at the time and place they wrote, to focus taxation on land.  Henry George, after all, was nearly elected Mayor of New York City in 1886 and 1897.  Frank Knight, founder of The Chicago School, followed them closely.  That explains why some of the points made herein may seem obvious to readers who have been spared the formal conditioning imposed on graduate students in economics.  In graduate training, however, the obvious is obscured, silenced, or denied.  Hundreds of books on economic theory are published with "land" absent from the index.  Denial is reinforced by dominant figures using sophistical, pedantic cant, which students learn to ape to distinguish themselves from the laity and advance their careers....

Common micro theory finesses Time.  It deals with economic relations as though they occurred at a point in time (and space as well); as though they were relations of coexistence, rather than a cavalcade of events in sequence.   Sometimes two points are allowed (short run and long).  Thus micro theory can ignore the birth of capital, its growth, maturity, senescence, death, burial, and replacement, vital elements of its difference from land.  Time, and relations of sequence, are hived off to the far satellite of "finance," usually not even taught in departments of economics.  ...

Land does have distinctive qualities for economic analysis and policy.  This essay gives 10 primary reasons why land is distinct from capital (and of course from mankind itself) as an economic input.  Then it gives 18 important economic consequences thereof, and their policy implications.  Making land markets, land policy, and land taxation work well for the general welfare is a major challenge for economists and statesmen.  They have neglected it too long by crediting and following the peculiar neo-classical sophisms that obscure or deny all distinctions between land and capital. ...

Land is not produced nor reproducible
Land is not produced, it was created.  It is the world, the planet from which man evolved, with the sun that energizes it and the orbit that tempers it.  Land is a free gift, variously expressed in different philosophies as Spaceship Earth, the Big Blue Marble, God's Gift, Creation, Gaia, The Promised Land, or nature.  Mankind did not create The Earth with its space and resources, nor can we add to them.  We can only acquire them, often by fighting, or rent-seeking, or in other counterproductive ways.  Man at best improves and develops capacities inherent in the free gift.  It is disappointing, and should alert us and make us suspicious, that economic analysis would ever purge out this paramount, self-evident truth.

"Land" in economics means all natural resources and agents, with their sites (locations and extensions in space).  Land is not just the matter occupying space: it is space. It includes many things not colloquially called land, such as
  • water and the beds under it,
  • the radio spectrum,
  • docks,
  • rights of way,
  • take-off/landing time slots for aircraft,
  • aquifers,
  • ambient air (the right to breathe it and the license to pollute),
  • "air rights" to strata in the third dimension of cities,
  • falling water,
  • wild fish, game, and vegetation,
  • natural scenery,
  • weather,
  • the environment,
  • the ecology,
  • the natural gene pool, etc. 
  • Any franchise, license or privilege giving territorial rights is a species of easement over land. 
    • Your driver's license is a right to use land;
    • red lights remind us of the critical value of space at central locations, since two objects cannot occupy the same space at the same time. 
    • It is worth a lot to have the right-of-way, as railroads do.
Economic land excludes many things, too, that are colloquially called land.  It excludes land-fill, for example, by which many cities are extended into shallow waters.  The site and seabed are properly land; the land-fill is an improvement.  There is no "made land" in the economic sense: it is reallocated from other uses.  Expanding cities take farmland from producing food and fiber, much of it for the expanding city itself.  Filled land in shallow water near cities is taken away from anglers and sailors and viewers and ecologists, who now routinely  organize to prevent it being "made" away with.  Drained and filled wetlands are taken away from endangered species, as well as from their primal role as filters protecting coastal waters from river trash and pollutants.  Thanks to the myopia and dereliction of economists, it has taken militant environmentalists to carry home this truth, developing in their struggle to be heard and understood a deep skepticism of economists and their "way of thinking." Some economists and environmentalists are now coming to terms with each other, after decades of mutual shunning.  Too many modern economists, however, still use their "way of thinking" to seal out important new evidence that doesn't fit the model.

Capital (K) is that which has been produced but not yet used up.  Capital is formed by human thrift, forbearance, investment and production.  Only after mankind forms and makes capital does it bear much likeness to land, in that they coexist.  Ordinary micro-economics obscures the differences because it deals mainly with relations of coexistence, ignoring the continual formation and destruction of capital, ignoring time and relations of sequence.  Thus it excludes from its purview one of the prime differences between land and capital.  The life of capital, like that of people, is marked by major sacraments of birth, growth, aging and death - all missing from micro theory. Economic life is a cavalcade in which the birth and death of capital are dated events.   Micro deals mainly with how existing resources are allocated at a moment in time, not how they originate, grow, flourish, reproduce, age, die, and decompose.

Capital occupies space; land is space.  In common micro theory, resources and markets come together at a point not just in time but in space.  Again, it excludes from its purview one of the prime qualities of land.6
6.      It is ironic that economists purport or affect to ape the methods of physics, when they delete both space and time from their subject.  If they have borrowed from physics, they have taken the form without the substance.

For the reasons given, alone, land and capital are mutually exclusive. There are, however, nine more, which follow. ...

Land as "site" (location plus extension) does not normally wear out, depreciate, spoil, obsolesce, nor get used up by human activities incident to occupancy and production. In contrast, capital depreciates from time and use, routinely and by nature.  After being formed, it must be conserved from entropy by continual maintenance, repair, remodeling, safeguarding against theft and fire, and so on.7  Like our own bodies, it returns to dust; land is the dust to which it returns.  Inventories are depleted; moving parts wear out; fixed capital depreciates with use and time. ...

No one can get more land without others keeping less.  One can acquire more capital by forming it through saving and investing.  One can consume more by working more, while others work no less.  Land is different: it is the most common basis of market power, therefore.   ...

When demand grows for land in a specific area or neighborhood, land cannot immigrate to meet the higher demand.  It is true that land elsewhere can be converted to the specific land use that is demanded.  Some micro theorists argue that this makes land as "mobile" as anything else, equating land and capital.  It dovetails with and reinforces their paradigm centered on "the firm," a unit that can add unlimited inputs of all kinds in the long run, and among which competition drives all profits to zero.  This rationalization overlooks the hoary adage of real estate: "value depends on three factors, location, location, and location." What happens then is not that supply rises to meet higher demand, but ground rent rises.

Land is not convertible into capital, nor vice versa.  Exchange of land for capital has misled many into equating them, but only through inadvertence and the fallacy of composition.  Exchange is not interchange: exchange does not change the quantity of either land or capital.  Capital is convertible into any other form of capital each time it turns over, by using Capital Consumption Allowances, the proceedings of turnover, to hire people actually to produce new capital.  Capital may also be disinvested and consumed, or augmented by new saving and investment.  None of those is true of land.   ...

Land is indispensable to life, hence to economic activity.  The same is generally true of labor and capital, but less "absolutely".  Land can exist perfectly well without labor or capital, and support timber and wildlife, but labor and capital cannot exist at all without at least some land, and often a great deal of land.  Substitution is limited.  It will not do just to have 57 varieties of labor, or of capital.  There must be at least some land.  Remember, land includes space itself, and a time-slot in it.  It includes air and water, the environment and the ecology and all original matter itself.  Without land there is nothing.20 Coupling  this with the non-reproduceability of land, and its fixity, land is distinctive.
 20.     An old limerick puts it well. 
"A captious economist planned
to live without access to land. 
He nearly succeeded,
but found that he needed
food, water, and somewhere to stand."
"Homelessness," a modem plague, is essentially landlessness.  A popular ditty from the 1930s includes the catchy line, "If you can't pay the rent, you can live in a tent," but you can't do even that without a campsite.  Perhaps this is why modern economists have so little to say about homelessness.  Joblessness they have dismissed as part of the vital economic function of "job-seeking," with which they have persuaded at least themselves.  The next logical step is that the person sleeping in the doorway is not really homeless, but just engaged in the vital market function of "home-seeking".  Rather than seem totally absurd they are simply silent, except to stress the "exclusionary principle" of private property as the bedrock of their system, and their system as a panacea. ...

Land is traditionally subject to a host of legal and customary limits on use and ownership.  Covenants are found in land titles: seldom in titles to cars or canned goods.  Divided ownership is common, there is so much about land to be owned.   There are easements through, air rights over, mineral rights under, and neighbors and zoning all around any parcel of land.  Changing lot lines is unavoidably a social process, there is no other way.

A large share of the more valuable land in cities is held by estates.  Public and eleemosynary [non-profit] holders are preferentially tax exempt and often without any visible motive to economize.  Water licenses are held subject to "use it or lose it" traditions leading to appalling waste.  Broadcasting/telecasting licenses are highly political.  And so on.  Only a resource with the characteristics of land could be subject to such a wide range of non-economic pressures.   ....

Amassing land is always done, can only be done, by shrinking the holdings of others.  To expand is to preempt.  If A is to have more then B, C, D et al. must have less, there is no other way.  A can amass more capital by saving, creating new capital, leaving B, C, D et al. with as much as before.  A can increase his labor income by working longer, or harder, or smarter, producing more, leaving others with as much as before.  He and she together can also spawn more children: labor, like capital, is reproducible, and indefinitely augmentable.  Possessing land, however, means just one thing: bumping others.

In the region of the mind, the thing possessed may be shared by all with no diminution to anyone.  No one's pleasure In Shakespeare, or Beethoven, or understanding physics is any less because at the same time millions of others have the same pleasure.  Art, letters and science are the common property of mankind, open to all who care to acquire them.  The creative producer's pleasure is in proportion to the number with whom he shares.  The gratification is from sharing, not excluding.  The contrast with landholding is nearly total.35
35.     Paraphrased from Upton Sinclair, 1923, The Goose Step.

Amassing claims on wealth by creating and producing is not, therefore, a threat to others.  Amassing capital through saving does not weaken or impoverish others.  Producing goods does not interfere with others' doing the same.  One producer may drive another from a particular limited market, but glutting one market increases real demand for the products of other markets, and raises the real value of others' incomes by lowering prices.  Amassing land, however, has to deprive others, both relatively and absolutely.  Concentrated holding and control of land, therefore, have always been threats to the well-being of those left out.

Conversely, the only way the landless, e.g. in South Africa, can get land is from those who now have it.  "Growth" is often advanced as the solution to maldistribution, injustice and poverty, but that is mere temporizing because land does not grow.  When production and demand grow, land rents rise.  Of land it is starkly true, "the problem is not production, but distribution".  There is no production; only distribution. Read the whole article
There is enough land, if only we use it well. Poverty and unemployment result from owners’ withholding better lands from full or any use, creating an artificial and specious scarcity of land relative to population. Definition: “land” means all natural resources (Gaffney, 1998).

Lemma:. Factor proportions are highly variable (Gaffney, 1976); labor-stinting use of land (same as land-lavishing use) is a form of withholding land from full use.

Lemma 2: Growth of jobs and output are not coupled in lockstep with resource extraction, or with preemption of more Lebensraum. Jobs and output can and should grow by using given lands better. Processes and products can and should be modified in more labor-intensive, land-conserving ways.

Lemma 3: Tyrants, and tyrannical landowning classes, circulate the “overpopulation” concept to conceal their own roles in famines and other extremes of deprivation. In this, George anticipated Amartya Sen. Read the whole article

Mason Gaffney: Property Tax: Biases and Reforms

Priority #1. Safeguarding the property tax
Priority #2: Enforce Good Laws
  • Reassess Land Frequently
  • Use the Building-Residual Method of Allocating Value
  • Federal Income Taxes
Priority #3. De-Balkanize Tax Enclaves
  • A. Rich and Poor
  • B. Timber and Timberland
  • The Role of Timber and Timberland
  • Two More Areas Deserving Attention
    • Offshore Oil
    • Tax All Natural Resources Uniformly and Comprehensively
Priority #4. What Tax to Fight First?
Priority #5: Make Landowners Pay Their Taxes

Tax All Natural Resources Uniformly and Comprehensively

Advances in the arts and sciences keep disclosing new values in old resources. Owing to institutional lag, these values can grow huge without finding their way onto the tax rolls. A thoughtless reaction is, "Bureaucrats want to tax everything!" The point is to tax all natural resources uniformly and comprehensively, to end the lowering taxes on incomes. productive business, and sales! Land taxation will not win wide support, nor will it deserve to, if it is perceived as a tax focusing on median homeowners, farmers, and merchants, while exempting oilmen, media tycoons, and timber barons.

In addition to newly awakened resources, many resources long known (like water) are held in odd tenures that have not been recognized as taxable property, although they should be. Any comprehensive move toward using resource rents for public revenue must include these varied resources and tenures. I have a list of 30 or so, too many to treat here. To give a sampling, they include

  • pollution easements over air and water;
  • aircraft landing time-slots and gates;
  • aquifers;
  • benefits from covenants;
  • access easements;
  • power drops;
  • concessions;
  • fisheries;
  • franchises;
  • the gene pool;
  • grazing licenses;
  • minerals;
  • orbits;
  • soils;
  • radio spectrum;
  • rights-of-way;
  • shipping lanes;
  • standing to sue;
  • strata titles;
  • use of the streets;
  • wildlife;
  • wind; and
  • zoning.

In tapping these many varieties of resources and tenures for public revenues, citizens and their representatives may have to set priorities. Two practical criteria rise to the top:

Mason Gaffney:  Sounding the Revenue Potential of Land: Fifteen Lost Elements
Variant kinds of natural resources, hitherto neglected or not classed with land, show great revenue potential.  Some examples are
  • the radio spectrum;
  • telecom relay sites;
  • slots in the geosynchronous orbit;
  • fishing quotas;
  • quotas of all sorts on production and marketing;
  • pollution permits;
  • power drops;
  • street parking spaces;
  • driving on congested roads and through bottlenecks;
  • mooring boats; etc.
Variant forms of tenures to resources, omitted from standard tax rolls, show great revenue potential.

      Leases on public lands give tenure, de facto, but are often exempt because the public land is exempt.
  • Often they are “sweetheart” leases, like grazing leases in New Mexico and 16 other western states.
  • Aircraft landing “slots” and “gates” are protected by Federal power from local taxes.
  • Water “rights” are mostly licenses, hence not real property, hence generally exempt from property taxes.
  •  Resort homes and mineral claims and timber cutting rights on Federal lands are “possessory interests,” sometimes not on the tax rolls.
  • Licenses assigning radio spectrum are “on” Federal property, hence exempt from local taxes.
      There is a class of “land-grabbing” capital whose value derives from its ability to preempt common land.
  • Vehicles on public land, whether parked or moving, preempt valuable space and are a means of establishing a kind of mobile tenure. (Donald Shoup reckons that potential revenues from street parking, now free, could raise as much money as the entire property tax now does.)
  • Boaters in large, fast, noisy, polluting vessels on small lakes take over the lakes as if they owned them.
  • Polluters in effect preempt de facto pollution easements over neighboring lands, including the public lands in streets and parks.
  • Owners of surfboards, ATVs, horses, snowmobiles, trail bikes, rifles and the like impose a wide footprint over vast tracts of public and semi-public land without paying rent.
Culturally we have a long way to go before the American public realizes what our cowboy attitudes are doing to us, but it’s time to start by collecting rent, directly or indirectly.

      Leaseholds on the OCS (Outer Continental Shelf) are outside state sovereignty, hence not subject to property taxes. Their tenure was established by U.S. military might as recently as 1946, when President Truman unilaterally extended our boundaries from the traditional 3-mile limit to 200 miles. That is not the end of it, however, for our military/diplomatic/financial umbrellas undergird tenures of American nationals and allies in nations around the world, and protect vessels at sea, even those flying foreign flags of “convenience” (i.e. tax-avoidance). There is every reason why private beneficiaries of these tenures should pay for their protection. Read the whole article
It may seem odd that both "capitalists" and "socialists" speak of the justice of their system and the vile in-justice of their opponents'. (Of course, the emotion behind such discussions is often heightened by a kind of home-team fervor.) Is there any universal standard of justice upon which economic policy can be based?

The answer lies in clarifying the question of the rightful basis (if there is one) of public vs. private ownership. For the thorough-going free-market capitalist, "public ownership" of anything is anathema: the community's interests are best served by the unhindered interactions of self-interested producers and traders. But the poverty, suffering and environmental destruction that come under such a "private property" regime cannot be denied. Because of this, the great bulk of social-policy debate revolves around how much of the efficiency of free enterprise must be traded for public interference, imposed in the name of equity. The question of the rightful balance between public and private control becomes one of expediency and political fashion, lacking any guiding principle. Indeed, modern "neoclassical economics" denies that any such principle exists.

For Henry George, however, the principle was clear. The value of natural opportunities belongs entirely to the community, and the production of wealth by labor, using capital, should be entirely unhindered by the penalty of taxation. For George, the most important question was not the amount of wealth that should be taken by the community, but the kind of wealth that should rightfully go to the community, because it is a value that the community has created.

In recent years, this understanding of the distinctive character of natural opportunity (land) as a factor of production has led to the coining of a new term: Geoism, indicating a philosophy based on the rightful understanding of the place of the Earth (Geo-) in economic life. Read the whole article
How would the world look if its political institutions were shaped by the conception of social justice advanced by Henry George?

a synopsis of Robert V. Andelson and James M. Dawsey: From Wasteland to Promised land: Liberation Theology for a Post-Marxist World

Beneath all ideologies, there are basic factors and relationships that underlie economic behavior. To understand the (otherwise inexplicable) omission of attention to land's economic importance, it is useful to go back to these basics.
  • The term "Land" refers to the whole material universe, exclusive of people and their products. Not the creation of human labor, yet essential to labor, it is the raw material from which all wealth is fashioned. It includes not only soil and minerals, but water, air, natural vegetation and wildlife, and all natural opportunities -- even those yet to be discovered. It is a passive factor of production, yielding wealth only when labor is applied to it.
  • Labor includes all human powers, mental and physical, used directly or indirectly to produce goods or to render service in exchange. Labor is often thought of as work that is done for hire, at fixed wages, mainly excluded from the risk-taking and decision-making that is normally classed under the heading of "entrepreneurship". Yet labor, properly understood, includes all human exertion in production -- including mental exertion. The payment to labor is called Wages. And it is important to remember that the payment, or return, to labor does not include any returns that are the result of monopoly.
  • Capital is the economic term that is most profoundly misunderstood and confused. For the term to make sense in any systematic analysis of wealth distribution, we must define capital in its classical sense as "wealth which is used to aid in further production, instead of being directly consumed." Since production is not completed until the product is in the hands of the consumer, products on their way to market, or "wealth in the course of exchange," are also considered capital.
Now, the objective of all economic behavior is the satisfaction of human desires. Human beings always seek to satisfy their desires with the least exertion: this self-evident proposition lies at the heart of our concepts of economic value and exchange. The primary thing needed for satisfaction is, of course, the tangible things, made from natural resources, that satisfy human desires and have exchange value. Things that meet these four fundamental criteria are termed "wealth". But money, bonds, and mortgages are but claims upon and measures of this value; they are not the wealth they symbolize.

A clear understanding of these basic definitions points immediately to the primacy of land as an economic factor. Human beings have inescapable material needs of food, clothing and shelter. Regardless of how long a chain of exchanges they may pass through in a modern economy, these things ultimately have their source in the land; they can come from nowhere else. Human beings need land in order to live. But if we must pay rent to a private land "owner" for access to the gifts of nature, it amounts to being charged a fee for our very right to live. Read the whole synopsis

George is largely remembered for the single tax. But the single tax came at the end of a long trail as a means -- the means, he said -- by which to remedy ills previously identified and diagnosed. Behind the single tax lay a closely knit system of thought. To understand George, it is necessary to go behind the single tax and explore that system for its major characteristics.

Notable in George's work is the emphasis he laid on the relation of man to the earth. "The most important of all the material relations of man is his relation to the planet he inhabits." 

George might well be called a land economist, indeed, the foremost land economist. For George, the basic fact of man's physical existence is that he is a land animal, "who can live only on and from land, and can use other elements, such as air, sunshine and water, only by the use of land."  "Without either of the three elements, land, air and water, man could not exist; but he is peculiarly a land animal, living on its surface, and drawing from it his supplies." 

So man not only lives off land, levying on it for its materials and forces, but he also lives on land. His very life depends on land. ". ..land is the habitation of man, the store-house upon which he must draw for all his needs, the material to which his labor must be applied for the supply of all his desires; for even the products of the sea cannot be taken, the light of the sun enjoyed, or any of the forces of nature utilized, without the use of land or its products. On the land we are born, from it we live, to it we return again - children of the soil as truly as is the blade of grass or the flower of the field. Take away from man all that belongs to land, and he is but a disembodied spirit." 

Land and man, in that order! These two things are the fundamentals. They are, for instance, the fundamentals of production. It is said that without labor, certainly, there can be no production. Similarly, without land, clearly there can be no agricultural production or mining production. It was just as clear to George that there could be no production of any kind without land. There could be no factory production, no trade, no services rendered, and none of the multitudinous operations of town and city.

All these processes require land: a place, a spot, a site, a location, so many acres or square feet of the earth's surface on which to be performed. "In every form ...the exertion of human labor in the production of wealth requires space; not merely standing or resting space, but moving space -- space for the movements of the human body and its organs, space for the storage and changing in place of materials and tools and products. This is as true of the tailor, the carpenter, the machinist, the merchant or the clerk, as of the farmer or stock-grower, or of the fisherman or miner." 

The office building, the store, the bank, as well as the factory, need land just as do the farm and mine. Land is needed as sites on which to build structures. Likewise, businesses need land as the locations on which to perform their subsequent operations.

George adds: "But it may be said, as I have often heard it said, 'We do not all want land! We cannot all become farmers!' To this I reply that we do all want land, though it may be in different ways and in varying degrees. Without land no human being can live; without land no human occupation can be carried on. Agriculture is not the only use of land. It is only one of many. And just as the uppermost story of the tallest building rests upon land as truly as the lowest, so is the operative as truly a user of land as is the farmer. As all wealth is in the last analysis the resultant of land and labor, so is all production in the last analysis the expenditure of labor upon land." 

The railroad needs land, not just for its terminals and depots but for its very roadbeds; whoever uses the railroad uses the land that the railroad occupies, as well as the improvements the railroad affords. The State needs land not only for parks and reservoirs but for schools and courts, for hospitals and prisons, and for roads and highways with which to link its residents together.

Our homes require land, whether the home is a country estate, a city apartment, or a room in hotel or tenement. Our diversions require land, whether for a ride in the country, a round on the golf course, a seat at the theatre, or a chair in the library or before the television set. "Physically we are air-breathing, light-requiring land animals, who for our existence and all our production require place on the dry surface of our globe. And the fundamental perception of the concept land -- whether in the wider use of the word as that term of political economy signifying all that external nature offers to the use of man, or in the narrower sense which the word usually bears in common speech, where it signifies the solid surface of the earth -- is that of extension; that of affording standing-place or room."

In George's view, man's dependence on land is universal and endless, "...for land is the indispensible prerequisite to life."  "What is inexplicable, if we lose sight of man's absolute and constant dependence upon land, is clear when we recognize it."

Here then is the main element, the distinctive characteristic, of George's work. In George's view, man's relation to the earth is his primary material relation. All other influences, therefore, must be appraised as to how they affect, or are affected by, this basic relation. It is perhaps this to which Soule refers when he says, of Progress and Poverty, "This book expounded a theory developed with superb logic."  ... read the whole article

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related themes:

land defined

land includes

land excludes


natural resources


land different from capital

warping of economics

land in the computer age

quaint agrarian idea?

land monopoly

land monopoly capitalism

land concentration

land value

urban land values relative to rural land values









two-factor economics

three-factor economics


absentee ownership

land and public finance

created equal

land as common property

property rights

land as God's provisioning

land progression

land earning more than work

land price cycle

land prices

lowering the price of land

the land problem

land redistribution

land residual method of assessment

land that shouldn't be built on

land value mapping

land value scale


equity for the landless


land value taxation

LVT not a tax on land

land value and women's employment

land share of real estate value

urban land share of real estate values

public lands

natural opportunities


land and wages


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Wealth and Want
... because democracy alone hasn't yet led to a society in which all can prosper