'The thought of Karl Marx continues to resonate throughout the world and is never more prominent than in the use of the propaganda term “capitalism” by both advocates and opponents of economic freedom. The opposition to “capitalism” by the Occupy movements show that Marxist thought has penetrated deeply into global economic culture. -- In the analysis of the American economist and social philosopher Henry George, the surplus from production is ground rent. Suppose in some geographic region, the average product of labor is greater than the wage paid to workers. The existence of that surplus at that location makes the location valuable, and so entrepreneurs will bid up what they pay to be located there. They will keep bidding up the rent until the rent has soaked up all the surplus. Generally, what economists call the “producer surplus” is really land rent, and since landowners produce nothing, they are non-producers, and the surplus is better called the “non-producer surplus.” -- Hence Marx is right that economists have fetishes. Most economists have made a fetish out of the producer surplus, imagining that it goes to the better producers rather than to non-productive landowners. This is what Mason Gaffney has called the “corruption of economics.” -- Karl Marx recognized that land rents grow not just out of soil but also from society. But rather than conclude logically that this rent should belong to society, Marx made a fetish out of labor and thought that the surplus is part of the economic wage. Marx did not understand that this surplus should be paid by the land title holder for the use of land, in order to have efficient economic calculation. The rent is an implicit reality apart from any explicit payments by tenants to landlords or no explicit payments by owner-occupants. If that rent is not explicitly paid, not only does the landowner take what comes from society and nature, but the rent generates land value that becomes an object of speculation that creates the boom and bust sequence.'

'The 19th-century economist and social philosopher Henry George developed the theory of the business or trade cycle based on malspeculation in land value, although he did not use that term. Such malspeculation would not occur in a pure free market, thus the “business” cycle should more accurately be called "the interventionist cycle" or "the economic distortion cycle." There are two major interventions that cause malspeculation. First is an injection of money into the banking system, an increase in loanable funds not caused by higher savings but by money expansion. The resultant cheap credit fuels both malinvestment and malspeculation in real estate. When the money injections stop, interest rates rise back up, and such projects and purchases slow down and stop. When land values stop rising, speculators sell, and the fall in land values brings down the financial sector that provided the mortgages. Malspeculation carries land values beyond that warranted by the rents. Henry George called this a lockout of labor and capital. With the use of real estate now unprofitable and unaffordable, land values crash. -- The boom-bust real estate and economic distortion cycles have repeated for that past 200 years, yet the 2008 crash surprised not just malspeculators but also economists, financial analysts, and governmental officials. The reason the cycle recurs is that, as the philosopher Hegel observed, people do not learn from history. Or they learn the wrong lessons. They shun Georgist theory, and thus become mal-economists, mal-financiers, and mal-authorities. Add “malspeculation” to your dictionary. Malspeculation is a vital concept that curiously has not had a name, because the role of land in the boom-bust cycle has not been appreciated. The Crash of 2008 was caused by malspeculation, and so the word will find the light of day.'

'#7. Critics say that LVT redistributes wealth from landowners, but there is nothing morally wrong with an inequality in wealth and income. But when government provides public goods paid for by taxes other than on land, this pumps up rent and land value, redistributing wealth from workers to landowners. And for land value provided by nature, geoist ethics say that human equality requires an equal benefit from natural resources. Inequality in market wages respects equal self-ownership, while an unequal benefit from the natural heritage does violate our creation as moral equals. -- #9. Critics of LVT claim that much of wages is due to luck, connections, and talents, so a portion is wages is unearned. But as Henry George wrote, justice is the end, taxation only the means. It is just for the benefits of natural resource to be shared, and for landowners to pay back the rental generated by public goods. Self-ownership is also just, even if some have greater wealth due to luck. Nobody is coercively harmed if one person has more talent than others. If others own your luck, you become a slave to them, violating self-ownership. -- #14. Socialist critics claim that LVT leaves intact capital inequalities. But much of the historical inequality of wealth has come from land tenure. Over time, inherited wealth other than land dissipates or gets donated to charity. With good education and equal access to natural opportunities, inequalities in financial assets are not unjust so long as there is no force or fraud.'

'Socio-economics recognizes that the market process includes both competition and cooperation. It encompasses institutions as well as individual behavior, and recognizes sympathy with others as an important human motivator along with self-interest. Socio-economics views rationality more broadly than the narrow rational-expectations approach of neoclassical economics. Socio-economics encompasses both economic reality (positive economics) and social justice (normative economics). The moral dimension of socio-economics is in tune with the geoclassical economics of Henry George, who melded economics and ethics. To George, there is a harmony between morality and economic efficiency, since the policy that maximizes productivity is also morally just. That geoist policy is the full ownership of wages by the worker and the equal distribution of land rent either as dividends or for public revenue. A key interest of socio-economists such as Robert Ashford has been the failure of economics to perform to their maximum productive capacity, with unutilized labor and underutilized land and capital goods. Georgist economics explains why this occurs. Land speculation, pricing land at expected higher future values, prices land too high for current investment, causing investment to slump. Secondly, taxes on labor and enterprise create an excess burden of misallocated resources. Third, central-bank-distorted interest rates create artificial stimuli that create the waste of unprofitable real-estate development. All these distortions prevent the full use of labor and other resources.'

'The geo-economic remedy for the cycle is the public collection of rent (PCR), also known as land-value taxation (LVT). When future rents are collected, the profit is taken away from real-estate speculation. The Austrian remedy for credit manipulation is free banking (Selgin, 1988), a banking system without a central bank, with unrestricted branches and with competitive private bank notes ("money substitutes" redeemable into base money such as gold or a frozen quantity of federal reserve notes). Hence, the geo-Austrian policy to eliminate the major business cycle would be the combination of PCR/LVT and free banking. The collection of the land rent by governments or by voluntary civic associations (Foldvary, 1994) would also provide revenue without interfering with price and profit signals, and without hampering the entrepreneurs who, in Austrian theory, play a key role in economic advancement. -- The 18-year cycle in the US and similar cycles in other countries gives the geo-Austrian cycle theory predictive power: the next major bust, 18 years after the 1990 downturn, will be around 2008, if there is no major interruption such as a global war.'