'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.'

'It's the NEW AMERICAN WAY....' -- Keeping those land prices high

'Real Estate 4 Ransom is a documentary about global property speculation and its impact on the economy. Real Estate 4 Ransom considers the changing motivations behind property investment and challenges the notion that the Global Financial Crisis was caused by bank lending alone.'

'The first man who, having enclosed a piece of ground, bethought himself of saying, This is mine, and found people simple enough to believe him, was the real founder of civil society. From how many crimes, wars and murders, from how many horrors and misfortunes might not any one have saved mankind, by pulling up the stakes, or filling up the ditch, and crying to his fellows, “Beware of listening to this impostor; you are undone if you once forget that the fruits of the earth belong to us all, and the earth itself to nobody.” -- From great inequality of fortunes and conditions, from the vast variety of passions and of talents, of useless and pernicious arts, of vain sciences, would arise a multitude of prejudices equally contrary to reason, happiness and virtue.'

'Failure to make the relationship of people to land the starting point for the study of modern economics has led to a proliferation of complicated, contradictory theories and to an imprecise use of terms. Since governments and major industries rely heavily on the advice of economists in making their decisions, the consequences of this confusion affect us all. #Land and Capital: The confusion between ‘land’ and ‘capital’ is particularly damaging to clear thought, because the two entities behave in utterly different ways in the process of wealth production: #1. Land is not produced by human beings at all, while capital is produced entirely by human activity (labour) operating on land. ... -- Ignoring the real nature of land and treating it as the private property of individuals has caused the human race much trouble and misery. Recognising this mistake gives us the opportunity to base our economy on a system of natural justice which will lead to a fairer, more prosperous and happier society.'

'Like all cartels, the unconscious combination of land speculators creates a "price umbrella" under which new resources enter the market. Students of cartels recognize a "price-umbrella syndrome". Cartels create an artificial scarcity of a resource or product and an artificially high "price umbrella" to shelter new competitors who come from outside the cartel. Previously marginal or untapped resources enter the market, often irreversibly. In urban growth, the cycle periodically thus creates an artificial surplus of half-developed land (graded, perhaps, roaded, platted, but lacking buildings). Other new land is even less than half-developed: accessed by new freeways, state highways, or county roads, but not even subdivided. At the same time, the lavish use of durable capital to bring settlers to all this marginal land creates a shortage of liquid capital, a shortage of loanable and investible funds, a rise of interest rates and a tightening of credit. The writer has analyzed elsewhere this lavish, irreversible misallocation of capital (Gaffney, 1976). Austrian cycle theorists have dwelt on this tilting of what they call "the structure of production", with too much capital getting sunk irrecoverably in what they call "higher order" goods. Well and good, they are onto something big and vital. Unfortunately, though, they find its cause solely in "forced saving" from bank expansion, with no reference at all to its "geo-economic" roots, and the role of inflated land collateral enabling bank expansion. Worst of all, they see no remedy except forcing down wage rates. -- Skeptics will wonder how we can take more taxes from rents when they are falling. Here is the key: the effect of untaxing trade, capital formation, enterprise, labor, and production is to raise and sustain land and resource rents as a tax base. This does not work through raising asking and holdout prices, but rather by raising bid prices, activating the market.'

'Anti-governmentalists often identify any tax policy with public extravagance. Georgist tax policy, on the contrary, saves public funds in many ways. By making jobs it lowers welfare costs, unemployment compensation, doles, aid to families with dependent children, and all that. It lowers jail and police costs, and all the enormous private expenditures, precautions, and deprivations now taken to guard against theft and other crime. Idle hands are not just wasted, they steal and destroy. George's program would abort other, less obvious wastes in government. It obviates much of the huge public cost now incurred to reach, develop, and safeguard lands that should be left in their natural submarginal condition. Today, people occupy flood plains and require levees, flood control dams, and periodic rescue and recovery spending. Others scatter their homes through highly flammable steep brushlands calling for expensive fire-fighting equipment and personnel, and raising everyone's fire insurance premiums. Others build on fault lines; still others in the deserts, calling for expensive water imports. Generically, people now scatter their homes and industries over hundreds of square miles in the "exurbs," or urban sprawl areas, imposing huge public costs for linking the scattered pieces with the center, and with each other. This wasteful, extravagant territorial overexpansion results from two pressures working together. One force is that of land speculators manipulating politics seeking public funds to upgrade their low-grade lands so they may peddle them at higher prices. The other force is that of landless people seeking land for homes, and jobs, and public funds for "make-work" projects. Both these forces wither away when we tax land value and downtax wages and capital. This moves good land into full use, meeting the demand for land by using land that is good by Nature, without high development costs. It also makes legitimate jobs, abating the pressure for "make-work" spending. Above all, it takes the private gain out of upvaluing marginal land at public cost. Such lands, if upvalued by public spending, will then have to pay for their own development through higher taxes.'

POINTING FINGER IS POINTING --> 'To the extent that capitalism has gone wrong, it is because it was allowed to become corrupted and hijacked by vested interests. Capitalism’s tendency towards excess and self-destruction is a matter of well-documented record and repeated regret. As long ago as the 18th century, Adam Smith noted that “as soon as the land of any country has all become private property, the landlords, like all other men, love to reap where they never sowed, and demand a rent even for its natural produce”.' <-- POINTING FINGER IS POINTING

'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.'

'If production gives to the producer the right to exclusive possession and enjoyment, there can rightfully be no exclusive possession and enjoyment of anything not the production of labor; for the right to the produce of labor cannot be enjoyed without the right to the free use of the opportunities offered by nature. To admit the right of property in gifts of nature is to deny the right of property in the produce of labor. When nonproducers can claim a portion of the wealth created by producers, the right of the producers to the fruits of their labor is to that extent denied. Taxation, like slavery, is wrong because it seizes the fruits of someone else's labor without their permission. It makes no difference whether the tax collector is a government or a land holder; taxation is still wrong. Any institution that places any portion of the product of labor and/or capital into the hands of nonproducers is the moral equivalent of taxation. Public taxation is immoral and private taxation, recognized as such or not, is equally corrupt. Natural resources are not the fruits of human effort; capital is. Capital is not essential for human life; natural resources are. Natural resources are fixed in supply; capital is not. Capital holdings do not penalize or hamper the private producti on of wealth; natural resource holdings do. The just ownership of capital is demonstrable by tracing its origin in production; ownership of natural resources is demonstrable only by the say-so of the current government.'

'Land monopoly is not the only monopoly, but it is by far the greatest of monopolies -- it is a perpetual monopoly, and it is the mother of all other forms of monopoly. Unearned increments in land are not the only form of unearned or undeserved profit, but they are the principal form of unearned increment, and they are derived from processes which are not merely not beneficial, but positively detrimental to the general public. Land, which is a necessity of human existence, which is the original source of all wealth, which is strictly limited in extent, which is fixed in geographical position -- land, I say, differs from all other forms of property, and the immemorial customs of nearly every modern state have placed the tenure, transfer, and obligations of land in a wholly different category from other classes of property. Nothing is more amusing than to watch the efforts of land monopolists to claim that other forms of property and increment are similar in all respects to land and the unearned increment on land.'

'In the few cases (if any) where a deed to land did not involve any confiscation from anyone during its history, the claim of ownership still does not rest on any clear and consistent legal principle. For example, suppose the legal principle is "first discoverer gets the land." But how much land can a person or government claim? Did the first person to enter North America have the right to claim the whole continent? Or suppose the legal principle is "to claim land, mix your labor with it, such as by cultivating it, or fencing it." That principle might enable someone to own the top few inches of soil, and the fence itself. But how would it enable someone to own a mineral deposit twenty feet below the surface, or air space twenty feet above? Also, how much mixing of labor is required?'

'If one believes that land can be owned like any resource, then men can be owned and that makes slavery acceptable. On the same principle it would even be acceptable to own all the oxygen on the planet if some means could be found to enclose it by extracting it all. We in the Campaign are realistic and accept that we are where we are and have to move forward. Nobody here is suggesting that land titles should be taken away from their owners or that land should be nationalised. But the old injustice continues as land value is something that is continuously sustained and re-created by the presence and activities of the community today. There is an ongoing theft as this value is privately appropriated. Our case is that the stealing of this ongoing wealth stream should stop, through collection of the rental value of and its use as the main source of public revenue. This would make it possible to get rid of that other institutional theft, the taxation of human labour and its products.'

'Bearing in mind that the State is the organization of the political means - that its primary intention is to enable the economic exploitation of one class by another - we see that it has always acted on the principle already cited, that expropriation must precede exploitation. There is no other way to make the political means effective. The first postulate of fundamental economics is that man is a land-animal, deriving his subsistence wholly from the land. His entire wealth is produced by the application of labour and capital to land; no form of wealth known to man can be produced in any other way. Hence, if his free access to land be shut off by legal predmption, he can apply his labour and capital only with the land-holder’s consent, and on the landholder’s terms; in other words, it is at this point, and this point only, that exploitation becomes practicable. Therefore the first concern of the State must be invariably, as we find it invariably is, with its policy of land-tenure.'

"A century ago a free market meant an economy free of rentiers, free of unearned income, free of landlords, and free of bankers."

'We Geolibertarians distinguish ourselves from right-wing, "royal" libertarians by our profound respect for the principle that one has private property in the fruits of one's labor. This includes the fruits of mental labor and the results of reinvestment of legitimate private property (capital) in future production. We remain consistent in that respect by recognizing, as did the classic liberals, that land and raw natural resources are not the fruits of labor, but a common heritage to be accessed on terms that are equal under the law for everyone. The statist system of land tenure empowers non-producing landlords to extract the fruits of tenants' labor. We also consider ourselves "green" in our respect for the earth as our common heritage. However, we clearly distinguish between land as common property and land as state property. Unlike left-wing or "watermelon" greens, we advocate governance of land in harmony with free market principles, and deny the right of statist bureaucracies to meddle in the affairs of individual land holders. We see ourselves as embracing the best attributes of the Green and Libertarian parties. Geolibertarians also believe in free trade, with no state support for monopoly privileges of any kind. We therefore oppose money monopolies, information monopolies, a host of lesser monopolies, and most of all, monopoly of the power to govern, as embodied by statist political systems.'

'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.'

'In most countries, income tax plus sales tax plus all the other taxes come to around 40% of income. So if you need $100, you have to earn $167 just to pay the tax (because 167 -40% = 100). This means no work can be done unless it makes an instant 67% profit. If you earn very little you pay slightly less tax (but you still pay sales tax etc.), but for most kinds of work, tax is unavoidable. Now imagine you paid the same amount as last year, but this year it was a fixed land rent. All the previous work would still be done, at the same prices (so you could pay the same amount as before to the government), but any extra work is completely tax free. So all the "less than 67% profit" work would suddenly become profitable. -- With land rent, there are no hidden taxes: you know exactly what each government costs each person. So voting will have a clear price, just like buying any other product or service. If trust is abused, you simply choose a different government. Or make your own.'

'If you are a central banker in the destination country, it might be that the flood of carry-trade money could push inflation upwards. What is the central banker or policymaker to do? The ‘hot’ money flooding into their country might be causing an asset-price bubble, or inflation. Something must be done. The problem is this: if interest rates are increased, the incentive for the carry trade is likewise increased – and might even cause the inflow of even more ‘hot’ money. If the central bank targets low interest rates, then there is the possibility that this might end the carry trade, but at the cost of creating an internal stimulus to inflation. The strengthening of the destination country’s currency might, in turn, have a negative effect on the balance of trade and the export sector of the economy. Exports will fall... Despite this, assets in the destination will be going up, while the underlying performance of the economy will be going down (albeit disguised by the inflow of money).'

'Land is a creation of nature, not human action, and its value comes from natural features and the population, commerce, and public works of the community. Land rent is a pure surplus that mother nature offers to us as a gift by which to finance the public goods provided by government. But you have rejected mama’s natural offer. Instead, you, by voting for the status quo governmental chiefs, you attack the earnings of labor, and with that loot, you provide public goods that pump up land rent and land value. Yes, you, the voter! What happens then is that rent absorbs much of the gain from economic expansion and progress. Speculators jump in to leverage profit from the land-value rise. Landowners buy land with borrowed funds, so they engage their partners, the banks and other financiers. Speculation raises land values to peaks unaffordable for actual use, and then land values plunge, and the leveraged mortgages and derivatives crash. That is the source of panics and depressions.'

'The term “capitalism” has been the most successful propaganda term in human history. ...the term “capital” masks the underlying and more fundamental interest that receives governmental privileges: ... the big landowners. If you want to understand the economic policies of governments world-wide, and the main cause of social problems, it becomes clearer if you grasp this proposition: The main purpose of government is to serve the big landed interests. ...the biggest subsidy to landowners is implicit: it is the enormous increase in land rent and land value due to the public goods provided by government. Streets, parks, security, schooling, transit, etc., all make land more attractive and productive. The rich pay high taxes, but they get it back, and often much more, in higher land value. Taxes fall most heavily on the middle class, as the state tax-confiscates about half the wages of a typical worker, including the taxes the pay when from their remaining wages they buy taxed goods.'

'... Marx and his followers then came along and mucked up the language and thinking. Marx wanted to distinguish the workers from all those who owned assets, and so he lumped land into capital. From then on, most economists followed Marx in focusing only on labor and capital, and the physiocratic and classical emphasis on land was set aside. The neoclassical economic thought that followed the classical was encouraged to forget land, since this benefited the landed interests who financed them, and it also made the mathematical models easier if there are two rather than three factors. From now on, the system would be called "capitalism." But is capital a problem? Capital provides investment, and investment and better technology is what has raised living standards world-wide. "Capitalism" makes entrepreneurs and owners of capital the villains, whereas Ricardo's law of rent shows that much of the gain from trade and technology go to the owners of land as rent...'

'Geoism is the philosophy of sharing the benefits of the land (geo), while respecting the equal self-ownership of persons. Self-ownership implies that one owns one's body and life, and therefore one's labor and wages and the products of labor. These should be unrestricted and untaxed, and traded without taxation or restriction. The benefits of land have their economic manifestation as rent, which can be shared either as public revenues, community financing, or as dividends to the members of a community. We can see that the two movements and philosophies have much in common and have no inherent conflicts between them. There are adherents to both movements, geolibertarians who identify with both geoism and libertarianism. But for the most part, these have remained distinct movements... Libertarians stress individualism, while many geoists emphasize community. Many libertarians have little knowledge about the economics of land and rent. Many geoists don't fully understand free trade...'

'There is a structure of capital goods from rapid turnover such as inventory to slowly maturing such as shopping centers. When interest rates are low, there is more investment in the slowly maturing capital goods. An expansion of money temporarily reduces interest rates, leading to more construction and other long-lasting investments, but rising prices later make these turn out to be bad investments. Land speculation sets in to take advantage of rising land prices. High prices and rising interest rates reduce profits, so investment slows down, leading to a recession. To reduce poverty, promote growth and efficiency, and eliminate depressions, eliminate taxation and generate public revenue from land rent and pollution charges. Switch from central banking and government fiat money to gold or private currency, with free-market banking. Free banking and the public collection of rent are the macroeconomic policies that promote smooth growth, full employment, and economic justice.'

'Karl Marx thought labor creates all value and get exploited when they don't get the whole value, but Carl Manger said no, values are subjective. Henry George said the surplus is rent, so tax that, and have free trade. Ludwig von Mises [said] pure socialism would be hopelessly inefficient, and government intervention makes the economy worse. Friedrich Hayek said so too, because knowledge is decentralized, so just let the spontaneous market order work. The bottom line to all this is that economic freedom leads to the most prosperity. Don't tax labor or enterprise. Get public revenues from rent and pollution fees. Let the market handle the money and banking. True free trade and enterprise are good; decentralized and market-based governance works best. As Henry George said, economics and ethics are one. The environment and the economy are one. Share rent, charge for damage, don't steal wages. That's economics in six minutes, and the path to prosperity.'

'As an economy recovers from a depression, more and more enterprises and households buy and rent real estate. Construction accelerates as rents and land values rise. Speculators then come in to buy real estate, hoping to sell at higher prices later. Much of the gain is not a pure market outcome, but the result of subsidies by government in the form of more streets, schools, and other goods that service commerce and residents, paid for by taxes on labor. The problem is both too much and too little construction. There is too much speculative construction of hotels, office buildings, shopping centers, apartments, and houses, much of this in the wrong places, creating sprawl, as speculators hold off lots from construction pending higher prices and more intensive uses of land. Much of this speculative buying and building is fueled by easy credit as the central bank expands the money supply to stimulate the economy. This expansion of money lowers interest rates...'

'Powerful lords of valued land holdings have controlled governments world-wide. Land value is highly concentrated in a few hands, and they have the strong incentive to keep it that way. It is not enough for their rent to be almost tax-free. To keep it that way, we must not even think of rent. In the economic textbooks, there are a couple of paragraphs on rent, maybe a graph, and then it is ignored in the rest of the book. The chapters on government policy don't even go there. What economics should be is a key that unlocks the reality beneath the superficial appearances. Economic sophistication is the understanding of implicit reality. Real rent is not what a tenant happens to pay some landlord. Rent is an implicit reality, caused by the differing qualities of land, the differences in qualities creating economic rent. Rent is there regardless of who owns the land or how a plot is used or how much money the landlord is getting or whether it gets counted.'

'My output is all wages. So 8 bushels of your output is wages, and 12 is rent. I get half, 6 bushels." Robinson had to admit this was correct. His income was therefore 20-6=14, and Friday's income was 8+6=14. They again had equal incomes, but higher incomes than before. Robinson realized that it did not matter which lands he possessed. He could possess better land, but so long as the rent is split equally, if the wage rate is equal, their income will not be affected. Lawyers say that possession is nine tenths of the law, but the law of rent says, possession does not matter. If the rent is split equally, those who possess land and want to maximize their income will possess only that amount that maximizes income for all. If they possess too much land, they would drive wages down and rents up, leaving less for the possessors. So it does not matter who owns what land, if the rent is equally split.'

'Vibrations of rent are generated by demands for space and natural materials, but unlike labor, the supply does not come from human sources. The supply comes from geological and geographical strings. Unlike labor strings, the strings of land services do not come from any individuals, but from society generally. It is the vibration of the community, not any individual, which generates land rent vibrations. Human strings are created equal; there are no master and slave strings in nature, so the financial flows of rent should go equally to all the human strings of the community. But governments typically intervene to shift the rent only to those having privileged legal title. Community members are not getting back their share of value generated. Their income strings become broken. The economic strings are broken, and we get economic diseases: inflation, unemployment, congestion, poverty, instability, war! Most people see the broken strings, but do not understand the causes.'

'...the supply of land is fixed, when the economy becomes more productive, wages rise somewhat as the margin becomes more productive, but the extra productivity of super-marginal land goes to land rent. Wages rise by less than productivity because enterprise also has to pay for the better capital goods, but the rent can rise by the amount of productivity. We cannot directly observe economic land rent because it is not the financial amount paid by a tenant to a landlord, but the greatest amount that a tenant would pay for the use of only the land, not including the building or the labor services of a landlord. ...[geo-economists] have detected and measured economic land rent from its effects. These effects are hidden in interest, profits, and capital gains. The dark matter that is rent amounts to some 20 percent of national output, and greatly effects the business cycle, the distribution of income, and economic growth.'

'Buying land for speculation anticipating higher future rentals not paid for by the landowner can induce higher prices for land that shifts the margin to inferior lands, raising the rents on superior lands and lowering wages set at the margin. -- Rent is ... the ideal source of general public and community revenue. Tax reform should therefore shift to rent as the primary source of general funds. Pollution charges can supplement the rent, and indeed can be considered a rental charge for using and abusing the atmosphere, land, soil, and other forms of land. There could also be user fees for services specific to users, fines for violating traffic rules, and profits from enterprises. The economic rent from minerals, water, and oil would be natural resource royalties that could be paid by bidding for the rights to extract, from payments based on the amount of mining, and the profits from the operations, depending on the circumstances.'

'Land includes all natural resources, including the spatial surface of the earth, material resources such as water and minerals, the radio spectrum, the atmosphere used for travel or as a dump, all wildlife, and the genetic information in living beings. A tenant's payment for a site has two components. The pure land rent is the natural rent, the payment for the resource as provided by nature. The second component is a rental for the advantages of a site due to the civic works. This is the infrastructure such as streets, parks, utilities, security, schools, and the legal system which makes real estate much more useful. This rental is really a return to capital goods and labor services rather than land. Real-estate land rent and rentals arise from the differing productivity of various sites: rent is the differential between the productivity of a site relative to the least productive marginal sites. This is the same as the "marginal product" of land as used in economics.'

'Self-ownership implies the right to one's body, labor, products, and wages, and to voluntary exchange without penalty or tax. Nature is all prior to and apart from human action, and human equality implies that all equally benefit from the resources of nature. Land is natural resources, and its value comes from differences in benefits. Land is fixed in supply, so the benefits of community works and services, adding to demand, create higher rent and site values. The civic works of communities are efficiently funded from these rents, in contrast to forced extractions of wages and profits, which raise prices and reduce quantities, imposing a social burden on present production and decreasing future growth.'

'Since land can take several forms, the "single" tax is really a single family of taxes, all based on the same principle. For example, some lands are valuable because they are located in the city, the value coming from commerce. Farm lands are valuable because of the fertility, including the climate, as well as due to available transportation. The value of mineral lands comes from the value of the natural materials in the ground. But the rents from all these lands have the same characteristic in having a value not created by the owner and unable to run away when taxed. In my experience in teaching and talking about taxes and land, most people are in favor of shifting to the single tax once they learn about it.'

'Consider what happens if government builds a subway. Land values rise downtown because there will be more commerce, and land values rise in the suburbs because it is now much easier to commute to downtown. So people are paying higher rent or mortgage payments in order to be located where the subway is. But they also paid for the subway in the first place with taxes, since it was financed mostly from taxes that come from their wages. Folks pay twice for the subway, first through taxes, and then through rent. If the tax is the rent, then people only have to pay once. Therefore, the single tax is single in being a single payment for government services, rather than the double payment that takes place when wages and profits are taxed. A tax only on rent is a twice-single tax, single in terms of there being only one type of tax and single in being only one payment for government services. With only one tax, people can tell just how much they are paying for government.'

'Another variant is geoanarchism, in which people would live in contractual communities whose public goods are financed from land rent. The members would share the belief that the land rent should be collected and distributed to all members equally or else used for public goods. Members could secede, but would lose the package, so secession would be limited. Folks would therefore have the advantages of a state, but without the tyranny. The greater association could include “anarcho-capitalist” communities that do not use land rent for their public finance. Economic theory indicates that the geoanarchist communities would have greater prosperity, since communities that do not use land rent for public goods would find that their public works get capitalized into higher rents, making the residents pay double for public goods, once as fees and then again as higher rent. Most folks would rather pay once than twice, so they would move out of anarcho-capitalism into geoanarchism.'

'It is the community which creates the value of the location. The valuations serve as the basis upon which local taxing jurisdictions calculate the actual "land value tax". The amount of the actual tax/rent depends on the budget of the local taxing authority. The community expenditures, public and private, increase the value of every location. It is up to the community to decide how to run their government and collect the necessary money therefore. Basing the amount of rent on the value of the location is the only fair and equitable way. Without the existence of a community around your "land", "your" land would have no value. Nobody would give you a pluck nickel for an acre of "your" land in the middle of the Mojave desert. Usually, the "dead beats" who want to enjoy the improvements around their location created by the community, are the ones that claim "they own the land", and no one has a right to tax them. Well, they don't own the land, period.'

'#Ending excuses for big government: Much of the government spending to which libertarians strenuously object is made necessary by its taxing productivity instead of land values. The property tax falls mostly on improvements, so less housing is built, giving the government an excuse to build public housing. Profits are taxed, leading to less employment and giving government an excuse to spend money on economic stimulus projects. Family income is taxed to the point that they have difficulty buying a house or sending their children to college, so government institutes subsidized mortgages and student loans. Even the indirect effects are substantial. Land speculations gone sour chew up inner cities, so poor people turn to crime (if drug selling and prostitution be crimes) and the government gets an excuse to beef up the police state. Even welfare increases do not stay in the hands of welfare recipients, but are quickly greeted by higher rent demands from ghetto landlords.'

'Geoism includes a moral philosophy regarding property. Human beings properly own their own bodies and lives. George therefore stated that it is morally wrong to tax wages and the products of labor. He may have been the first to say that such taxation is theft. But self-ownership does not extend to land. Geoists recognize that markets function well when the owners control the use of property, and so geoism includes individual rights to possess land. But it is not necessary for the title holder to keep the rent in order to put his land to best use. The rent is a surplus due to its better location, not to any effort by the title holder. -- Geo[anarchist] communities would join together in leagues and associations to provide services that are more efficient on a large scale. The voting and financing would be bottom up. The local communities would elect representatives, and provide finances, and would be able to secede when they felt association was no longer in their interest.'

'And then there is the Chinese property bubble, with the Telegraph article saying the following: Meanwhile, China Daily reports that 70pc of all flats in Hainan, 66pc in Beijing, and 51pc in Shanghai are empty, based on a survey of electricity use. They are presumably owned by investors and speculators. It was something I observed first hand whilst living in China and reported in this blog a couple of years ago. The reason why the apartments are left empty is that Chinese people will pay a premium for an apartment that has had no occupants. This is the reason why they lie empty, rather than being rented out. Of course, had they been rented, then the investment bubble would have popped, as declining rents through excess supply would have (at least eventually) offered a market signal. Thus a peculiarity of the Chinese market has translated into a massive bubble.' -- !!!

'#Property ownership rights and their extent are a source of contention among different philosophies. Anarcho-capitalists may be strong or weak propertarians. Many critics see property rights as less absolute than anarcho-capitalists do. The main issues are what kinds of things are valid property, and what constitutes abandonment of property. The first is contentious even among anarcho-capitalists: there is disagreement over the validity of intellectual property – intangible goods that are not economically scarce. Agorists are one group of anarcho-captitalists who deny the validity of intellectual property. Some supporters of private property but critics of anarcho-capitalism may question how natural resources can be validly converted into private property (Georgism, geolibertarianism, individualist anarchism). ...thus rejecting anarcho-capitalism as a philosophy that takes private ownership of land as a morally questionable initial premise.' -- From land all issues arise.

'Financial services are mostly parasitic on the real economy since they produce nothing. Banks should not act as moneylenders, nor should they give credit for anything other than to facilitate the physical process of production. Thus it is right for banks to give credit for the purchase of seeds, tools and for the payment of the the farmers' sustenance over the season. It is not right that banks should give credit for land purchase because that has added nothing to the overall productive power of the economy (the land was there from time immemorial, all that has happened through land purchase is that a release fee has been paid to a land owner [right of use owner] to enable its use).'

Comment: Pat Fields: '@George Sign Cite: "I can never quite get my head around the ownership of land." -- Title in anything is a duality ... At Law and In Equity. These are separable aspects and must be understood to clearly understand the paramount evil in artificial 'money' within the Common Law system. Plantation Scrip ["money"] entitles possession At Law, but since it is purely credit, it can not acquire title In Equity (beneficial ownership). Since government assumes authority of [Surety], it defends legal possession 'unless a superior title can be presented at bar'. That conversely authorizes it to defend the beneficial rights of Holders In Equity ... which it does through taxation on the land.'

'This creates a state of affairs in which neither Greece nor the EC are “states” or “governments” in the traditional political sense. The EU and IMF bureaucracy is not elected. And at the point where their foreign-dictated financial plan succeeds, the economy’s capital will be stripped and social democracy will collapse. Is this where Western civilization really is supposed to be leading? Confronted by parliaments controlled by aristocracies, the 19th-century reformers sought to take them over on behalf of democracy. Classical political economy was a reform program to tax away the “free lunch” of land rents, monopoly rents and financial interest extraction. John Maynard Keynes celebrated this program in his gentle term, “euthanasia of the rentiers.” But the vested interests have fought back. Calling social democracy and public regulation “the road to serfdom,” they are trying to set Europe’s economies on the road to debt peonage.' -- (A statist, but useful for understanding land.)

'"Unaffordable housing" The term still keeps cropping up. Which part of a house is not affordable? The roof? The bricks? The drains? The roofing tiles? The plumbing system? The amount builders have to be paid to put it all together? -- Too many have stood aside, not watched what is going on in the world and failed to try and make sense of it. Hence the talk about "unaffordable house prices" Anyone who uses the phrase "unaffordable house prices" without further explanation is guilty of extreme mental laziness. Which is most of us, and now we are living with the consequences of our neglect. This of course includes the Nationwide Building Society, which would do everyone a good turn if they scrapped their so-called House Price Index and replaced it with a housing Land Price Index.'

'#Fear of Change. #Fear it will be just another tax on top of all existing ones. #Ignorance on the part of those in positions of influence. #Failure to understand economic laws. #Failure to understand LVT by economists. #Non-comprehension of incidence of taxation. #Belief that land and buildings are not separate. #Embedded self interest namely the great land owners, the church, universities. #The House of Lords. #Pension schemes. #Effective lobbying by those who currently benefit. #Common people's liking for the notion of 'property owning democracy'. #Desire for house price windfall. #Living on unearned income. #Calling it Land Tax. The name we give it. #Belief that economics should be separate from morality. #Cultural resistance - attachment to 'My Land'. #Lack of real public debate. #Hereditary monarchy. #Requires a paradigm shift in understanding. #Not a vote winner. #Disliked - seen as unfair (like rates) or last straw. #Belief of the fairness of Income tax.'

'Future relations between Old and New Europe will depend on the Eurozone’s willingness to re-design the post-Soviet economies on more solvent lines – with more productive credit and a less rentier-biased tax system that promotes employment rather than asset-price inflation that drives labor to emigrate. In addition to currency realignments to deal with unaffordable debt, the indicated line of solution for these countries is a major shift of taxes off labor onto land... There is no just alternative. Paying in euros – for real estate and personal income streams in negative equity, where the debts exceed the current value of income flows available to pay mortgages or for that matter, personal debts – is impossible for nations that hope to maintain a modicum of civil society. IMF and EU-style “austerity plans” are nothing but technocratic jargon for the life-shortening impact of gutting income [and] social services that have long been subsidized by progressive taxation...'

'Ah, the new terms—illegal land use and land hording! This is analogous in our opinion to the term "predatory lending" aimed especially at mortgage brokers in America who used high-pressure sales tactics to supposedly force individuals to buy expensive houses. The fault of course is with the monetary system itself, not the poor salespeople caught up in its inexorable tidal pull. But since the fiat-money/central banking mechanism that causes the problems in the first place cannot be mentioned, or identified as the culprit (for political reasons) the blame will [be passed on]. -- When one gets to a point where the only way to control price inflation is by banning purchases then it is probably already too late. One can, perhaps, puncture the boom psychology, but the result is then inevitably a bust. The power elite in the West, for a variety of reasons, has wanted to pretend that China is a "free-market" success story. But this dominant social theme is beginning to unravel.'

'...where the biases of individuals enter into market transactions, potentially changing the perception of fundamentals of the economy. -- A current example of reflexivity in modern financial markets is that of the debt and equity of housing markets. Lenders began to make more money available to more people in the 1990s to buy houses. More people bought houses with this larger amount of money, thus increasing the prices of these houses. Lenders looked at their balance sheets which not only showed that they had made more loans, but that their equity backing the loans—the value of the houses, had gone up (because more money was chasing the same amount of housing, relatively). Thus they lent out more money because their balance sheets looked good... This was further amplified by public policy. Many governments see home ownership as a positive outcome and so [grant first home owners with financial subsidies such as the exemption of a primary residence from capital gains taxation.]'

Gisted -- Harrison breaks the cycle down into 5 phases: #1 RECOVERY (7 yrs): After the previous crash, optimism returns. #2 MINI-RECESSION (A few months): Will typically bring calls for lower rates and tax cuts. #3 EXPLOSIVE (7 yrs): Low rates, mortgage tax breaks and loose lending terms combine to fuel speculation. Greed eventually overwhelms fear of being left off the property ladder. People con themselves into believing houses are an 'investment' rather than just a place to live. #4 WINNERS CURSE (The last 2 yrs): Wild enthusiasm for capital gains. Property must be acquired at any price cursing everyone with unsustainably high valuations. #5 CORRECTION (3–5 yrs): Mortgages default. Risk is perceived again. Banks tighten up; liquidity/credit/money dries up. Banks sell repossessed inventory at low prices. Prices are driven down. Mortgage holders who bought during the bubble now expect capital losses. Renters switch from renting into buying setting the stage for the next recovery.

"How does Harrison do it? Well, he uses an 18 year cycle. He has traced and verified the length of this cycle going all the way back to 1700. For Harrison, the length of the cycle arises partly from how homes are financed. He points out that 5% has been a normal mortgage interest rate for much of Britain's past and that 5% compounded will double in almost exactly 14 years. After a period of 14 years, property prices reach a level where prices are too high and rental yields are too low. When banks have exhausted all their tricks in finding ways to make prices look affordable, the high valuations choke off demand and once the peak is in place, the 3–5 year slide begins which brings prices back down to earth. The timeframe for the downturn is shorter because it operates on fear rather than greed. After the turn, increasing fear and bank tightening of lending terms destroys excessive valuations faster than greed built them up."

"All democratic governments maintain a tax system that milks the poor to keep the rich, rich. 'Progressive' taxes are a cover for a cruel hoax on people with low incomes. This is how the scam works..." -- Chart: 'UK Taxation History: The Shift From Land (Rent) To Labour (Wages)' http://www.flickr.com/photos/adamcrowe/4446366350

'...despite record incentives (such as the "homebuyer tax credit" and similar games) there are simply no more people who are willing and able to gorge themselves on more debt. The cash-out refinance is dead, as there's no equity to extract. The use of the home as an ATM machine powered the last "expansion" in our economy, but that was a false expansion - it was not made up of production increases and general wealth, but rather with debt. There are millions of Mikes who have been seduced by the dark side of credit and then serially abused by the banksters and their minions. Until the market clears these moribund consumers' debt from the system, an act that can only occur two ways (through the passage of the aforementioned forty years - or bankruptcy of both borrower and lender) we cannot have sustainable economic recovery. Our government has committed itself to the balance sheet lies and screwing Mike - as many times and as roughly as they can get away with.'

'P.M. Lawrence also expresses a view on the general Georgist approach that I have a lot of sympathy with: "Geoanarchism, or even anything with that much of a Georgist base, presumes an enduring problem with landlordism and gives up on it, preferring palliative care." -- Land value tax is a big hammer for dealing with externalities, which can be better handled on the micro scale by user fees. It treats all the forms of rent, which are created by poor internalization of the costs of public services, as an aggregate, and then treats land rent as a proxy for all the assorted externalities and subsidies created by the community. This leaves a very weak connection between the amount one pays in taxes, and the value of any particular service (undermining, in other words, George's own distinction between a tax in form and a tax in substance), and thus weakens any incentives to economize on the consumption of particular services in light of the cost of providing them.' -- Hmm...

Max on possible WTO overrule of Volcker's 'too big to exist' Plan: "Who is the biggest financial terrorists? China? America? Wall St? Goldman? JPMorgan?" -- "They should all be thrown in jail as racketeers. Until people figure that out, the vampires will run riot." -- Stacy on the Supreme Court unlimited corporate campaign contributions ruling: America has become a Banana Republic. The people should start campigning for corporate rights. -- Fred Harrison explains the "forbidden knowledge" of the 18-year boom/bust cycle in the land market. Listen up.

'Thanks to a cooperation with Citi and other third-party data suppliers, Bundle is able to compile detailed statistics about how Americans are spending their money. To get started, you just enter your location, age, income and whether you are married, single or have kids. Bundle will then create an infographic that represents the spending habits of similar households in your neighborhood. From there, you can drill down deeper into the statistics. At its most granular level, Bundle displays where people are spending their money. My neighbors, for example, buy their electronics at Best Buy, Apple and Fry's.' -- Lambs to the slaughter.

'Some recent reading has got me thinking as to whether the US and UK central banks were actively complicit in an aggressive re-distributive policy benefiting the very rich. Indeed, it has been amazing how little political backlash there has been against the stagnation of ordinary people's earnings in the US and UK. Did central banks, in creating housing bubbles, help distract middle class attention from this re-distributive policy by allowing them to keep consuming via equity extraction? The emergence of extreme inequality might never otherwise have been tolerated by the electorate (see chart below). And now the bubbles have burst, along with central banks' credibility, what now?' -- Comment: Anonymous: 'Welcome to Austrian economics.'

“Bubbles are best identified by credit excesses, not valuation excesses. And there’s no bigger credit excess than in China.” -- Most economists and governments expect Chinese growth momentum to continue this year, buoyed by what remains of a $586 billion government stimulus program that began last year, meant to lift exports and consumption among Chinese consumers. -- ...betting against China will not be easy. Because foreigners are restricted from investing in stocks listed inside China, Mr. Chanos has said he is searching for other ways to make his [short sale] bets, including focusing on construction- and infrastructure-related companies that sell cement, coal, steel and iron ore. -- ...many analysts now say that money, along with huge foreign inflows of “speculative capital,” has been funneled into the stock and real estate markets.' -- Government spending = malinvestment = asset bubble(s) = inevitable correction = obvious short sale. This isn't rocket science.

'There are two reasons why so-called strategic defaults have been considered antisocial and perhaps amoral. One is that foreclosures depress the neighborhood and drive down prices. //But in a market society, since when are people responsible for the economic effects of their actions?// [Um, what market society?? You've got a debt society where the debt dealer always wins.] -- The other reason is that default (supposedly) debases the character of the borrower. Once, perhaps, when bankers held onto mortgages for 30 years, they occupied a moral high ground. These days, lenders typically unload mortgages within days (or minutes). And not just in mortgage finance, but in virtually every realm of our transaction-obsessed society, the message is that enduring relationships count for less than the value put on assets for sale.'

Bischoff: "The kind of taxation for which the school argues is the only tax that when applied does not provide less of what is taxed, namely land values. Any other tax applied causes a diminishing effect to the matter taxed." -- On America: "The only way the crises can be resolved is by returning to the gold standard, by reviving the Bill Market, by returning to the provisions of the original Federal Reserve Act of 1913, and definitely by suspending paragraph (b) of Section 14 of the act, and by repealing "legal tender" laws. Thereafter, the "invisible hand" of Adam Smith will take over and launch us on the road to an unimaginable prosperity, provided of course that the only tax collected by sovereign States and governments is Henry George's "single [land value] tax". Due to its constitution, and due to the work ethics, the general common sense and the goodness of its people, the United States is uniquely positioned to overcome the present economic and government crises."

Bischoff: "George's economic analysis has lost popularity due partly to a concerted effort by land and natural resource "owners" to protect their privilege of collecting community created land values. In this, they are aided by politicians who implement favorable tax policies and by the educational profession which has redefined land as "private" capital, thereby destroying the distinction between land and real capital. Taxation on land value reacts totally different from taxation on real capital. -- Americans have long deemed it a right to profit from community created land values. Now that land values are declining [due to deindustrialization], people feel themselves deprived of an assumed entitlement. They are beginning to wonder about the efficacy of speculating in land, particularly when it involves the land underneath their houses. It is quite likely that the present dilemma of declining land values will bring about a resurgence of the land value tax idea."

'Geolibertarianism is a political movement that strives to reconcile libertarianism and Georgism (geoism). Geolibertarians are advocates of geoism, which is the position that all land is a common asset to which all individuals have an equal right to access, and therefore if individuals claim the land as their property they must pay rent to the community for doing so. Rent need not be paid for the mere use of land, but only for the right to exclude others from that land, and for the protection of one's title by government. They simultaneously agree with the libertarian position that each individual has an exclusive right to the fruits of his or her labor as their private property, as opposed to this product being owned collectively by society or the community, and that "one's labor, wages, and the products of labor" should not be taxed. Geolibertarians generally advocate distributing the land rent to the community via a land value tax, as proposed by Henry George and others before him.'

'Georgism, named after Henry George (1839-1897), is a philosophy and economic ideology that holds that everyone owns what they create, but that everything found in nature, most importantly land, belongs equally to all of humanity. The Georgist philosophy is usually associated with the idea of a single tax on land. Georgists argue that a tax on land is efficient, fair and equitable, and can accrue enough revenue so that other taxes (which are less efficient) can be reduced or eliminated. -- ...unlike other taxes, land taxes do not distort economic activity, and do not impose an excess burden (or "deadweight loss") on the economy. A replacement of other more distortionary taxes with a land tax would thus improve economic welfare. -- Georgism, which is nowadays associated with left-libertarian philosophy, has endured criticism from those right-libertarians who believe that common land ownership would result in an infringement of the rights of self-ownership and individual property.'

'Never before have so many Americans gone so deeply into debt so willingly. Most members of the rentier class are very rich. One might like to join that class. And so our paradox (seemingly) is resolved. With the real estate boom, the great mass of Americans can take on colossal debt today and realize colossal capital gains—and the concomitant rentier life of leisure—tomorrow. If you have the wherewithal to fill out a mortgage application, then you need never work again. What could be more inviting—or, for that matter, more egalitarian? -- The bubble will burst, and when it does, the people who thought they would be living the easy life of a landlord will soon find that what they really signed up for was the hard servitude of debt serfdom.' -- '...commercial real estate investors hide most of their economic rent in “depreciation” write-offs for their buildings, even as those buildings gainmarket value.'

'Never before have so many Americans gone so deeply into debt so willingly. Most members of the rentier class are very rich. One might like to join that class. And so our paradox (seemingly) is resolved. With the real estate boom, the great mass of Americans can take on colossal debt today and realize colossal capital gains—and the concomitant rentier life of leisure—tomorrow. If you have the wherewithal to fill out a mortgage application, then you need never work again. What could be more inviting—or, for that matter, more egalitarian? -- The bubble will burst, and when it does, the people who thought they would be living the easy life of a landlord will soon find that what they really signed up for was the hard servitude of debt serfdom.' -- '...commercial real estate investors hide most of their economic rent in “depreciation” write-offs for their buildings, even as those buildings gainmarket value.'

Neo-liberal financialization as neo-feudalism: Explains how people have been fooled by bankster-infected government and think-tank propaganda into voting against property/land taxes.

'...only 20 percent of the federal housing aid goes to renters. The remaining 80 percent goes to homeowners, mostly in the form of mortgage-interest tax deductions. Another way of putting this is that America uses policy to create a rentier society, subsidizing landlords and creating property bubbles for their short-term benefit. The alibi for these subsidies to those who are already relatively privileged is that homeownership is an inherent good in its own right, a widely disputed claim. It is neither economically efficient, environmentally sustainable, nor the facilitator of more livable communities.' -- Dear middle class property ponzi schemers, how's gambling with each others tax money going?

'They met with bankers at Bear Stearns, Deutsche Bank, Goldman Sachs, and other firms to ask if they would create securities—packages of mortgages called collateralized debt obligations—that Paulson & Co. could wager against. The investment banks would sell the CDOs to clients who believed the value of the mortgages would hold up. Mr. Paulson would buy CDS insurance on the CDO mortgage investments—a bet that they would fall in value. This way, Paulson could wager against $1 billion or so of mortgage debt in one fell swoop. Some investors later would argue that Mr. Paulson's actions indirectly led to the creation of additional dangerous CDO investments, resulting in billions of dollars of additional losses for those who owned the CDO slices. At the time, though, Mr. Paulson still wasn't sure his trade would work. He simply was buying protection, he said. "We didn't create any securities, we never sold the securities to investors," Paulson said. "We always thought they were bad loans."'

'The conventional language employed to promote the re-socialisation of rent (and the re-privatisation of wages) will continue to obstruct fiscal reform. The entrenched interests will not allow a "tax on land values". After all, it's "their land", anyway, isn't it? -- ...it's NOT a tax. It's inviting middle-class home-owners (today's aristocracy, in political power terms) to honour their value system - pay for what you get, and get rid of taxes on the incomes you earn. This is the language of a political/moral prospectus that the voting majority - middle-class home-owners - would not be able to oppose, publicly. That's why the vested interests would have to try to shift the debate back onto the territory of the landowners' choosing: "this is a tax, really". That ploy would need to be resisted. -- People need to be reminded: stop whinging about what's wrong with this world, stop talking about your entitlements, accept personal responsibility and claim what is yours by right.'

'The advantages: #MARGINAL AREAS REVITALISED. Economic actitivities are handicapped by distance from the major centres of population. Conventional taxes such as VAT and those on transport fuels cause particular damage to the remoter areas of the country. Land Value Tax, by definition, bears lightly or not at all where land has little or no value, thereby stimulating economic activity away from the centre - it creates what are in effect tax havens exactly where they are most needed. #LESS URBAN SPRAWL. Land Value Taxation deters speculative land holding. Thus dilapidated inner-city areas are returned to good use, reducing the pressure for building on green-field sites. #NO AVOIDANCE OR EVASION. Land cannot be hidden, removed to a tax haven or concealed in an electronic data system. #AN END TO BOOM-SLUMP CYCLES -- Is it fair? ...land value owes nothing to individual effort and everything to the community at large. It belongs justly and uniquely to the community.'

'Land value taxation (LVT) (or site value taxation) is an ad valorem tax on the value of land. This ignores buildings, improvements, and personal property. -- Critics of LVT warn that a rapid reduction of real estate values could have profoundly negative effects on banks and other financial institutions whose asset portfolios are dominated by real estate mortgage debt, and could thus threaten the stability of the whole financial system. -- LVT advocates support a gradual shift to avoid disrupting the economy, and argue that the reduction in private rent collection would result in increased net wages received from employment and asset growth from entrepreneurial activity. -- Hong Kong is perhaps the best modern example of the successful implementation of a high LVT. The Hong Kong government generates more than 35% of its revenue from land taxes. Because of this, they can keep their other taxes rates low or non-existent and still generate a budget surplus.'

'The logic of a land value tax is inescapable when serious people examine the causes and remedies of booms and busts in the property market. ...inevitably the vested interests and unthinking classes marshal their forces to kill it. The unthinking classes have a lot to lose if land reform fails again in Britain, as they are the fall guys for the big landowners and property speculators. It is not without fostering damaging myths and media management that the landed gentry, the descendants of the Norman invaders, still own more than 80% of the land in Britain.' -- Daily Express: 'The report’s author Toby Lloyd said: “Social justice demands that the gains in land value be shared more equitably with the community than at present, and a tax system that could stabilise the housing market and reduce the chances of booms and busts is in everyone’s interest. With an annual Land Value Tax, all land would be taxed on the unimproved site value... we are not talking about a tax on property values.'

'Most forms of direct taxation are inevitably a disincentive to enterprise and work. The advantage of a land tax over other kinds of tax is that it is in principle based on pure space and need not be a disincentive to either capital or labour. ...indeed it provides a positive incentive to use land wisely and not to hoard it. It is also one of these rare things: a redistributive measure with few adverse kickbacks. (Land ownership is far more concentrated than wage income or even capital ownership.) I suspect that the main reason for popular lack if enthusiasm for a land tax is the suspicion that it is not a genuine tax reform but an addition to the total tax burden, if not a stealth tax at least a backdoor tax. And who is to say that popular opinion would be wrong? It is therefore very important that some other highly visible tax is removed or reduced at the same time. A land tax should not be introduced in the context of a general tax-raising budget.'

'INSUFFICIENT attention has been paid to the ways in which the chaos makers in the land market shape our destinies. Land supply is in fixed supply in those places where people need to live, close to the opportunities for employment. ...speculation in land pushes its price beyond affordable limits ...instability manifests itself in myriad forms of conflict that torture the industrial economy (labour relations, unemployment, etc). -- The treatment of rent as a public revenue would eliminate the acquisitive force behind the booms and busts. The fiscal reform proposed here would ensure that the short-term private interests of the individual would converge with the long-term interests of the community. This would enable people to plan the accumulation of savings over their earning lifecycle to the point where the price of capital would drop to very low levels: it would be at this point that poverty and unemployment would be permanently eliminated within a system of sustainable development.'

'We should untax people's wages and savings: conventional taxes inflict deadweight losses on incomes. Instead, public services could be funded out of rents that people were willing to pay for the benefits they enjoy at a particular location. That is efficient. Productivity would rise and speculation in gains from land would fall. It is also fair. It is the voluntary, self-assessment approach in which payments are direct and proportionate to the public services people want to use. -- Politicians of all parties should champion a simple ad valorem charge on the location value of all land - excluding improvements such as buildings. A high enough rate would end boom and bust cycles and establish a new relationship between citizen and the state. The interface between the public and private sectors would be redefined, and many of the disputes that divide our communities would be resolved.' -- More: http://renegadeeconomist.com/video

'The Renegade Economist goes to New York to hear Dr. Michael Hudson's views on the state of the US Economy.' -- Explained.

No one looked at the bubble in land prices.

On the ideal size of government: "The issue is not how large government is, or how much the government takes in revenue, but *how* it takes that revenue."