Land doesn't matter in an advanced economy

Monday, 07 September 2009 13:30
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A response on Richard Murphy's Tax Research web site...

"The apportionment of land currently is due to all manner of historical accidents, and none of it is "fair". But any attempt to redistribute it "fairly" would lead to a Zimbabwesque collapse by taking land from those productively using it and handing it around willy-nilly to people who would probably be less productive on it. Still, there is an argument for a one-off redistribution if you want to risk the chaos. I don't, but that's just me.

"The point is, in an advanced economy land ownership just doesn't matter very much. There is plenty of land available for rent, and very few of us need much land to sustain ourselves. Many businesses can be run from a single office. Richard Murphy doesn't need rolling acres of farmland to be a prosperous economist. So in an advanced economy, we don't really need to worry about land. Yes, it's irksome that the Duke Of Wotsit makes lots of money from rents because his distant ancestor did something for the king, or whatever, but it's not the end of the world.

"In a free (or indeed mixed) economy, there are so many options for prosperity that we can step beyond arguing about land taxes; it's just mad old Henry George's obsession that refuses to die. Even Karl Marx derided him as a monomaniacal nutter. Prosperity in an advanced economy is not tied to resource ownership. It is tied to productivity. A carpenter does not need to own a forest; he makes his money turning low value wood (which he purchases) into high value furniture. It doesn't matter whether the tree farm is in his own country, or another, even. Resources don't matter. What matters is how much value you can add, that's all"

So now we know. It's an uphill struggle.
 

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