Parables, Analogies and Teaching Stories

In the early years of the 20th century, a Baltimore Quaker named Lizzie Magie developed The Landlord's Game as a way of teaching the ideas of Henry George.   Most of us have played the board game, Monopoly, which was first published in the 1930's, and would find the structure of The Landlord's Game very familiar.

Apartment/Hotel - George


Nic Tideman:  Global Economic Justice, followed by Creating Global Economic Justice

To rearrange and condense George's axiom about natural opportunities:

The equal right of every human being to the use of all that nature offers is natural, inalienable and limited only by the equal rights of others.

How would acceptance of this axiom affect relations among nations?

To see the matter clearly, suppose first that the world consists of just two agricultural island nations, with equal populations but different amounts of land of a uniform quality, and no rent differentials arising from differences in location. Suppose further that each island is initially governed by an oligarchy that collects all of the rent of land and provides no public services, but leaves the population otherwise free to produce what they choose. If the people of this world come to an understanding that the equal right of every human being to the use of all that nature offers is natural, inalienable and limited only by the equal rights of others, they will see that justice requires them to share the rent of land equally rather than have it collected by the oligarchies.

Would they then divide the rent of each island nation among the people of that nation? No, they would not. From the clear meaning of the words, the people of the nation with more land would understand that they, as a nation, were appropriating more than their share of a common heritage to which the people of the other nation had as much right as they did, and that they were therefore required to compensate the people of the other nation.

Consider some forms that such compensation might take. One possibility is that everyone with exclusive use of land would divide the rental value of his land equally among all persons. This would be equitable, but it would have a very high transactions cost. The conceptually simplest way to compensate for unequal appropriations of the common heritage is to have everyone send to a clearing house the full rental value of the land to which he has exclusive access. The clearinghouse would then divide the proceeds equally among all persons in both nations.

While this is conceptually simplest, it entails transferring more money than necessary. It would suffice for each person with more than his share to send the difference between the rental value of his land and the global average rental value per capita. This would provide a fund that would exactly suffice to compensate every person with less than the global average per capita amount, for the difference between the average and his holding.

With people organized into two nations, it would probably be convenient to have the excess rent sent not to a global clearinghouse, but to a national clearinghouse. The clearinghouse of the larger nation would then send the clearinghouse of the smaller nation an amount of money equal to the rental value of the amount of land by which nation's area exceeded half of total land. Both clearinghouses would then have just enough money to compensate their citizens who had less than the global average per capita access to land.

The assumptions of just two nations, equal populations and land of uniform quality simplify the identification of what one nation owes the other. It is easy to dispense with these assumptions. When there are many countries, land quality varies, and population sizes differ, a nation is fully entitled to what it is using, taking account of the equal entitlements of the citizen of other nations to all that nature offers, if its average rent per capita is no greater than the global average rent per capita. If the nation's rent per capita is greater than this, it owes compensation equal to the excess of its aggregate rent above the product of its population and the global average rent per capita.

Note that an equal sharing of natural opportunities does not imply either that people derive equal satisfaction from their shares of natural opportunities or that what constituted one person's share will remain constant over time. If you are the only person who likes mountain top land, you may be able to obtain a great deal of it as your share of what nature offers, and be much more satisfied than those who like land in valleys and have to compete with many others who want valley land. If mountain top land becomes more popular, the amount that constitutes your share will decline.

Now suppose that nations are not entirely agricultural, but have cities as well as agricultural areas. Cities have streets, water systems, sewer systems, and a variety of other public services that raise the rental value of land. How does this additional source of rent affect the compensation process? Recall the principle:

The equal right of every human being to the use of all that nature offers is natural, inalienable and limited only by the equal rights of others.

Streets, water systems, sewer systems, and other public services are not offered by nature. The additions to the rental value of land that these services provide are the product of the human effort that goes into creating and sustaining them. Thus the increases in the rental value of land that arise from them are not part of what must, by the application of our axiom, be shared among nations.

This distinction between rent to which all persons have equal rights and rent that is properly the income of a particular community creates a problem of assessment. To fulfill their obligations to people in rest of the world, the people of a city must know what the rental value of the land they occupy would be if the city were not there. How can they know this?

This assessment problem is formidable, but not a reason to abandon the effort to achieve equal rights to natural opportunities. In principle, the pre-development value of the land beneath a city is the difference between the rental value of the land when developed optimally and the annual cost of that development. One might call upon city planners or the developers of new towns to make such estimates. Even if we could not achieve complete precision in such estimates, we might achieve substantial agreement. It would be a great step in the direction of equal rights to natural opportunities if each nation were to make a declaration of the form, "This is what we believe to be the pre-development value of our land, and of the land in the rest of the world, and this is the basis for our belief."

What has been established so far is that adherence to a principle of equal rights to natural opportunities requires payments among nations to offset inequalities in the value of natural opportunities per capita, that natural opportunities are exemplified by the pre-development rental value of land, that significant difficulties can be expected in identifying these pre-development rental values, and that such difficulties are not a sufficient reason to abandon all efforts to identify the pre-development rental value of land....  Read the whole article