Land is the most basic of all economic resources, fundamental to the form
that economic development takes. Its use for agricultural purposes is integral
to the production of the means of our subsistence. Its use in an urban context
is crucial in shaping how effectively cities function and who gets the principal
benefits from urban economic growth. Its ownership is a major determinant
of the degree of economic inequality: surges of land prices, such as have
occurred in Australian cities during the last decade, cause major redistributions
of wealth. In both an urban and rural context the use of land – and
nature more generally – is central to the possibility of ecological
sustainability. Contemporary social concerns about problems of housing affordability
and environmental quality necessarily focus our attention on ‘the land
question.’
These considerations indicate the need for a coherent political economic
analysis of land in capitalist society. Indeed, the analysis of land was
central in an earlier era of political economic analysis. The role of land
in relation to economic production, income distribution and economic growth
was a major concern for classical political economists, such as Smith, Ricardo
and Malthus. But the intervening years have seen land slide into a more peripheral
status within economic analysis. Political economists working in the Marxian
tradition have tended to focus primarily on the capital-labour relation as
the key to understanding the capitalist economy. Neo-classical economists
typically treat land, if they acknowledge it at all, as a ‘factor of
production’ equivalent to labour or capital, thereby obscuring its
distinctive features and differences. Keynesian and post-Keynesian economists
have also given little attention to land because typically their analyses
focus more on consumption, saving, investment and other economic aggregates.
However, there is an alternative current of political economic thought for
which ‘the land question’ is central. This is the tradition
based on the ideas of Henry George. This article seeks a balanced assessment
of the usefulness of George’s ideas in the modern context. It outlines
how insights derived from Georgist thinking can help in dealing with contemporary
economic, social and environmental problems, while noting deficiencies
and additional concerns. Following a general summary of Georgist ideas
and policy proposals, six themes are addressed:
- the moral issue,
- wealth inequality,
- housing affordability,
- environmental concerns,
- urban development and
- economic cycles.
In each case it is argued that Georgist insights provide a valuable but
incomplete basis for analysis and policy. ...
Enthusiastic proponents of Henry George’s ideas have often presented
them as a panacea for the economic, social and environmental problems that
beset contemporary society. Indeed, the Georgist analysis does have much
to offer. By more adequately addressing land as a unique economic, social
and ecological resource, it can help to reveal underlying causes of currently
pressing issues such as declining housing affordability, growing economic
inequality, and environmental decay.
The Georgist land tax ‘remedy’ can also play an important role
in the redress of these problems. However, there are limitations to the modern
application of George’s ideas, as outlined in this article. While a
uniform land tax is a necessary component in addressing contemporary political
economic problems, it is not sufficient. It needs to be set in the context
of a broader political economic analysis and policy program, also addressing
public housing, urban and regional policies, environmental taxes and regulations, ‘floors
and ceilings’ to limit income inequalities and macroeconomic stabilisation.
While the Georgist analysis redresses the general neglect of land in modern
economic orthodoxy, it is important not to go too far to the other extreme.
In other words, the important emphasis on land should not come at the expense
of attention to problems associated with labour and capital and to the complex
forms of government policy necessary for the balancing of contemporary economic,
social and ecological concerns. The Georgist analysis needs to be integrated
into a comprehensive political economic analysis of contemporary capitalism.
So what does ‘putting Henry George in his place’ entail? It
means recognising the political economic importance of land and the potential
social gains from the extension of land taxation. Equally, it means recognising
the necessity of relating Georgist ideas and policy prescriptions to a broader
canvas of modern political economy, including the analytical traditions associated
with Karl Marx, J. M. Keynes, and J. K. Galbraith, and modern environmental
economics. Henry George’s place is in good company. ... read the whole article