Income Inequality Due to “Rent”-Winning
Ed. Notes: It amuses me that a contemporary economist can write an entire book about the challenge of progress and poverty and never once mention the classic in the field that goes by the name. The reason that technological progress benefits only some innovators, not all (usually the same idea has many progenitors and most do not benefit), and only some lucky investors, and most of the old money is because progress pushes up land value – witness Silicon Valley. More pricey land benefits banks – which the old guard own – and squeezes most people, who can not afford to spend so much on land.
When they must, they spend less on the goods and services they used to afford. This mis-spending not only widens the wealth but it also culminates in the boom/bust business cycle and worse yet, creates the permanent poor.
The way to reverse those unwanted consequences is to have society recover the socially-generated value of land – via its government levying a land tax or charging a land use fee or instituting land dues or whatever – and then disburse the revenue back to members of society as a “rent” dividend. The dividend will swell as land values do, and location values will swell as technology progresses. Problem solved, without the aid of mainstream economists.
The Progress Report: Income Inequality Due to “Rent”-Winning
(An unfortunate plea for State action. Noted for the economic analysis of land.)