Putting Land and Power Back into Economics

In The Wealth of Nations, Adam Smith wrote, “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.” By land, Smith and the “classical” economists who followed him meant all natural resources. The landlords were the ruling class, heirs of the conquerors of the territory, deriving their “rent” from the mere privilege of having titles granted and protected by the state. Smith and the others argued that the best tax was one that fell on the market value of land, collecting the landlords’ rent. “Neoclassical” economics was invented in the late 1800’s by John Bates Clark to pull the teeth from classical economics by merging land into capital–partly in response to Henry George and other reformers who sought to implement land taxation. Rethinking the Economics of Land and Housing, by three British economists, puts land and power back into economics. It also provides an enlightening history of British postwar housing policy, which has gone from building inexpensive rental housing for the working class, to pumping up property values for the ownership class.

READ THE REVIEW from Dollars and Sense November/December 2017

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