LAND
REFORM


1. Is it right? Will it work?
2. Application
3. Examples
4. FAQ
5. How Much Rent Is There?
6. What if We Don't
Collect the Rent?

7. Urban Dilemma
8. Sustainability
9. Taxes: What Are
    They Good For?
10. Liberation
   Theology
    & Land Reform

Understanding Economics


The ownership of land is the great fundamental fact which ultimately determines the social, the political, and consequently the intellectual and moral condition of a people. And it must be so. For land is the habitation of man, the storehouse upon which be must draw for all his needs, the material to which his labor must be applied for the supply of all his desires; for even the products of the sea cannot be taken, the light of the sun enjoyed, or any of the forces of nature utilized, without the use of land or its products. On the land we are born, from it we live, to it we return again—children of the soil as truly as is the blade of grass or the flower of the field. Take away from man all that belongs to land, and he is but a disembodied spirit. Material progress cannot rid us of our dependence upon land.
— Henry George, Progress and Poverty

Huge tracts of useful, arable land lie idle, while hordes of willing workers struggle to find some way to support themselves. It takes no special training to know that something is terribly wrong. A tiny portion of the world's people own the vast majority of its wealth. And while we know that land isn't the only kind of wealth, we also know that land has always been the foundation of the world's greatest fortunes. Human beings cannot live without access to land; if they are compelled to pay land "owners" for that access, then they are, in effect, forced to pay for their right to exist. And yet, "Land Reform" is often seen as a discredited, leftist, anti-market ideology.

When we talk about concentration in land ownership, it is crucial to distinguish between land area and land value; the two are seldom synonymous. The largest landholding entities, in terms of area, are are oil and timber companies, holding many millions of acres. However, land in major cities is often worth millions of times as much per acre. Indeed, in terms of market value, the world's most valuable natural resource is not oil, or water or strategic minerals, but urban locations.

"First-world" nations have a large number of individual landholders; some two-thirds of all American families have title to some land. Of course, many have long-term mortgages — and therefore they actually own only a small portion of their land’s value. Still, many people are accustomed to seeing themselves as "landowners" — and resent any threat to their "property."

In "less developed" countries, especially in Africa and Latin America, land ownership is often extraordinarily concentrated. In these societies the land problem is not masked and diffused as it is in wealthier nations. A small group controls nearly all the land in a nation, and the need for land reform is keenly felt.

This reform — which has often engendered bitter controversy — usually consists of breaking up large estates, often with compensation to landlords, and making small holdings available to tenants on supposedly favorable terms. Thus, several small owners are substituted for a few large owners. Even if it does overcome its many obstacles, this measure does not take into account the changes in society, such as fluctuating populations, changes from generation to generation or the tendency of rural workers to move into urban areas. In many cases, the tendency to monopolization asserts itself and smaller holdings are taken over and absorbed into large estates.

If, on the other hand, a popular revolution — whose original goal may have been land reform — succeeds in installing a socialist regime, the result has often been the seizing of nearly all the land and capital in the nation. The rights of wealth producers are not upheld when their capital goods are seized and held as government property.

The Alternative: Land Value Taxation

Henry George’s brand of land reform, on the other hand, establishes equal land rights for all. It gives people the freedom to take as much 0r as little land as they can productively use — provided the obligation to society is paid. Thus, it enables the economy to progress under free conditions.

Henry George proposes to "abolish all taxation save that upon land values." (This has been called the "Single Tax.") Many nations already take some rent in taxation — directly, in the form of the real property tax. They would only have to make some changes in our modes of taxation to take it all. Many less-developed nations, however, lack systems for registering land ownership and assessing values. Establishing these procedures is often touted as the first necessary step to joining the modern world economy. A nation could modernize, while avoiding the modern world’s chronic economic problems, by simply retaining the rent of land for public revenue.

We must realize that the present system of "property taxation" is a tax on real estate, and real estate is comprised of two very different elements: wealth (buildings and improvements) as well as land. The first step toward implementing Henry George’s remedy would be to increase the levy on land and simultaneously decrease the tax on improvements.

Simply removing the tax burden on buildings would be an instrument of growth in both urban and rural economies — but George’s remedy would not stop there. Its ultimate goal would be to remove all taxation on the production of wealth, substituting the collection of the full rental value of land for public revenue.

 Liberation Theology and Land Reform