Answers Answers: how to save the world

To see how land rent ends war, we need to understand three things:
1. Land rent will spread around the world
2. Land rent nations operate like any other big business, except...
3. ...land rent nations have moral authority

Land rent spreads round the world

Land rent provides more money and more freedom, so will naturally be copied. Any nation that does not copy will fall further and further behind, until it acts as merely a sweat shop for land rent nations.

Land rent turns a nation into an efficient business with a clear bottom line (the land rent people are willing to pay) business, so land rent nations will compete, evolve and expand at the same speed as large corporations.

A corporate world, but no down side

Land rent becomes a big business, but without any of the disadvantages of big business:

1. No unpleasantness: Today's corporations can profit from damaging the environment, from harming competitors, and from harming their employees. But land rent measures the total value of everything that happens within a town or nation.

2. No excuses: A corporation can say "it's not my fault." Anything that happens within their borders is their fault, and land rent lets you easily compare their performance with others.

2. No "too big to fail:" Today's corporations are so deeply entwined in our lives that they are "too big to fail." Democracy allows any government, no matter how big, to be replaced in a matter of weeks.

4. No hiding place: Today's corporations can pay tax in tax havens and threaten to take work overseas. But a government is by definition tied to the land: they have to make your life better or be replaced.

5. No unjust laws. Today's corporations can benefit from unjust laws. land rent allows everyone to choose their ideal government, so unjust laws cannot survive.

6. No unjust wealth. Today's wealthy people can invest in land, then sit back and watch the rental value come in. But land rent uses that rental value to benefit everyone. With land rent you can only make money by actually creating something useful.

No wars between or within land rent nations

All wars can be traced to a desire for land, or a desire for autonomy. Land rent means nobody profits by simply owning land - they have to pay land rent on it, and can only profit by doing something useful. And land rent allows anyone to have their own ideal laws.

So as land rent spreads, the possibility of war disappears. Also, wars make life unpredictable and disrupt trade, and businesses hate that.

And no terrorism

Terrorism is a mixture of war and crime. That is, bombs used in a criminal way. By removing the motive for war and the possibility of crime, terrorism becomes impossible.

Removing tyrants is just good business

Removing tyrants becomes a simple calculation: How much land rent before? (Very little: tyrants are inefficient.) How much land rent after? How much would the liberated people be happy to pay? (If they're not happy they'll vote us out. But citizens of the worst dictators would absolutely love their nation to become a new state of the USA.) How much would liberation cost? Are there any other benefits? (E.g. it gets us votes; the liberated nation contributes to world trade) Are there any other costs? (E.g. unpopular wars are very costly.).

Note that this only attacks the very worst tyrants. The very worst, by definition, provide nothing that their people want. In other words, their countries are very weak and their people would welcome efficient government. Other governments are perfectly safe.

War without war

The calculation becomes so clear, that actual war will not be necessary. If you are a dictator in a world with land rent, you watch your rankings. As soon as you get near the bottom of the list of evil dictators you better pack your bags: that, or suicide, are your only options.

War without the insurgent quagmire

If you liberate a country in order to install a land rent based system, insurgents cannot win:

1. Land rent liberation is easy. As a simple profit and loss calculation, only the weakest of dictatorships would be targeted, and only one at a time. (Note that land rent ends the problem of terrorism, so there would be no 9/11, and no pressure to invade nations like Iraq and Afghanistan.)

2. Land rent is popular among common people in the developing world. Most developing countries have a small minority of visible land owners who pay no land rent, arousing great resentment among the masses.

3. Land rent is popular among insurgents because it lets them form their own government among their followers. With land rent, the central federal government can never gain more power than the regions want to give it.

4. Land rent destroys all hope for insurgents. Insurgents put up with difficulty because they know that one day the invader will grow weary and leave, then the insurgents will be in power. But land rent liberators stay and form a proper government.

5. Land rent liberators do not impose their culture. They simply run an efficient business that lets local people have their own form of government.

6. Land rent liberators cannot steal oil. Oil-rich land has extremely high land rent. This is a simple calculation, unlike the complex secret deals and taxes of the current world. The government spends that land rent on benefiting the nation, or you vote in another government that does.

7. Land rent liberators have international support because it's just good business: they target the weakest dictatorships in such a way that everyone profits.

Land rent is simply a more efficient way to get what you want. E.g. if you want valuable land then you pay those who make land valuable. If you want goods and services you only pay those who create the goods and services. This increases gross national product in every way:

Big improvements in the first few years

Efficiency
Land rent is much easier to collect and harder to avoid than tax. So billions of dollars are saved, entrepreneurs no longer waste their time, and accountants are free to do productive work instead.
Work
Land rent quickly leads to full employment.
Investment
To compensate land owners, government will need to inject a massive amount of capital into the economy: up to three times the GDP. (This is paid back by the expanding economy.) Land owners will invest this in industry, in order to earn a better return than they used to get from just holding land.
Demand
Demand for goods increases because of new jobs. And most people who already had jobs do not own much land, so they see their income increase as taxes are phased out.
Raw materials
Land that is not used efficiently floods the market, reducing its price.
Trade
With no taxation, most industries have a great competitive advantage over other nations.
New businesses
Large foreign companies will flood into the first large developed nation to end all tax.

Improvements every year forever

Efficient spending
Every penny of land rent goes to benefit society in the most efficient way possible. In contrast, money spent on land at present is spent in the way that benefits the land owner the most.
Entrepreneurs
With more investment, more raw materials and no tax, entrepreneurs flourish.
Training
More employment, more entrepreneurs and less reliance on government welfare means there is far more incentive for individuals to train. A better trained workforce will constantly increase productivity.
Efficient costs
Land rent is also vastly simpler than taxes to administer, freeing up the nation's brightest minds for more productive work. Also, businesses no longer make sub-optimal decisions just to save tax.
Capital for labor
Any machinery that is not land intensive is now much cheaper, allowing for a faster upgrades of equipment.
Mobility
Since land costs almost nothing (other than land rent), it becomes very cheap and easy to move.
Competition
Increased demand, entrepreneurs, mobility and lower prices mean competition increases.
Stability
Most recessions are fueled by property speculation: for example, the 2007 sub prime lending, or the 1980s Japanese property price boom. land rent means there is no profit in land speculation, so no property-fed booms and busts. This enables businesses to predict the future more accurately, thus increasing options and profits.

Long term: better government, almost no crime, and more information
Even greater benefits come in later years, as discussed elsewhere.

The effect of land rent can be quantified in a number of ways.

1. Established models of elasticity: 40% increase at first
E.g. land use is inelastic (taxing land does not reduce the amount of land) but work is elastic (taxing work means less money is available to pay for new work). By applying normal measures of elasticity, land rent typically causes a 40% increase in GDP. One such calculation indicates that each family in the first world should have $100,000 extra each year. For details, see the objections page. Note that these models only look at one time improvements, and do not include increased growth rates due to other factors listed above.

2. Add up all the little improvements: long term doubling of economic growth
Each of the improvements adds a percentage increase to the size or efficiency of the economy. Even the tiniest change - such as less time spent on complex forms - can save many billions For details, see the objections page. If increased efficiency adds 1% to productivity and full employment adds 1% etc., we easily come to forty percent one off improvement then a permanently doubled growth rate.

3. Compare other economies in "catch up" mode: seven percent per year
Consider the glaring weaknesses in the current system:
* roughly a third of our net wealth is spent on rent, with no benefit beyond the random.
* taxes discourage work - forty pecent of our income is spent actively discouraging wealth creation!
* there is no simple, objective way to measure the return on taxation.
* ten percent of the workforce does not even work
* half of those who do work are not motivated - they dislike their jobs but don't have much choice
* and so on
These are massive, obvious and fundamental problems that can be rapidly fixed. We are in the same position as developing nations who lack basic infrastructure. Nations in this condition can quickly catch up, growing at a rate of ten percent per year over several decades.

Worst case scenario: it still works
The forecasts in this work are based on just seven percent growth, with a worst case scenario of just one percent above the no-land rent baseline, and land rent still works, making everyone rich.

Land rent measures everything about the desirability of a location, in other words, it measures how happy you are to live there. In other words, it measures happiness: land rent measures everything that is worth measuring, and in the simplest possible way, a way that makes it easy to compare. Better yet, this measures real wealth, in real dollars. land rent allows all good and bad to be calculated precisely.

Examples:

If a teenager throws a stone through a house window, how bad is it? Land rent will tell you precisely. Throwing stones through windows will affect the reputation of a street. A typical house costing $100,000 can easily have its value reduced by £1000. If a street has 100 houses, that stone destroys £100,000 in real wealth.

Similarly, if someone runs a youth club, how good is it? By the same measure, land rent would show that a youth club might create £100,000 a year in real wealth.

Land rent can therefore put a real value on all behavior, rewarding the kind and gentle and helpful and punishing the unkind, violent or unhelpful. Land rent is like turning on a light and seeing the real truth in any action or society.

With land rent, government becomes a business

Land rent provides a simple bottom line for government. The profit or loss is how much land rent the government creates.

This allows a government to behave just like any other business: if it does well, it will attract more customers (those who can easily move house) and please shareholders (those who own its land). If it does badly, the board (governing party) will be replaced.

Extreme competition

With a single, easily understood, objective measure of effectiveness, parties will compete to maximize land rent in every area. Note that this is a virtuous circle: being able to charge more land rent means an area must be more attractive. That land rent is then used to pay for services that make the area even more attractive.

If a government ignored an opportunity to make an area attractive, it would be easily measured in terms of lost land rent, and would be a clear case of negligence, for which the party will pay at the next election.

Make an offer to your government

If your village decides that it wants a local change to the law, it can very easily make the central government an offer it cannot refuse: measure the current land rent and current government expenditure on an area, and offer a better deal.

This is no different from making an offer to any other business: if your offer helps their bottom line and their industry is a competitive one, they will accept or risk losing to a competitor.

Note that this kind of deal is simply not possible without land rent: calculating the total tax paid by a region is extremely difficult,a nd proving that a particular course of action makes more money is also extremely difficult. But land rent makes it easy.

Choose your own government

As each town and village tweaks its own laws, they will develop their own unique character and attract people who like what they offer. After a few years, regions will evolve with very distinctive sets of laws. In other words, their own semi-autonomous local government.

No Balkanization

Land rent ensures that all regions get on well together. Any bad relations make an area unattractive (or costly for security), which reduces the land rent available, so the central government does not allow it. Note that the central government is strong (it decides who does what) but always allows any profitable idea. Government simply becomes good business.

Rapid improvement

Land rent makes it easy to see which kind of government does best, so most towns will copy the best ideas, and become wealthier and more comfortable.

Any kind of government you want

Does this mean only money obsessed governments can survive? No, any group can have its own government even if it has a low income..

Example: Say you want to live in a rustic, old fashioned village. All you need to do is find some poor land far from any town, where land rent is very cheap because nobody wants to live there. Then make some permanent contract with the government, paying them a little more land rent than they would otherwise expect to get. Your friends then irrigate it and build our own little cottages, making the area more attractive. But the land rent will never go up beyond our contract, because none of this wealth is created by the government.

What if the government sees the improved site and tries to raise the land rent anyway? Land rent is such a simple idea that the contract will be very plain. Any government that tries to break such a clear contract will lose the confidence of the electorate and be voted out.

If you don't want to live in the middle of nowhere, just find a high rise apartment: land rent is only charged on bare land, not on buildings. If a thousand people share the same land then their individual land rent will be extremely low. It will be easy to offer the government a premium in exchange for whatever freedoms you require.

A better environment

Land costs money, so people will use less of it, resulting in more wild space. This also means more compact cities, so efficient public transport becomes economical and everyone is just a few miles from open spaces. Ugly developments reduce land rent, since nobody wants to live there, and the loss of land rent can be charged to the developer who caused it. So all new development will be attractive.
Meanwhile, parks increase the value of surrounding land, so land rent creates more parks. It is largely thanks to Henry George that New Yorkers have Central Park.

And end to the crisis of global warming

All the problems of global warming are problems of poverty. Deserts only increase if the local people are too poor to adapt (e.g. by irrigating and planting trees). Nobody will object to leaving an island if they are rich enough to live on an even better island. By solving poverty, land rent solves the most serious problems of global warming.

And end to the cause of global warming

Global warming occurs because people do not measure the true cost of fuels: nobody would burn oil if they had to pay the full long term cost. Land rent creates a culture of measuring real values and not just short term local gains. When people are used to measuring the real land rent value of parks and beauty then they will be more ready to measure the real cash value of nature in general.

Also, land rent allows everyone to choose their own government, so we will soon see who the smart people are. Then if the smart people then say "stop using oil" we listen.

And so many other advantages

The list of advantages from land rent is endless. How could it be otherwise? Land rent simply puts reason and ethics at the heart of an economy. That leads to ideal government, based on making people happy. Naturally everything else falls into place. Land rent just means running the world properly.

Land rent provides so much new wealth that governments can afford to fully compensate land owners, and land owners then make far more money than before.

Land rent benefits investors
Investors can make even more money by investing away from land, due to the expanded economy.
Land rent benefits home owners
Most home owners pay more in tax than the rental value of their home, so even with land rent they still gain.
Land rent benefits building owners
Building become more valuable as they are no longer tax liabilities, and trading in buildings is much easier as land rent removes the unit cost of buying land.
Land rent benefits owners of parks
Parks increase the value of the surrounding land. Heritage owners often create more land value than they use, so would pay only a nominal rent.
Land rent benefits most land intensive businesses
Businesses that are land intensive (such as farms) will pay more land rent than they previously paid in tax, but so do their competitors, so they have no disadvantage. However, they will all benefit from all their other costs being lower, due to the healthier economy.

The transition can be gentle and painless
There are several ways to move gradually and painlessly toward land rent:

Option 1: tax by tax
Find the least efficient forms of tax each year and replace them with a small increase in land rent each year.
Option 2: house by house
Allow individual businesses to opt for land rent individually. Gradually adjust sticks and carrots to encourage a steady switch over.
Option 3: field by field
Start with the most obviously underused land, and gradually spread the system until it reaches the hardest cases.
Option 4: do nothing
Land rent is a more profitable way to run a government. Sooner or later some other nation or region will try it, and our nation will either copy or become irrelevant.

Government finance is simple. Government creates the value of the land, so they can claim it back as rent. It's rational, it's honest, it's simple. End of story.

Yet instead, governments insist on stealing our money. If we earn money they take some of it, and threaten us with jail if we disagree. It's nothing more than robbery with the threat of kidnap. If I earn money then I earn it. The government does not earn it.

Land rent is not tax. Tax is a transfer away from the one who created wealth. Land rent means returning wealth to its rightful owner.

Excuses for taxation

Government offer services in exchange for the stolen money. But that just makes me an accomplice to the theft.

Governments claim to have a social contract, but I have no choice to pay tax. If I don't I am put in jail, through violence if necessary. Any contract obtained through violence is not a valid contract.

Taxation claims to be progressive: you only pay what you can afford. That is the classic justification of all thieves: "it's OK to take his money because he can afford it!"

But land rent is far more progressive than taxation: if you don't want to pay land rent, don't own land. Simple as that. Anyone who wants to earn money will of course want to own land and pay what it is worth. (Note that land rent always costs less than tax, yet pays for the same things: click here to find out why.)