Georgism is the idea that, although the improvements built on land can be owned by a private person, land itself cannot, being a part of the natural world which is by right the common property of all humankind. By this idea, anyone claiming exclusive use of a piece of land owes to the community a rent equal to the value of the unimproved land. This idea extends to all that is (or ought to be) the commons: natural resources, pollution, the EM spectrum, etc.
If you think about it this makes perfect sense: why is a small lot in a city (say central Paris) worth millions while a 10ha estate in the Australian outback worth a few thousand? Because of the community that throughout the generations built the city into a place with value where people want to live. It is therefore to the community that this economic value belongs.
Beyond the moral dimension of this proposal, there is also a surprising economic depth: this rent/"tax" would discourage unproductive use of land, as speculators cannot afford to sit in a property, wait for its value to go up, and collect the income from the hard work of the community around it.
I'll leave you with some quotes:
The tax upon land values is, therefore, the most just and equal of all taxes. It falls only upon those who receive from society a peculiar and valuable benefit, and upon them in proportion to the benefit they receive. It is the takingby the community, for the use of the community, of that value which is thecreation of the community. It is the application of the common property to common uses. When all rent is taken by taxation for the needs of thecommunity, then will the equality ordained by Nature be attained. No citizen will have an advantage over any other citizen save as is given by his industry, skill, and intelligence; and each will obtain what he fairly earns. Then, but not till then, will labor get its full reward, and capital its natural return.
—Henry George
Landlords grow rich in their sleep without working, risking or economizing. The increase in the value of land, arising as it does from the efforts of an entire community, should belong to the community and not to the individual who might hold title.
—John Stuart Mill
The underlying problem is the whole structure of our economy which has become more oriented at increasing rents than increasing productivity and real economic growth that would be widely shared in our society... but a tax on land rents would actually address some of the underlying problems. This is an idea that Henry George had more than 100 years ago but the analysis that I have done says it would actually go one step beyond Henry George. Henry George argued for a land tax because it was non-distortionary but this analysis says that a land tax actually improves the productivity of the economy because you encourage people to invest in productive capital rather than into rent generating wealth and the result of that shift in the composition of savings toward more productive investment leads to a more productive economy and leads to a more equal society.
—Milton Friedman (and believe me, I don't often quote Milton Friedman!)
Georgism really shines when applied to energy [1], maybe even better than to land. How ridiculously appalling we will appear to our far-future successors with "our" companies making trillions of dollars burning scarce resources because they can be easily "owned" while the big fiery explosion in the sky is unspent and for all intents and purposes unspendable, alas, also naturally un-ownable. The sun is one of the few current "georgist objects" in our present capitalist realism.
[1] From Conclusion, "[t]he petroleum industry is a perfect example of the way a Georgian tax system can be used to enforce communal interests in limited natural resources", Leeson, Joseph (2019) "A Georgist Perspective of Petroleum Taxation," Indiana Journal of Global Legal, https://www.repository.law.indiana.edu/cgi/viewcontent.cgi?a...
If you think about it this makes perfect sense: why is a small lot in a city (say central Paris) worth millions while a 10ha estate in the Australian outback worth a few thousand? Because of the community that throughout the generations built the city into a place with value where people want to live. It is therefore to the community that this economic value belongs.
Beyond the moral dimension of this proposal, there is also a surprising economic depth: this rent/"tax" would discourage unproductive use of land, as speculators cannot afford to sit in a property, wait for its value to go up, and collect the income from the hard work of the community around it.
I'll leave you with some quotes:
The tax upon land values is, therefore, the most just and equal of all taxes. It falls only upon those who receive from society a peculiar and valuable benefit, and upon them in proportion to the benefit they receive. It is the takingby the community, for the use of the community, of that value which is thecreation of the community. It is the application of the common property to common uses. When all rent is taken by taxation for the needs of thecommunity, then will the equality ordained by Nature be attained. No citizen will have an advantage over any other citizen save as is given by his industry, skill, and intelligence; and each will obtain what he fairly earns. Then, but not till then, will labor get its full reward, and capital its natural return.
—Henry George
Landlords grow rich in their sleep without working, risking or economizing. The increase in the value of land, arising as it does from the efforts of an entire community, should belong to the community and not to the individual who might hold title.
—John Stuart Mill
The underlying problem is the whole structure of our economy which has become more oriented at increasing rents than increasing productivity and real economic growth that would be widely shared in our society... but a tax on land rents would actually address some of the underlying problems. This is an idea that Henry George had more than 100 years ago but the analysis that I have done says it would actually go one step beyond Henry George. Henry George argued for a land tax because it was non-distortionary but this analysis says that a land tax actually improves the productivity of the economy because you encourage people to invest in productive capital rather than into rent generating wealth and the result of that shift in the composition of savings toward more productive investment leads to a more productive economy and leads to a more equal society.
—Milton Friedman (and believe me, I don't often quote Milton Friedman!)