Thorstein Veblen had much to say about escalating land prices, particularly in the context of speculation, absentee ownership, and the broader dynamics of American capitalism. He viewed rising land values (especially in urban and real estate contexts) as a prime example of predatory, non-productive “vested interests” extracting unearned gains at the expense of industry and society.

Veblen critiqued how urban real estate speculation drove up land prices as a major avenue for wealth accumulation in the late 19th and early 20th centuries. He described America’s rapid urbanization as essentially a “great real estate game” — a zero-sum pursuit where promoters and absentee owners sought “something for nothing” through inflated land values, often fueled by credit, banking, and hype rather than productive effort. In his analysis, land rent and escalating real estate prices became intertwined with high finance. Banks financed speculation, turning real estate into the economy’s largest asset class and a key driver of inequality.

Public investments (like infrastructure) often boosted land values, but the gains were captured privately by speculators and absentee owners rather than benefiting the community. This theme appears prominently in works like Absentee Ownership and Business Enterprise in Recent Times (1923), where he extends his critique of absentee landlords and rentiers to modern corporate and financial forms.

He also touched on speculative inflation of values (including real estate) in The Theory of Business Enterprise (1904), linking it to credit expansion, rising prices during prosperity eras, and eventual crises when bubbles burst.

Veblen’s perspective echoes some ideas from Henry George (on unearned land rent) but emphasizes institutional and financial symbiosis more than single-tax solutions. Modern interpreters (like economist Michael Hudson) highlight Veblen’s foresight: he saw real estate speculation and rising land prices as symbiotic with finance, diverting resources from technological efficiency toward rent-seeking.

In short, Veblen didn’t just note escalating land prices — he saw them as emblematic of dysfunctional “business” interests sabotaging productive industry for pecuniary gain.

….. as the west has become bogged down in railing against Chinese “communism”.

It appears that China’s intensive productivity will defeat what’s left of the west’s productivity after its speculation in asset prices and war mongering?

Oh, but we respect ‘human rights’, ‘freedom’ and ‘private property’, and they don’t, don’t we?

Do we ……. really?

~~~~

The Georgist theory of change, though valid, has proven a little lonely. It goes something like this: –

1. If we were to tax land rents–in the widest sense of the word ‘land’ (that is, all the economic rents of our natural resources), and un-tax incomes and purchases: –

2. then land prices must decline because land prices represent the private capitalisation of uncaptured rent;

then private mortgage debt will decline, because the land component, now more than 80% of the cost of a home, must decline (because of the point above); 

then miners will also pay their fair 50% EBITDA share to the nation, i.e. before taxation, because that is what is required as rent from any other commercial ‘going concern’. (Why have they been exempted?); 

then all prices will decline at least by the amount of taxation which has been reduced (as the extent of publicly-captured, publicly-generated rents rise), because, unlike rents, all taxes are passed off into prices; 

then commercial ‘super-profits’ will decline, including the internet-based giants paying their proper share of the electromagnetic spectrum rents, because more of their rents/super-profits are being captured to the public purse.

3.  Thereby, then the world will regain productivity, progress and prosperity, without poverty, because reinvigorated economies would also be able to deliver a dividend to all their citizens from surplus economic rents – and there’s plenty there! (Like 50% of the economy, ATCOR and EBCOR)

Why then have Georgists been unable to sell such a great story to the public? Could it be because they’ve been opposed by powerful vested financial interests, including banking, real estate and media?

It might prove valuable to revisit the Georgist theory of change when the US, UK and Australian real estate bubbles burst shortly then, because Georgism explains the boom-bust phenomenon precisely.

Peter Smith

Admonishing politicians for their airfare costs has become something of a sport. Another shock jock was on about it again on radio 3AW this morning.

There are bigger issues that never get a mention.

Yes, politicians do need to be answerable, but the amount of a first class air ticket is a pimple on a pumpkin compared to the far greater rort, namely, commodifying land, and the attendant speculation in land prices. Together with the taxing of purchases and earned incomes, high land prices act to generate impossible levels of mortgage debt, dispossession and poverty.

Put into perspective, petulantly challenging politicians on the amount of their air fares seems juvenile in comparison to political inaction on the extent of our escalating real estate prices. They’re certainly not evidence of a true ‘market’. Taxing land values more and abolishing many other taxes as a trade-off, as recommended in the Henry Tax Review, offers hope of putting a lid on out-of-control real estate prices.

Why won’t shock jocks take a peep at Australia’s ten trillion dollars in land prices sometime? That amount represents $375,000 for every man, woman and child in Australia. The mounting level of mortgage debt suggests that another massive financial collapse is at hand.

Have the banking and real estate industries become too big to challenge? And that warm inner glow as our property prices continue to rise is hard to resist – repetitively devastating socio-economic outcomes notwithstanding.

So, I guess all of us just keep our mouths shut on unpopular, though effective, tax and land reform solutions, 3AW?

…. WITH CURSORY ACKNOWDEGMENT ONLY OF THE SCIENCE BEHIND P – R = W + I

And little understanding that land prices are a measure of our economically pathological state.

Maybe another cash bribe in order to sell even more of the terribly regressive GST, from which companies and overseas ‘investors’ are excluded?

It also looks like we may be in for further Dick Turpin-like ‘road user charges’. How incredibly stupid would that be!

Stand and deliver!