Land is pretty important. All wars are fought over land and territory.
So, I put this forward as the possible truth about inflation.
Bryan Kavanagh’s theory of inflation
- Taxes and land prices generate inflation which is passed on in prices.
- Public capture of land rent does not create inflation.
- The Consumer Price Index does not measure the inflation from taxes and land prices.
- Hidden inflation from taxes and land prices continues to rise until it can no longer.
- A deflation eventually sets in to wipe out land price inflation.
- This generates devastating financial crashes and social problems.
- As recovery from the process takes place, taxes remain on incomes and goods and services instead of on land values.
- The cycle of the tax regime inflating land prices is repeated.
Many blame money and debt as the generators of inflation, without bothering to concern themselves on what the debt was incurred and the money spent.
Beneficiaries from the pathological inflationary/deflationary cycle (“the natural business cycle”) are the few extraordinarily large owners of land values (not land areas). In the economics sense, ‘land’ includes all natural resources (land, mining, oil, electromagnetic spectrum, aircraft slots, &c.)
Inflation is a terribly big price to pay for obeisance to big land owners, particularly when the word ‘owner’ is said to come from the Middle English ‘owerner’: he who owes the rent.
Maybe we need to understand the near-uselessness of CPI as a measure of inflation? Real inflation is generated from the private capitalisation of land rent, land having no cost of production.