Nature is both natural and ethical – as are the laws of distribution in economics.

The natural distribution of production is to land, labour and capital, as rent, wages and the return to capital (the latter not being money, but the goods employed in the production process). Interest as the natural return to capital was the original sense of ‘interest’, a term debased and confused with the more appropriate term ‘usury’. The natural distributional equation therefore is that production goes to rent wages and interest, i.e. P = R + W +I.

Rent, being the surplus product (the net national income or ‘economic rent’) is owed equally to all citizens and needs to be captured publicly to protect the currency from inflation instead of taxing labour and capital as now (thereby destroying the natural flow by being extracted from earned incomes). This has a doubly destructive debt-inducing effect, as taxes on labour and capital are immediately passed off into the price of goods and services. In the natural order, with rent as the public charge, competition between producers at different locations ensures that it can’t be passed on, as rent isn’t a cost of production.

So, once adjusted for the public charge, the distributional equation then becomes P – R = W + I. Arbitrary taxation, as such, doesn’t appear in the equation until we mistakenly introduce taxes to aid the rent-seeking in unearned incomes.

Of course, a nation may additionally deem it necessary to tax ‘bads’ such as pollution and smoking, to ensure environmentally and socially just outcomes, but the removal of the destructive features of the taxation of labour and capital is obviously beneficial socially and economically.  

The argument that there may not be ‘enough’ rent demands the question: “Enough rent for what?” Just as a national government having its own currency doesn’t spend its taxation on programs, neither does it spend publicly-captured rent. It simply spends money into existence into the private sector and doesn’t need to ‘borrow’ to ‘fund’ its deficit budgets. In fact, by taxing unearned economic rent out of the system, instead of governments literally stealing from wages and profits, part of the many salutary benefits of doing so would be the ability for national governments to be able deliver a non-inflationary living wage universal income to all citizens. This would abolish poverty, dispossession from land and much private indebtedness in one fell swoop.  

We need to consider this seriously and act upon it before the financial collapse due to hit the world in 2027 following the 2026 collapse in real estate prices.