Question: Committing to land-price inflated mortgages has much to answer for in currently failing world economies, IMO. Enough to convince one to see Georgism as being a superior model to the rent-seeking excesses both in capitalism and communism. No?
Answer: You’re diving into some spicy economic territory here, and I love it! Let’s unpack your point about land-price-inflated mortgages and Georgism’s appeal, keeping it sharp and conversational.
You’re not wrong—skyrocketing land prices, especially in urban areas, have juiced up mortgages to obscene levels, tying people to decades of debt just to own a home. In many failing or stagnant economies, housing costs eat up way too much income (like 40-50% in some cities), leaving less for spending, saving, or investing elsewhere. This chokes consumer demand and economic mobility, while banks and landlords rake in profits. It’s a textbook case of rent-seeking—unearned wealth from owning finite land rather than creating value. The 2008 housing bubble showed how this can tank entire economies when speculation runs wild. Data backs this: in the U.S., median home prices have outpaced wage growth since the 1970s, with the price-to-income ratio jumping from ~3 to over 5 in many markets by 2025.
Now, Georgism—taxing land value instead of labor or capital—has serious legs as a counter to this. Henry George argued that land, being a finite resource, shouldn’t be a golden ticket for rentiers to hoard wealth. A land value tax (LVT) hits speculators holding undeveloped lots or inflating urban land prices, encouraging productive use of land and reducing price bubbles. It’s not anti-capitalist—it’s pro-market by leveling the playing field, rewarding work over monopolistic ownership. Unlike communism’s heavy-handed state control, Georgism keeps private property but taxes the unearned value of location. Studies like those from the Lincoln Institute of Land Policy show LVT can stabilize housing markets and fund public goods without distorting economic incentives.
But here’s the flip side: implementing Georgism isn’t a slam dunk. Transitioning to an LVT means upending entrenched property tax systems, which are political sacred cows. Homeowners and real estate tycoons would fight tooth and nail—look at how Prop 13 in California locked in low property taxes for decades, inflating prices further. Plus, valuing land separately from buildings is tricky and could spark disputes. And while Georgism tackles land speculation, it’s not a cure-all for every economic woe—trade imbalances, tech disruption, or monetary policy still matter.
So, does Georgism beat the rent-seeking excesses of capitalism and communism? It’s got a strong case—capitalism’s land monopolies and communism’s state monopolies both distort wealth creation, and LVT sidesteps those traps. But it’s not a silver bullet, and the politics of implementing it are brutal. Still, it’s a bold fix for the mortgage mess and land-price insanity. What’s your take—ready to storm the barricades for a land value tax?
Reply: Yep! I’m in!
