Highlights from Land is a Big Deal by Lars Doucet
Highlights from this book
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The common usage, both then and now, is “anything with an exchange value.” George doesn’t like how this mixes dissimilar things. By George, what is wealth? Wealth is produced when nature’s bounty is touched by human labor resulting in a tangible product that is the object of human desire.
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And by George, money isn’t wealth. Articles of gold are wealth because they’re tangible things that have been dug up, crafted, and fulfill certain human desires. But paper currency, digital currencies, and other things that aren’t inherently valuable but merely represent value are not wealth (outside of putting their physical articles in coin collections or making paper airplanes, and so forth). Now don’t get the man wrong, these things are certainly valuable. They’re just not wealth. They are certificates that represent claims on wealth. For any computer programmers in the audience, money is a pointer to wealth.
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By George, capital is “wealth devoted to procuring more wealth” and it is the next thing he insists everyone is hopelessly confused about.
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By George, all capital is wealth, but not all wealth is capital. George notes capital is often described as being “stored up labor” and endorses this view—but what it really means, is capital is stored up production. It is not literally the labor that’s stored up, but the wealth generated by it, set aside, and then dedicated to the purpose of getting more wealth. George insists that it is the owner’s intention that transforms wealth into capital. If you buy an old factory to throw parties in for your hipster friends, it is just wealth. But the minute you decide to put it to work to make something useful (or start charging your hipster friends a cover charge at the door) it becomes capital.
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By George, land is not wealth. And it is definitely not capital. The unique specialness of land is George’s entire schtick and the very core of his philosophy. The term land embraces, in short, all natural materials, forces, and opportunities. That means that a field or a meadow is “land,” as is a mountain. But so are the fish in the sea, the clouds in the sky, veins of gold in the earth’s crust, and the oil deep underground. These things aren’t yet wealth—not until human beings both a) desire them and b) touch them with labor.
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The important thing to grasp about land is that it comes before everything humans do or make, and is itself a thing no human can make.
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By George, we’re told that there are three factors in production: Land, Labor, and Capital. For each of these terms there must be a “law of distribution” that explains how each gets compensated for its part in production. The reward you get from production by owning Land is called Rent. The reward you get from production by supplying Labor is called Wages. The reward you get from production by supplying Capital is called … um, what? We’re looking for a term that clearly expresses the return to capital alone and nothing else. The closest thing we have is Interest, and that’s probably good enough.
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Rent, in short, is the price of monopoly, arising from the reduction to individual ownership of natural elements which human exertion can neither produce nor increase.
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Federal tax receipts in 2020 were $3.42 trillion, and operation costs for the IRS were $12.3 billion (IRS, 2021), or 0.36%. However, the IRS outsources most of the labor of tax preparation to the taxpayers themselves, with compliance costs estimated between $200 billion (Bosch & Gray, 2018) and $400 billion (Erb, 2016) a year, to the delight of private tax preparation software companies like Intuit (Appelbaum, 2021). Add that up, and the total cost of federal tax collection to the economy is anywhere between 6-12% of the amount it raises.