ŏ Ŕ ō Ŝ Š ő Ş ȘșLand, Money, and Capital
Formation*
ţōŕŠŕŚœ ŠŔŞśšœŔ ŘōŚŐśţŚőŞşŔŕŜȘ
What service, if any, do landowners perform for the rents they collect?
Land, narrowly interpreted as sheer space and the associated pure gifts of
nature, is justthere, available to render services regardless of ownership
and of owners’ work. Partly with such a thought in mind, Henry George
proposed taxing away most pure land rent. Even some fervent defenders
of private ownership of land and collection of rent give incomplete and
thus feeble accounts of service performed. Ļe landowner, according to
Murray Rothbard,
finds, brings into use, and then allocates, land sites to the most value-
productive bidders.... [I]t is not just the physical good that is being sold,
but a whole bundle of services along with it—among which is the service
of transferring ownership from seller to buyer, and doing so efficiently.
Ground land does not simply exist; it must beservedto the user....
Ļe landowner earns the highest ground rents by allocating land sites
to their most value-productive uses, i.e., to those uses most desired by
consumers....
Ļe view that bringing sites into use and deciding upon their location
[sic] is not really “productive” is a vestige from the old classical view that a
service which does not tangibly “create” something physical is not “really”
productive. Actually, this function is just as productive as any other, and
a particularly vital function it is. To hamper and destroy this function
would wreck the market economy. (RothbardȀȈȅȁ, vol.ŕŕ: pp.ȇȀȂ–ȇȀȃ;
attached endnotes on vol.ŕŕ: pp.ȈȁȈ–ȈȂǿ, are omitted here.)
*FromEconomic Policy in an Orderly Framework: Liber Amicorum for Gerrit Meijer,
eds. J.G. Backhaus et al. (Münster: Lit Verlag,ȁǿǿȂ),ȃȄȄ–ȃȅȈ.
ȀAn omitted introduction contains complimentary remarks about Gerrit Meijer, the
honoree of the Festschrift.
ȁǿȈ