Veblen and George 225three elements of distribution—rent, wages, and interest. Land
and labor combine to produce wealth. Capital, the product of the
wealth created by land and labor is returned to production.
T aking Ricardo’s concept of the “law of rent,” George concludes
that rent swallows up the gains of land, labor, and capital. Thus,
we have the victory of unearned income (rent) over earned
income (wages and interest). George winces at the thought that
an individual on a large piece of land, working it as hard as he
can, struggles to survive, while the lucky fellow who owns a
small piece of land in the center of a large city grows rich on rent.
George sees the problem of speculation not only as the culprit
but also as a preventable activity. Those who buy land and hold
it out of production, by so doing bid up the price of that land. For
example, if speculators purchase land near an expanding area,
those who need the land will pay a premium to obtain it. Thus,
nearby land increases in value as well. The idea that land
purposely undeveloped, unused, and unproductive grows in
value by leaps and bounds is at the heart of George’s complaint.
The solution, however, is at hand, says George. Since mo
nopoly in general, and land monopoly in particular, is at fault—
end it. The power that is in the hands of the landowner is
immense. The wealth that is generated by speculation and rent at
the expense of the worker and capitalist will continue to prevent
increased wages and industrial progress, but it will create an
immoral and ever more powerful elite. If, however, land were
held in common, such a condition could not exist.
Should, then, the government confiscate the land and institute
a socialist form of government? Not quite, says George. Social
ism, while admired as a concept by George, cannot be imposed
on a society. He sees society as an organism, not a machine that
can be built and adjusted according to someone’s plan. Rather,
the desired end can be achieved not by confiscating land, but by
confiscating rent. The confiscation of rent can be achieved by a
single tax on land. The end result of this process would undoubt
edly lead to a situation wherein most of the land would end up in
the hands of the government—but that land would only be the
unused land. Productive land would remain in the hands of
individuals, producing goods, wages, wealth, and capital.
If there were but one tax, and that tax were on the value of the
land—not the buildings or the produce—no land would be held