how to save the world: replace tax with land rent

time, space, and experience: simple math

science and religion: God is the universe

  

Fixing the world is simple. We do not need to persuade people to "be good" - we just need basic economics: i.e. replace tax with land rent. Land rent fixes nearly everything. For example:Abortion   Abuse   Alienation   Apartheid   Balkanization   Banking   Bullying   Capitalism   Child abuse   Christianity   Corruption   Cost of living   Courts   Cults   Cyber-crime   Democracy   Deserts   Dictators   Disability   Dreams   Drugs   Economic crisis   Education   Energy   Euthanasia   Evil   Extinction   Extremism   Failed states   Fascism   Free speech   The future   Gay marriage   Global power   Global warming   Habitat loss   Health care   Humanitarian crises   Immigration   Inequality   Inflation   Irrationality   Islamists   Israel-Palestine   Libertarians   Marx   Mass murder   Minority rights   Monopolies   Moon landings   Nationalism   Natural disasters   Nomads   Nuclear weapons   The Olympics   Piracy   Politics   Population   Privacy   Problem families   Psychopaths   Rent   Resources   Responsibility   Short term thinking   Slavery   Stress   Stupidity   Tax avoidance   TED.com   Terrorism   Torture   Tragedy of the commons   Transparency   Unequal power   Value   Wall Street Crash   War   'Wicked problems'  

AnswersAnswers.com does not advocate any particular political party or religion. The web site is just a resource for socialists, capitalists, liberals, environmentalists, theists, and anyone who wants a better world.

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Objections to land rent

Paul Birch examines and criticizes different types of land rent. Using his classification, I am Geo-libertarian. People and governments should be rewarded for what they do, and not for what they don't. I do not promote common legal ownership and do not appeal to "natural rights." But only a proportion of rental value should be captured as land rent: to change from tax to land rent we must ensure that land owners profit. Regarding Birch's other points:

1. Do we still own our land? Yes, and we also own the results of our actions. By occupying land we deny it to others, thus creating a cost for society. Land rent pays that cost. We then pay no other taxes.
2. Only individuals add value? True, but most value is shared. E.g. we all contribute to a safe society, we all ensure that shops can trade, etc. That shared value is owned by society and can be measured in the value of a bare location: its land rent.
3. Land rent is not enough to replace tax? A site's total value is everything a person pays in order to live there, and therefore includes all existing taxes. E.g. tax paid in the USA is rent for living in the USA. Then why not just call it rent?
4. Land rent hurts landowners? This was the fatal flaw in land rent in the past. For land rent to succeed, land owners must be compensated.
5. Land becomes unprofitable? Only a proportion is removed as land rent. Overall the owner benefits, due to increased national economic growth. If the land then became unprofitable then its sale value (and hence land rent) reduces until it becomes profitable again.
6. Land rent tends to concentrate towns into small spaces, leaving unused land in between? Land rent is a proportion of market values. So if the countryside is abandoned then it becomes very cheap, so people move out again.
7. What if you can't pay the rent? In the proposed system, land rent is voluntary, and is set at the same as was previously paid in tax.
8. How can rent assessors calculate externalities? This is the beauty of choosing your own variant government: the more variants there are, the more data there is to compare.
9. The market is already fairly efficient? Tax on work prevents a proportion of work from ever being done, so it is fundamentally inefficient. it also prevents people from setting up better systems of government, adding to the inefficiency.
   

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Abortion

Both pro-abortion and anti-abortion people agree on one thing: their own view makes a more attractive society. land rent is therefore an answer. Both sides can choose their own variant government. Have pro-abortion and anti-abortion variants, and see which becomes the kinder, gentler, more attractive place to live. As it attracts people it will grow, while the other one will shrink. Problem solved.

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Abuse

A common theme in all kinds of abuse is that the abused person wants to get away, but it isn't easy. So the abuse continues. land rent makes it easy to escape. It provides numerous alternate mini-societies, and many will have people like you. It also provides full employment so you can always pay your way: there is no danger that you will have to wait or might be turned down. See also child abuse.

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Alienation

Economic alienation, is where you have no power over your work or your physical needs. Marx's solution was a centrally planned economy, but central planning is fundamentally inefficient. Land rent offers a better solution: full employment and the freedom for each individual to choose a different political system. This returns power, money and freedom to the ordinary person.

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Anyone who wants a better world:

Ask any charitable organization, on any topic, what they really need: they need political change. But politics is based on taxing work: this makes some work unprofitable, and rewards governments regardless of what they do. The foundations of the world are rotten. Land rent fixes this: more work becomes profitable, and government is only rewarded if it makes their nation more attractive. With this foundation everything else improves.

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Apartheid

Apartheid is the policy of a government to treat groups differently: e.g. blacks and whites live apart. Being apart is not in itself bad: we all like our own space. But under a single government one side will inevitably get better treatment. land rent solves the problem by shrinking central government and letting local groups choose their own government.

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Balkanization

Balkanization is where multiple tiny states try to grab each other's land, which leads to hatred. This is because they don't have land rent: anybody who grabs land can get free money. So everybody believes they deserve the land, and hates their neighbors accordingly. Land rent reduces the profit from simply occupying land. It also increases economic efficiency, which increases trade and reduces conflict: see war.

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Banking problems

Failed banks are currently bailed out, which rewards bad behavior. Land rent prevents unwise bail outs: it allows multiple variant governments, so any government that saddles its people with massive debt will find that its people leave.

land rent also avoids the crisis in the first place. Bank runs start with weak banks. A better information system means weakness is spotted much sooner.

Land rent allows easier credit, thanks to the information system. Banks can assign more value to reputations, and more value to unfinished projects, thus reducing risk. When risk is low enough almost any group can act as a bank for its members.

Finally, land rent removes tax related red tape. So if your currency is in trouble you can make deals using barter or shares. Whatever the problem, simplicity helps.

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Bullying

land rent lets you choose your own rules, and provides jobs to it's easy to move. So if somebody bullies you then you can simply move to a place with better rules. I suspect that all the sensitive people will leave. E.g. any school or workplace that allows bullying will lose its smartest people and have to either change or close.

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Capitalism:

Capitalism is about rewarding effort. So our current system is anti-capitalist: allows the powerful to extract unearned wealth from land and from regulatory capture. land rent allows capitalism to work as it was intended: when you can choose your own government then government becomes a commodity like any other; work is not taxed, and market failure is removed.

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Cheaper and better goods and services:

No tax on work, and more efficient use of land, results in cheaper goods and services. The ability for laws to evolve and compete results in more efficient laws. See the economics page for details.

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Child abuse

land rent allows soft values to be measured. Raising a child in love, for example, benefits a society far more than it costs. land rent will measure this. So if a child is abused, they know that numerous other societies will welcome them. So a child always has somewhere loving to escape to.

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Choice of government:

land rent lets you negotiate for the rules you want. Effectively, people can set up multiple mini governments. These will all be good neighbors, because otherwise that creates costs for the parent government, and they will charge extra.

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Christianity

land rent lets you set up a small Christian society, with exactly the rules you want, and prove it to everyone. No need to argue, no need to endure and suffer until death, just show everybody that it works. Show lower crime, happier people, etc. Be a light unto the world! (For bad religion, see extremism and fascism).

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Compensation

Land owners will only vote for land rent if they can land owners profit from it. The economics page shows how land rent can be set at less than a land owner currently pays in tax This link explains how governments can guarantee land prices. This link is why land owners will not lose money on their investments.

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Control

People need to feel control over their lives. Some people want to control businesses or nations. For this you need more information, more wealth, and more control over the rules you must obey.

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Corruption

If land rent replaces tax on work then, no wealthy person can avoid paying it (you can't hide land), and government finances become much easier to understand. So there is less room for corruption. This also benefits the government: more wealth and more governments mean more opportunities for honest leaders.

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The cost of living

land rent is based on how much ground is used. If you thousands of people live in a tall building, on a small amount of land, each pays very little land rent. Governments have lower policing costs, lower defense costs and lower welfare costs due to full employment. Add cheaper goods and services and lower health costs and the cost of living is far less than before.

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Courts

Our legal system is too slow and expensive to work for ordinary people, and even rich people find it is often cheaper to settle than contest a claim. Why? Because laws are complicated, and more are added every year. land rent solves the problem in three ways:

1. Many laws are designed to compensate for poverty, inequalities of power, or tax. Land rent reduces or removes these things.
2. Land rent lets you choose your state, so you trust it, so most laws can be unwritten. If trust is abused, this reduces the value of the state and people leave.
3. Land rent allows new states to be created, and they can start with a clean slate if they wish. A state with a simpler simpler legal system has a competitive advantage.

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No crime:

Small villages and gated communities have very little crime, because everybody is watching everybody else. This is only acceptable if you have the rules you want and the leaders you want. land rent provides this, along with more transparency and equality so any hint of crime is spotted, and crime never pays.

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Cults

According to anti-Moonie and anti-Scientology sites, these groups survive by donations from members in the wider community. Their headquarters are not economically viable: a Moonie HQ allegedly survives only by selling flowers at roadsides, and members of Sea Org (the Scientology HQ) are paid just pennies an hour. Each group relies on religious tax breaks to survive. This is not the sign of economic strength.

Yet each group claims to have a better way to run society. land rent calls their bluff. Let them have their own mini-government: that must pay the same land rent as anybody else. With land rent's better information system their strengths or weaknesses will be obvious to all.

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Cyber-crime

A better information system (built on greater trust) would have proved multiple ways to check identities and check data as it's transmitted. This makes cyber crime, like other crime, practically impossible.

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Democracy

Modern democracies are not very democratic. We cannot choose as individuals, you have to all agree. Then there is no scientific way to show who was right or wrong. This is not a recipe for progress.

land rent has an answer. Let each person create their ideal government and see what works.

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Deserts

Imagine letting anybody move to a desert if they pay a very low fixed rent, and keep certain rules to safeguard locals and wildlife. Pretty soon the Sahara would be covered in communities that export solar energy to the world. They then make even more money by irrigating the land, using it for normal land purposes. Pretty soon you've solved not just the problem of bad government, but African poverty, the energy crisis, global warming, and desertification.

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Dictatorship

By simplifying politics, land rent devolves power, and by improving the economy it eases tension. So a bad leader can stay in power, do less damage, and be loved for making the people better off.

This is how Britain ended its monarchy: the monarch gradually allowed freedom, just enough so that economic growth put the monarch in a stronger position despite becoming more a symbol than a dictator. So everybody wins.

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Disability

A person who is "disabled" in one way is usually "able" in every other way. But the present economy has high costs and high unemployment, so disabled people become dependent on others. land rent provides more jobs and reduces all costs, including health care. It also places a high cash value on skills such as helping in the community.

Those who cannot work still create wealth: their existence proves a state is compassionate. This attracts more people people to the state, thus measurably increasing the state's rental income. Thus the severely disabled person creates a measurable wealth and is not reliant on handouts.

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Dreams

Almost anything is possible if there is the political will and the money (including money for research). land rent lets you have your own ideal laws and gives the wealth you need, so dreams can come true.

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Drugs

land rent greatly simplified how we pay for government. This makes it easy to make deals: "my area will pay more (or take less) if you let us do X." So one area could agree to legalize drugs, and another could have even stricter laws. Then see the result. Why should we just guess what works, when we can have proof?

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Economic crisis

In a crisis, a nation faces stark choices: like austerity or massive debts (or in the Euro crisis, leaving the Euro). With land rent different parts of the country can choose different options. Meanwhile you grow your way put of the crisis.

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Education

If a child does not want to go to school, full employment makes it practical for them to get a job instead and learn as an apprentice. Then they can come back to school only when they need new skills in order to progress. So everybody at school wants to be there, which makes learning and teaching more enjoyable and more effective. Meanwhile mini-states can experiment with new ways of teaching and others can learn from the best.

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Efficiency

land rent costs for the land you own. This is passed on as higher prices for raw materials (balanced by lower prices for every other stage of manufacture, leading to lower overall prices because more work is done). This leads to ever more efficient use of resources.

Meanwhile cities will build upwards rather than outwards, to minimize rent. The more compact the city, the lower the cost of transport, and the greater the efficiencies of scale. So large scale recycling becomes profitable.

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Energy

The world pays around half a trillion dollars in subsidies to fossil fuels (around ten times more than goes to renewables). The true cost is even higher due to global warming. As for nuclear, investors won't build them without heavy subsidies and government guarantees against the unexpected.

In contrast, solar power in deserts uses safe technology, and provides cheap, clean energy forever. It just needs stable governments in desert states, and a long thick cable (energy loss is only 10 percent over 3000 km, e.g. from the Sahara to Europe). Supply and demand ensures that people will adjust to the cheap daytime energy and invest in fuel cells or salt batteries as required for the rest.

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Entrepreneur heaven:

If land is taxed then idle land will be sold. This increases the supply and lowers the price, so anybody with a profitable idea can buy as much land as they need. land rent also removes all tax related red tape, offers ideal laws, more information to spark new ideas, and speeds up the legal system.

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Environmentalism

Environmentalism is just better economics: it reflects the long term cost of poisoning the planet, and the true value of working with nature. land rent lets you measure values more accurately, and ensures long term thinking.

Animals

Wealthy nations tend to care more for animal welfare. This is because animals create wealth in ten ways:

1. Animals that serve humans: If an animal does work, being healthy results in better work. If an animal is to be eaten, a healthy and active life may result in better taste. If an animal is a pet or in a zoo, they do more interesting things if given more freedom.
2. Training ourselves: Animals let us practice habits that are useful with people: love, responsibility, patience, respect, etc. Each of these skills has great economic value.
3. Therapy: Animals are much cheaper than a therapist (and cheaper than choosing the wrong human as a partner) for love, self esteem, companionship, etc.
4. Information: Animals are like us. (How alike depends on your point of view. My personal view is that animal minds are more like ours than we want to admit.) We can learn from animals. Note that we learn most when they are in their natural environment: real life is not like a sterile laboratory.
5. Social status: Kindness to the weak (e.g. animals) shows we are so strong that we can afford to be generous even when we don't have to be, and our minds are so sharp that we can detect value in even the subtlest places. Kindness to animals is a display of mental wealth, just like having a large house and wearing the best clothes is sign of physical wealth. These benefit us by improving our social rank. (This may be why Hitler was vegetarian: he wanted his followers to believe he was a more advanced person.) Kindness to animals is also a sign of showing our wealth: we can afford expensive organic eggs while weaker people can only afford cage eggs.
6. Allowing cooperation: Simple rules make us predictable to others. Kindness to the very weak (animals) suggests "I hate causing pain" rather than "I will cause pain, perhaps for fun, if I think I can get away with it."
7. Offending humans: If we help an animal no person will complain. But if we hurt an animal its owner or some other person may complain, indicating that looking after an animal creates value for that person. E.g. it reflects well or badly on society, usually because of the correlation between animal cruelty and poverty or ignorance.
8. Cruelty to humans: It is possible that harming animals is linked to harming humans.
9. Insurance against ignorance: "Respect other beings" is a simple rule that always works in all possible circumstances. But "do not respect some classes" often comes back to hurt us. E.g. in the ancient past, slaves and foreigners were treated as no better than animals, and harming the environment was assumed to have zero cost, but we were wrong.
10. Insurance against global risk: The natural world has survived for billions of years. It does this by ensuring the widest possible variety. If we want to guarantee our own survival it might be a good idea to let nature do its own thing as far as possible. I.e. let animals be free, let forests regrow, and minimize our interference.

These values increase as the economy expands, and a better information system makes the values clearer. Meanwhile the factors that reduce the cost of living for people also apply to animals. So land rent makes kindness ever more profitable.

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Euthanasia

land rent allows different groups to negotiate slightly different rules. Assisted death is precisely the kind of controversial rule where some groups would choose one way and some would choose another. So anybody wanting assisted suicide merely has to move to an area that allows it, while others stay in the areas that forbid it.

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Evil

In the long run, being good makes you stronger than being bad in the long run. We know this because history is written by the winners: our definition of good is whatever helps us survive. E.g. cooperation and truth are moral because they create efficient societies. So bad people can be shown a more profitable way of living, in the long run. But for that you need an efficient economy, such as land rent provides.

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Extinction

How do we solve the threat of animal extinction? Take the great apes for example. Jane Goodall talks of the tragedy of chimpanzee orphans, and the loss of habitat. She does what she can to help her thirty square miles of protected Gombe national park. But the problems are far bigger than that. The real problems are economic: poverty, war, and bad politics. So we need land rent.

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Extremism, and the need to borrow money

land rent lets you negotiate your own mini Islamic, Christian, or socialist states. But they can't be extremist, because states need to borrow money for infrastructure. If there is even the slightest chance that a future leader might annoy neighbors then banks will not invest. (They can't even rely on other extremists: see fascism.)

Will the possibility of government failure make borrowing more expensive for good governments? Not on average. The possibility of failure enforces responsible thinking: this leads to a stronger economy, which not only pays back the borrowing cost but encourages others to provide cheap credit. See banking.

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Failed states

What should we do when tempted to invade another nation to help its people? Some of them want help, some see it as simply an invasion for oil. Land rent allows each area to negotiate its own rules: some will want us, some will not, and all get what they want. (See also dictatorships.)

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Fascism

Fascism is a form of slavery (the strong restrict the choices of the weak) and is thus inefficient. War is also inefficient. If we allow land rent then we get a more efficient economy, so these differences become important. To gain any kind of scale, fascists rely on abusing "winner takes all" power where a single group can control an entire nation. That is not possible with land rent. They would find it very hard to get started even in a small area.

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Flexibility

land rent can be applied to any political system. It's even good for dictators, and even better for their people.

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Freedom

In a land rent system government finances and boundaries are extremely simple, so people can negotiate their own ideal laws and find their own kind of people. They also have jobs and more equality and more wealth so can make choices. A choice of rules plus supportive people plus money to spend equals real freedom.

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Freedom: Free speech

land rent measures the value of any behavior to society. It measures the value of unlimited free speech. It measures the value of protecting people from libel. It measures everything in between. Land rent gives objective answers to difficult questions.

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The future

land rent is simply a more efficient economic system. The first nation to get it right will become wealthier, and compound growth means it will eventually become more powerful than any other nation. Other nations will either have to copy or fade into insignificance. So land rent is not a question of if, but when. If left to chance, this process might take a hundred years... or a thousand years. This is a period of uncertainty, where we will continue to have wars over land, and poverty and injustice due to inefficient resource allocation. If we wish to end the uncertainty over the future we can adopt land rent now, and be the nation that leads all the others out of the swamp. Or we can stay in the swamp. It is our choice.

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Gay marriage

Gay marriage is exactly the kind of small policy change that could be handled by land rent: imagine a town that negotiates to pay very slightly higher rent if it is allowed a particular law regarding gay marriage. That town could then attract more people and everybody profits. Of course, this assumes that there are enough jobs to make moving an easy matter. Jobs are another area where land rent excels.

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Global power

As Germany has shown over the past 100 years, and China is showing the US today, and as Russia found when it lost the cold war, economic strength is more powerful than military strength. land rent provides overwhelming economic strength in several ways:

1. Full employment
2. More efficient use of resources (particularly land)
3. More efficient government (due to competition between variant forms of a government)
4. More workers, with more ideas (a few of these new governments will find ways to benefit from mass immigration, allowing rapid economic expansion).
5. More efficient business (due to better information: more variant governments for scientific comparison, and more willingness of citizens to share information, as they choose their ideal government)
6. Compound growth, year after year.

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Global warming

Most studies say we will not be able to react quickly enough to global warming (e.g. by irrigating deserts). Result: millions die. land rent, however, provides greater wealth and more efficient government, especially for the poor. So people can adapt to the hotter areas, while benefiting from the now arable tundra. If, however, the situation is so bad that massive action must be taken, land rent provides the money to do it, and the means to accurately measure the effect of global warming on the value of a state (since all its value is captured in land value).

Finally, land rent provides the pressure for bad nations to be good neighbors. As land rents spreads to other nations the reputation system becomes ever more powerful, so you don't want to be on the wrong side of history: thirty years later people will remember what you did, and either charge or reward you, as an incentive to others.

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Habitat loss

land rent provides plenty of spare land (because people use as little as possible, to minimize rent). Land becomes more beautiful (because that attracts people, thus increasing land rent income). Land term also leads to better environmental decisions, gives animals a higher value, and solves other causes of habitat loss: poverty and overpopulation.

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Health care

Land rent allows each person to choose their own form of government. So we can see which kind of health care works best. land rent's better information allows for better prevention and better drug research, and a lower cost of living reduces the cost of labor intensive care.

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A group you call home:

land rent lets you choose your own mini-government, and provides plenty of jobs so it's easy to move. So you can always find a people where you fit in and feel at home, or if you already have such a people they can make their own ideal society.

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Humanitarian crises

If we really care about suffering then we should focus our efforts where we can help the most people. That is, don't start with the hard problems like Syria, and focus on wherever is the easiest to fix. When the weakest state is fixed then they become part of the expanding global land rent movement. Together we then focus on the next weakest and so on. By the time we reach the hard problems they will be, by definition, the easiest.

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Immigration

Most nations have problems with immigration because their economies are not designed for it. Yet the opportunities for profit are staggering: a desperate immigrant will work for a dollar an hour, and even an unskilled job will create five times that. They can teach themselves to read, then learn whatever they need, and then create ten or a hundred dollars an hour.

So immigrants are basically free money, if a state can find a way to absorb them in large numbers. land rent allows people to try different rules, and sooner or later one group will find a way. Then all the world's displaced people can go to mini-states that welcome them, and reduce the pressure on everybody else..

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Inequality:

land rent reduces inequality in many ways:

• It solves market failure, so nobody gets money unless they provide something of worth.
• It measures real value and provides better information so if somebody does not add value to society then you know.
• It creates more jobs, so you are always free to leave. You are never trapped.
• It lets you choose your ideal government.
  
• This in turn creates alternate states: if your state is unfair you can choose a better one.
• It ends the abuse of monopoly positions.
• It can be exported to end global poverty.
  

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Inequality

More jobs means employers have to treat workers well or lose them. Ending global poverty reduces pressure from cheap immigrant labor. Better government means fewer opportunities to skim unearned wealth from the top. The result is less inequality.

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Inflation and monetarism

Monetarism is the policy of changing an economy by printing money: if you have a recession then print money to pay people to work. But this causes inflation. Economists can't be sure of the right amount of money to print because they have very limited data sets (just a few nations). land rent solves the problem by providing better information. On a smaller scale, better information keeps prices down by highlighting hidden or unfair price rises.

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Information

More trust in government allows them to gather much better information. Less crime means similar trust in neighbors. land rent also creates a better legal system so nobody is afraid of being sued for telling the truth. Meanwhile, we can compare the true value of many alternative governments and thus calculate the results and value of any change. Better information means better outcomes in everything we do.

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Irrationality

How do you cope with irrational enemies? If they are truly irrational then you can ignore them. If somebody thinks that 2 + 2 = 5 then that person will fail at anything requiring math. Mathematically they are not a threat. The real problem is that enemies we think are irrational may more rational than we think. This is why we need economics. Economics, at its purest, ignores what people say, and looks at what actually happens.

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Islamists

land rent lets you set up your own mini-Caliphate, with exactly the rules you want. If it's good, people will see the results and want to join. But bad new states will fail (see extremism and fascism).

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Israel-Palestine

Imagine if Palestinians paid land rent to some neutral body, and that then spread the rent between both groups. This gives Israel an incentive to treat Palestinians well, so they make more money. This also makes it simple for any peaceful Palestinian group to negotiate better conditions for better behavior. So friendly groups appear and expand, while unfriendly groups pay higher rent and contract. Problem solved.

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Jobs:

Current societies typically have 10 percent unemployment. Compare this to the added 67% cost that tax adds to work, making a lot of work unprofitable. land rent allows every bit of work to be done, and also encourages better laws and more entrepreneurs, so full employment is very likely.

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Libertarians

Libertarians have a problem: no government will voluntarily relinquish power. Land rent solves the problem. In the long term, as more local groups negotiate better deals, the proportion of power increases in the direction of individuals. But at every stage the total economic pie increases in size, and both sides benefit financially, and more money means more power. The final stage is the government is as the central clearing house for land rent in a vastly more powerful collection of mini-states. Government's role is thus minimized, yet everyone is better off than before. A similar thing happens when a monarchy moves from dictatorship to symbolic head of state: they lose the power to assassinate people, but their country is no longer a basket case so they gain overall in wealth and respect. Land rent is just good business: it's win-win.

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Liberals:

land rent creates equality. The Land Song used to be the anthem of the British Liberal party.

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Love

land rent allows an information system that is orders of magnitude better than anything we have today, because it is built on absolute guarantees of trust. Any desperately unhappy person would have a much better chance of finding his or her soul mate, and a million emotional tragedies, including suicides and murders, could be avoided.

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Karl Marx

Karl Marx's objective, the replacement of our current capitalist system with something better, failed because it was built on a faulty premise: the labor theory of value (see value). However, land rent achieves his dream, not by opposing capitalism, but by embracing it and forcing it to become consistent. Capitalism claims to reward those who create wealth. Great! Then do not tax work (that punished wealth creation) and tax land value instead (because society creates that wealth). Result: power moves from elites toward workers, just as Marx hoped, and society becomes more efficient. But with land rent all kinds of workers benefit, even land owners, if they add relative value to their land (i.e. they make their land more valuable than merely its location).

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Markets and fair competition

Market failure is caused by five problems.

1. information asymmetries (you don't know the facts)
2. non-competitive markets (you don't have a choice)
3. principal–agent problems (the person making the decision does not care)
4. externalities (somebody else pays for your mistakes)
5. or public goods (one person pays, everyone else benefits without paying)

All are solved by land rent. Land rent makes it easy to measure the value of a society, easy to trace what decisions work, and easy to track reputations. So there is nowhere to hide. People will have to care about their effect on society as a whole. If they don't, there is less demand for that society's land, so the government has less to spend on goods and services, resulting in even fewer people wanting to live there, and a downward spiral.

For externalities across borders (e.g. mini states working against each other), see Balkanization.

Governments often create artificial markets. E.g. hospitals choose their suppliers. This might improve one area by making another area worse (e.g. hospitals spend time marketing instead of treating the sick). Land rent solves the problem by letting you choose an entire system based on its total results, not just one measured detail. In general, land rent

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Mass murder

"My Northeastern University colleague Jack Levin and I have studied dozens upon dozens of mass murderers over the past few decades [...] The road to mass murder typically involves years of disappointment and failure that produce a mix of profound hopelessness and deep-seated resentment. Socially or psychologically isolated, mass murderers lack emotional support and encouragement from confidants."- James Allan Fox

Land rent lets you choose a society where you fit in (and full employment means you have plenty of choices). This removes the usual causes of mass murder. It also makes mental illness part easier to spot because you have more friends.

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Measuring:

land rent measures the value of a loction. As every house buyer knows, this is hugely affected by whether you have good neighbors and a functioning community. Therefore land rent becomes a direct measure of the cash value of soft values such as niceness, helpfulness, trust, etc.

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Minority rights

Majority rule based on tax is a perverse incentive: it rewards majorities who crush minorities. land rent is different: if America had instituted land rent in Iraq then not only would the ordinary people be richer, but each group could negotiate the rules they want, and no government could extract money except by earning it. Why risk death squads when you can have wealth and freedom and justice instead?

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Monopolies

One cause of market failure is that that people do not have a choice ("non-competitive markets"). Yet monopolies always exist. If your requirements are very precise, you will frequently have only one business that can fulfill it. land rent lets you easily choose a different government with different rules. So if you believe that this business is inefficient, then you mentally add this to the cost of living under this government. When the costs all add up then you may decide a better government is worth the switch. So with land rent, even a monopoly is not a monopoly.

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Moon landings

Manned moon landings are fading into history. As the years pass, fewer people are left alive who stood on another planet. The problem is of course money: moon landings were very, very expensive. There is also the concern that moon landings are not a priority when people on earth are starving. One simple answer is land rent: expand the economy, meet other political and social needs, and let the private sector flourish as never before. Then we can once again turn our eyes heavenward in a big way.

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Nationalism

land rent is the answer to a belief in nationalism: you can choose (or create) the exact nation you want.

Nationalists may fear that their existing states break apart. But the opposite may be true: most min-states will only differ in tiny ways, as anything bigger would create barriers to trade and reduce their ability to rent land. However, as land rent spreads across the world, many mini-states around the world will want to be close allies to large successful states. The USA could easily expand from 50 states to 500. Land rent is not only a secessionist's dream, it is also a nationalists' dream.

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Negotiate rules

If all government income is a single payment per location, it becomes a simple matter to negotiate different terms: "We will pay more, or take less, if you do X." As more people do this, they can form alliances and their bargaining power increases. At every stage the parent government benefit as well, so this gives freedom without conflict.

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Natural disasters

Natural disasters (Hurricanes, earthquakes, floods,etc.) are mainly a problem for the poor. Rich nations can afford long range weather stations, and build strong buildings, and rich people have insurance and cars and good roads to get away to safety. land rent, by providing strong economic growth, provides the money that protects you. Global wealth will also allows more money for spotting and deflecting asteroids. Global wealth increasing over centuries will even allow us to leave the planet, or hide underground (safe from gamma bursts) and generally avoid all conceivable risk.

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Nomads

Nomads are no different economically from other people: they do work for money. That work requires land, so they need to buy or rent it. It just happens that nomads need lots of land for a very short time, rather than a small amount permanently. The real problem here is that the nomads do not have enough money, for the usual reasons: a poor economy with few choices. land rent fixes any economy, allowing everyone (including nomads) to do more work for good pay, while paying lower prices for what they need, and letting them make deals for better government. So land rent solves the problem. Land rent also fixes the problem of inequality, as will be covered in the next post.

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Nuclear weapons

land rent allows each nation to become wealthier through trade, and provides better government. More trade and better government (and comfortable people) makes war less and less likely. Meanwhile, increased competition creates pressure not to waste money, as wasteful nations attract fewer people. So expensive nuclear weapons become obsolete.

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The Olympics

The Olympic ideal is of nations competing on a level playing field. Unfortunately this is not true: wealth makes a huge difference to who wins. Worse, only a tiny number of athletes compete: the rest of the world only watches. Yet people get very excited about seeing their own nation win. land rent is even better because the whole nation competes: this is real competition between nations, where the best nations get the highest land rent and expand, and other nations must either opt out, or work harder if they want to to keep up.

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Piracy

The larger movie and music producers believe media piracy is evil: see the anti-piracy messages at the start of DVDs. Meanwhile many others (including small producers) believe heavy handed anti-piracy does more harm than good. So who is right? land rent allows the formation of groups within a state that try subtly different laws. Then the amount of land rent people will pay is a measure of the desirability of those laws. By comparing a sufficiently large number of variations we can statistically determine the real cost or benefit of any law. Then land rent provides better information for catching the real crooks. Problem solved.

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Politics

In an election, each candidate must persuade voters that their ideas are best. Each side suspects the other of bending the truth. Wouldn't it be so much simpler if we could see their plans in action, and have a simple way to compare them? land rent lets you have Republican locations and Democrat locations side by side for comparison. land rent then lets you directly measure who is best.

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Population growth

As nations become wealthier their population growth declines. In many first world countries (e.g. Japan) populations are shrinking, or only maintained by giving economic incentives to raising children (time off work for mothers, tax breaks for families, etc.). This is hardly surprising, as having children is hard work and expensive, so not everyone wants to do it, and the biological need for a child is often satisfied with just one. land rent allows all nations to become wealthy, so population will either decline, or rise in a controlled and desirable way.

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Poverty

land rent creates wealth while reducing inequality. Thus is ends poverty. As a system it can be applies to any size of land (it does not have the complexity of tax), and is politically neutral, so its easy to export: even to dictators. Another way to end global poverty is to allow the creation of a state that welcomes immigrants. Either way, land rent can end global poverty.

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Privacy

More information allows better decisions. But we fear that our information will be used against us. But with greater infirmation and a goernment you can trust, anybody who misused information would be quickly caught. Similarly, businesses can share more secrets, knowing that anybody who abuses the system will be found and made to pay any costs they create. So we get the privacy we need plus maxmimum freedom and opportunity.

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Problem families

Problem families are defined (in Britain at least) as those with a history of crime and also no jobs. land rent provides full employment, so by definition there can be no problem families. This is not just playing with words: full employment gives hope and better choices to the individual. It also gives society the moral right to be tough, and the money (no longer wasted on unemployment) to do whatever needs to be done.

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Psychopaths

Psychopathy is hard to prove. On the one hand you don't want to let people harm you, on the other hand you don't want to lock everybody up "just in case." The answer of course is a much better information system: much more nuanced understanding of the individual, and more data for predicting a person's behavior in different circumstances. land rent can provide this.

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Ricardan rent

David Ricardo observed that employers will pay the minimum necessary: the amount a worker can get if they leave and start their own business on whatever land is available. That land will tend to be the worst kind, or else it would already be used. So the profit from land is the the difference between the rent on the worst land and the rent on your land. When no land is left then wages go down to starvation levels.

However, if we tax land then idle land is sold, allowing workers to set up their own businesses, so the minimum wage increases. Yet no landowners need lose out, because of the expanding economy.

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Resources

Human needs are finite. We need around 2000 calories per day, a certain amount of water, a certain temperature range, etc. But human ingenuity is infinite: we find more and more ways to obtain these things at lower and lower cost. Meanwhile no resource will ever run out, because as it comes closer to running out its price increases (supply and demand) so alternatives become profitable.

The real limit is our bad management of the planet. land rent solves this by ending war, poverty, short-term thinking, and waste.

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Responsibility

When is somebody responsible for their actions? Who causes something to happen? land rent provides plenty of control groups and better information within each group, so we can infer cause and effect statistically with great confidence.

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Science:

Science has made technology a thousand times better. Imagine the same benefits in every area of life.

land rent allows people to create alternate mini-governments. It also measures everything of value. It therefore allows scientific government: you can compare subtle variants of each group and see their effect of small changes on the total value of a state.

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Short term thinking

Current governments have "moral hazard": whatever they do, they are not allowed to fail. They make short term decisions and future generations pay the price. But with land rent, anybody can negotiate their own rules, hence their own mini government. if they fail, the mini government ends. The possibility of failure, even in theory, will force nations to think long term (or in the worst case where a nation ignores the warnings, replace a bad nation with a better one).

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Simplicity:

land rent is a single amount per location, a simple percentage of the location value. So you can throw away the ten thousand page tax code. Apart from saving time for business, government, and avoiding tax evasion (you can't hide land), you can know exactly what you spend and exactly you get in return. This simplicity allows individuals and groups to negotiate deals, so everybody gets what they want.

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Slavery

There is more slavery today than at any time in history, mainly due to the much larger world population. Slavery is inefficient, because a slave is prevented from using their talents in the most effective way possible. This is only a small effect compared with the general mess of the world economy, so slavery can be relatively profitable, but only relative to other inefficient systems (such as governments that tax work). land rent removes economic inefficiency, so inefficient systems like slavery become unprofitable.

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Small government

Multiple local governments allow the true value of transparency to be calculated. This creates financial pressure for central government to be honest and transparent. The more honest and transparent, the more valuable it is. So the eventual government will be entirely separate from all service provision: it will simply be an unimpeachable source of accurate information on the true value of all local governments or services. Where natural monopolies exist, it will say "company A provides best value for roads, and company B for the military." As a pure information provider it can be checked by other pure information providers: each local government can have a department to shadow the central government's decisions and suggest better choices.

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Socialists

Why not create your own ideal society and see if it works? land rent allows you to make deals with central government, so they benefit from giving you freedom.

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Stress

If your life is so bad that you wish you were somewhere else, land rent provides the jobs and alternate governments to let you escape.

Does this mean you have to work harder to pay more rent? Quite the opposite. Perhaps your idea of utopia is to only work for one hour a week? Then find the tallest buildings on the cheapest land and share rooms. Your land rent per person fall to almost zero, yet the parent government gets more money per square foot. So everyone is happy.

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Stupidity

land rent lets everyone choose their ideal government. So the smart people can all create their ideal society and move there. It will soon be obvious who is right and who is wrong. Land rent also leads to a reliable reputation system, and forces governments to think long term. So land rent is the cure for stupidity.

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Sustainability

Sustainability is just good economics: destroying the world we live in destroys our economic base. Wasteful destruction is a sign of market failure: allowing destruction of assets to benefit a minority. Land rent fixes these market failures, and so ends the throw away culture.

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Tax avoidance

$21-32 trillion is hidden in offshore tax shelters. Even the low estimate is the equivalent of the United States and Japanese economies combined. A simple solution: replace all tax with land rent. You can't hide land offshore.

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TED.com

TED.com has a number of "big problem" videos on environmental or social problems. They usually say there is "no simple solution" and it requires "very hard work" in "many areas." Yet the problems always trace to bad economics. E.g. we can use something like carbon based fuels without paying the full price, knowing that the cost will be paid by others in the future. So the problem is not complicated, it's simple: fix economics.

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Terrorism

land rent removes the need for war, and so removes the main cause of anti-Americanism. Most terrorists simply want their own government, and land rent already offers that in a way that prevents extremism (see). Extremism is usually fueled by economic injustice, and land rent fixes that as well. Ads for lone fanatics, they are in the same situation as criminals, and and rent makes crime almost impossible (see). Basically, land rent drains the swamp that breeds terrorism.

Al Qaeda:

Young people join Al Qaeda for a mixture of idealism and adventure. Idealism is certainly the emphasis in Al Qaeda recruitment materials. Terrorism is not a great choice for idealists: you might force the infidel out, but only after much bloodshed and the next rulers may be just as bad. But land rent offers a way to get the government you want, and solve the world's problems, without the pain. Land rent is a better offer for idealistic young men. Instead of investing in drones and

ck ops, the west should invest in idealism.

Fear of terrorism:

When people choose their own nation they all support it, share more information and allow more surveillance, so terrorists have nowhere to hide. Also, more states mean more competition. As a cause of death, terrorism is far down the list behind almost everything else. As states focus on more serious threats, terrorism will gain less publicity, and without publicity terrorists have no incentive, so the fashion will decline.

Home grown terrorism:

Terrorists like Anders Breivik showed evidence of racism and a large ego. This is normal in terrorist cases: in hindsight there are always clues. But how to spot them early? And how to know statistically what leads to what? Land rent leads to a better reputation system, so these problems are easier to identify at an early stage. Also, land rent allows people to create their own ideal government. So this drains the swamp: nobody needs to feel that their government is wrong.

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Theft brings less rewards; fewer desperate people

War is an economic calculation. Currently, owning land means free money (e.g. you can extra wealth, and the government can tax whoever lives on the land). This is effectively theft from whoever had the land before, then grabbing unearned wealth. Add people who are desperate enough to risk death to get it, and you have war. For how land rent changes the calculation, see war.

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Torture

Torture is a calculation: in order to stop a short term problem (the ticking bomb) you create a long term problem:

1. You gain less information in the long run. Your best source of information is people on the other side who trust you. They don't trust you anymore.
2. You create more ticking bombs: your victim's supporters want vengeance, and they have long memories.
   
3. The problem multiplies: ticking bombs are rare, and you never know who has the information, so you torture a lot more people than the ticking bomb can ever justify. You also have no reason not to accept evidence from torture in other countries, so you end up supporting tyrants.
   

Multi-variable problems like this are solved by land rent: it allows multiple states for scientific comparison. Some will allow torture (usually denied of course, or called special interrogation). Some will ban anything like torture in any circumstances. See which become the safest place to live.

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Trade:

Trade, specialization, and taxing ground rents instead of work, are the secret to the wealth of nations, as identified by Adam Smith. People naturally want a better life (those who don't find themselves unable to compete), so for more trade we simply need more freedom. Note that trade forces people to cooperate and to depend on each other, and is thus the antidote to war.

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Tragedy of the commons

"Public goods" are goods like air and water that some people use but everyone pays for. This is an example of market failure. But under land rent, everything is automatically measured, and information is more widely available. So the benefit of every action to the whole of society is very clear. States that reward good behavior will grow economically, and those that allow public goods to be squandered will shrink.

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Transparency

The only way to guarantee transparency is to let individuals choose their own form of government. Transparency creates efficiency, so the most transparent governments will be more economically attractive.

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Tyranny

Tyrants become very good at holding onto power. It becomes very hard to get rid of them. So instead, land rent offers a win-win situation: a solution that gives the tyrant what they want and also gives the people what they want. Basically the tyrant can become a constitutional monarch and benefit from the expanded economy.

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Trust in government

With land rent, groups can negotiate their own rules. This leads to multiple alternate mini-governments. Combine this with more jobs, and you can easily change governments if you don't like the present one. Any government that abuses trust will then lose customers and become weaker.

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Unequal power

Conventional activism involves a small group fighting a powerful foe. Being powerful, the foe generally wins. But land rent is a business approach: a way to change the world that benefits both sides. There are no enemies, so nobody gets crushed or disappointed. It's win-win.

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Values:

Our current rules have no way of measuring real value objectively. So it is possible to become rich by harming society. A better system would directly measure the overall good people do, and also the financial value they add to society in total.

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The Wall Street Crash

The Wall Street Crash was caused largely by land speculation: cheap land leading to too many unprofitable farms; land bubbles in Florida, Chicago and Detroit; and an end to a housing boom in New York. The 2008 crash was also triggered by land speculation: the belief that land would always rise in value led to worthless sub-prime mortgages on balance sheets. The great Japanese depression of the 1990s was also caused by land speculation. land rent means there reduces the profit from simply occupying land, so there are no land speculation bubbles.

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War

Most wars are over land. But with land rent the incentive disappears. Central government becomes too small and transparent to gain wealth except by earning it Meanwhile local government must be efficient or people leave. That leaves the ordinary people, and if they grab valuable land they just pay more land rent. So land is no longer a license to print money, and is no longer a reason to go to war.

Drone strikes and other easy wars

Drone strikes seem like an easy way to hurt the other side at low cost. But there are always easy ways to hurt the other side at low cost: that's why a few terrorists can scare an entire nation. But how can you be sure the other side won't bear a grudge and come back and hurt you later? The only way to be sure is get a solution that both sides want. Land rent provides such a solution, a way for everyone to get the wealth or the form of government that they want.

Wars between cultures

The proven and permanent alternative to war is trade. Land rent makes work more profitable, so creates more opportunities for trade. Land rent itself is politically neutral: it's the same policy whether you are good or bad, rich or poor. Your power or history or politics does not matter. It gives each side what they want: power, land, security and peace. See also terrorism.

War and profit

Is the economic solution to war discredited? In 1913, Norman Angell observed that a European war was not profitable for the winner, because trade is a more efficient way to create wealth. We then had two major European wars. Yet Angell was proven right: war was not profitable at all for Germany, and peace was very profitable: Germany now has a strong aversion to war because peace is vastly more rewarding. This is not just because Hitler lost: General Franco was like Hitler, and he won. This was economically disastrous for Spain, and Spain returned to democracy once Franco died. Land rent merely exaggerates this effect: it makes traders vastly more wealthy, and increases trade so much that disrupting trade is vastly more costly. So while war is still possible under land rent, it is far less likely.

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Wealth:

land rent allows more work to be profitable, and creates more opportunities for entrepreneurs. It also allows more causes of wealth to be identified. This leads to greater total wealth in a society.

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'Wicked problems'

A "wicked problem" is any social planning problem that is too complex to solve through planning, and needs to solved by trial and error. Land rent allows groups to negotiate their own laws, so we don't need to model a problem in theory, we can just see what works and copy it.

More work:

Work creates wealth. Yet our current economic system taxes work, making some work uneconomic. Attempts to compensate (e.g. progressive taxation) merely shift the loss to other parts of the economy. Click for details. land rent makes more work profitable, so more work is done. Land rent also provides more opportunities for entrepreneurs.

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