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I have heard that Henry George wrote one of the biggest selling economics books in history (Progress and Poverty) and was so famous that 100,000 people attended his funeral, and yet his ideas about land are nowhere to be seen in most economics textbooks. Why is this? Were his ideas thoroughly rebutted?

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  • $\begingroup$ Georgist ideas find a little comeback in Glen E. Weyl's controversial book "Radical markets". $\endgroup$ – Bayesian May 19 at 22:19
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Henry George's economic theories and politics were influential enough around the turn of the last century to attract a significant number of opponents, who had vested interests in land speculation and rent-seeking in general. As such, they promoted an alternate formulation of economic theory that reduced/ignored the role of land as one of the primary factors of production. Most modern economic theory has been built on this new foundation, even though the original (largely political) reasons for doing so have long since been forgotten. So nowadays you find extremely convoluted definitions of "economic rent" that attempt to ignore the role of land, and conflation of George's ideas with communism or socialism or other inappropriate connections.

The bottom line is that most economists (and most people, period) know very little about the history of economic thought, and vastly underestimate the role that political posturing played in its early development. George's theories are the victim of his political popularity, and our modern theories of economics are all the worse off as a result.

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  • $\begingroup$ Interesting - I've heard similar things before - but all rather second or third hand... do you know of any articles that have actually documented the suppression of Georgist ideas? $\endgroup$ – Mick May 20 at 19:55
  • $\begingroup$ I'll do some more digging but Mason Gaffney has a good paper on Neo-classical Economics as a Stratagem against Henry George which is an excellent starting point. $\endgroup$ – Bill Clark May 20 at 20:32
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If you're referring to a land-value tax, I'll just quote The Economist:

Other economists like it too. Adam Smith said “nothing could be more reasonable”; Milton Friedman termed it “the least bad tax”. Winston Churchill said scornfully that a landlord “contributes nothing to the process from which his own enrichment is derived”. The Organisation for Economic Cooperation and Development, a Paris-based thinktank for industrialised countries, supports the idea. So too did a recent working paper by the International Monetary Fund and the Mirrlees Review of British taxation by the Institute of Fiscal Studies. The mayor of New York City, Bill de Blasio, hopes that taxing vacant lots by value will help deal with urban blight in the Bronx and elsewhere.

[...]

The idea has wide-ranging support among modern economists, and more than 30 countries have some form of land-value taxation, usually in harness with other property taxes, on buildings.

While the idea of a land-value tax certainly has its drawbacks, it's far from being discredited.

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  • $\begingroup$ +1 for interesting information - but it now makes it even more puzzling why it's not in the textbooks. $\endgroup$ – Mick Nov 6 '16 at 16:08

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