Those who do not learn from history are condemned to repeat it. This applies not least to the immense crisis into which the world has fallen. So what lay behind it? The answer is the credit-fuelled property cycle. The people of the US, UK, Spain and Ireland became speculators in land. The toxic waste poisons the world economy.
In 1984, I bought my London house. I estimate that the land on which it sits was worth £100,000 in today's prices. Today, the value is perhaps 10 times as great. All of that vast increment is the fruit of no effort of mine. It is the reward of owning a location that the efforts of others have made valuable, reinforced by a restrictive planning regime and generous tax treatment – property taxes are low and the gains tax free. I am a land speculator – a mini-aristocrat in a country where private appropriation of the fruits of others' efforts has long been a prime route to wealth. This appropriation of the rise in the value of land is not just unfair: what have I done to deserve this additional wealth? It also has dire results.
First, it makes it necessary for the state to fund itself by taxing effort, ingenuity and foresight. Taxation of labour and capital must lower their supply. But land taxes merely reduce the unearned rewards to owners.