Nell henry george and how growth in real estate contributes to inequality and financial instability (2019)

PALGRAVE STUDIES ON HENRY GEORGE FOR THE 21ST CENTURY Henry George and How Growth in Real Estate Contributes to Inequality and Financial Instability Edward Nell Palgrave Studies on Henry George for the 21st Century Series Editor Edward Nell New School New York, NY, USA This is a series in memory of Henry George, taking off from his writings and dealing with the issues he raised in his time, as they persist, but also taking his approach into our time and dealing from his perspective with some of today’s most pressing issues and problems in the political economy This series contextualizes Henry George as an important figure in what is currently a widespread pattern of interest in critiques of mainstream economics Much critical work in economics in the late twentieth century was aimed at critiquing and destroying mainstream theory, particularly those aspects that appeared to support and justify neoliberal policies But after the crash of 2008, much more attention is being paid to non-mainstream approaches that offer new explanations of economic phenomenon This series fits that mold, drawing on a uniquely significant American figure once widely known and venerated but lost sight of during the dominance of mainstream neoclassical theory More information about this series at http://www.palgrave.com/gp/series/16249 Edward Nell Henry George and How Growth in Real Estate Contributes to Inequality and Financial Instability Edward Nell New School New York, NY, USA ISSN 2524-8847     ISSN 2524-8855 (electronic) Palgrave Studies on Henry George for the 21st Century ISBN 978-3-030-18662-3    ISBN 978-3-030-18663-0 (eBook) https://doi.org/10.1007/978-3-030-18663-0 © The Editor(s) (if applicable) and The Author(s), under exclusive licence to Springer Nature Switzerland AG 2019 This work is subject to copyright All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed The use of general descriptive names, registered names, trademarks, service marks, etc in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication Neither the publisher nor the authors or the editors give a warranty, express or implied, with respect to the material contained herein or for any errors or omissions that may have been made The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations Cover illustration: © A.F. Archive/Alamy Stock Photo This Palgrave Pivot imprint is published by the registered company Springer Nature Switzerland AG The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland This book is dedicated to the memory of Andrew Mazzone, my friend, colleague, and the President of the Henry George School of Social Science from 2013 until his death in 2017 Andy’s commitment to bring Henry George’s ideas into the twenty-first century was the reason for my joining the Board and the driving force behind this book Preface: About Henry George Henry George was born in Philadelphia in 1839, the second of ten children His father was a clerk at the Philadelphia Customs House, a devout Episcopalian, and a publisher of religious works But the family lived modestly George attended school until the age of 13, when he told his father that he desired “to go out into the world” to work and help support the family He worked odd jobs and learned to set type At 16, he sailed to Australia and India as a ship hand, eventually returning to the United States At age 18, he headed west in search of gold George spent 1858  in West Coast mining camps and settled in San Francisco in 1859 He found employment as a compositor He met and married Annie Corsina Fox in 1861 George struggled to find employment and pursued a career in journalism George published his first book, Our Land and Land Policy: National and State, in 1871 In his landmark book Progress and Poverty (1879), George proposed a deceptively simple solution to the problems of economic inequality and industrial depression He called for the replacement of all federal, state, and local taxes with one tax on land His proposal became known as the “single tax.” Taxing only land values, George believed, would generate all the revenue needed to operate government and produce ever greater levels of opportunity In the winter of 1881–1882, George embarked on the first of several tours of the British Isles He influenced English politics, helping spur not only a popular land reform movement but also modern British socialism and Irish nationalism vii viii  PREFACE: ABOUT HENRY GEORGE Back in the United States, George was invited to testify before the Senate Committee on the Relations between Labor and Capital in 1883 He published Social Problems, a compilation of his editorials The United Labor Party nominated him to represent the interests of more than 150,000 working men and women in the New York City mayoral race of 1886 Although he lost the election, his campaign attracted national attention as the culmination of what some commentators called “the year of labor.” He out-polled Theodoee Roosevelt in that election.  The campaign also ignited religious controversy In 1891, Pope Leo XIII placed Progress and Poverty on the Vatican’s List of Forbidden Books. George wrote a powerful commentary on the Pope’s approach to land and rents George edited a weekly newspaper and authored three books: The Condition of Labor (1891), The Perplexed Philosopher (1892), and The Science of Political Economy (1898) He was nominated again for mayor of New York in 1897 Three days before the election, on October 29, 1897, he suffered a stroke and died His funeral two days later was likened in size to that held for General Grant The New York Times reported: “No demonstration of popular feeling on the death of a public man since Lincoln’s body lay in the City Hall has been so imposing in extent and character as that of yesterday Call it, if you will, hero worship; but its object was really a hero.” New York, NY, USA Edward Nell Acknowledgments This book was written on the run and produced in a flash in order to honor Andrew Mazzone at the opening of a new phase—which he himself planned—in the history of the Henry George School of Social Science To make this happen a number of people had to work exceptionally hard and exceptionally good work Tom Phillips did an immensely helpful reading and editing of the first full draft Barbara Ross then followed up with subsequent drafts Kenneth Wapner discussed every stage of the book with me and helped over and over with difficult passages, seeing it through from start to finish Sam Truitt did wonderful work preparing the book and cleaning it of errors and infelicities Many thanks to the President, Board of Directors, and Staff of the HGSSS, especially Andrada Chercheres, for supporting this project and providing help at crucial moments And I owe a special debt to the outstanding editors at Palgrave, Elizabeth Graber and Sophia Siegler Finally I want to thank my wife Marilyn Adams for her patience, sound advice, and common sense ix Contents 1 Introduction: Reviving the Work of America’s Most Original Economist  1 A Quick Look at Henry George   4 Bibliography   7 Part I Progress and Rents   9 2 Understanding Rents in the Real Economy 11 Henry George’s Idea of Progress  12 Growth Models and the Treatment of Rent  13 The Classical View  17 Factor Markets  18 Henry George’s Treatment of Distribution  21 Rents and Real Estate  23 Bibliography  25 3 Growth and Rents in the Real Economy 27 4 A New Look at the “Henry George Theorem” 35 The Traditional Case  36 Rents, Demand Pressure, and Taxes  39 Discussion of Revised 2016 GDP Accounts, by Andrew Mazzone  45 Bibliography  49 xi 134  E NELL (although the financial changes may bring about changes in the real economy, too) But changes in currency values can have such major consequences that it will be necessary to hedge against them Provisional Conclusions In the craft economy, rents, resulting in real estate values, were a straightforward transfer from the working class, broadly considered, to landlords, but because of similar propensities to consume and other reasons this transfer did not greatly affect aggregate demand—although, over time, it did seem to significantly change the income distribution Rents did tend to lead to rising inequality, and eventually to divergent patterns of class behavior Much the same can be said in the case of mass production, at least in the early stages, but once rents and real estate became securitized, they came to play a truly major, and dangerously destabilizing, role in the interaction between the real and financial sides of a growing economy Who would have thought that Ricardian rents, reconceptualized along lines suggested by George, Marx, and Sraffa, would provide a key to understanding the processes that are chronically destabilizing the modern global financial system? Bibliography Kindleberger, Charles (1978) Manias, Panics and Crashes: A History of Financial Crises New York: Basic Books Minsky, Hyman P (1986) Stabilizing an Unstable Economy, New Haven: Yale University Press Nell, E J (1998a) The General Theory of Transformational Growth: Keynes after Sraffa Cambridge: Cambridge University Press Nell, E J, ed (1998b) Transformational Growth and the Business Cycle London: Routledge Nell, E J and Errouaki, K (2013) Rational Econometric Man Cheltenham: Edward Elgar CHAPTER 11 Conclusions Abstract  Poverty and instability result from the working of the whole financial system, not just real estate Henry George’s proposal for a single tax on rents should be expanded to a set of taxes on the financial system, especially on speculation, for example, Tobin taxes The  financial sector should be seriously reorganized and reduced in size and importance With taxes falling chiefly on rents and financial earnings, government spending should be used to manage aggregate demand and support innovation. These policy changes could break the link between Progress and Poverty Keywords  Single tax • Tobin taxes • Progress • Poverty • Real estate Progress, in Henry George’s view, led to greater productivity and wealth, to improved education, technological development, and scientific advance; but it also led to greater inequality, poverty, and degradation Progress brought poverty in its wake because progress drove up rents, until rents absorbed all the increased wealth. This had to be corrected by the ‘single tax’.  But this claim depended on his argument that wages and profits would be prevented from rising during progress—wages because they were set on marginal land, which would become progressively poorer ­during growth, and profits because they depended on capital, which would © The Author(s) 2019 E Nell, Henry George and How Growth in Real Estate Contributes to Inequality and Financial Instability, Palgrave Studies on Henry George for the 21st Century, https://doi.org/10.1007/978-3-030-18663-0_11 135 136  E NELL also have to work on poorer land, and in many cases would be subject to monopolization This last was surely true, but his earlier argument directly contradicts his account—his brilliant and ingenious account—of how rents arise in the first place, on the “unbounded savannah.” Remember: there, all land was equally fertile, so there was no reason to choose one plot over another Hence, as progress took place, there was no movement to poorer land, because there was no poorer land Rents depend on differentials, but differentials not have to arise because of diminishing returns; in George’s account, the differentials emerged because division of labor and innovation took place and productivity rose in settled areas, which then became desirable and productive locations In this story there is no reason to expect wages or profitability to diminish Average and marginal productivity might very well rise rather than fall as development takes place But rents will still tend to rise with progress, because new differentials will be created or old ones widened And because progress offers opportunity for monopolies to emerge This tendency of rents to rise creates a special kind of pressure in the economy George saw this and suggested that it could explain the value of land in a region or nation Growth would increase output—GNP—but at the same time it would drive up rents The value of land would be the capitalized value of the rents, and GNP the accumulated value of the increments of growth These two would obviously move together, and if the capitalization factor were an interest rate equal or nearly equal to the rate of growth, the values would obviously be close But many other factors and forces can intrude This set of relationships has a close parallel in the modern world, in Q, the ratio of financial claims to real productive assets—two variables dependent on different forces and factors that nevertheless also have a tendency to move together and equal each other in appropriate circumstances But perhaps even more importantly, George saw that there would be a close connection between the total amount of rent in a region or nation and the costs of government in such an area This would be due partly to the fact that improving government would advance progress, and so drive up rents; it would be due partly to the fact that progress, in driving up rents, creates conditions that require regulation and government attention, calling for spending on government (Notice that if rents and costs of government move together there is no need for austerity; rents can be taxed to cover the costs of government—assuming landed interests don’t block the legislation.) In any case, total rents and the costs of government 11 CONCLUSIONS  137 would tend to move together If rents were heavily taxed, that might well pay for government But it should not be rents alone; all of finance and monopoly should be subject to tax, to be set against the costs of today’s larger, and tomorrow’s much larger, government There is yet another aspect to the rise of rents The process readily leads to concentration, and George saw this as driving the growth of inequality, also setting in motion land speculation, which further increased inequality He was convinced that progress would necessarily lead to increased inequality, bringing poverty in its wake All of which, he hoped, could be rectified by the single tax Some of his analysis and argument may have flaws, but the overall insight is surely on target The effects of progress on rents need to be recast in terms of the macroeconomics of a modern economy, a financialized economy In this context, we can see the pressures that will indeed lead to growing inequality—pressures, for example, of wealth on earning power, and of rising rents leading to concentration of land ownership. Likewise we are seeing a vast increase in debt, both for households and for business. But, following George, the argument here is that these dangerous developments can be curtailed with appropriately designed taxes, together with  carefully designed ways of using the proceeds, among other things to reduce the burden of debt But concentration doesn’t happen only in land and land ownership In a financialized economy, the availability of money and credit is controlled by the system, and the system is controlled by a smaller and smaller group of larger and larger banks and financial firms, as mergers and acquisitions increase concentration The power to determine the allocation of credit resides in these institutions and is used for their benefit, not the benefit of the public, just as George pointed out that land and rents impoverished the general public This is the new form of the danger that he so clearly saw and sought to confront. Accordingly, the taxes will have to hamper concentration and consolidation, regulation will have to prevent price-­ fixing, monopolizing of credit and other activities against the public interest, while taxation—Tobin taxes—will be needed to dampen and reduce speculation. And as a result of urbanization and the shift to mass production, the economy now  faces weakness and instability in aggregate demand—so the Government Budget will have to take on the management of overall demand and employment—another topic altogether. And all this now faces the uncertain  prospect of massive and widespread destruction of jobs by Artificial Intelligence and computer-run automation. (The uncertainty makes planning a response all the more difficult.) 138  E NELL Finally, rents and real estate are securitized in the modern world, and this creates a whole new situation In a financialized economy, some securities will increase in value even though there is no change in their underlying condition The underlying real asset—land or location or social position— increases in value because its “rental” price has risen, in spite of the fact that there has been no investment or other change in it Securities based on such assets will therefore tend to rise in value, so long as the economy as a whole is growing, even if weakly, in a slump This has a very significant implication: a growing financialized economy cannot grow in equilibrium If some securities are rising in value and others are not, there will be a tendency to shift in favor of the rising securities The financial system will always have to rearrange its portfolio of securities, and it will have to put pressure on the real economy to support higher security prices It will have to this under conditions that will lead to difficult-to-control credit expansion, tending to spill over into a positive feedback spiral The growth of rents tends to make the system unstable and liable to crisis This, of course, interacts with the tendency toward increased inequality; progress may indeed bring us inexorably to poverty after all—unless policy-makers can rise to the occasion!  And, as George understood very well, that depends on the development of a strong political force backing programs in the interest of the general public, the people as opposed to the profiteers! Why tax the rich? Because, as the NY bank robber famously said, that’s where the money is! 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Early Economist New York: Palgrave Macmillan CBO/JCT (Congressional Budget Office / Joint Committee on Taxation) (2016) The Distribution of Asset Holdings and Capital Gains Washington, D.C.: CBO/JCT. August © The Author(s) 2019 E Nell, Henry George and How Growth in Real Estate Contributes to Inequality and Financial Instability, Palgrave Studies on Henry George for the 21st Century, https://doi.org/10.1007/978-3-030-18663-0 139 140  BIBLIOGRAPHY Foldvary, Fred (2005) “Geo-Rents: A Plea to Public Economists,” Economic Journal Watch, 2(1) 106–132 Garegnani, Pierangelo (1970) “Heterogeneous Capital, the Production Function, and the Theory of Distribution,” Review of Economic Studies, 73(3) 407–36 George, Henry (1883) Social Problems Chicago and New York: Belford, Clarke ——— (1915) Progress and Poverty Garden City: Doubleday Hagemann, Harald (1992) “Traverse Analysis in a Post-Classical Model.” In Beyond the Steady State, edited by Joseph D.  Halevi, David Laibman, and Edward J. Nell London: Macmillan Hall, R, and Hitch, C. J (1939) “Price Theory and Business Behavior,” Oxford Economic Papers, 2: 12–45 Harcourt, G. C (1972) Some Cambridge Controversies in the Theory of Capital Cambridge: Cambridge University Press Hayek, Friedrich A (1941) The Pure Theory of Capital London: Routledge and Kegan Paul Hicks, John (1932) The Theory of Wages, London: Macmillan ——— (1965) Capital and Growth Oxford: Clarendon Press Hudson, Michael (2017) J is for Junk Economics, ISLET Kaldor, Nicholas (1957) “A Model of Economic Growth” Economic Journal, 67, 591–624 Kindleberger, Charles (1978) Manias, Panics and Crashes: A History of Financial Crises New York: Basic Books Kurz, Heinz (1990) Capital, Distribution and Effective Demand Cambridge: Polity Press and Basil Blackwell Kurz, Heinz, and Neri Salvadori (1993) “The ‘Standard Commodity’ and Ricardo’s Search for an ‘Invariable Measure of Value.’” In The Dynamics of the Wealth of Nations, edited by Mauro Baranzini and G. C Harcourt 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into the Nature and Causes of the Wealth of Nations, edited by Edwin Cannan London: Methuen Solow, Robert (1956) “A Contribution to the Theory of Economic Growth,” Quarterly Journal of Economics, 70, 65–94 Sraffa, Piero (1960) Production of Commodities by Means of Commodities Cambridge: Cambridge University Press Tobin, James (1969) “A General Equilibrium Approach to Monetary Theory,” Journal of Money, Credit and Banking, 1, 15–29 Turner, Adair (2014) “The Consequences of Money-Manger Capitalism,” Oct 4, YouTube.com ——— (2015) Between Debt and the Devil, Princeton: Princeton University Press Index1 A Accelerator, 86 Adjustment to demand fluctuations, in mass production economy, 76–82 Aggregate portfolio, 106, 109 Agricultural capital, 22 Anderson, James, 14 Andrews, P. W S., 20 Arnott, R., 37n1 Atkinson, A., 37n1 B Balanced financial expansion, 123 Barter, 16 Beard, Charles, 21 Beard, Mary, 21 Block, Thorsten, 80n2 Bonds, 24, 31, 40, 41, 101n1, 103–107, 114, 116, 122–124 Business cycle, 62n7, 79, 80n2, 86, 91, 128, 129 C Capital, 12, 15, 17–23, 29, 30, 73, 74, 76, 135 agricultural, 22 controversy, 20 financial, 20, 33, 116–118 liquid, 97, 114–116 productivity, 22 real, 20 Capital accumulation, 61, 62, 76 golden rule of, 65n9 Capital and Credit (Morishima), 78n1 Capital and Growth (Hicks), 78n1 Classical view of rents, 17–18 Conference of the Eastern Economic Association (March 2017), Consumption, 17, 18, 20, 21, 30, 31, 37, 38, 41, 59, 59n5, 60, 62, 64, 65n9, 72–76, 78, 80, 80n2, 82, 91, 93–95, 100, 122 Cooperation, 3–5, 21, 28–31, 37, 39, 41, 42, 52, 56, 88  Note: Page numbers followed by ‘n’ refer to notes © The Author(s) 2019 E Nell, Henry George and How Growth in Real Estate Contributes to Inequality and Financial Instability, Palgrave Studies on Henry George for the 21st Century, https://doi.org/10.1007/978-3-030-18663-0 143 144  INDEX Costs of government, growth and, 42–45 Craft economy, 12, 19, 24, 51, 52, 56, 57, 59, 61–63, 73, 74, 81, 82, 95, 134 adjustment to demand fluctuations in, 58 Craft industry, 68 D D’Agata, Antonio, 57n1 D/E, see Debt/equity ratio Debt/equity (D/E) ratio, 103–105, 123, 125–127 Degree of optimism in market, 108 Demand pressure, 39–45, 64 Differentials, 3, 13, 15, 17, 21, 23, 28, 31, 41, 43, 89, 92, 94, 95, 104n4, 136 Diversification, 29, 105 Division of labor, 3, 5, 18, 21, 24, 28, 29, 31, 41, 42, 88, 136 E Economic growth, 6, 12, 27–33, 56 Economic policy, 2, 86 Economic rent, 15 ELR, see Employer of last resort policy Employer of last resort (ELR) policy, 119, 130, 131 Equality, 4, 67, 71–72, 131 Errouaki, K., 20n6, 125n1 F Factor markets, 18–20 Ferguson, C. E., 78n1 Feudal Europe, 11 Feudalism, 12 Financial capital, 20, 33, 116–118 Financialization, 68, 97–98, 137 Financial market, 40, 86, 97, 98, 102, 114, 125, 130 Financial speculation, 2, 132 Fixed-price economy, 77 Friedman, Milton, 102 Frontier thesis, 21 Full employment, 19, 62, 68, 72, 74, 75, 79, 102, 116 G Gaffney, Mason, 39n3 Garegnani, Pierangelo, 19n5 GDP, see Gross domestic product General Theory (Keynes), 72 George, Henry, 1–7, 3n1, 5n2, 9–12, 15, 17, 18, 20, 23, 28, 29, 32, 33, 36–38, 42–46, 51, 52, 56, 62, 67, 68, 71, 80, 82, 83, 85, 86, 88, 90n5, 91, 94, 95, 97, 100, 101n1, 103n2, 109, 113–115, 119, 122, 123, 132–137 Glass-Steagall Act of 1933, 107 Global financial crisis of 2008, GNP, see Gross national product Gross domestic product (GDP), 45–48 Gross national product (GNP), 3, 6, 10, 14, 28, 32, 33, 51, 56, 82, 136 Growth analysis, 41–42 and costs of government, 42–45 of demand, 87, 88, 90–94 models, 13–17 of output, 66, 88, 125 of productivity, 88–89 rate, 30, 32, 38, 42, 60, 62–69, 87–92, 119, 128, 133, 136 and rents, relationship between, 42, 85–95 transformational, 13, 42–45, 86, 98, 100  INDEX  H Hagemann, Harald, 92n6 Halevi, Joseph D., 92n6 Hall, R., 20 Harcourt, G. C., 19n5, 65n9 Henry, George, 12–13 Henry George School of Social Science, 3n1 Henry George Theorem, 2, 36–48, 82, 131 demand pressure, 39–45 rent tax, 39–45 Revised 2016 GDP Accounts, 45–48 traditional case, 36–39 Hicks, John, 77, 78n1 Hitch, C. J., 20 Holding securities, 103–105, 114 Hudson, Michael, 102 I Imperfect markets, 37 Inequality, 2, 3, 7, 9, 23, 24, 91n5, 127, 128n2, 134, 135, 137 in financial system, 113–119 wealth, 62, 116–119 Innovation, 2–4, 6, 24, 28, 29, 31, 41, 43, 52, 57, 68, 73, 77, 86, 88, 91, 92, 95, 119, 127, 132, 133, 136 Innovative growth, 86 Interest, effects on saving and investment, 80–82 Investment, 6, 30, 31, 36–41, 52, 55–69, 72–82, 86, 87, 90–94, 101, 102, 104, 105n5, 106–108, 114, 116, 118, 119, 122–124, 127–129 K Kalecki, M., Keynes, John Maynard, 6, 71–73, 76, 101, 102 145 Keynesian adjustment, 78–80 Keynesian model, 30 Kindleberger, Charles, 125n1 Kucera, David, 80n2 Kurz, Heinz, 17n4, 19n5, 20n6 L Labor, 12–17, 19, 20, 22, 29, 30 division of, 3, 5, 18, 21, 24, 28, 29, 31, 41, 42, 88, 136 market, 23, 72 movement, 21 productivity, 29 stored-up, 18 unpaid (non-monetized), 30 Laibman, David, 19n5, 92n6 Land, 12–17, 19–21, 24, 27–31, 33, 82–83 price, 29, 30 speculation, 68, 97, 114 value, 30 Land-backed securities, 33 Layoffs, 72, 74, 77, 86 Liquid capital, 97, 114–116 Liquidity premium, 106 Lowe, Adolph, 92n6 M Macroeconomics, 6, 51–52, 78, 79, 86, 137 Malthus, Thomas R., 14, 28 Marginal product, 9, 19, 20, 38, 61, 64, 72–75 Margin of production, 6, 57, 67 Marginal productivity, 2, 9, 14, 78, 95, 136 of labor, 71 theory, 18–20 Markovitz portfolios, 109–111 Marshall, Alfred, 18, 52 Marshallian technology, 56–61 Marx, Karl, 13, 76, 134 146  INDEX Mass production economy, adjustment to demand fluctuations in, 76–82 Mazzone, Andrew, 1–3, 3n1, 6, 7, 38n2, 39n3, 45–48 Meade, James, 78 Mill, John Stuart, 61 Miller, Merton, 103n3 Minsky, Hyman P., 125n1 Modigliani, Franco, 103n3 Monopolization, 67, 94n8, 136 Monopoly rent, 4, 10, 12, 39, 39n3, 44–46, 48, 71, 91, 99, 100, 132, 136 Morishima, Michio, 78n1 Multiplier, 38, 72–76, 79, 80n2, 119, 126 N NBC, see New Business Cycle Nell, E. J., 19n5, 20n6, 59n5, 65n9, 80n2, 88n2, 92n6, 125n1 Neoclassical models of rents, 14–15 Neoclassical Theory of Production and Distribution, The (Ferguson), 78n1 Neo-Ricardian approach, 14–15, 17 Network externalities, 20 New Business Cycle (NBC), 79n2 Non-basic good of type II, 15, 17 No-rent land, 14, 17, 57 O Old Business Cycle, 62n7 Oligopoly, 39, 52, 100 Order of fertility, 17 Ownership, 5, 5n2, 9, 30, 31, 41, 68, 100, 103n3, 105, 114, 115, 137 right to, P P/E, see price/earnings ratio Petri, Fabio, 19n5 Phillips, Tom, 80n2 Portfolio analysis, 106–107, 109 Post-Keynesian approach, 14–15, 18 Poverty, 2, 5–7, 9, 12, 13, 23, 91n5, 95, 113, 135, 137 Price mechanism, 56–63 growth and, 61–63 growth rate, 63–69 Price/earnings (P/E) ratio, 122–125 Primitive accumulation, 21 Private land ownership, Production function, 73–76 Productivity, 3, 5, 12, 17, 21, 22, 24, 28, 29, 41–44, 57, 61, 63n8, 65–67, 79, 89, 90n5, 91–94, 113, 116, 127, 135 capital, 22 growth of, 88–89 of labor, 29, 78, 79 marginal, 2, 9, 14, 18–20, 71, 78, 95, 136 Progress, 9, 12–13, 29, 52, 56, 85, 135–138 Progress and Poverty (George), 1, 2, 4, 28, 45, 56 Q Quadrio-Curzio, Alberto, 17n4 Quantitative adjustment, 130 R Real capital, 20 Real economy, rent in, 11–24 Real estate, 2, 6, 7, 12, 14, 23–24, 28, 31, 33, 39n3, 41, 45, 48, 51, 68, 93, 95, 98, 100, 102, 106, 116,  INDEX  117, 119, 123–127, 129, 132–134, 138 Real wage, 52, 58, 60, 61, 64–67, 71, 72, 74, 75, 79, 88–90, 92–94 Real-financial instability, 127–134 international implications, 133–134 policy implications, 130–133 Real-financial linkages, 100–103 Rent, 2, 3, 6, growth and, 42 in real economy, 11–24 and securities markets, 122–134 securitization of, 12, 24, 33, 51, 98, 106–111, 127, 134, 138 tax, 36, 39–45 treatment of, 13–17 See also individual entries Rental assets, 51 Rent-seeking behavior, 15, 57n1 Revised 2016 GDP Accounts, 45–48 Ricardian theory of rent, 17, 28 Ricardo, David, 9, 14, 15, 17, 21–24, 28, 76 Right to ownership, Rights to use, 5n2 Risk aversion, 104, 108 Robinson, Joan, 65n9, 88, 93 Ryan, Paul, S Salvadori, Neri, 17n4, 19n5, 20n6, 57n1 Samuelson, Paul, 65n9 Savings, 23, 52, 55–69, 64n8, 79, 102, 114, 116, 118, 122, 124 Schefold, Bertram, 19n5, 88n3 Securities markets, rents and, 122–134 real-financial instability, 127–134 Securitization of rents, 12, 24, 33, 51, 98, 106–111, 127, 134, 138 degree of optimism in market, 108 Markovitz portfolios, 109–111 portfolios, 106–107 147 Self-financing, 123 Semmler, Willi, 125n1 Separation theorem, 111 Settlement, 3, 29, 32, 42, 43 expansion of, 29 Shaikh, Anwar, 20n6, 88n3 Short-run realistic adjustment, 19 Single tax, 2, 36, 45, 131 Smith, Adam, 14, 57n1, 133 Solow, Robert, 63n8, 65 Space, 2, 4, 9, 15, 20, 44 Sraffa, Piero, 15, 15n1, 16, 18, 19n5, 22, 57, 88n2, 134 Stiglitz, J., 37, 37n1 Stocks and bonds, 106 Stored-up labor, 18 Superprofits, 57, 58, 67, 68, 86, 89, 92 T Theory of Economic Growth (Morishima), 78n1 Theory of factor markets, 18 Theory of income distribution, Theory of interest/profit, 22 Thomas, Stephanie, 80n2 Tobin effects, 102 Tobin tax, 132 Transformational growth, 13, 42–45, 86, 98, 100 Treatment of distribution, 21–23 Trump, Donald, 2, 7, 57n1 Turner, Adair, 102 Turner, Frederick Jackson, 21 U United Kingdom, 40 United States (US), 12, 17, 36, 40, 45, 46, 48, 116n1, 131 economy rents, 23 Universal Declaration of Human Rights, 131 148  INDEX Unpaid (non-monetized) labor, 30 Urbanization, 44 US, see United States V Value and Capital (Hicks), 78n1 Verdoorn-Kaldor equation, 88, 89, 94 Victorian equilibrium, 67 W Wage-accumulation curve, 88, 92, 93, 93n7 Wage rate/growth of demand curve, 91–92 Wages of superintendence, 61, 62 Wealth accumulation, 116–119 Wealth inequality, 62, 116–119 West, Edward, 14 ... both in his own time—when his work was a worldwide sensation? ?and afterward, © The Author(s) 2019 E Nell, Henry George and How Growth in Real Estate Contributes to Inequality and Financial Instability, ... distant © The Author(s) 2019 E Nell, Henry George and How Growth in Real Estate Contributes to Inequality and Financial Instability, Palgrave Studies on Henry George for the 21st Century, https://doi.org/10.1007/978-3-030-18663-0_2... Rent tax © The Author(s) 2019 E Nell, Henry George and How Growth in Real Estate Contributes to Inequality and Financial Instability, Palgrave Studies on Henry George for the 21st Century, https://doi.org/10.1007/978-3-030-18663-0_4