THE LAND TRAP

A searching history of land as a measure—and mismeasure—of wealth.

They’re not making any more of it, barring dredging operations off Holland or Japan. So it is that, Economist editor Bird writes, land remains enormously valuable, accounting for “about 35 percent of the $520 trillion in real wealth on earth,” twice the value of all the publicly traded corporations on the world’s stock markets. But whereas most markets are regulated, land is less so—it’s just there, it seems, an asset that “does not really decay,” that is, depreciate. It is thus the basis for hereditary wealth and present-day inequalities, since those who own land can use it as collateral, commanding loans unavailable to tenants and the landless poor. By Bird’s wide-ranging account, this very fact has propelled such movements as the westward expansion of America, with seekers scrambling for real estate to call their own. Against this, the author chronicles a powerful 19th-century economic-reform movement led by activists such as Henry George, who called for steep taxes on landownership, and especially on land that was rented out, inasmuch as the landowners “needed to do nothing more than collect the income”—and besides, benefited disproportionately from publicly funded infrastructure improvements. Naturally, Bird writes, the wealthy were strongly opposed to such reforms. Among other cases, the author examines a tax on China’s landowners propounded by the country’s first president, Sun Yat-sen, so that building an urban industrial economy “could be paid for by the uplift in the value of the land around it.” In another intriguing instance, Bird looks at McDonald’s as a real estate business fronted by hamburger sales, with the company making “more money from rent…than it does from royalties on Big Macs, Happy Meals, and all its other…menu items put together.”

A thought-provoking look at the little-examined role of land in making the rich richer and the poor poorer.