Henry George and Second Life

Experimenting and thinking in 2008 about Second Life, it occured to me that its land-based economy would have appealed to Henry George. In SL, virtual land is a proxy for access to Linden’s computer resources and almost the only basis for ‘government’ revenue.

Henry George (1855-97) was a self-taught American journalist and political economist. In 1879 he published Progress and Poverty, which was a huge success. George argued that a much of the wealth created by social and technological advances in a free market economy is captured by land owners and monopolists via economic rents, and that this concentration of unearned wealth is the root cause of poverty. George considered it unjust that private profit was being earned from limiting access to natural resources while productive activity was taxed. This, he said, was wage slavery.

George advocated abolition of all taxes save those on unimproved land value. Modern economists like Milton Friedman agree that Henry George’s land tax is potentially beneficial. Some environmentalists support the idea of resource rental or tax.

George was influential in Australia, where some land tax is still levied. His popularity has declined, but his ideas are still advocated by some and his influence continues through bodies such as the Henry George Foundation of America and the Center for the Study of Economics and the Robert Schalkenbach Foundation.

Australia’s Henry George League is now Prosper Australia. It proposes a system of resource rentals as a foundation for more equitable public finance. Those who benefit from the use of community resources, particularly natural resources, its says, should be required to pay the community for the privilege. "It is a simple but far-reaching change-stop punishing labour with taxes and start collecting the rental value of land." Rent on buildings and improvements would go to the person who owns them. But rent on the land and other natural resources would go to the community. This would include all resources such as land, water, oil, coal, and the electromagnetic spectrum. Other tax would be abolished. Resource tax would be perhaps 10% or more, but the prices of general goods and services would fall.