The Problem With Expensive Real Estate

The U.K. Office for National Statistics has recently begun to track the value of land as part of the national accounts — and it turns out that dirt is now just about the biggest thing going in Britain:

I was tipped off to this development by Josh Ryan-Collins, an economist at University College London's Institute for Innovation and Public Purpose. Ryan-Collins has been making the case lately that we ought to paying much more attention to land and its economic role. This was a central concern of such early economic theorists as Adam Smith, David Ricardo and John Stuart Mill, who saw land as a fundamentally different resource from labor or capital and thus deserving of special scrutiny and treatment. One frequent prescription was stiff taxation of land values, which in the U.S. became the focus of a political movement inspired by the economist Henry George. Some went even further. When pro-free-market theorist Léon Walras built the general equilibrium model in the 1870s that was a precursor to much of modern economics, he assumed that in an optimally functioning economy, land would be nationalized — with the rent it from it replacing taxes as the means of funding government.