| hat does this chart tell us about the distribution of wealth? This chart refers mainly to the production of wealth, not its distribution. The basic unit of wealth output in this example is the aggregate amount produced per worker each day. That aggregate is divided among the three factors, labor, capital and land. The "infrastructure cost" in this example is basically what we mean by "tax revenue" -- and it could have been collected from all three of the factors.
hat if society did not take care of the unemployed workers? Their presence -- and their human needs -- would still impose a burden on society.
sn't it our softness and concern for "the poor unemployed" that really creates the economic inefficiency shown here? Not enitrely. It is true that there is a loss to the economy from tax revenues taken from producers and consumers to support the poor (or to do anything at all), there is another, and greater, inefficiency caused by land being withheld by speculators from people who are able and willing to use it.
hy is there infrastructure cost even where land is not used? Because the land is available for use; public infrastructure is provided that would facilitate its highest and best economic use. This is one of the greatest sources of waste in a modern economy.
hy use tax revenue to provide public services on the free land? Land use in today's society is tremendously inefficient. If land speculation were eliminated, a large amount of land that presently has market value -- and is provided with public services -- would no longer be in demand. But if services were still provided in these areas, it would provide a safety valve for people who could, or would. not make it in the mainstream economy. The great success of the United States of America in its early years was that it presented precisely this sort of "safety valve". |