Review of The Land Trap by Mike Bird – The Land is Down | books

‘T“The owner is a gentleman who does not earn his wealth… His only job, his chief pride, is to consume the wealth produced by others.” It was 1909, and a Liberal politician was launching an attack on a class of people who, in the eyes of many, contributed nothing to Britain’s industrial progress while living off its gains.

Just over a century since David Lloyd George’s Limehouse speech, it is as if the land issue has returned to politics: an analysis of MPs’ financial interests revealed that a quarter of Tory MPs earned more than £10,000 from property rentals, while 44 Labor MPs – 11% – did the same. The winner of last year’s most impressive political campaign was the mayor-elect of New York City Zahran Mamdani has made the “rent freeze” his central pledge. On the right, the rebellion against property taxes is accelerating. Journalist Mike Beard’s history of fundamental assets arrives at an opportune moment.

There is no doubt that land ownership was extremely important for most periods of history, and was linked to financial independence and social status. But its role changed dramatically with the industrial revolution and the growth of cities.

The world’s most valuable companies now design chips, develop software or extract oil. The wealthy escape high taxes by moving to the Gulf region, and some dream of “network states,” which are virtual countries that organize and govern themselves via the Internet. Henry George, the journalist and economic thinker who advocated a single tax – on land – was widely read in the nineteenth century, but is now largely forgotten. George saw land monopolies as the source of economic inefficiency and the root of inequality, as the gains from increased land values ​​went to owners and speculators rather than to productive firms.

But since the early twentieth century, politics has been organized on the left around class, and on the right around questions of identity and personal freedom. The rise of widespread property ownership seemed, for a time, to have eliminated land as a political issue. George’s only major legacy was the board game invented to popularize his ideas, the Landlord’s Game, known to most children in its later incarnation: Monopoly.

Bird charts the return of land as a central economic and political force. Real estate was used as collateral for loans that enabled the creation and expansion of businesses, and it became a source of income for companies as well: McDonald’s, which was built on a franchise model and owns the land on which many of its franchises are located, makes more money from rent than it does from royalties on its Big Mac and the rest of its menu.

For decades, real estate has been key to China’s economic growth, as local governments relied on land sales to generate revenue and citizens invested their savings in the sector. The real estate boom weakened the dynamism in other sectors. Baird points out that the country now faces a painful choice: allow prices to collapse and wipe out the wealth of the middle class, allow prices to remain high and exhaust the rest of the economy, or succumb to a gradual recession. This is the “Earth Trap” in the title.

There are some important absences in Beard’s novel. There is little about the role of engineering and technology, for example. “They bought the land, they didn’t make it anymore” is the old saying, but in reality it’s not true: steel frames and elevators allowed Chicago to become a city in the sky, while the waters of the Hoover Dam raised Las Vegas from the Mojave Desert. Surprisingly, there is nothing that shows how floods and wildfires exacerbated by climate change could destroy land values, although this is a growing possibility everywhere from the US Gulf Coast to the Mediterranean, as ownership structures magnify the injustices. When fields are flooded, tenant farmers with the least resources suffer the most and have difficulty rebuilding.

Arguably the main mystery of the Earth is its failure to keep pace with improvements in other aspects of life: the devices people use may be vastly more advanced than the smartphones of the 1990s, but the quality of the homes they live in has improved little in the past century. This book is a brilliant introduction to the economics of land ownership, although it says little about the social consequences.

Private landlords have little incentive to invest when they can easily fill the housing they rent, while states increasingly lack the funds for repair and renovation. The combination of an ailing private rental sector (expanded in Britain thanks to mortgages created 29 years ago) and shrinking public allocations, stripped by the right to buy, is one of the main reasons why land has become a prominent issue again. The system we created has failed to provide the shelter people need, and instead has facilitated the return of slums.