inevitable phenomenon in a commodity producing society. If there is some
product, be it crude oil, or corn, the efficiency of whose production depends
on the land being used, then rent incomes will arise.
In a socialist economy all rent income should accrue to the state
and be used for the good of the community. Socialist states have usually
nationalised land, but have not always charged a rent for using the land.
In the case of mineral extraction this made no difference, since this was
done by state enterprises and rent would just have been a fictitious transfer
between sections of the state. Failure to charge agricultural rents to farms
will, however, accentuate differences in income between fertile and less fertile
agricultural regions.
It is a moot point whether land nationalisation would be popular today
in Europe. An economic alternative, which over the long term would produce
a similar effect, would be to introduce a land tax on the rentable value of land.
This is an old populist objective, originally proposed by Henry George. The
threshold for the tax could be set high enough to ensure that small farmers
paid nothing or only a token amount, but for larger more fertile estates it
could be set at a level that would confiscate the greater part of rent revenue.
The effect on large landowners would be to deprivethem of their unearned
income and making it available for communal uses If they refused it would
be tax evasion but it is ideologically harder for the likes of the Duke of Atholl
to mount a campaign to justify tax evasion than it is to mount one to justify
resistance to expropriation.
3.5 Investment
It will still be necessary to fund new investments. During the crisis of 2008
it has been necessa