The economic significance of land has been recognized by serious thinkers since the founding of modern economics. The classical tradition, starting with Adam Smith and continued by others, treated land as fundamentally different from labor and capital — a non-produced input whose returns flow to the holder of title rather than to anyone who created the value. That distinction has structural consequences for how productivity gains are distributed, how inflation propagates, and what kind of economy we end up with. Below are multiple papers (with links to SSRN) that extend this tradition with new empirical findings on the U.S. economy from 1960 to 2023. They will soon be the basis for a new book.
The broader intellectual tradition these papers build upon was established by Smith, Ricardo, Paine, and George. (Those author summaries are provided even further below,)
Land Inflation as a Theory of Ordinary Inflation (Ellis 2026)
This paper presents 63 years of U.S. data from 1960 to 2023 supporting land appreciation as the primary structural driver of ordinary inflation. The paper shows that cumulative real estate capital gains track roughly 93 percent of cumulative productivity growth over the period, indicating that the productivity gains the economy generates are predominantly absorbed into land rather than reaching workers as real wage growth. When productivity gains flow into real estate, they increase the cost structure of housing, of commercial rents, of energy infrastructure, and more, which then drives up the price of nearly every good and service sold. Land appreciation is largely what drives persistent, year after year inflation.
Rent and Dividend: A Policy Remedy to Remove Land Capture of Productivity Gains (Ellis 2026)
This sketch outlines a policy mechanism in which land rent is captured by the state through a land value tax and returned to citizens through a public dividend, in the tradition of Thomas Paine's Agrarian Justice and the Alaska Permanent Fund. The mechanism preserves private property in improvements while routing socially-created location value back to the public, restoring the productivity-to-wages link that the current system breaks. The proposal is presented as a starting point for further empirical and modeling work, with full implementation details and counterfactual analysis left for subsequent papers.
Land Rents and the Timing of Services Inflation: Evidence from 1914 to 2026 (Ellis 2026)
This paper documents that housing costs lead non-housing services inflation by approximately 12 months across three independent datasets spanning a century, with strongly asymmetric cross-correlations consistent with directional propagation from land cost into the broader price level. The directional asymmetry is inconsistent with common-cycle explanations and supports the propagation framework developed in the keystone paper. The findings establish that the land-to-services pathway is observable in the data at high frequency, complementing the cumulative evidence of the broader empirical record.
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Adam Smith. In Wealth of Nations (1776), Smith identified ground rent as fundamentally different from wages or profits — a return on a non-produced input rather than a payment for productive labor or capital. Smith argued that land rent was uniquely well-suited to taxation because, unlike labor or capital, land cannot move, hide, or reduce its supply in response. The one tax a nation can levy that doesn't distort productive activity, in Smith's analysis, is a tax on land. America adopted five out of six recommendations from Smith, but left his land taxation program out. This has been a consequential mistake for America, as the papers above demonstrate.
David Ricardo. Ricardo formalized the economics of land rent in 1817 in his Principles of Political Economy and Taxation. His central insight was that land rent is a residual claim — what remains after labor and capital have been paid — and that productivity gains in agriculture and industry tend to flow disproportionately to landholders rather than to workers or capitalists. Ricardo's analysis remains the formal foundation for modern treatments of differential rent and locational value.
Thomas Paine. Paine, the writer who gave the American Revolution its name, proposed in his 1797 essay Agrarian Justice that the unearned appreciation of land belongs to all citizens collectively, not to whoever happens to hold title. He distinguished natural property — the earth, water, air — from artificial property created through human labor, and proposed that the unearned portion of land value should be returned to citizens through a public dividend. Paine's mechanism is the intellectual ancestor of the framework developed in the policy paper above.
Henry George. George's Progress and Poverty (1879) brought the classical analysis of land rent to a mass audience. George observed that industrial economies were producing unprecedented wealth alongside persistent and deepening poverty, and argued that the paradox could be explained by land monopolizing the gains of progress. As productivity rose, rents rose with it; the productive surplus flowed to landholders rather than to the workers and capitalists who had created it. George proposed a single tax on the unimproved value of land as the remedy — sufficient to fund government and return the socially-created value to the public. The book sold millions of copies, inspired a movement that influenced public discussion for decades, and remains the most-read economics text ever written by an American.