I wanted to post this somewhere, and this seemed as good a place as any. It probably won’t interest anyone, so you can stop reading now.

I’m making this game to fund my long term goal of researching the economics of land rent. And sometimes – yesterday for example, I spend a whole morning making a single argument just a tiny bit more logical.  Other times - today, for example – I spend all my time reading about historical GDP and house prices, and spend no time at all making the game. I like to feel that I’m making progress in both areas, y’see.

Today I used a spreadsheet for the first time in twenty years. I needed to compare how a country’s GDP would change under different scenarios, and the only practical way was to spreadsheet it. So I did, and finally got some firm numbers for something I’ve suspected for years but been unable to prove:

If the government decided to buy all the land in the country, it would have to issue bonds with a good rate of interest, and hope to have the money by the time they mature. Which would be a lot of money – roughly three times the GDP.  And the bottom line is, they could, and they could pay off those bonds in just fifteen years. Fifteen years! That’s not long. And that does not involve a single cutback – indeed – most areas of government spending would increase.

(In case you think that buying all the land means I’ve suddenly become a communist, I should explain that in this scenario the government would immediately sell that land again, at a great loss. The reason for buying it is simply to ensure that current land owners do not lose a penny when land values crash. The theory I’m working on – that land rent is superior to taxation – is a very old and popular one, but has always had the Achilles heel that it reduces land values and is therefore opposed by land owners. So today I worked out the numbers for a thought experiment: what if the government just bought all the land at full; market value? It’s a pretty extreme idea, and I do not for an instant think this is the way it would happen, but it’s useful to consider extremes in order to test the limits of a theory. And the result? The numbers add up. And in only fifteen years! All because of the miracle of compound interest.

“What are you talking about? How can that be? Are you mad?” I hear you ask. Well that’s a topic for another time.