What Caused the Crisis?

Jeff Dean

[ GroundSwell, March 2012]

(The following text is from a pamphlet produced by Earthsharing Canada member Jeff Dean, and forwarded to GroundSwell by Frank De Jong. Jeff Dean says he wrote this pamphlet to distribute at rallies October 15, 2011 in solidarity with the Occupy Wall Street protesters. GroundSwell did not space for the graphics in the pamphlet.

What caused the crisis?

The financial crisis was in large part caused by a housing bubble. As the bubble grew, fueled by property speculation and risky mortgage lending, people thought the rise in house prices was inevitable and based on fundamentals. As rises in house prices outstripped rises in income, people borrowed against their house price to keep up their consumption, while private savings collapsed.

Once the housing bubble burst, however, people couldn’t keep up their consumption. Demand collapsed, leading to the destructive world-wide recession.

The root cause of this crisis is right in front of us, yet it escapes everyone’s view.


Speculative bubbles in real estate, oil, commodities and food have punished billions of innocent bystanders. Financial speculation, cheap credit and bank bailouts prey on this underlying cause… that we all need the earth to live yet allow some to privatize and speculate on its value.

But there’s a simple solution…

One that was worked out more than 100 years ago by the American economist and social reformer, Henry George. It has been endorsed by Poets, Statesmen and Nobel-Winning Economists:

“People do not argue with the teachings of [Henry] George, they simply do not know it. And it is impossible to do otherwise with his teaching, for he who becomes acquainted with it cannot but agree.” – Leo Tolstoy

“The earth belongs to the people. I believe in the gospel of Georgism.” – Mark Twain

“I have made speeches by the yard on the subject of land value taxation, and you know what a supporter I am of that policy. It is quite true that the land monopoly is not the only monopoly which exists, but it is by far the greatest of monopolies – it is a perpetual monopoly, and it is the mother of all forms of monopoly.” – Winston Churchill

“The teaching of Henry George will be the basis of our program of reform.” – Sun Yat-Sen

“I have already read Henry George’s great book and really learnt a great deal from it. Yesterday evening I read with admiration -– the address about Moses. Men like Henry George are rare, unfortunately. One cannot imagine a more beautiful combination of intellectual keenness, artistic form, and fervent love of justice. Every line is written as if for our generation. The spreading of these works is a really deserving cause, for our generation especially has many and important things to learn from Henry George.” – Albert Einstein

“It (land value taxation) guarantees that no one dispossess fellow citizens by obtaining a disproportionate share of what nature provides for humanity.” – William Vickrey, Nobel Prize Winner in Economics

“I think in principle it’s a good idea to tax unimproved land, and particularly capital gains (windfalls) on it.” –- James Tobin, Nobel Prize Winner in Economics

“It is important that the rent of land be retained as a source of government revenue” –- An Open Letter signed by 30 economists, including 4 nobel-prize winners, to Soviet president Mikhail Gorbachev in 1991

“We need a big debate on different kinds of taxation, to talk about how corporations are freeloading on public services and getting tax breaks while taxes are falling on workers and smaller businesses. We need to open a debate about land taxation and Henry George, to tax bad things, not good things, and not to tax people who go to work every day.” – Ralph Nader

Is it fair?

Land Value Taxation would considerably dampen property speculation and housing bubbles, leading to sustainable growth. The public revenue would support needed government services and infrastructure, while untaxing the productive economy would raise wages and increase business opportunities. Economic shocks that hurt people would be far less frequent and severe.

Land value taxation and related policies are simple, realistic and evolutionary measures we could take at any level of government.

What is Earthsharing Canada?

We are part of an international grassroots movement advocating revenue-neutral tax shifting off consumption and income taxes and onto site rental, resource rental, and pollution levies. Untaxing the productive economy creates wealth while taxing nature conserves the planet.

We believe that this is a missing economic link that could help progressive movements realize their goals.

Learn more about the advantages

  • A stronger economy
  • Marginal areas revitalised
  • Reducing unnatural inequality
  • Ample revenue for public services
  • Self-financing public infrastructure
  • Environmental conservation
  • Sustainable cities
  • Less bureaucracy

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