Review of the Book:
Boom Bust: House Prices, Banking and the Depression of 2010
By Fred Harrison

Marvin Morris

[Reprinted from GroundSwell, November-December 2005]

This book is published by Shepheard Walwyn Ltd., London.

Fred Harrison's book is a superb work with touches of genius in clarifying how the speculative land problem plays a major role in cyclical depressions. I have read this book with great admiration for his crystal clear insights and marvelous ability to express himself -- and his spirited forthright ability to attack problems head on. I have been in contact with the author by mail and phone.

His background includes a career in investigative journalism ending as Chief Reporter of a Fleet Street newspaper. He then left to work as an economic consultant. This included ten years during the 1990's advising the Economics Department of the Russian Academy of Sciences and the Russian Parliament on the importance of tax reform in the transition from a command economy to a more equitable market economy. He now turns a strong focus on the failure of the past and current economic analysis and public policies. This includes a clear and positive resolution based on his very extensive experience and knowledge pertaining to this global problem.

Fred Harrison was alerted to an 18-year property cycle by a very successful, Washington-based property speculator. His early research into this phenomenon in the UK, USA, Japan and Australia was published in his first book, The Power in the Land. Twenty years later, having witnessed his prediction of a recession in 1991/1992 come true, he now exposes the internal mechanism that periodically causes the capitalist economy to crash.

This book contains interesting charts that show the ongoing increase in land value in relationship to the cost of a residence done in Harrison's colorful way. It is hoped that this awareness will motivate people to consider the solution that is being offered. The book delves into the history of ground rent discourses. It deals with rent as site value, which is determined by the value of the infrastructure services and its benefits (services not provided by the titleholder). The book refers to several of the major world protagonists over a considerable time in history and their quotations which support land rent or site value legislation. These include Winston Churchill, Leon Tolstoi, Sun Yat Sen and Andrew Jackson. It includes legislators and political parties in England and other countries now giving this serious consideration.

The emphasis in government today is to maximize the acceleration and growth of the nation's income as the guideline for the country's economic welfare and stability. This releases politicians from the responsibility for the persistent failure to confront the power that is in the hands of those who control the land and rental income. There is a need for the population to understand the need to recognize rent as a reflection of the value of infrastructure services and should be collected at point received -- the benefit, in part, being lowered income taxes, reduced taxes on home and business structures and very possibly the elimination of sales taxes.


Governments stealthily intervene in our lives through the medium of rent. The size and the distribution of rent (net rent after taxes) are manipulated through the tax system. The partial retention of ground rents rewards those who choose to speculate -- resulting in capitalization of the untaxed portion of the rent. This is the equivalent of selling the rights to claim the net rent. This capitalization is the value of the rights to claim the value of what the government is losing. The author's conclusion is that by collecting proper and adequate land rent to cover infrastructure services there will be a vast reduction on income taxes, reduction or possible elimination of sales taxes, much lower prices for the combination purchase of house and land, a definite reduction in sprawl and its pollution caused from extra car mileage, less corruption in government, a giant step toward balancing the budget, and much more funding available to meet the social needs that the government is now providing with much more private and corporate funds, new construction and more jobs. Fundamentally, with the above and lesser taxes paid from wages and interest will be an uplift in purchasing power to aid our economy -- with stability and growth.

ATTENTION: To all members of Common Ground USA and the Council of Georgist Organization members and others:

Reading and reflecting on the events in this book and its facts and logic will provide assistance in educating and motivating others -- by the clear and strong manner in which Fred Harrison presents himself. Books are available at bookstores and can be requested at libraries. At a dinner meeting held earlier this year for its clients, Merrill Lynch of London provided this book at no charge to its guests. The knowledge will be forearmed information for understanding and guidance and conceivably save clients substantial sums as well as aggravation.

You are urged to contact accountants who may wish to do likewise, other professionals and financial councilors who may offer this as a guide on their own personal planning. Following this book review is my requested response from Fred Harrison on the current state of legislation in England.

For comments and questions please email: Marvin Morris at, And/or to: the author, Fred Harrison at

by Fred Harrison, Teddington, Middlesex, UK

My study of the business cycle in the UK and USA leaves me in no doubt that the only effective remedy to booms and busts is the recovery of every red cent of rent from land and natural resources to pay for public services.

Some say that this is a utopian project, that I am whistling in the wind. And yet, in Britain, we seem to be making progress in terms of public debate. The Financial Times (the British equivalent of the Wall Street Journal) is now campaigning for land value taxation. As recently as the December 9, 2005 edition, that paper's senior columnist, Samuel Brittan, wrote an article that was entitled "Land: a suitable case for taxation". He wrote:

  • "Of all the three traditional factors of production - land, capital and labour - land is the most obvious object for taxation."

But progress will not be made until something like a consensus emerges among the political parties. And as it happens, the opposition Liberal and Conservative Parties in Britain are re-examining their tax policies. Samuel Brittan had some advice for them. He concluded his article by declaring: "If the promised policy re-examinations of both opposition parties mean anything at all, they should be prepared to examine land taxation on its merits." In the policy circles in Britain, just about everyone reads -- and respects -- what Sam Brittan writes.

It gets better than that, however, for land taxation is now on the Blair government's agenda. In his pre-budget Autumn Statement, in December 2005, the finance minister, Chancellor of the Exchequer Gordon Brown, announced a consultation process on what he had previously called "the unearned increment of land". A public charge on the rent of land is now at the heart of political debate. That debate is well advanced in Scotland, where parliament and government have commissioned investigations into property taxation with special reference to site-value taxation.

Is LVT likely to surface as a topical issue in other countries? It did so in the past, supported by such luminaries as Winston Churchill in Britain, Leo Tolstoy in Russia and Sun Yat-sen in China. They all believed that Henry George was correct when he advocated that government should rely, in the main, on the rents of land for public revenue. The debate needs to be revived in the United States at the state and federal levels, in a way that challenges America's political parties to rethink their policies.

To animate people's vision of the benefits that would flow from LVT, it will be necessary to drag the policy away from the sphere of local property taxation and relocate it -- as Henry George did -- at the heart of the nation's current affairs. The failure to reform taxation means, for example, that the counter-cyclical benefits of LVT will continue to be denied to the people. If we tax wages and savings, instead of "the unearned increment of land", our enterprises will continue to be savaged by booms and busts. Our economies weathered the storms caused by land speculation in the last two centuries, but only because Europe and North America were top dogs in the global markets. In the 21st century, we are playing in a different ball game. Unless we redefine the rules of public finance, the ability to recover from the waves of recessions will become increasingly difficult, creating the social stresses which, in the past, led to revolutions.

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