Tag Archives: economic reform

Liberal economic philosophy has its roots in land reform and economic justice. John Locke said that “God gave the world in common to all mankind….” Thomas Paine stated that “men did not make the earth… It is the value of the improvements only, and not the earth itself, that is individual property.”

John Stuart Mill wrote: “When the ‘sacredness’ of property is talked of, it should be remembered that any such sacredness does not belong in the same degree to landed property.” Mill also wrote: “The increase in the value of land, arising as it does from the efforts of an entire community, should belong to the community and not to the individual who might hold title.”

In a free market capitalist economy markets allocate resources through the price mechanism. An increase in demand raises price and businesses produce more goods or services, but they cannot produce more land.  The quantity of products consumed by people depends on their income, but rising income translates to increased land rents when supply is static.

John Maynard Keynes challenged the idea that free markets would automatically provide full employment. He instead argued that aggregate demand determined the overall level of economic activity and that inadequate aggregate demand could lead to prolonged periods of high unemployment. Keynes advocated the use of fiscal and monetary policies to mitigate the adverse effects of economic recessions and depressions.

William Beveridge set out the framework for the modern welfare state to tackle poverty, health, housing, education and unemployment.  Following the principles of Keynes, the post-war government took control of key industries. Under this managed economy tax money could be used to keep an industry afloat, even if it faced economic difficulties and maintain full-employment.