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The Philosophy of Public Finance

THE TREATMENT of rent as public revenue is part and parcel of an organic theory of the State.
In the contractual theory, government is a kind of business which extends services to landowners. They only need pay for benefits received, which are construed in the narrowest possible terms.
In the organic theory, landowners hold title to land as a privilege. In return, they owe the State – acting on behalf of the community – certain obligations. The entire value of land is regarded as a benefit received from government. This is in keeping with the definition of land as “Public Value” offered by Alfred Marshall, the distinguished Victorian economist.
Chapter 7 in Fred Harrison (ed.), The Losses of Nations. London: Othila Press Ltd., pp.175-205

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