In 1933, a University of Chicago contemporary of Milton Friedman's named Homer Hoyt published his doctoral dissertation, entitled "100 Years of Land Values in Chicago." It detailed 5 cycles during those 100 years. Those cycles displayed a series of events which consistently occurred in the same order.
What might we learn from Homer Hoyt, 75 years later? More important, is there something we can do to prevent this cyclical activity from destroying prosperity for the many, and creating it for the few?
Here are the 30 events ... Which ones are you observing in your community now?
1. Machine techniques, production methods improved
2. Population begins to spurt up
3. Shortage of housing, office & commercial space first felt
4. Rents begin to rise.
5. Selling prices of old buildings begin to advance
6. Vacant lot purchases begin to rise
7. Rate of new construction begins to rise sharply
8. Credit eases to stimulate volume of new building
9. Rapid growth of population projected far into the future
10. Prices of tracts near settled areas advance rapidly to peak.
11. Large tracts subdivided beyond needs of immediate development
12. Lavish public expenditures
13. Rate of population growth falls off
14. Vacancies reappear
15. Rise in rents slackens
16. Volume of building construction at peak.
17. Asking prices of land advance in face of fewer land sales
18. Financial institutions continue loans on peak values in face of lessened construction
19. Holders of 2nd mortgages begin to foreclose with faith in 1st mortgages
20. Stock market crash
21. Unemployment mounts to peak; wages down
22. Increased movement of population to small city or farm; doubling up in city
23. Vacancies mount to peak in houses, apartments, offices, stores; industrial rents down
24. Interest charges high in proportion to net rents
25. Taxes high in proportion to net rents
26. Second mortgage holders wiped out in flood of first mortgage foreclosures
27. Bank failures mount; loaded with real-estate "frozen assets."
28. Volume of new building at bottom
29. Subdividing stopped; most vacant land not salable at any price
30. Construction costs at lowest point
source: Homer Hoyt: One Hundred Years of Land Values in Chicago, Copyright University of Chicago Press, 1933, detailed by Weld Carter in A Clarion Call to Sanity, to Honesty, to Justice
The subtitle to Henry George's book, Progress & Poverty is "An inquiry into the cause of industrial depressions and of increase of want with increase of wealth ... The Remedy"
It is interesting that Item #1 is "1. Machine techniques, production methods improved." That's the "progress" in P&P. Henry George began the book with the observation that if Ben Franklin or Joseph Priestley (the renowned chemist) in 1777 could have imagined the enormous leaps in technological progress that would occur in the next 100 years, they would have imagined that there would be no poverty. Yet poverty in 1879, when George wrote P&P, was widespread and serious in the US. Why?, he wondered. He sought the cause, and laid out his findings in Progress & Poverty.
I commend it to your attention, either the original or a new contemporary-language abridgment. If you've read the former, it will ring in your ears as you read the latter. Links to some very short versions are here.
Here's the very shortest!
All Boasted Charitable Doles Ever Futile.
God Hates Injustice.
Justice Knows Land May Not be Owned.
Poverty Quickly Remedied by Single Tax Upon Value, Work-value Excepted.
Yours Zealously, The Author)
The author of that is J. W. Bengough, and it comes from his The Up-To-Date Primer: A First Book of Lessons for Little Political Economists In Words of One Syllable, With Pictures