We worked through spring and winter, through summer and through fall.
But the mortgage worked the hardest
and steadiest of them all;
It worked on nights and Sundays, it worked each holiday;
It settled down among us and it never went away.
Whatever we kept from it seemed almost as bad as theft;
It watched us every minute and it ruled us right and left.
The rust and blight were with us sometimes, and sometimes not;
The dark-browed, scowling mortgage was forever on the spot.
The weevil and the cutworm they went as well as came;
The mortgage stayed forever, eating heartily all the same.
It nailed up every window, stood guard at every door,
And happiness and sunshine, made their home with us no more;
Till with falling crops and sickness we got stalled upon the grade.
And there came a dark day on us when the interest wasn't paid.
And there came a sharp foreclosure, and I kind o' lost my hold.
And grew weary and discouraged and the farm was cheaply sold.
The children left and scattered, when they hardly yet were grown;
My wife she pined and perished, and I found myself alone.
What she died of was a mystery, and the doctors never knew;
But I knew she died of mortgage — Just as well as I wanted to.
If to trace a hidden sorrow were within the doctors art.
They'd ha' found a mortgage lying on that woman's broken heart.
Worm or beetle, drought or tempest, on a farmer's land may fall.
But for a first-class ruination, trust a mortgage 'gainst them all.
How much of a farmer's mortgage is for the value of the land itself, and how much for the present value of the improvements which previous owners have made, such as clearing, draining, fencing, irrigating, building structures, plus, perhaps, equipment purchased with the land and buildings?
For that matter, how much of a homeowner's mortgage is for the value of the land itself --including its access to community-provided services such as city water and sewer, fire hydrants, and the like -- and how much for the purchase price of the landscaping and structures on the property, built by any of the previous owners?
To what degree is the modern buyer including in his formal calculations or his underlying assumptions the notion that the land will increase in value during his tenure? (See Case & Schiller, 2003.)
Suppose we removed the notion that the buyer would receive any increase in the value of the land, so that one wouldn't "invest" in land, and instead treated the value of the land itself as our common treasure.
The farmer, the homeowner and the commercial building owner would be able to buy their farm, or home, or building for the value of the building and other improvements to the land, paying the seller for the (depreciated) value of those structures. Whatever down payment they had would reduce the amount of the mortgage required, and the term of that mortgage could probably be shorter than the now-standard 30 years.
What about the land, you ask? Instead of paying the seller of the farm, or home, or commercial property, for the value of the land as a lump sum (financed by a mortgage), one would pay one's community, month in and month out, the current rental value of the land. One could reasonably expect that that rent would be low in places less favored by nature, less served by infrastructure (be it city water, sewers, broadband internet -- particularly low cost offerings such as Google's Kansas City project -- the interstate highway system, passenger or freight rail, subways, frequent bus service, airports, harbors, etc. -- we assume electricity these days, and perhaps natural gas in some places) and services (quality schools, hospitals, sufficient doctors, ambulance, firefighters, police, courts, public health, libraries, colleges, universities, parks, state national guards, etc.) But as population -- locally and nationally -- grows, and as infrastructure and services are expanded into the specific neighborhood, one could expect that monthly rent to increase -- faster in served places than others, but largely predictable.
And that payment to one's community would substitute for wage taxes, for sales taxes, for building taxes -- take them entirely out of the equation. Think what that would do for one's cost of living and for the stability of the economy.
Think what it would mean if one's taxes were not a function of one's wages, or one's purchases, or one's improvements to one's home, or farm, or investment property, but simply of the current value of the pieces of land one chose to occupy.
Believe it or not, the board game Monopoly was an outgrowth of a 1902 game called The Landlord's Game which sought to explore this idea.
There was a slogan 130 years ago: "Free Land, Free Trade, Free Men." The reference to "Free Land" was that one could acquire land from a seller for free, taking over from a willing seller the responsibility for paying to the community the monthly rent associated with that particular site.
Payments to the community for land rent, supplemented by payments for things like
- the value of non-renewable natural resources, for
- the privilege of polluting, for
- the use of scarce resources like electromagnetic spectrum (those airwaves we SAY belong to all of us, but whose value we permit media companies and others to privatize),
- water rights,
- geo-synchronous orbits for those satellites which orbit over specific sites or on specific paths,
- landing rights at congested airports like LaGuardia,
- parking in congested areas
and a lot of other like things -- all of which the classical economists would recognize as "Land" -- could finance our common spending AND reduce our inequality -- the concentration of wealth and income (and thus of political power) which so many of us recognize as poison to our economy and our society.