Ground Rent as a Portion
of U.S. National Income

David Friedman

[A quotation from: The Machinery of Freedom, 1973, xiv-xv]

"This leaves open the question of how one attains ownership of things that are not created or that are not entirely created, such as land and mineral resources. There is disagreement among libertarians on this question. Fortunately, the answer has little effect on the character of a libertarian society, at least in this country. Only about 3 percent of all income in America is rental income. Adding the rental value of owner-occupied housing would bring this figure up to about 8 percent. Property tax -- rental income collected by government -- is about another 5 percent. So the total rental value of all property, land and buildings, adds up to 13 percent of all income. Most of that is rent on the value of buildings, which are created by human effort, and thus poses no problem in the definition of property rights; the total rent on all land, which does pose such a problem, is thus only a tiny fraction of total income. The total raw material value of all minerals consumed, the other major "unproduced" resource, is about another 3 percent. There again, much of that value is the result of human effort, of digging the ore out of the ground. Only the value of the raw resources in fact may reasonably be regarded as unproduced. So resources whose existence owes nothing to human action bring to their owners, at the most, perhaps one-twentieth of the national income. The vast majority of income is the result of human actions."