The Great Return of Land in Wealth Publication date : January 19, 2022
Étienne Wasmer is a professor at Sciences Po Paris, and at New York University Abu Dhabi (NYUAD). He founded and directed doctoral studies in economics at Sciences Po, as well as the Laboratoire interdisciplinaire d’évaluation des politiques publiques [Laboratory for Interdisciplinary Evaluation of Public Policies] (LIEPP).
Alain Trannoy is course director at the École des Hautes Études en Sciences sociales (EHESS), professor at the École d’économie d’Aix-Marseille, and scientific advisor at France Stratégie.
Both authors have been members of the Conseil d’analyse économique [Council of Economic Analysis] (CAE) working with the prime minister from 2012 to 2016.
What should we make of the continual increase in the wealth of the French? Some will see it as a source of inequalities, others good news: wealth is redistributed all the better when it is abundant.
The subject of this work is French property wealth. It has reached an unheard-of volume of 7000 billion euros, corresponding to 4 years of the national GDP. Such a figure indicates that the French are confident in the future of their country, which remains well-governed, as seen in the number of foreigners who want to live in France. Now, this land wealth is unique in that it can be taxed without much loss in economic effectiveness. It can be mobilized to benefit production capital in order to reinvigorate a country that is regularly classified among the most pessimistic on the planet, whereas it is one of the richest.
Shedding new light on the ideas of David Ricardo, who theorized the value of agricultural land and its taxation, the authors stress their relevance in the Twenty-First Century: from a critical reading of the rise in inequalities to the question of the Covid debt, they show how the debate on the taxing of capital and wealth has gone in the wrong direction in our country. Instead of seeking to imitate the United States, which has neglected the explosion of inequalities in the past thirty years, France should adapt its tax system to its own situation and use its abundant land wealth to alleviate the burden on production without going backwards with its social model.