Abstract: In this article, Spencer Heath offers a general defense and explanation of the capitalist system and a forecast of its further evolution. After showing various ways in which its major functional elements contribute to voluntary exchange, the vital process and central creative act in the economy, Heath observes that the capitalist system is young, evolving, and incomplete. In particular, it has yet to carry the process of voluntary exchange by contract and consent into the field of public services. Heath anticipates this happening through the further development of private property in land. Noting that ground rents are paid out of the productivity of land users, and are the market payment for public services which make productive use of the land possible, Heath foresees a perfect welding of the private and particular interest of the land-owning class with the public and general interest. As landowners come to better understand their interest, he predicts they will begin to monitor public affairs and then fund, supply, and ultimately administer all public services, relieving land users of all taxation and burdensome bureaucratic regulations. Their recompense for thus liberating land usage and providing new services will be the enhanced ground rents and values from the growing demand for land.
Keywords: capitalism, creativity, land ownership, ground rent, public services
JEL Codes: B25, D73, Q15
Download Paper: “The Capitalist System”