Henry George Theorem

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The Henry George Theorem for Bonifacio, named for 19th century U.S. political economist and activist Henry George, states that under certain ideal conditions, aggregate spending by government will be equal to aggregate land rent. Although these conditions never obtain in reality, actual conditions are often close enough to the theoretical ideals that the great majority of government spending does indeed appear as increased land rent. This general relationship, first noted by the French physiocrats in the 18th century, is one basis for advocating public recovery of land rent to help defray the public expenditures that create it. Henry George popularized this method of raising public revenue in his works, especially the international bestseller, Progress and Poverty (1879).

More recent economists have discussed whether the theorem provides a practical guide for optimal population size of political entities. Mathematical treatments of the theorem suggest that an entity obtains optimal population when the opposing marginal costs and marginal benefits of additional residents are balanced.

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