Lars Doucet — Progress, poverty, Georgism, & why rent is too damn high

**Lars Doucet** (0:00)
Over the last century, we've had this huge conflict. All the oxygen has been sucked up by capitalism and socialism duking it out. We have this assumption that you either have to be pro-worker or pro-business, that you can't be both. I have noticed a lot of crypto people get into Georgism, not the least of which is Vitalik Buterin, who endorsed my book. If you earn $100,000 in San Francisco as a family of four, you are below the poverty line.
Let's start with just taxing the things nobody has made and that people are gatekeeping access to. Let's tax essentially monopolies and rent seeking.

**Dwarkesh Patel** (0:39)
Okay, today I have the pleasure of speaking with Lars Doucet, who developed the highly acclaimed Defenders Quest game and part two is coming out next year, but now he's working on a new startup.
But the reason we're talking is that he wrote a review of Henry George's Progress and Poverty that won Scott Alexander's Book Review Contest. And now it has been turned into and expanded into this book, Land is a Big Deal. So, Lars, welcome to the podcast.

**Lars Doucet** (1:09)
Great to be here, Dwarkesh.

**Dwarkesh Patel** (1:10)
Okay, so let's just get into it. What is Georgism?

**Lars Doucet** (1:12)
Okay, so the book is based off of the philosophy of a 19th century American economist by the name of Henry George from Once We Get Georgism. And basically, George's thesis is kind of the title of my book, That Land is a Big Deal.
Georgism is often reduced to its main policy prescription that we should have a land value tax, which is a tax on the unimproved value of land, but not a tax on any buildings or infrastructure on top of the land, anything humans add.
But the basic insight of it is that it's kind of reflected in the aphorisms you hear from real estate agents when they say things like the three laws of real estate or location, location, location, location, and by land, it's the one thing they're not making any more of. It's basically this insight that land has this hidden role in the economy that is really underrated. But if you look at history through the right lens, control over land is the oldest struggle of human history. It goes beyond human history. Animals have been fighting over land forever. That's what they're fighting over in Ukraine and Russia right now.
Basically, the fundamental insight of Georgism is that over the last century, we've had this huge conflict. All the oxygen has been sucked up by capitalism and socialism duking it out. We have this assumption that you either have to be pro worker or pro business, that you can't be both. Georgism is genuinely pro worker and pro business.
But what it's against is land speculation. If we can find a way to share the earth, then we can solve the paradox that is the title of George's book, Progress and Poverty. Why does poverty advance even when progress advances? Why do we have all this industrialized technology and new methods? In George's time, it was industrial technology. In our time, it's computers and everything else. We have all this good stuff. We can make more than we've ever made before. There's enough wealth for everybody and yet we still have inequality. Where does it come from? George answers that question in his book and I expand on it in mine.

**Dwarkesh Patel** (3:15)
Yep.
I'm excited to get into the theory of all of it in a second. First, I'm curious how much of your interest in the subject has been inspired by the fact that as a game developer, you're constantly dealing with decentralized rent seekers like Steam or iOS app store. Is that part of the inspiration behind your interest in Georgism or is that separate?

**Lars Doucet** (3:38)
It's interesting. I wouldn't say that's what clued me into it in the first place, but I have become very interested in all forms of rent seeking, right? In this general category of things we call land-like assets that come to first mover advantages in these large platform economies. I've started to think a lot about it basically, but the essence of land space is speculation is you have this entire class of people who are able to basically gatekeep access to a scarce resource that everybody needs, which is land, right? That you can't opt out of needing. And because of that, everyone basically has to pay them rent. And those people don't necessarily do anything, you know? They just got there first and tell everyone else, it's like, well, if you want to participate in the world, you need to pay me.