Page 94 - _21-0619 OK

The International Journal of the Royal Society of Thailand
Volume XII, 2020

brought about new concentrations of wealth in Thailand we need to assess the
role of rising prices of assets and land in particular. Asset price appreciation
explains how individuals and families increase wealth without going through

long periods of saving or earning abnormal income. This paper reviews inequality
of wealth in Thailand generated by appreciation of the principal national
asset – land.

It is widely known that land rents and high prices have brought wealth
to landowners. Yet when the consequences for inequality come into conflict with
the need for social cohesion founded on mutual respect, the legitimacy of large
private land holdings comes into question. The historic text on this issue, and one
of the most widely read books on economics, is Progress and Poverty by Henry
George, published in New York in 1879. Observing the difference between rents
in small towns and major cities, Henry George advocated taxation of land at
levels that would appropriate a major part of the rent, basing his argument on the
observation that "economic value derived from land is created by all and should
belong to all". Despite the popularity of this view in late 19 and early 20 century
th
th
USA and Europe, land tax did not supplant income tax and sales tax as the main
sources of revenue in industrial countries and has had little success in the latter
part of the 20 century in developing countries. Given that zoning and planning
th
procedures have hardly reduced landed wealth, profits arising from changes in
land use remain a touchy issue in developed countries today. Following Piketty's
analysis of inequality in Capital in the Twenty-First Century, which was published
in 2014 and became a best-seller on a level to rival Henry George, examination

of statistics published by the Federal Reserve System revealed that real estate is
still the main component of private wealth in the US. A study by Òscar Jordà and
1
others on “The Rate of Return on Everything, 1870-2015” covering 16 developed
economies over the past 150 years showed that the long-period return on real
estate was as high as or higher than the return on stocks and has exceeded
growth of national income by a large margin in all periods except wars and
recessions. This and other similar analyses confirm that appreciation of land and
real estate is the major source of present-day inequality of wealth in developed
countries.

1 The Quarterly Journal of Economics, Vol. 134, Issue 3:1225–1298 (August 2019).

86 The Value of Land in Thailand Today

5/1/2565 BE 09:03
_21-0619(085-112)6.indd 86 5/1/2565 BE 09:03
_21-0619(085-112)6.indd 86