In 2008, Dr. Fred Foldvary was one of the few economists who predicted the collapse of finance in America. In his Smart Talk interview, he discusses how Henry George’s theory of land helped explain the business cycle and allowed him to reach that conclusion. A lecturer in economics at San Jose State University, California, and a research fellow at The Independent Institute, Dr. Foldvary is the author of The Soul of Liberty and Public Goods and Private Communities among others. His Smart Talk interview reveals the positive impact Henry George’s theories would have on a multitude of economic factors: the business cycle, funding of “transfer payments” (e.g. social Security), unemployment. He speaks also of the decline in manufacturing: “Capital goes where it’s best treated. If we treat it better here by not taxing it, that is taxing land instead of financial capital or capital goods, there’ll be plenty of capital that’ll stay here.”
In discussing the advantages of a free market economy and free banking, Dr. Foldvary points out when “interest rates are set by the market, according to supply and demand,” those rates “truly balance borrowing and saving….savings and investments…..” He shows, too, how government fosters unemployment through zoning, permits and licenses, minimum wage, taxes and restrictions on self- employment.
In concluding, Dr. Foldvary presents a plan for local assessment, collection and distribution of land rent. In addition, he calls for replacing “mass democracy with small group democracy in order to eliminate demand for campaign funds, which is provided by the special interests and that prevents significant reforms.”