Known as “the Henry George guy of Fannie Mae,” Edward J. Dodson served as that organization’s business manager and market analyst and was heavily involved in initiatives to increase the supply of affordable housing. He retired from Fannie Mae in 2005 and is now an instructor at Temple University. A long-time member of the faculty of the Henry George School of Social Science, he is author of the book The Discovery of First Principles.
When Dodson first became interested in land-use policy issues, Henry George’s analysis of land markets and the effect tax policy has on those markets hit him “like a lightning bolt.” He had been aware that tax policy encouraged speculators to acquire vacant land and hold it until the community started to turn around, when they would sell it at huge profits. Dodson calls this practice “rent-seeking” and says, “A profit from land ownership is not a profit from constructive economic activity.”
Dodson blames the “game of politics” for preventing implementation of George’s land value tax. He points to campaign contributions and attorneys representing the big land interests who oppose any “threat to the land game.” Other reasons that Georgist theories are not practiced include the historical shift in economists from political economy to analysis of information, which is heavily mathematical. “The old school political economists who believed in the three-factor model—land, labor and capital—were slowly replaced. …They’re not concerned about the distribution of income and wealth from a value standpoint, only from a statistical standpoint.”
Looking to solutions to today’s economic problems, Dodson says, “We need to have a situation where we have a sustained increase in the demand for labor. The tax policy and removing the tax burden on earned income flows, on capital goods, and on commerce is a way to get there.”