This article is part of a series by Jeffery J. Smith on the surplus—also known as “economic rent”—that exists in the economy. Currently, this surplus is hoarded; yet once shared, this surplus could generate undreamed of possibilities for the entire human population. To see the entire series, visit Progress.org/Counting-Surplus

At Least It’s not Sisyphean, Is It?

Comfortable? Better be. To measure the worth of Earth, there’s a lot to do.

• Search for every previous articles that estimated the value of land and resources.
• Look for reports and studies on line and in the academic centers and government agencies—all sources of data—that tabulate the flow of rent.
• Extract all the relevant stats and sum up this surplus, this bounty, ourselves.

It’s an uphill battle, but do all that and the knowledge of Earth’s worth can be squeezed from its gatekeepers … eventually.

If you DIY, you’ll strain the eyes peering at tables and reports and articles. You’ll wade through numbers, jargon, even conventional mistakes now accepted as gospel. With that caveat, let’s get started.

Plan of Attack

Because numbers are harder for the brain to understand than are words, a good place to start is with what’s been written. Among those, the best place to begin is with the articles for popular consumption. Let’s Google “worth of Earth” and “land value in the US” and “resource value in the US” and “rental value of US land” and go back 10 years:

Top 10 Articles

1. 2006 January, Dr. Fred Foldvary, Civil Society Institute, Santa Clara University; “The Ultimate Tax Reform: Public Revenue from Land Rent”—Without giving the figures, he figures land rents could fulfill 60% of all public budgets (over $4 t). He notes that amount would suffice if governments were to quit making income transfer payments (one might prefer they quit paying corporate welfare and fulfilling the wet dreams of weapons contractors). The beneficial results of treating land rent as tax base include “higher incomes, reducing the demand for government welfare programs. Decentralization, privatization, and the elimination of wasteful government programs would further reduce the amount needed to fund government.”
   
   Seven years later, a slew of articles in 2013:
   
   
2. Sept 3, Ashok, a college kid at UPenn (who was cited in the next article); “A Remark on Ricardian Taxes”—Rather than tally, he projected: “… minerals can be taxed under Ricardian principles, there is a gold mine of untapped tax revenue. Just look at the sales of America’s oil and gas sector. Along with land, and maybe a small levy on income earned above $1M we can finance a big government (25% G/GDP) with sensible tax policies.”
   
   
3. Nov 22, Jesse Myerson, Occupy Wall Street, Salon; “End the 1 percent’s free ride: Taxing land would solve America’s biggest problems”—He also cites: “Michael Hudson has assessed that the land value of New York City alone exceeds that of all of the plant and equipment in the entire country, combined… the amount of revenue that can be raised by taxing the land is huge. Enough, for example, to support truly liberatory social spending, like a universal basic income, without risking inflation.”
   
   Elsewhere in 2013, a couple articles popped up at Slate within their MoneyBox section, one by Ashok (above), one by …
   
   
4. Dec 20, Matthew Yglesias; “What's All the Land in America Worth?”—Based on the Federal Reserve's Flow of Funds report (PDF), his total was $14.488 trillion.
   
   
5. 2014 Feb 6, Joseph Henchman, The Tax Policy Blog; “Response to Jesse Myerson's Land Tax Idea”—His back-of-an-envelope total is $50 trillion, half should be locations, or $25 t.
   
   
6. 2015 Apr 22, Eric Morath, Wall Street Journal; “How Much Is the U.S. Worth?”— He cites William Larson at the Bureau of Economic Analysis: “Land has long been recognized as a primary input in production and as a store of wealth. Despite its fundamental role in nearly all economic activity, there is no current and complete estimate of the value of the land area of the United States.” Larson figures the 1.89 billion acres of the 48 contiguous states and the District of Columbia (not buildings, roads, or other improvements, nor bodies of water) may sell for $23 trillion—equal to about 1.4 times last year’s GDP…
   
   
7. 2015 Apr 23, Tim Worstall, Forbes; “Fun Number: The US Is Worth $23 Trillion. Or, Why A Land Value Tax Won't Work”—Working from Larson’s total, Tim points out 5% has been the average rent on land for long historical periods in a number of different places. So, unimproved land actually brings in $1.15 trillion a year.
   
   
8. 2015 Jun 7, Riley Ashton, Quora; “How much would it cost to lease all of the land in the United States per year?”—Riley found subtotals for private land, both residential and commercial, and for public land, but only federal, and listed the sources. That leaves out some acreage and other uses yet it totaled $2.72 trillion, over double the estimate of Worstall above.
   
   The eight above fall short of a figure for the worth of all Earth in use in America, but the next tabulator thinks very, very big, giving us comfort in our quest.
   
   
9. 2015 Jun 21, BizShifts-Trends; “Imagine the Ultimate Business Mega-Deal: Sell the Planet Earth– All Its Resources, Assets… But; What is the Earth Worth?”—It cited astrophysicist Greg Laughlin who came up with a calculation for valuing planets; Earth is worth a bank-breaking $US5 Quadrillion ($US5,000,000,000,000,000). By adding even more non-natural assets, the author bumped it up to $7,000,000,000,000,000.

How Far Off are Those Estimates?

While astrophysicists might see the glass as overflowing, others often see the glass as bone dry. The pessimists cite the official figures above (if they cite anything). However, all these estimates have four big shortcomings.

First, when researchers separate property value into land and buildings, their estimates are biased toward buildings and underestimate the contribution of location. They have a hard time accepting the fact that a million dollar house in San Francisco is actually a $800,000 site with a bungalow on it. Same goes for $10 million dollar apartments in New York; those are $8 million sites. Remove the building and maybe it’s easier to see. In the wealthy ski resort Aspen CO a vacant lot fetches $10 million easy.

Second, the estimates above leave out lots of land. The category “land” would have to include both private and public, as Riley tried to do. Everyone forgets roads, around another $10 billion annually, plus parking. And all land uses must be tallied: residential, commercial, industrial, agricultural, pastures for ranching, sylvan, mining, oil drilling, etc.

1. 2013 July 8, Amanda Radke in BEEF Daily; “What’s Land Worth?”—She notes how ranches (a safe-deposit box with a view) now sell mostly to urban investors and outdoorsmen who’ve bidded up prices beyond what many cattlemen can afford.

Besides terra firma, there’s water, about $40 billion annually despite giving a lot of it away for free to agri-business and others. Besides surface and subsurface, add supra-surface—the airwaves. You can probably extend the list.

Third, most of these estimates equate value with price. Price is not even basic; it is capitalized rent. Annual payments for land more accurately reflect its true value. It is the amount that all users would pay for all the sites at any one point in time. Yet if all land in the US were put up for sale at one time, it could not fetch anything near those official price totals. The greater supply of parcels on offer would drive down their price to a figure about the same size as the annual rent for all the land—true value.

The problem is we’re so used to buying and selling everything, including land, that we automatically, and mistakenly, assume that price is value. No, it’s not. Economic value is the total we’re willing to pay to own or use a location. Yet value = price is a hard frame to lose, even for openminded thinkers.

Fourth, there are other obligatory payments besides price. The estimates above are based on official assessed value which only tracks price. Price is only what the buyer pays the seller. Value is all of what the buyer is willing to pay, including the mortgage interest paid to banks (the “F” in “FIRE), and insurance (the “I” in “FIRE), and other charges the Real Estate industry manages to impose yet are not necessary.

Plus, buyers/owners pay taxes on all sorts of property. The revenue recovered by the land half of the property tax is part of the land value total. Land taxes or land dues socialize rent, just as land prices capitalize rent.

An accurate tally of the worth of national Earth would include all these various payments—rent, interest, insurance, tax—in the total.

Follow the Money

Given all the above shortcomings, why can’t they make it easy and update all the values of all parcels daily, like they do with the New York Stock Exchange? Looks like we’ll have to create that ourselves. Larson (above) said his study attempted to provide baseline methods upon which further research can draw. Let’s take him up on that and turn from the popular press to the academic press. Into the footsteps of the brave researchers who went before …

This article is part of a series by Jeffery J. Smith on the surplus—also known as “economic rent”—that exists in the economy. Currently, this surplus is hoarded; yet once shared, this surplus could generate undreamed of possibilities for the entire human population. To see the entire series, visit Progress.org/Counting-Surplus