Most of the modern rise in the capital share is land, not capital (v3 draft — evidence rail)

Design-comparison draft, v3 (2026-07-16). Same claim and evidence set as the page of record and the v2 ledger draft. Here the ledger becomes a standing evidence rail: the full roster stays in view while you read, the narrative cites into it by number, and the site sidebar is retired on this page so nothing competes with the proof point.

The Claim

The rising share of national income flowing to "capital" in developed economies — popularised by Thomas Piketty's Capital in the Twenty-First Century — is, when decomposed, almost entirely a rise in the housing sector, and therefore largely a rise in land rent. Reproducible capital (machines, equipment, structures) shows little long-run increase in its income share; land does.

The Case, Guided

Start with the two core decompositions. Rognlie №1 showed that the long-run rise in the net capital share is concentrated in housing — strip housing out and capital's share is roughly flat. Bonnet, Chapelle, Trannoy & Wasmer №2 reached the same conclusion independently, with different countries and different methods: rising wealth-to-income ratios are driven by land prices, not produced capital. Two teams, two continents, one result — the "capital" in rising capital shares is mostly location.

Then follow the chain that connects housing to land. Knoll, Schularick & Steger №3 supply the price history: across 14 advanced economies, real house prices were roughly flat for eight decades, then surged after 1950 — and rising land prices explain about 80% of that boom. Davis & Heathcote №4 provide the benchmark US series separating land from structures — residential land's share of housing value reached 46% by 2006. La Cava №6 traces the income side down to the state level, where supply constraints concentrate the gains — a land-scarcity story.

Then note how many independent angles corroborate it. Kerspien, Madsen & Strulik №5 reach the real-estate reading from two centuries of factor-share data; Bakker №7 restates the claim from the measurement side (recorded "capital income" is partly land rent); Stiglitz №8 derives it from theory; Rognlie's 2014 note №9 is the precursor result; and Furman & Orszag №10 connect the housing channel to the wider rents debate.

The Counter-Case

The honest counterweight comes from the firm-level literature — and it sits in the same rail, in red. Autor, Dorn, Katz, Patterson & Van Reenen №11 explain the falling labor share without land at all: reallocation toward high-markup "superstar firms," read substantially as an efficiency story. Barkai №12 measures a fall in both the labor share and the required-return capital share, offset by rising pure profits attributed to market power, not land. Neither paper rebuts the housing decomposition directly — they work on different data at a different level — but both cap how much of the economy-wide shift away from labor the land story can claim for itself. The wiki's corporate-rents claim page carries that side of the ledger in full.

Strength of Evidence

Strong. The core result is independently replicated across US and European datasets by separate teams №1№2, and the supporting chain runs through three literatures — price history №3№4, factor shares №5№6, and growth accounting №7 — that share neither data nor methods. Two caveats the rail keeps visible: the challengers are published in top field journals, so the counter-case is not fringe — it limits the claim's scope (how much of the labor-share decline land explains), not its core; and Kerspien et al. №5 frame the appreciating asset as "buildings," so the "buildings are land" step is supplied by Knoll et al. №3, not by that paper alone.

Why It Matters

If inequality's capital dimension is really a land dimension, a tax on land values targets the actual driver — without the efficiency cost of taxing productive capital. This connects 21st-century inequality research directly to Henry George's 19th-century diagnosis in Progress and Poverty.

Context — Not in the Rail

Adjacent evidence, deliberately excluded from the rail because it is not wired as direct support or challenge: McKinsey's global balance sheet (real estate dominates global net worth), Blanco et al. on Spain (a national case study), Hornbeck & Moretti ("the split between labor and land is potentially more consequential… than the split between labor and capital"), and the concepts Economic Rent, Unearned Increment, and Land Value Tax.