A discussion erupted over on Google+ that lead one of the commenters to remark
All wealth is derived from the land, which is why all taxes which are not use taxes should be property taxes.
Being unable to convince the author of this comment that his statement is bunk, that if indeed “all wealth is derived from the land” then we’d still be in the stone age, I here present proof that all wealth does not “originate from the land”. In fact, very little wealth does “originate from the land”.
Here’s a simple boulder. In and of itself, it has some value. For sake of simple math, let’s say that the boulder’s value is $1. If I came along and took this boulder, my wealth would increase by $1 (neglecting the costs of obtaining and transporting the boulder, of course).
So, there we have it. “All wealth is derived from the land”. I am now $1 wealthier thanks to picking up this boulder.
But wait…it occurs to my feeble mind that this boulder might actually be useful for something. Nah. Never mind. It’s a simple $1 boulder.
This nags me for a few days. Surely there’s something I can do with this boulder besides sit on it or use it to hold down my important papers. Still nothing comes to mind.
My neighbor comes by on the way to his cave and topples my boulder. It rolls and rolls and rolls down the hill. HARK!!
I can turn my boulder into one of these new-fangled wheel things. I create my design, I chisel away and my boulder becomes…
Now I have a wheel. Made from the same $1 boulder. But now instead of being worth $1, my “boulder” has become much more valuable.
The chief tells me that he had an idea for a thing called a “cart” and that if I could get one more of these wheel things, he’d gladly give me $10 for each one.
Now my $1 boulder is worth $10!!
That extra $9 wasn’t “derived from the land”, it was created through my ingenuity. That ingenuity separates me from all of the other boulder collectors who didn’t figure out that they could turn their boulder into a wheel. No one else can lay claim to this $9 simply because I collected the resource “from the land”, because the wealth created is independent of the original boulder.