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Resource Rents and Value Capture

Subcategory for Resource Justice articles and content.

A Radical Vision of Equality: Dr. Martin Luther King Jr.’s Economic Plan to Eliminate Poverty

There are few figures in 20th century American history more roundly beloved than Dr. Martin Luther King, Jr – and, as an unfortunate consequence, few whose legacies have faced more colossal efforts at appropriation. This is ironic, since of course in his own lifetime Dr King was among the most polarizing figures in American politics. This transformation has been facilitated in no small part by the snipping of his most broadly agreeable remarks and views and a great deal of ignorance about Dr King’s sophisticated – but more controversial – economic views. 

Economics were fundamental to Dr King’s career, and the ultimate goal of his economic thought was the elimination of poverty. It was to this end that King promoted the Freedom Budget of All Americans, which had as its goal the “determination that in this, the richest and most productive society ever known to man, the scourge of poverty can and must be abolished—not in some distant future, not in this generation, but within the next ten years!” King endorsed the budget and threw the support of the Southern Christian Leadership Council behind it.

Value Capture

Traditional views of fiscal policy focus on the role of government in providing benefits like safe and efficient transportation options, good schools, and public safety, financed through the collection of taxes, bonding, and other means of collecting revenues from members of the public. What is often overlooked, however, is that the beneficiaries of these investments are private: the developers, businesses, and homeowners who see their projects greenlighted as a result of infrastructure extensions, their customer bases swell because of new transit stops, or their property values soar as a result of enhanced public schooling.

Value capture strategies focus on reclaiming the incremental increase in private land values (not improvements like homes or businesses) that results from public investments and returning it to the public coffers. In this way, they close the fiscal loop, making those who benefit most from public investments pay the most to support them.