This is a long predicted effect when “assets”, a misleading term, have been acquired without a concomitant cost of production. These “assets” which cannot be classified as wealth, always fall into the category of monopoly. Such as location value in land, being by far the largest. Super normal profits on money creation a distant second place. Followed far behind by patents etc

Henry George predicted this 130 years ago, now, what more evidence do we need, to proceed with a solution we are confident about?

The one economic theory that all economists agree on, both orthodox and unorthodox, is Ricardo’s Law of Rent. That is all production above the margin (what can be made on the least productive land available) always goes to location value in economic rent. We can see this in the latest property boom very clearly. The author has alluded to this but then diverted root cause to wealth for no coherent reason.

It must necessarily follow from this law that an increase in the power to produce wealth, loosely related to GDP in this case, whether that power comes from working harder, more technology, less corruption, greater skill and industry etc… will ALWAYS go to Rent.

This can clearly be seen in the graph here:

http://gco2e.blogspot.com/2009/11/wages-do-not-rise-with-rent-as_12.html

I’d welcome any comments disputing or otherwise. But remember if you are disputing, you are disputing a natural law of economics that has stood the test of reason for 250 years.