The Henry George Theorem, named for 19th century U.S. political economist and activist Henry George

Henry George

Henry George was an American writer, politician and political economist, who was the most influential proponent of the land value tax, also known as the "single tax" on land...

, states that under certain ideal conditions, aggregate spending by government

Government

Government refers to the legislators, administrators, and arbitrators in the administrative bureaucracy who control a state at a given time, and to the system of government by which they are organized...

 will be equal to aggregate rent based on land value (land

Land (economics)

In economics, land comprises all naturally occurring resources whose supply is inherently fixed. Examples are any and all particular geographical locations, mineral deposits, and even geostationary orbit locations and portions of the electromagnetic spectrum. Natural resources are fundamental to...

 rent

Economic rent

Economic rent is typically defined by economists as payment for goods and services beyond the amount needed to bring the required factors of production into a production process and sustain supply. A recipient of economic rent is a rentier....

). Although these conditions never obtain in reality, actual conditions are often close enough to the theoretical ideals that the great majority of government spending does indeed appear as increased land value. This general relationship, first noted by the French physiocrats in the 18th century, is one basis for advocating the collection of a rent/tax based on land values to help defray the public expenditures which created the land values in the first place. Henry George popularized this method of raising public

Public

In public relations and communication science, publics are groups of individuals, and the public is the totality of such groupings. This is a different concept to the sociological concept of the Öffentlichkeit or public sphere. The concept of a public has also been defined in political science,...

 revenue

Revenue

In business, revenue is income that a company receives from its normal business activities, usually from the sale of goods and services to customers. In many countries, such as the United Kingdom, revenue is referred to as turnover....

 in his works, especially in the international bestseller, Progress and Poverty

Progress and Poverty

Progress and Poverty: An Inquiry into the Cause of Industrial Depressions and of Increase of Want with Increase of Wealth: The Remedy was written by Henry George in 1879...

(1879).

More recent economists have discussed whether the theorem provides a practical guide for optimal population

Population

A population is all the organisms that both belong to the same group or species and live in the same geographical area. The area that is used to define a sexual population is such that inter-breeding is possible between any pair within the area and more probable than cross-breeding with individuals...

 size of political entities. Mathematical treatments of the theorem suggest that an entity obtains optimal population when the opposing marginal cost

Marginal cost

In economics and finance, marginal cost is the change in total cost that arises when the quantity produced changes by one unit. That is, it is the cost of producing one more unit of a good...

s and marginal benefits of additional residents are balanced.