This is an early expression of the Henry George theorem that Joseph Stiglitz and others expanded upon. Hotelling pointed out that when local public goods like roads and trains become congested, users create an additional marginal cost of excluding others. Hotelling became an early advocate of Georgist congestion pricing and stated that the purpose of this unique type of toll fee was in no way to recoup investment costs, but was instead a way of changing behavior and compensating those who are excluded. Hotelling describes how human attention is also in limited supply at any given time and place, which produces a rental value; he concludes that billboards could be regulated or taxed on similar grounds as other scarcity rents. Hotelling reasoned that rent and taxation were analogous, the public and private versions of a similar thing. Therefore, the social optimum would be to put taxes directly on rent. Kenneth Arrow described this as market socialism, but Mason Gaffney points out that it is actually Georgism. Hotelling added the following comment about the ethics of Georgist value capture: "The proposition that there is no ethical objection to the confiscation of the site value of land by taxation, if and when the nonlandowning classes can get the power to do so, has been ably defended by [the Georgist] H. G. Brown." Non-convexities Hotelling made pioneering studies of non-convexity in economics. In economics, non-convexity refers to violations of the convexity assumptions of elementary economics. Basic economics textbooks concentrate on consumers with convex preferences and convex budget sets and on producers with convex production sets; for convex models, the predicted economic behavior is well understood. When convexity assumptions are violated, then many of the good properties of competitive markets need not hold: Thus, non-convexity is associated with market failures, where supply and demand differ or where market equilibria can be inefficient. Producers with increasing returns to scale: marginal cost pricing In "oligopolies" (markets dominated by a few producers), especially in "monopolies" (markets dominated by one producer), non-convexities remain important. Concerns with large producers exploiting market power initiated the literature on non-convex sets, when Piero Sraffa wrote about firms with increasing returns to scale in 1926, after which Hotelling wrote about marginal cost pricing in 1938. Both Sraffa and Hotelling illuminated the market power of producers without competitors, clearly stimulating a literature on the supply-side of the economy. Consumers with non-convex preferences When the