Land Value Taxation will solve many of the 21st century's most serious social, economic and environmental problems, and promote justice, fairness and sustainability. We CAN have a world in which all can prosper.
Progress and Poverty, by Henry George Here are links to online editions of George's landmark book, Progress & Poverty, including audio and a number of abridgments -- the shortest is 30 words! I commend this book to your attention, if you are concerned about economic justice, poverty, sprawl, energy use, pollution, wages, housing affordability. Its observations will change how you approach all these problems. A mind-opening experience!
Henry George: Progress and Poverty: An inquiry into the cause of industrial depressions and of increase of want with increase of wealth ... The Remedy This is perhaps the most important book ever written on the subjects of poverty, political economy, how we might live together in a society dedicated to the ideals Americans claim to believe are self-evident. It will provide you new lenses through which to view many of our most serious problems and how we might go about solving them: poverty, sprawl, long commutes, despoilation of the environment, housing affordability, wealth concentration, income concentration, concentration of power, low wages, etc. Read it online, or in hardcopy.
Bob Drake's abridgement of Henry George's original: Progress and Poverty: Why There Are Recessions and Poverty Amid Plenty -- And What To Do About It! This is a very readable thought-by-thought updating of Henry George's longer book, written in the language of a newsweekly. A fine way to get to know Henry George's ideas. Available online at progressandpoverty.org and http://www.henrygeorge.org/pcontents.htm
Where Else Might You Look?
Wealth and Want The URL comes from the subtitle to Progress & Poverty -- and the goal is widely shared prosperity in the 21st century. How do we get there from here? A roadmap and a reference source.
Reforming the Property Tax for the Common Good I'm a tax reform activist who seeks to promote fairness and reduce poverty. Let's start with the enabling legislation and state requirements for the property tax. There are opportunities for great good!
The physical parish church offers not only a place for public worship but also a place for study groups, social and fund-raising events, soup kitchens and the like. Nobody, surely, wants to be like the early Christians, wandering through deserts and hillsides, without a physical place of worship, without roots. We need the Church Physical, just as we need the Church Ethical and the Church Social. Even the modest Quakers, with their great commitment to prayer and social justice, need meeting houses, organization and a network.
But no one launching an attack upon the papal elections, Vatican finances, sexism and the rest should think that they are attacking Catholicism per se. From my perspective, our Catholic Church is vibrant, helpful, intellectual, and working in so many ways to fulfill the message to love God and to love, and reach out to, one’s unknown neighbor. Everything else is, well, footnotes.
The op-ed, by a professor at Yale, does not speak to whether the local parish or the worldwide church sees a need, or does anything about, challenging the structures which funnel the world's wealth, power and income into relatively few pockets, and insure that there will always be poor people -- and a growing number of them -- to whom they can render charity.
Wouldn't it be better to work for justice, even if that meant challenging the structures which many of our universities seem designed to uphold and to prepare their students to benefit from, to the detriment of the rest of the world?
OR let him go to Edinburgh, the "modern Athens," of which
Scotsmen speak with pride, and in buildings from whose
roofs a bowman might strike the spires of twenty churches he
will find human beings living as he would not keep his
meanest dog. Let him toil up the stairs of one of those
monstrous buildings, let him enter one of those "dark
houses," let him close the door, and in the blackness think
what life must be in such a place. Then let him try the
reduction to iniquity. And if he go to that good charity
(but, alas! how futile is Charity without Justice!) where
little children are kept while their mothers are at work,
and children are fed who would otherwise go hungry, he may
see infants whose limbs are shrunken from want of
nourishment. Perhaps they may tell him, as they told me, of
that little girl, barefooted, ragged, and hungry, who, when
they gave her bread, raised her eyes and clasped her hands,
and thanked our Father in Heaven for His bounty to her. They
who told me that never dreamed, I think, of its terrible
meaning. But I ask the Duke of Argyll, did that little
child, thankful for that poor dole, get what our Father
provided for her? Is He so niggard? If not, what is it, who
is it, that stands, between such children and our Father's
bounty? If it be an institution, is it not our duty to God
and to our neighbor to rest not till we destroy it? If it be
a man, were it not better for him that a millstone were
hanged about his neck and he were cast into the depths of
the sea? — The
Reduction to Iniquity (a reply to the Duke of Argyll) -- at page 25 -- originally in The
Nineteenth Century, July, 1884.
I wonder if Morgan the Pirate,
When plunder had glutted his heart,
Gave part of the junk from his ships he had sunk
To help some Museum of Art;
If he gave up the role of "collector of toll" And became a Collector of Art?
I wonder if Genghis the Butcher, When he'd trampled down nations like grass.
Retired with his share when he'd lost all his hair, And started a Sunday school class;
If he turned his past under and used half his plunder In running a Sunday school class?
I wonder if Roger the Rover,
When millions in looting he made,
Built libraries grand on the jolly mainland
To honor Success and "free trade;"
If he founded a college of natural knowledge Where Pirates could study their trade?
I wonder, I wonder, I wonder,
If Pirates were ever the same,
Ever trying to lend a respectable trend
To the jaunty old buccaneer game;
Or is it because of our Piracy Laws That philanthropists enter the game?
—Wallace Irwin, in Life. -- reprinted in The Painter and Decorator, a union journal, 1907
IF it were possible to express in figures the direct pecuniary loss which society suffers from the social mal-adjustments which condemn large classes to poverty and vice, the estimate would be appalling. England maintains over a million paupers on official charity; the city of New York alone spends over seven million dollars a year in a similar way. But what is spent from public funds, what is spent by charitable societies, and what is spent in individual charity, would, if aggregated, be but the first and smallest item in the account. The potential earnings of the labor thus going to waste, the cost of the reckless, improvident and idle habits thus generated, the pecuniary loss (to consider nothing more) suggested by the appalling statistics of mortality, and especially infant mortality, among the poorer classes; the waste indicated by the gin palaces or low groggeries which increase as poverty deepens; the damage done by the vermin of society that are bred of poverty and destitution — the thieves, prostitutes, beggars, and tramps; the cost of guarding society against them, are all items in the sum which the present unjust and unequal distribution of wealth takes from the aggregate which, with present means of production, society might enjoy. — Progress & Poverty — Book IX, Chapter 2: Effects of the Remedy, upon distribution and thence on production
see the corresponding passage in Drake's abridgment of P&P
"The Lord's Prayer says, Give us this day our daily bread. Our
daily bread comes from the land. No man made the land. It is God's
gift to mankind. It belongs to all men. Therefore individual
ownership of land is wrong. Individual control of the fruits of the
land is wrong."
The only point where I do not find myself in complete accord (and
that is perhaps more due to your comparative silence than anything
else) is that I attach relatively more importance to the initial
injustice done by the permitted monopoly of raw material in a few
hands. It seems to me that individualism, in order to be just, must
strive hard for an equalisation of original conditions by the
removal of all artificial advantages. The great reservoir of natural
wealth that we sum up as land (including mines, etc.) ought, it
seems to me, to be nationalised before we can say that the
individual is allowed fair play. While he is thwarted in obtaining
his fair share of the raw material, he is being put at a
disadvantage by artificial laws.
—Grant Allen, Letter to Herbert Spencer, 1886, in "Grant Allen, A
Memoir," by Edward Clodd.
The final sentence: "The law of gravitation is not more clearly demonstrable than the law of taxation which Henry George, the Newton of Political Science, has revealed to the world."
Another from The American Cooperator (1903):
A Work for the Church
Rev. Herbert S. Bigelow
the average church-member what is the mission of the church? He has a
readymade phrase for you. He says it is to "save souls." In the
theological seminaries young men are taught that to he good preachers,
they must have a "passion for souls." A certain missionary society of a
church in this city reported at the end of the year, "Two souls saved
and one sanctified."
it the paramount duty of the church to save souls? That depends on what
is meant by the phrase. Save them from what? From hell, of course. Is
it the mission of the church to save souls from hell? That depends upon
the location of hell. Do you mean by hell some place of torment in the
next world or do you mean the torment of body, mind and soul that is
produced in this world, by greed of gain, and slavish prejudice, and
bigotry and hate, by oppressive monopolies, and corrupting power, and
take no stock in your God-made hell, but I know there is a hell on
earth which man has made. Here on this earth I have witnessed the
torture of the damned. Let us storm one hell at a time and the nearest
there are many church members who do not know what we mean by a hell on
earth. They are able to go to the sea-shore in the heat of summer. They
can go to Florida or California and eat strawberries in winter.
seldom come in contact with poverty. From the very air they breathe,
they have imbibed the prejudice that poverty is mostly a result of
depravity; that for the "deserving poor," there is no help but charity;
that the masses who toil are by nature unfit for a happier lot; that the
man who imposes an extra tax of two cents a gallon on oil and
contributes a million to a university is a paragon of virtue, and the
institutions which make it possible for him to do this are ordained of
of these more comfortable churchmembers visited recently in Cincinnati.
She heard men in the street crying "Coal, coal!" She asked what it was
they were selling. When told, she expressed amazement that the people of
Cincinnati did not buy their coal in the ton. She declared she had
never heard of such a thing. Indeed she was certain that in Cleveland
where she lived, there was no coal sold by the bushel. This woman is
typical of her class. Within a narrow sphere, she is generous to a
fault. There is no question about the genuineness of her piety. She will
shed sincere tears over the tragic sufferings of the Nazarene, and
contribute for the preaching of the gospel in foreign parts, but of the
appalling misery in her own city and of its cause, she is as grossly
ignorant as the Australian Bushman is of the doctrine of salvation by
duty of the church to save souls? Yes, it is the duty of the church to
save the souls of men and women from that ignorance and indifference
which makes them oblivions of the sufferings of their fellowmen.
every great city you will find a little group of earnest men and women
who are trying to bring to the notice of the public, the desperate
conditions under which their brothers and sisters live and to show the
economic cause of this destitution and its remedy. And while such bands
are few and weak, you will find scattered here and there and everywhere
thru the city, churches, often costly edifices, religious organizations,
representing a vast expenditure of wealth and energy. All the reformers
in the city could not contribute for their work what is paid in a year
to one of these clergymen. Fancy how things would begin to move if this
tremendous energy were directed toward the solution of the problem of
poverty! If all this thought and sentiment and power of wealth were only
hitched to this car of progress, how the wheels would start out of the
Edwards used to say to his audience: ''The God that holds you over the
pit of hell, much as one holds a spider, or some loathsome insect, over
the fire, abhors you and is dreadfully provoked; his wrath towards you
burns like fire. . . . It would be a wonder if some who are now present
should not be in hell in a very short time . . . There is reason to
think that there are many in this congregation, now hearing this
discourse, that will actually be the subjects of this very misery to all
long as men believed in that sort of a God, they naturally expected the
church to help them flee from the wrath to come. But from the various
sources of modern thought has come a better thought of God. He is still
the Creator but he is not the bungler. He made a good world. This world
is "lapt in universal law." In his benevolence, the Creator contrived
these laws so that in the keeping of them, men should find great reward.
Hell on earth-is due to the breaking of these laws. To learn to obey
them, is to find heaven here.
teach men these laws is the mission of the church. There is no law of
the Decalogue which is more self-evident than the law that the land is
the inheritance of all and its monopoly by the few a crime against the
many. The law of gravitation is not more clearly demonstrable than the
law of taxation which Henry George, the Newton of Political Science, has
revealed to the world.
The most impudent hypocrite of all is the great proprietor who,
being a principal cause of the misery which he affects to deprecate,
would be disgusted and furious if he were to be shown in his true
colors, and so trusts in ignorance and sophistry when he laments the
condition of the poor, but secretly and steadily adds to their
— PROFESSOR THOROLD ROGERS, Work
and Wages, Chap. XVI., p. 457.
A sig-file on a listserv brought to my attention a quote from St. Ambrose, which, to my surprise, Ernest Crosbydidn't include in his Earth-for-All Calendar:
"You are not making a gift of what is yours to the poor man, but you are giving him back what is his. You have been appropriating things that are meant to be for the common use of everyone. The earth belongs to everyone, not to the rich."
In the very first pages of Scripture we read these words: "Fill the
earth and subdue it."(19) This teaches us that the whole of creation is
for man, that he has been charged to give it meaning by his intelligent
activity, to complete and perfect it by his own efforts and to his own
Now if the earth truly was created to provide man with
the necessities of life and the tools for his own progress, it follows
that every man has the right to glean what he needs from the earth. The
recent Council reiterated this truth: "God intended the earth and
everything in it for the use of all human beings and peoples. Thus,
under the leadership of justice and in the company of charity, created
goods should flow fairly to all." (20)
All other rights, whatever
they may be, including the rights of property and free trade, are to be
subordinated to this principle. They should in no way hinder it; in
fact, they should actively facilitate its implementation. Redirecting
these rights back to their original purpose must be regarded as an
important and urgent social duty.
The Use of Private Property
"He who has the goods of this world and sees his brother in need and
closes his heart to him, how does the love of God abide in him?" (21)
Everyone knows that the Fathers of the Church laid down the duty of the
rich toward the poor in no uncertain terms. As St. Ambrose put it: "You
are not making a gift of what is yours to the poor man, but you are
giving him back what is his. You have been appropriating things that are
meant to be for the common use of everyone. The earth belongs to
everyone, not to the rich." (22) These words indicate that the right to
private property is not absolute and unconditional.
No one may
appropriate surplus goods solely for his own private use when others
lack the bare necessities of life. In short, "as the Fathers of the
Church and other eminent theologians tell us, the right of private
property may never be exercised to the detriment of the common good."
When "private gain and basic community needs conflict with one another,"
it is for the public authorities "to seek a solution to these
questions, with the active involvement of individual citizens and social
The Common Good
certain landed estates impede the general prosperity because they are
extensive, unused or poorly used, or because they bring hardship to
peoples or are detrimental to the interests of the country, the common
good sometimes demands their expropriation.
Vatican II affirms
this emphatically. (24) At the same time it clearly teaches that income
thus derived is not for man's capricious use, and that the exclusive
pursuit of personal gain is prohibited. Consequently, it is not
permissible for citizens who have garnered sizeable income from the
resources and activities of their own nation to deposit a large portion
of their income in foreign countries for the sake of their own private
gain alone, taking no account of their country's interests; in doing
this, they clearly wrong their country. (25)
Those interested in Catholic Social Thought should look for a new book which came out of a 2007 conference held at the University of Scranton, and edited by Professor Kenneth R. Lord of UScranton, entitled "Two Views of Social Justice: A Catholic/Georgist Dialogue." The version I've seen is the October, 2012, issue of The American Journal of Economics and Sociology, and I understand that it will be made available in other forms as well.
The abstract for the book:
Sixteen scholars have come together in this issue to examine eight social-justice themses from the perspectives of Catholic Social Thought and the philosophy of Henry George. The themes they address are natural law, human nature, the nature of work, the nineteenth-century papal encyclical Rerum Novarum, causes of war, immigration, development, and wealth, and neighborhood revitalization. While they sometimes wrangle with each other, their common aspiration is the same as their nineteenth-century predecessors,: to find solutions to the human suffering caused by injustice.
That any human being should dare to apply to another the epithet
"pauper" is, to me, the greatest, the vilest, the most unpardonable
crime that could be committed. Each human being by mere birth
has a birthright in this earth and all its productions; and if they
do not receive it, then it is they who are injured, and it is not
the "pauper," oh, inexpressibly wicked word! — it is the well-to-do
who are the criminal classes.
— RICHARD JEFFERIES, The Story of
My Heart, Chap. X., p. 122.
Piers: Fare not the birds well? . . .
Wat Tyler: No fancied boundaries of mine and thine
Restrain their wanderings. Nature gives enough
For all, but Man, with arrogant selfishness.
Proud of his heaps, hoards up superfluous stores
Robbed from his weaker fellows, starves the poor.
Or gives to pity what he owes to justice!
Then he says: "If I am born into the earth, where is my part? Have the goodness, gentlemen of this world, to show me my wood lot, where I may fell my wood, my field where to plant my corn, my pleasant ground where to build my cabin."
"Touch any wood or field or house-lot on your peril," cry all the gentlemen of this world; "but you may come and work in ours for us, and we will give you a piece of bread."
Thou, O Lord, providest enough for all men with Thy most liberal and bountiful hand, but whereas Thy gifts are, in respect of Thy goodness and free favour, made common to all men, we (through our naughtiness, niggardship and distrust), do make them private and peculiar. Correct Thou the thing which our inequity hath put out of order, and let Thy goodness supply that which our niggardliness hath plucked away.
— A Prayer for Them That Be in Poverty, from Queen Elizabeth's Private Prayer Book (1578).
At the outdoor mass you held in Wroclaw in Poland during your recent visit to that country, you said the following very true and sincere words:
"The Earth is capable of feeding everyone. Why therefore -- here at the end of the 20th century -- should thousands of people die from starvation" -- "Pray solidarity will prevail over the unrestrained thirst for profit and ways to handle laws of trade, which do not take into consideration inalienable human rights".
It was the same concern about the greed of the wealthy and the plight of the poor, that your predecessor, Pope Leo XIII, expressed in his Encyclical Letter of 1891, 'Rerum Novarum'. Yet, in the more than hundred years that have past, if there has been a change, it has been for the worse!
The wealth is there. The growth of industry and the discoveries of science about which Pope Leo spoke, are even more fantastic and surprising than he would have imagined in his most inspired dreams. The enormous fortunes of individuals, of which he also spoke, have become more enormous. Yet the poverty is still there. Even in countries that are considered wealthy, people are homeless and live in cardboard boxes; people die, not just by the thousands as your Holiness said in Wroclaw, but by the millions, from poverty related diseases, malnutrition and starvation. You are indeed right to ask the question:
THE EXCLUSION FROM THE GIFTS OF GOD
As your Holiness will know, the Encyclical Letter of 1891 was not only an attack on socialism, but also a strong defence of the right to hold land as private property, a right that Pope Leo XIII claimed to be natural.
But the right to hold land includes the right for the owner to exclude other people from it, and, as all usable land in industrially developed countries is owned in that way, people without such a right will be unable to enjoy the gifts of God unless they accept the conditions exacted of them by a landowner. Neither can they work, reside nor relax without land, and again they have to accept conditions exacted by a landowner.
Normally the landowner will ask people to pay the market-determined site rental, which is high because of the many excluded people who want land, or he will offer to let them work at a market-determined wage, which is low because of many excluded people wanting a working place.
Some people, in fact -- as a consequence of the many excluded -- a growing number of people, can neither qualify for a job nor afford to pay the site rental, and they have to live on the streets, on the roads, at the dumping grounds or wherever they can find a poor shelter, some clothes and a little to eat. Some of them find that crime and prison give them a better life than there is available through the legal opportunities open to them.
In some countries Social Security is implemented to mitigate the cruel consequences of the exclusion of people from the gifts of God. The Social Security bill is not paid by landowners, but by entrepreneurs, wage earners, pensioners, savers and consumers.
In other countries only private charity is available to relieve the hardships.
But neither Social Security nor charity will change the basic injustice that causes the horrible conditions of the people excluded, that increases the site rentals to be paid for the use of land, and reduces net-wages, widening the gap between poor and rich. The basic cause of these evils has to be destroyed.
Political leaders from all over the world, including representatives of the Holy See, agreed at the United Nations conference on Human Settlements (Habitat II) at Istanbul last year, that:
"The failure to adapt, at all levels, appropriate rural and urban land policies and land management practices remains a primary cause of inequity and poverty".
LETTER TO POPE LEO XIII
Allow us, your Holiness, to point to the Open Letter of September 11th, 1891, written in New York by Henry George and sent to your predecessor his Holiness Pope Leo XIII, as a response to 'Rerum Novarum'.
Published as a book this Open Letter has been read by many thousands, and still today the book is sold and read.
Henry George did consider 'inalienable human rights' and 'unrestrained thirst for profit and ways to handle laws of trade'. On exactly this background he spoke for all people's equal rights to the gifts of God.
To maintain this right for everybody and at the same time to allow exclusive right for some to own land as private property, he advocated that people who are given the exclusive right to own land -- and thereby the right to exclude other people from the gifts of Nature -- should pay a compensation to the people they exclude (in fact to all citizens).
The compensation, as a duty to be paid by the landowners, should be the market-determined rentals of the sites from which they can exclude others. This being a fair charge of justice as the rentals are not due to efforts or investments made by the landowners, but due to the development of society and to the growth of the population of human beings, all wanting a place to work, and a place to reside.
The rentals should be collected from all landowners by society, and the revenue should be used to the benefit of all citizens. In that way, Henry George emphasized, all citizens would be able to get their equal share of the gifts of God.
HOLY INCENTIVES OR HOLLOW FALSEHOOD
We do agree with your Holiness and with Henry George that people have private right to property created by man, the right to the fruits of their labour; and also that people can achieve private right to exclusive possession of land, from which they can exclude other people.
But we find it logically inconsistent to believe that people have equal right to life and to be on the Earth, when at the same time some of them have exclusive right to own land as private property without paying compensation to those people whom they exclude from their land.
Your Holiness' sincere words, as quoted initially in this letter, accord with Rerum Novarum of 1891 and with the Habitat II statement quoted above, but they will only become true if your Holiness will succeed in urging on the rulers/governments of this world to collect the annual market-determined Site Rentals of all land in their countries, and distribute the revenue thus acquired to the benefit of all their citizens.
If your Holiness could succeed in persuading the governments to do so, all people on Earth would gain equal access to the gifts of Nature, and true solidarity would become a reality. If not, all statements about equal right to life, to work, to education and to residence, will continue being hollow and false; and our successors will not see a change for the better; on the contrary, they will see the gap between very rich people and alienated poor people grow bigger, and the problems of poverty grow more serious than they are today.
We pray your Holiness may succeed in convincing the governments of this world of the importance of public collection of the annual market rental of all land, and the revenue to be used for equal benefit of all the citizens, thus to provide far all human beings, equal rights to the gifts of Nature.
Let this become the manifestation of the new Millennium, the 2000 year anniversary of the birth of Jesus Christ. Let it become a Jubilee in the original meaning of the word, striking unjust shackles from society; thereby preparing a new age of humanity, a social life in friendship and peace.
A. The outlawing of abortion so that all embryos that implant are permitted to mature to full term.
B. The outlawing of some sorts of birth control so that all fertilized eggs have rights
C. The provision of full pre-natal care and healthy foods, air and water to all pregnant women until birth, so that all babies born have as good a start as possible
D. The provision of affordable healthy food, clean air and clean water until age 18, so that all young people have as healthy a start as possible
E. The provision of good schools, without regard for one's parents' ability to pay, for all children, including those with special needs
F. The provision of some reasonable income so that the families of children can afford to meet all of each child's most simply defined needs, including health care, education, nutritious good, a safe home
G. The provision of healthy air and water to all, of all ages
H. The acknowledgments that (a) every person has a right to himself or herself; and (b) that all persons have equal rights to the gifts of nature, even after they reach the age of 18 or 21
I. The notion that the born have more rights than the unborn if one comes into conflict with the other
This quote came across my inbox today, and I thought it worth sharing:
“We operate from the concept of ‘shalom,’” Forrister said when he reported on that meeting to The Huntsville Times. “’Shalom’ means more than the absence of war, it means the well-being of all. Ezekiel said to seek the ‘shalom’ of the city you’re in – and he was writing to people in exile in Babylon. We’re to seek the good of the whole community, of all of society.”
I came very slowly to the point of view that the nature of the ways we fund our common spending is at least as important as the spending side of the budget. That taxation can be destructive or constructive. That it can be used to create vital healthy communities or ones in which wealth and power concentrate into a few hands.
I grew up with the benefit of grandparents who understood this, and I still didn't "get it" until well after they were gone. Certainly my college education didn't provide me any glimpses of it, despite being concentrated in fields in and around it. I hope that others who are seekers after peace -- after Shalom -- will investigate what Henry George's "Remedy" -- land value taxation -- has to offer for their community and their country.
And here's the final paragraph from the email that the first quote came from:
Taking care of each other is simple kindness, not something sinister, said Forrister, who was trained as a Church of Christ minister.
“Thinking about looking out for the common good is not socialism,” Forrister said. “Capitalism has to be tempered by social policy that responds to human needs that capitalism won’t respond to.”
Our current form of capitalism is, among other things, land monopoly capitalism. Were we to remove the land monopoly aspect, through land value taxation, we would have a purer capitalism, one which I think would better serve the ideals we claim to hold dear.
When I heard that Trinity Church was not particularly keen on hosting the Occupy Wall Street protestors, I was not overly surprised. Years of watching Louis Rukeyser's "Wall Street Week" with the opening scenes of Trinity Church, and a reading of Thomas Shearman's 1889 article "The Owners of the United States" (below, posted on October 6),passed through my mind. Shearman was the co-founder of Shearman and Sterling law firm, and was a highly respected legal scholar of the late 19th century. He also wrote some fine books
Here are some relevant paragraphs:
The figures indicate the wealth believed to be possessed on the average by each of the persons whose names follow:
J. J. Astor, Trinity Church
C. Vanderbilt, W. K. Vanderbilt, Jay Gould, Leland Stanford, J. D. Rockefeller
Estate of A. Packer
John I. Blair, Estate of Charles Crocker
Wm. Astor, W. W. Astor, Russell Sage, E. A. Stevens, Estates of Moses Taylor, Brown & Ives
P. D. Armour, F. L. Ames, Wm. Rockefeller, H. M. Flagler, Powers & Weightman, Estate of P. Goelet
C. P. Huntington, D. O. Mills, Estates of T. A. Scott, J. W. Garrett
G. B. Roberts, Charles Pratt, Ross Winans, E. B. Coxe, Claus Spreckels, A. Belmont, R. J. Livingston, Fred. Weyerhauser, Mrs. Mark Hopkins, Mrs. Hetty Green, Estates of S. V. Harkness, R. W. Coleman, I. M. Singer
A. J. Drexel, J. S. Morgan, J. P. Morgan, Marshall Field, David Dows, J. G. Fair, E. T. Gerry, Estates of Gov. Fairbanks, A. T. Stewart, A. Schermerhorn
O. H. Payne, Estates of F. A. Drexel, I. V. Williamon, W. F. Weld
F. W. Vanderbilt, Theo. Havermeyer, H. O. Havermeyer, W. G. Warden, W. P. Thompson, Mrs. Schenley, J. B. Haggin, H. A. Hutchins, Estates of W. Sloane, E. S. Higgins, C. Tower, Wm. Thaw, Dr. Hostetter, Wm. Sharon, Peter Donohue
Trinity Church is included in this list because it is practically an individual owner. For the purpose of estimating the distribution of wealth, it is obvious that this corporation, which has no stockholders, must be treated as a unit.
So which side is the church on? Which side is the Church on? The side of the poor, or the side of the wealthy?
How do we judge it? By its words, or by its actions? The Episcopal Church, in some places, is known as the Frozen Chosen. In many places, it is a very welcoming community, but with some exceptions, it does not seek to find the structures that create poverty, or to challenge them when faced with them. It is good at charity, but not as good at justice. It asks prayers for seekers after justice, but doesn't otherwise encourage them.
"Faith, hope and charity ... but the greatest of these is ... justice!"
I guess I don't expect too much of Trinity Church, a/k/a The Republican Party at Prayer. They know where their bread is buttered, and aren't going to have a lot of interest in the folks who rely on margarine. But I hope their theology works for them; it doesn't work for American society. But that's what freedom of religion is about: give them tax exemptions to spread whatever they call their theology!
PostScript: I'm led to wonder about how there can be vacant land in lower Manhattan, and second, what sort of harm it would do to its owners to permit someone to put it to use for a while. I'm sure the church isn't paying property taxes on that vacant land. Why should that be? And for whose benefit is it being kept vacant?
And what is this lowest man who holds the fate of the world in his hands; whom we must lift or perish? He is landless, workless, poverty stricken, degraded, drunken, dishonest. In a word overflowing with plenty, he lacks everything. In a world of brightness, he and his cower in a cellar, or burrow in a sun-abandoned court. With abundance of pure air, they breathe only the foul.
Let us go to this man, whom we have thus painted in somberest hues; loveless, imbruted, dirty, lazy. What shall we do with him?
Let me rehearse some of the favorite processes of the philanthropic tread-mill so amiably worked by the well-meaning, though willfully blind, in their efforts to "raise the fallen":
Preaching Jesus to his soul.
Giving soap and water to his filth.
Compelling him, willy-nilly, to work.
Exhorting him to abstinence.
Giving his children a taste of heaven on earth, with a treat of fresh air (sending them back again to hell of foul air).
Building airy tenements for his occupation.
Providing for his immediate wants in food, fuel, clothing and physic.
Although these do not exhaust the enumeration, they are typical and must suffice. But they are all wrong wrong, wrong.
What! Wrong to preach Jesus to the fallen? Yes, wrong to preach Jesus to them, until we practice Jesus ourselves.
What a mockery to preach Jesus to the fallen man, with the proceeds of his stolen rights in our pockets, in the suit of clothes we wear, and in the meal we enjoyed before we went forth to meet him. The first lesson in religion we can give him is an object lesson in the restoration of his lost inheritance in the earth. The first sermon he hears us preach should be one exhorting ourselves to repentance, confession, and restitution. Having obeyed and thus done the first duty in the premises, it remains for us to aid our fallen and defrauded brother in recovering the ground from which we have thrust him.
And this fallen man is not hurt harmlessly. He is the fly in the ointment of our wealth. He is the barrier to the realization of our social dreams. To secure ourselves we must secure him. The oneness of industry in its best conception is impossible until we have made this our brother one with ourselves. In some sad respects we trace evidences of our relationship. Is he sinful? So are we. Has he fallen? So have we. He was robbed and fell. We robbed and fell. Clearly our first duty is to "restore the pledge, given again that we have robbed." We can restore; he cannot recover; he is helpless; only we can help.
Until the lowest man and his rights are practically dealt with, and his opportunities to rise assured, we shall suffer; depressions, crashes, anxiety, overcompetition, aggravated covetousness, will mar all our industry.
We produce as individuals; we suffer as an organism. No man liveth to himself. The need of one is the calamity of all.
We have taken our brother's inheritance — the right to the use of the earth — and we make merchandise out of it. Let us agree to pay into the public treasury the whole annual value of the land we use in city or county, only retaining the proceeds of our own industry. Having agreed to and carried out this act of simple justice, no one will hold, can hold, land for profit. He must use or abandon it. The abandoned estates will then be available for our brother now landless, hopeless, degraded. Then, and only then, can we preach Jesus to him.
We are many members in one body. Which of us can be hurt and not bring hurt on the rest? In this sense, in the sense of sharing in suffering, the oneness of industry is perfect.
This appeared in a California weekly 115 years ago. Much of it could have been written in 2011. Does this mean that these problems are eternal, necessary and simply can't be avoided?
Or does it mean that when we continue to maintain the structures that create these problems, we ought not to be surprised that the problem continues to show up?
These problems can be solved -- and prevented -- by a simple, logical, just, efficient reform of our tax structure. But almost none of our elected representatives are the least bit familiar with it. You might send yours a copy of Walt Rybeck's book, "Re-Solving the Economic Puzzle," if you think yours might have an open mind.
Young Men and Their Opportunities The San Jose Letter, February 1, 1896
But what are young men to do for a living? Did it ever occur to you that thousands of young Americans between the ages of 16 and 21 are pondering over that very question? What are they to do, indeed? Shall they study for a profession? Scores of young professional men in San Jose are not earning enough to pay their office rent, young lawyers, doctors, dentists, waiting for the practice that does not come.
The professions are overcrowded, some one says, let them learn a trade. What trade, pray? Would you have any of them learn the carpenter's trade, for instance? The valley is over-run with idle carpenters. Would you have them become house painters? Every other tramp one meets appears to be a painter. Would you have them learn the printer's trade? A dozen idle printers are clammoring for every place.
I was talking with a gentleman who is in the hardware business the other day. This question of idle young men came up. The merchant got down a list containing probably a score of names. Applicants, he told me, for a chance to learn the plumber's trade. "I have not a place," he said, "for one in twenty of them. They offer to work for nothing, if permitted to learn the trade. But idle journeymen apply for work every day."
It is so with every trade that may be named. Plenty of young men are fitting themselves for a $20 job, by spending months in learning shorthand and type writing. There was a time when a book-keeper could earn a living-assuring salary. He cannot now. Book-keepers, good enough for any average retail business, are hunting $40 jobs.
What are the young Americans of this generation to do, then? Such as have parents to furnish them with a home can work for $20 a month. Those with no home cannot compete with home-cheapened labor. The result is, San Quentin is filling up with young fellows under 25 years of age. Most of our tramps appear to be under 30.
Since the land is filled with idle doctors one can safely conclude that none want for medical assistance and advice. Since idle carpenters are begging for work, the people of America must have all the houses they want. There can be no more plumbing to do, for plumbers are idle; no houses that need painting for painters are tramping the country seeking work, no one without bread for there is no sale for breadstuffs, and bakers are without employment.
But, strange to say, hundreds of men are suffering for the services of the idle doctors. Families are shelterless, while carpenters are begging to build them houses. Men and women and children are suffering for bread while bread-stuffs rot, and bakers starve to death because they can find no one who can command their services.
Doctor A wants to build a house, and carpenter B is anxious to build it for him; but the house is not built. In the meantime Carpenter B's children die for the lack of medical assistance. Blacksmith C is unable to furnish his family with wood, for he "has no work." However, Wood-dealer D sees his horses go lame because he cannot afford to have them shod.
A very interesting state of affairs, is it not? Work that should be done, and plenty of it; while the young men of the nation are drifting to State prisons and the road because they can find no work.
This condition of affairs is new in America. Hungry men startle the well-fed, until they, too, hunger for the luxuries that once seemed necessities, then they are more than startled.
Along with this an evil is growing up in America that cannot be too earnestly condemned; it is that of the steadily growing custom of giving charity. The recipient of charity is demoralized. The American laborer wants work, not charity. When you give him charity you sink him to a condition lower than that of the negro slave. I know philantropists who employ Chinese, while white labor goes begging for a purchaser, who pompously "pay the white man's butcher bill." The white man wants to pay his own butcher bill, and demands work that will enable him to do it.
The evil results of this charity are doubled when school children are taught to "give to the poor." San Francisco has been turned into a pauper-making, pauper-sustaining educational institution. The papers reek with "charity," and the children are given lessons in pauperizing their elders. A year ago last winter the children were encouraged to feed the men employed at $1 a day in the Golden Gate Park. What did this mean? It meant that the children were made accustomed to see laboring Americans want for food, while the laborers, although working ten hours a day, were obliged to stoop to accept charity, and charity at the hands of children. It is very pathetic, this picture of Susie or Johnnie giving a ham sandwich or a piece of sponge cake to a hungry laboring American — a pretty picture, if you like; but the children are not benefited by it and the laborer can know no greater degradation. But, what are the young men who are leaving schools, colleges and universities each year to do for a living? Must the majority of them become objects of charity, to be given work, charity work, at wages which will not sustain life, only to be helped out of the difficulty by a lot of idle society women, who have nothing better to do than to take up the fad, charity; and by a parcel of school children who are encouraged in doing their little towards the ultimate pauperization of the American laborer?
This was most likely written by Franklin Hichorn, editor of The San Jose Letter.
Here's another from "Tax Facts." It speaks to the difference between fortunes which come about because of privileges granted (or grabbed), and those created through rendering service and -- not so incidentally -- employing people!
Should we continue to look the other way when we see privilege? Should we educate the next generation to continue to permit privileges, and to accept the miserable effects they create on society as a whole?
President Coolidge gives his approval of the great fortunes in this country on the ground that they have been the means — through the various endowments — of promoting learning and culture.
The righteousness of a great fortune depends not upon the end to which it is put, but upon the source from which it came. If a man earns his fortune he can do so only by employing labor and producing wealth, or by rendering his fellow men some great service. A fortune made in that way benefits all.
But when a fortune is made through legal privilege, by a grant from a king, by a franchise from a republic — which grant or franchise he sells or leases to another for a great sum — the possessor of that fortune has employed no labor, produced no wealth and rendered no service to his fellow men. The owner of that fortune is a social parasite, and a burden upon his fellows. He has done society a wrong that never can be righted by devoting a part of the fortune, no matter how large a part, to public service.
Nor does the virtue of a fortune depend upon its size. One dollar gotten without adequate return is wrong. A million gotten by service may be justified.
Two thoughts for the day, both from the January-February, 1909, "Single Tax Review."
To be satisfied with things as they are is to believe that progress is at an end.
Charity that is a substitute for justice is a loveless charity.
Think of the latter one when you see the bumper sticker "practice random acts of kindness." Random acts of kindness are wonderful, but they aren't a substitute for active seeking of a more just society for all. Nor is charity to the poor a substitute for examining and correcting the structures which impoverish so many people.
The issue of whether and how we ought to tax large fortunes upon the death of the second-to-die of a wealth-holding couple seems to have gone away recently, but this report to the federal government in 1915 ("Final Report of the Commission on Industrial Relations") from a Commission created by a 1912 Act of Congress, provides some interesting and timely reading nearly 100 years later -- and not just for questions related to the estate tax, but for economic justice and stability in general. Those who have seen the film "Inside Job" will also find some interesting items below. (While initially I wanted to share the David Lloyd-George quote, the length of this post grew some: it was difficult to pick starting and ending points. This starts on page 23.)
This sense of tension and impending danger has been expressed by numerous witnesses before the Commission, but by none more forcibly than by Mr. Daniel Guggenheim, a capitalist whose interests in mines and industrial plants extend to every part of the country.
Chairman Walsh. What do you think has been accomplished by the philanthropic activities of the country in reducing suffering and want among the people?
Mr. Guggenheim. There has a great deal been done. If it were not for what has been done and what is being done we would have revolution in this country.
The sources from which this unrest springs are, when stated in full detail, almost numberless. But upon careful analysis of their real character they will be found to group themselves almost without exception under four main sources which include all the others. These four are:
1. Unjust distribution of wealth and income. 2. Unemployment and denial of an opportunity to earn a living. 3. Denial of justice in the creation, in the adjudication, and in the administration of law. 4. Denial of the right and opportunity to form effective organizations.
1. Unjust Distribution of Wealth and Income.
The conviction that the wealth of the country and the income which is produced through the toil of the workers is distributed without regard to any standard of justice, is as widespread as it is deep-seated. It is found among all classes of workers and takes every form from the dumb resentment of the day laborer, who, at the end of a week's back-breaking toil, finds that he has less than enough to feed his family while others who have done nothing live in ease, to the elaborate philosophy of the "soap-box orator," who can quote statistics unendingly to demonstrate his contentions. At bottom, though, there is the one fundamental, controlling idea that income should be received for service and for service only, whereas, in fact, it bears no such relation, and he who serves least, or not at all, may receive most.
This idea has never been expressed more clearly than in the testimony of Mr. John H. Walker, President of the Illinois State Federation of Labor:
A working man is not supposed to ask anything more than a fair day's wage for a fair day's work; he is supposed to work until he is pretty fairly tuckered out, say eight hours, and when he does a fair day's work he is not supposed to ask for any more wages than enough to support his family, while with the business man the amount of labor furnishes no criterion for the amount they receive. People accept it as all right if they do not do any work at all, and accept it as all right that they get as much money as they can; in fact, they are given credit for getting the greatest amount of money with the least amount of work; and those things that are being accepted by the other side as the things that govern in everyday life, and as being right, have brought about this condition, this being in my judgment absolutely unfair; that is, on the merits of the proposition in dealing with the workers.
The workers feel this, some unconsciously and some consciously, but all of them feel it, and it makes for unrest, in my judgment, and there can be no peace while that condition obtains.
In the highest paid occupations among wage earners, such as railroad engineers and conductors, glass-blowers, certain steel-mill employees, and a few of the building trades, the incomes will range from $1,500 to $2,000 at best, ignoring a few exceptional men who are paid for personal qualities. Such an income means, under present-day conditions, a fair living for a family of moderate size, education of the children through high school, a small insurance policy, a bit put by for a rainy day — and nothing more. With unusual responsibilities or misfortunes, it is too little, and the pinch of necessity is keenly felt. To attain such wages, moreover, means that the worker must be far above the average, either in skill, physical strength, or reliability. He must also have served an apprenticeship equal in length to a professional course. Finally, and most important, he or his predecessors in the trade must have waged a long, aggressive fight for better wages, for there are other occupations whose demand for skill, strength and reliability are almost as great as those mentioned, where the wages are very much less.
These occupations, however, include but a handful compared to the mass of the workers. "What do the millions get for their toil, for their skill, for the risk of life and limb? That is the question to be faced in an industrial nation, for these millions are the backbone and sinew of the State, in peace or in war.
First, with regard to the adult workmen, the fathers and potential fathers, from whose earnings, according to the "American standard," the support of the family is supposed to be derived.
Between one-fourth and one-third of the male workers 18 years of age and over, in factories and mines, earn less than $10 per week; from two-thirds to three-fourths earn less than $15, and only about one-tenth earn more than $20 a week. This does not take into consideration lost working time for any cause.
Next are the women, the most portentously growing factor in the labor force, whose wages are important, not only for their own support or as the supplement of the meager earnings of their fathers and husbands, but because, through the force of competition in a rapidly extending field, they threaten the whole basis of the wage scale. From two-thirds to three-fourths of the women workers in factories, stores and laundries, and in industrial occupations generally, work at wages of less than $8 a week. Approximately one-fifth earn less than $4 and nearly one-half earn less than $6 a week.
Six dollars a week — what does it mean to many? Three theater tickets, gasoline for the week, or the price of a dinner for two; a pair of shoes, three pairs of gloves, or the cost of an evening at bridge. To the girl it means that every penny mnst be counted, every normal desire stifled, and each basic necessity of life barely satisfied by the sacrifice of some other necessity. If more food must be had than is given with 15 cent dinners, it must be bought with what should go for clothes; if there is need for a new waist to replace the old one at which the forewoman has glanced reproachfully or at which the girls have giggled, there can be no lunches for a week and dinners must cost five cents less each day. Always too the room must be paid for, and back of it lies the certainty that with slack seasons will come lay-offs and discharges. If the breaking point has come and she must have some amusement, where can it come from? Surely not out of $6 a week.
Last of all are the children, for whose petty addition to the stream of production the Nation is paying a heavy toll in ignorance, deformity of body or mind, and permature old age. After all, does it matter much what they are paid? for all experience has shown that in the end the father 's wages are reduced by about the amount that the children earn. This is the so-called "family wage," and examination of the wages in different industries corroborates the theory that in those industries, such as textiles, where women and children can be largely utilized, the wages of men are extremely low.
The competitive effect of the employment of women and children upon the wages of men, can scarcely be overestimated. Surely it is hard enough to be forced to put children to work, without having to see the wages of men held down by their employment.
This is the condition at one end of the social scale. What is at the other?
Massed in millions, at the other end of the social scale, are fortunes of a size never before dreamed of, whose very owners do not know the extent nor, without the aid of an intelligent clerk, even the sources, of their incomes. Incapable of being spent in any legitimate manner, these fortunes are burdens, which can only be squandered, hoarded, put into so-called "benefactions" which for the most part constitute a menace to the State, or put back into the industrial machine to pile up everincreasing mountains of gold. *
In many cases, no doubt, these huge fortunes have come in whole or in part as the rich reward of exceptional service. None would deny or envy him who has performed such service the richest of rewards, although one may question the ideals of a nation which rewards exceptional service only by burdensome fortunes. But such reward can be claimed as a right only by those who have performed service, not by those who through relationship or mere parasitism chance to be designated as heirs. Legal right, of course, they have by virtue of the law of inheritance, which, however, runs counter to the whole theory of American society and which was adopted, with important variations, from the English law, without any conception of its ultimate results and apparently with the idea that it would prevent exactly the condition which has arisen. In effect the American law of inheritance is as efficient for the establishment and maintenance of families as is the English law, which has bulwarked the British aristocracy through the centuries. Every year, indeed, sees this tendency increase, as the creation of "estates in trust" secures the ends which might be more simply reached if there were no prohibition of "entail." According to the income tax returns for ten months of 1914, there are in the United States 1598 fortunes yielding an income of $100,000 or more per year. Practically all of these fortunes are so invested and hedged about with restrictions upon expenditure that they are, to all intents and purposes, perpetuities.
An analysis of 50 of the largest American fortunes shows that nearly one-half have already passed to the control of heirs or to trustees (their vice regents) and that the remainder will pass to the control of heirs within twenty years, upon the deaths of the "founders." Already, indeed, these founders have almost without exception retired from active service, leaving the management ostensibly to their heirs but actually to executive officials upon salary.
We have, according to the income tax returns, forty-four families with incomes of $1,000,000 or more,1 whose members perform little or no useful service, but whose aggregate incomes, totalling at the very least fifty millions per year, are equivalent to the earnings of 100,000 wage earners at the average rate of $500.
1 — The income tax statistics, as a matter of fact, cover only a period of ten months in 1914.
The ownership of wealth in the United States has become concentrated to a degree which is difficult to grasp. The recently published researches of a statistician of conservative views 2 have shown that as nearly as can be estimated the distribution of wealth in the United States is as follows:
2 — Prof. Willard I. King, The Wealth and Income of the People of the United States.
The "Rich," 2 percent of the people, own 60 percent of the wealth.
The "Middle Class," 33 percent of the people, own 35 percent of the wealth.
The "Poor," 65 percent of the people, own 5 percent of the wealth.
This means in brief that a little less than two million people, who would make up a city smaller than Chicago, own 20 percent more of the Nation 's wealth than all the other ninety millions.
The figures also show that with a reasonably equitable division of wealth, the entire population should occupy the position of comfort and security which we characterize as Middle Class.
The actual concentration has, however, been carried very much further than these figures indicate. The largest private fortune in the United States, estimated at one billion dollars, is equivalent to the aggregate wealth of 2,500,000 of those who are classed as "poor," who are shown in the studies cited to own on the average about $400 each.
Between the two extremes of superfluity and poverty is the large middle class — farmers, manufacturers, merchants, professional men, skilled artisans, and salaried officials — whose incomes are more or less adequate for their legitimate needs and desires, and who are rewarded more or less exactly in proportion to service. They have problems to meet in adjusting expenses to income, but the pinch of want and hunger is not felt, nor is there the deadening, devitalizing effect of superfluous, unearned wealth.
From top to bottom of society, however, in all grades of incomes, are an innumerable number of parasites of every conceivable type. They perform no useful service, but drain off from the income of the producers a sum whose total can not be estimated.
This whole situation has never been more accurately described than by Hon. David Lloyd-George in an address on "Social Waste":
I have recently had to pay some attention to the affairs of the Sudan, in connection with some projects that have been mooted for irrigation and development in that wonderful country. I will tell you what the problem is, — you may know it already. Here you have a great, broad, rich river upon which both the Sudan and Egypt depend for their fertility. There is enough water in it to fertilize every part of both countries; but if, for some reason or other, the water is wasted in the upper regions, the whole land suffers sterility and famine. There is a large region in the Upper Sudan, where the water has been absorbed by one tract of country, which, by this process, has been converted into a morass, breeding nothing but pestilence. Properly and fairly husbanded, distributed, and used, there is enough to fertilize the most barren valley and make the whole wilderness blossom like the rose.
That represents the problem of civilization, not merely in this country but in all lands. Some men get their fair share of wealth in a land and no more — sometimes even the streams of wealth overflow to waste over some favored regions, often producing a morass, which poisons the social atmosphere. Many have to depend on a little trickling runlet, which quickly evaporates with every commercial or industrial drought; sometimes you have masses of men and women whom the flood at its height barely reaches, and then you witness parched specimens of humanity, withered, hardened in misery, living in a desert where even the well of tears has long ago run dry.
Besides the economic significance of these great inequalities of wealth and income, there is a social aspect which equally merits the attention of Congress. It has been shown that the great fortunes of those who have profited by the enormous expansion of American industry have already passed, or will pass in a few years, by right of inheritance to the control of heirs or to trustees who act as their "vice regents." They are frequently styled by our newspapers "monarchs of industry," and indeed occupy within our Republic a position almost exactly analogous to that of feudal lords.
These heirs, owners only by virtue of the accident of birth, control the livelihood and have the power to dictate the happiness of more human beings than populated England in the Middle Ages. Their principalities, it is true, are scattered and, through the medium of stock-ownership, shared in part with others; but they are none the less real. In fact, such scattered, invisible industrial principalities are a greater menace to the welfare of the Nation than would be equal power consolidated into numerous petty kingdoms in different parts of the country. They might then be visualized and guarded against; now their influence invisibly permeates and controls every phase of life and industry.
"The king can do no wrong" not only because he is above the law, but because every function is performed or responsibility assumed by his ministers and agents. Similarly our Rockefellers, Morgans, Fricks, Vanderbilts and Astors can do no industrial wrong, because all effective action and direct responsibility is shifted from them to the executive officials who manage American industry. As a basis for this conclusion we have the testimony of many, among which, however, the following statements stand out most clearly:
Mr. John D. Rockefeller, Jr.: 1
1 — Before Congressional Investigating Committee.
..." those of us who are in charge there elect the ablest and most upright and competent men whom we can find, in so far as our interests give us the opportunity to select, to have the responsibility for the conduct of the business in which we are interested as investors. We can not pretend to follow the business ourselves.
Mr. J. Pierpont Morgan.
Chairman Walsh. In your opinion, to what extent are the directors of corporations responsible for the labor conditions existing in the industries in which they are the directing power?
Mr. Morgan. Not at all I should say.
The similitude, indeed, runs even to mental attitude and phrase. Compare these two statements:
Mr. John D. Rockefeller, Jr. My appreciation of the conditions surrounding wage-earners and my sympathy with every endeavor to better these conditions are as strong as those of any man.
Louis XVI. There is none but you and me that has the people 's interest at heart. ("II n'y a que vous et moi qui aimions le peuple.")
The families of these industrial princes are already well established and are knit together not only by commercial alliances but by a network of intermarriages which assures harmonious action whenever their common interest is threatened.
Effective action by Congress is required, therefore, not only to readjust on a basis of compensation approximating the service actually performed, the existing inequalities in the distribution of wealth and income, but to check the growth of an hereditary aristocracy, which is foreign to every conception of American Government and menacing to the welfare of the people and the existence of the Nation as a democracy.
The objects to be attained in making this readjustment are: To reduce the swollen, unearned fortunes of those who have a superfluity; to raise the underpaid masses to a level of decent and comfortable living; and at the same time to accomplish this on a basis which will, in some measure, approximate the just standard of income proportional to service.
The discussion of how this can best be accomplished forms the greater part of the remainder of this report, but at this point it seems proper to indicate one of the most immediate steps which need to be taken.
It is suggested that the Commission recommend to Congress the enactment of an inheritance tax, so graded that, while making generous provision for the support of dependents and the education of minor children, it shall leave no large accumulation of wealth to pass into hands which had no share in its production. 1 The revenue from this tax, which we are informed would be very great, should be reserved by the Federal Government for three principal purposes:
1— It is suggested that the rates be so graded that not more than one million dollars shall pass to the heirs. This can be equitably accomplished by several different gradations of taxation.
1. The extension of education.
2. The development of other important social services which should properly be performed by the Nation, which are discussed in detail elsewhere.
3. The development, in cooperation with States and municipalities, of great constructive works, such as road building, irrigation and reforestation, which would materially increase the efficiency and welfare of the entire Nation.
We are informed by counsel not only that such a tax is clearly within the power of Congress, but that upon two occasions, namely, during the Civil War and in 1898, such graded inheritance taxes were enacted with scarcely any opposition and were sustained by the Supreme Court, which held that the inheritance tax was not a direct tax within the meaning of the Constitution. We are aware that similar taxes are levied in the various States, but the conflict with such State taxes seems to have presented little difficulty during the period in which the tax of 1898 was in effect. Under any circumstances this need cause no great complication, as the matter could be readily adjusted by having the Federal Government collect the entire tax and refund a part to the States on an equitable basis.
There is no legislation which could be passed by Congress the immediate and ultimate efforts of which would be more salutary or would more greatly assist in tempering the existing spirit of unrest.
2. Unemployment and Denial of Opportunity to Earn a Living.
As a prime cause of a burning resentment and a rising feeling of unrest among the workers, unemployment and the denial of an opportunity to earn a living is on a parity with the unjust distribution of wealth. They may on final analysis prove to be simply the two sides of the same shield, but that is a matter which need not be discussed at this point. They differ in this, however, that while unjust distribution of wealth is a matter of degree, unemployment is an absolute actuality, from which there is no relief but soul-killing crime and soul-killing charity.
To be forced to accept employment on conditions which are insufficient to maintain a decent livelihood is indeed a hardship, but to be unable to get work on any terms whatever is a position of black despair.
A careful analysis of all available statistics shows that in our great basic industries the workers are unemployed for an average of at least one-fifth of the year, and that at all times during any normal year there is an army of men, who can be numbered only by hundreds of thousands, who are unable to find work or who have so far degenerated that they can not or will not work. Can any nation boast of industrial efficiency when the workers, the source of her productive wealth, are employed to so small a fraction of their total capacity?
Fundamentally this unemployment seems to rise from two great causes, although many others are contributory.First, the inequality of the distribution of income, which leaves the great masses of the population (the true ultimate consumers) unable to purchase the products of industry which they create, while a few have such a superfluity that it can not be normally consumed but must be invested in new machinery for production or in the further monopolization of land and natural resources. The result is that in mining and other basic industries we have an equipment in plant and developed property far in excess of the demands of any normal year, the excess being, in all probability, at least 25 percent. Each of these mines and industrial plants keeps around it a labor force which, on the average, can get work for only four-fifths of the year, while at the same time the people have never had enough of the products of those very industries — have never been adequately fed, clothed, housed, nor warmed — for the very simple reason that they have never been paid enough to permit their purchase.
The second principal cause lies in the denial of access to land and natural resources even when they are unused and unproductive, except at a price and under conditions which are practically prohibitive. This situation, while bound up with the land and taxation policies of our States and Nation, also rests fundamentally upon the unjust distribution of wealth. Land or mineral resources in the hands of persons of average income must and will be used either by their original owners or by some more enterprising person. By the overwhelming forces of economic pressure, taxation, and competition they can not be permitted to lie idle if they will produce anything which the people need. Only in the hands of large owners — free from economic pressure, able to evade or minimize the effects of taxation and to await the ripening of the fruits of unearned increment — can land be held out of use if its products are needed.
There can be no more complete evidence of the truth of this statement than the condition of the farms of 1000 acres and over, which, valued at two and one-third billion dollars, comprise 19 percent of all the farm land of the country and are held by less than one percent of the farm owners. The United States Census returns show that in these 1000-acre farms only 18.7 percent of the land is cultivated as compared with 60 to 70 percent in farms of from 50 to 499 acres. Furthermore, it is well known that the greater part of these smaller farms which are left uncultivated are held by real estate men, bankers and others who have independent sources of income. More than four-fifths of the area of the large holdings is being held out of active use by their 50,000 owners, while 2,250,000 farmers are struggling for a bare existence on farms of less than 50 acres, and an untold number who would willingly work these lands are swelling the armies of the unemployed in the cities and towns.
A basic theory of our Government, which found expression in the Homestead Acts, was that every man should have opportunity to secure land enough to support a family. If this theory had been carried out and homesteads had either gone to those who would use them productively or remained in the hands of the Government, we should not yet have a problem of such a character. But these acts were evaded; land was stolen outright by wholesale, and fraudulent entries were consolidated into enormous tracts which are now held by wealthy individuals and corporations.
The Public Lands Commission, after an exhaustive inquiry, reported in 1905:
Detailed study of the practical operation of the present land laws shows that their tendency far too often is to bring about land monopoly rather than to multiply small holdings by actual settlers.
. . . Not infrequently their effect is to put a premium on perjury and dishonest methods in the acquisition of land. It is apparent, in consequence, that in very many localities, and perhaps in general, a larger proportion of the public land is passing into the hands of speculators than into those of actual settlers making homes. . . . Nearly everywhere the large landowner has succeeded in monopolizing the best tracts, whether of timber or agricultural land. 1
1 — Senate Doc. 154, 58th Cong., 3d Sess., p. 14.
To one who has not read the preceding statements carefully, there may seem to be a contradiction in proposing to prevent great capitalists from creating an excess of productive machinery and overdeveloping mineral resources, while pointing out the necessity of forcing land and other natural resources into full and effective use by the people. The two propositions are, as a matter of fact, as fundamentally distinct as monopoly and freedom. The capitalist increases his holdings in productive machinery and resources only because through monopolization and maintenance of prices he hopes to reap rewards for himself or increase his power, while the aim in desiring the full development of land and other resources by the people is that they, producing for themselves, may enjoy a sufficiency of good things and exchange them for the products of others, and thus reduce to a minimum the condition of unemployment.
There are, of course, many other causes of unemployment than the inequality of wealth and the monopolization of land which there is no desire to minimize. Chief among these are immigration, the inadequate organization of the labor market, the seasonal character of many industries, and the personal deficiencies of a very large number of the unemployed. It can not be denied that a considerable proportion of the men who fill the city lodging houses in winter are virtually unemployables, as a result of weakness of character, lack of training, the debasing effects of lodging house living and city dissipation, and, last but not least, the conditions under which they are forced to work in the harvest fields and lumber, railroad and construction camps. The seasonal fluctuations of our industries are enormous, employing hundreds of thousands during the busy season and throwing them out on the community during the dull season, and almost nothing has been done to remedy this condition. It would be difficult to imagine anything more chaotic and demoralizing than the existing methods of bringing workmen and jobs together. Certain measures for dealing with these conditions, which are discussed elsewhere in the report, need to be pushed forward with all possible vigor. But it may be confidently predicted that the unemployment situation will not be appreciably relieved until great advances have been made in the removal of the two prime causes — unjust distribution of wealth and monopolization of land and natural resources.
The most direct methods of dealing with the inequality of wealth have already been briefly discussed and will be considered elsewhere in the report. "With respect to the land question, however, the following basic suggestions are submitted:
1. Vigorous and unrelenting prosecution to regain all land, water power and mineral rights secured from the Government by fraud.
2. A general revision of our land laws, so as to apply to all future land grants the doctrine of "superior use," as in the case of water rights in California, and provision for forfeiture in case of actual nonuse. In its simplest form the doctrine of "superior use" implies merely that at the time of making the lease the purpose for which the land will be used must be taken into consideration, and the use which is of greatest social value shall be given preference.
3. The forcing of all unused land into use by making the tax on nonproductive land the same as on productive land of the same kind, and exempting all improvements.
Other measures for dealing with unemployment are discussed under that head on p. 181.
The unemployed have aptly been called "the shifting sands beneath the State." Surely there is no condition which more immediately demands the attention of Congress than that of unemployment, which is annually driving hundreds of thousands of otherwise productive citizens into poverty and bitter despair, sapping the very basis of our national efficiency and germinating the seeds of revolution.
We have no disposition to say anything about Andrew Carnegie's munificent benefactions. On the one hand there is nothing in this philanthropic spree of a modern Dives to call for commendation; and on the other, the expenditure by any man of what society concedes to be his own fortune, is a private matter outside the pale of criticism.
It is only when the question of how a millionaire ought to use his wealth is brought forward in connection with these charitable performances that the subject becomes one of public concern. Then it is of public concern only to the extent of justifying the retort that it is nobody's business but his own how any millionaire uses his wealth, provided he does not use it prejudicially to the rights of others.
The vital question is not how millionaires use their wealth, but how they get it. Not how they did get it, for what has happened has happened, and by-gones should be by-gones; but how they are getting it now.
Have they a hoard of goods formerly accumulated, from which they draw? Then their getting it hurts nobody.
Do they earn it as they go along? Then their getting it benefits everybody.
Or do they merely possess legal authority to levy continually upon the common earnings for their own enrichment? Then their getting it is a present and continuing wrong, which is of incalculable public concern.
-- From "The Public," March 23, 1901
One might be led to ask whether the FIRE sector is levying upon the earnings of the larger community a toll they don't actually rightly earn.
I sang this hymn this morning, and the fourth and fifth verses made me wonder whether it might have been inspired by the ideas of Henry George.
1 "Thy kingdom come!" on bended knee the passing ages pray; and faithful souls have yearned to see on earth that kingdom's day.
2 But the slow watches of the night not less to God belong; and for the everlasting right the silent stars are strong.
3 And lo, already on the hills the flags of dawn appear; gird up your loins, ye prophet souls, proclaim the day is near:
4 The day to whose clear shining light all wrong shall stand revealed, when justice shall be throned in might, and every heart be healed;
5 When knowledge, hand in hand with peace, shall walk the earth abroad; the day of perfect righteousness, the promised day of God.
Words: Frederick Lucian Hosmer, 1891 Music: Irish, St. Flavian
I also found a second related hymn Hosmer wrote in 1905, here:
1 Thy Kingdom come, O Lord, Wide circling as the sun; Fulfill of old Thy Word And make the nations one.
2 One in the bond of peace, The service glad and free Of truth and righteousness, Of love and equity.
3 Speed, speed the longed for time Foretold by raptured seers— The prophecy sublime, The hope of all the years.
4 Till rise at last, to span Its firm foundations broad, The commonwealth of man, The city of our God.
Henry George delivered a sermon entitled "Thy Kingdom Come," in 1889 in Glasgow, Scotland. Most likely he gave that speech many more times in other places. It includes these paragraphs:
Nothing is clearer than that if we are all children of the universal Father, we are all entitled to the use of His bounty. No one dare deny that proposition. But the people who set their faces against its carrying out say, virtually: “Oh, yes! that is true; but it is impracticable to carry it into effect!” Just think of what this means. This is God’s world, and yet such people say that it is a world in which God’s justice, God’s will, cannot be carried into effect. What a monstrous absurdity, what a monstrous blasphemy!
If the loving God does reign, if His laws are the laws not merely of the physical, but of the moral universe, there must be a way of carrying His will into effect, there must be a way of doing equal justice to all of His creatures.
There is. The people who deny that there is any practical way of carrying into effect the perception that all human beings are equally children of the Creator shut their eyes to the plain and obvious way. It is, of course, impossible in a civilization like this of ours to divide land up into equal pieces. Such a system might have done in a primitive state of society. We have progressed in civilization beyond such rude devices, but we have not, nor can we, progress beyond God’s providence.
There is a way of securing the equal rights of all, not by dividing land up into equal pieces, but by taking for the use of all that value which attaches to land, not as the result of individual labor upon it, but as the result of the increase in population, and the improvement of society. In that way everyone would be equally interested in the land of one’s native country. Here is the simple way. It is a way that impresses the person who really sees its beauty with a more vivid idea of the beneficence of the providence of the All-Father than, it seems to me, does anything else.
One cannot look, it seems to me, through nature — whether one looks at the stars through a telescope, or have the microscope reveal to one those worlds that we find in drops of water. Whether one considers the human frame, the adjustments of the animal kingdom, or any department of physical nature, one must see that there has been a contriver and adjuster, that there has been an intent. So strong is that feeling, so natural is it to our minds, that even people who deny the Creative Intelligence are forced, in spite of themselves, to talk of intent; the claws on one animal were intended, we say, to climb with, the fins of another to propel it through the water.
Yet, while in looking through the laws of physical nature, we find intelligence we do not so clearly find beneficence. But in the great social fact that as population increases, and improvements are made, and men progress in civilization, the one thing that rises everywhere in value is land, and in this we may see a proof of the beneficence of the Creator.
Why, consider what it means! It means that the social laws are adapted to progressive humanity! In a rude state of society where there is no need for common expenditure, there is no value attaching to land. The only value which attaches there is to things produced by labor. But as civilization goes on, as a division of labor takes place, as people come into centers, so do the common wants increase, and so does the necessity for public revenue arise. And so in that value which attaches to land, not by reason of anything the individual does, but by reason of the growth of the community, is a provision intended — we may safely say intended — to meet that social want.
Just as society grows, so do the common needs grow, and so grows this value attaching to land — the provided fund from which they can be supplied. Here is a value that may be taken, without impairing the right of property, without taking anything from the producer, without lessening the natural rewards of industry and thrift. Nay, here is a value that must be taken if we would prevent the most monstrous of all monopolies. What does all this mean? It means that in the creative plan, the natural advance in civilization is an advance to a greater and greater equality instead of to a more and more monstrous inequality.
“Thy kingdom come!” It may be that we shall never see it. But to those people who realise that it may come, to those who realize that it is given to them to work for the coming of God’s kingdom on earth, there is for them, though they never see that kingdom here, an exceedingly great reward — the reward of feeling that they, little and insignificant though they may be, are doing something to help the coming of that kingdom, doing something on the side of that Good Power that shows all through the universe, doing something to tear this world from the devil’s grasp and make it the kingdom of righteousness.
Aye, and though it should never come, yet those who struggle for it know in the depths of their hearts that it must exist somewhere — they know that, somewhere, sometime, those who strive their best for the coming of the kingdom will be welcomed into the kingdom, and that to them, even to them, sometime, somewhere, the King shall say: “Well done, thou good and faithful servant, enter thou into the joy of thy Lord.”
I wonder if Henry George's words helped inspired Frederick Hosmer's hymn. I commend the entire sermon to your attention; parts of it will make you smile.
This is a wonderful story, but it begs the question: after it gets young children in impoverished countries through the critical first few years, will it reduce poverty in any way, or does it leave in place virtually all the structures which impoverish the people of these countries?
The final paragraphs touch ever so lightly on this:
Collins asks, “How are they addressing the need for poor people in Haiti not to be dependent on outside intervention in the first place?”
This question hung, unanswerable, over Salem’s journey through Haiti. Salem went there with a promise to donate a shipping container filled with $60,000 worth of Nutriset-patented products to Partners in Health, the charity run by her friend Paul Farmer. While grateful, the organization still preferred to manufacture its own product, Nourimanba, with the profits accruing to local farmers. But even this program was more a principled exercise than a development strategy. Haiti’s endemic problem of malnutrition wasn’t something you could solve with peanuts. Partners in Health also took Salem on a couple of home visits. At a one-room shack in Cange, a mother presented her 3-year-old daughter, saying she had gained 11 pounds on a regimen of Nourimanba. But the mother complained that there was no help for other serious problems she faced, like the fact that she had no job and the tin roof of her shack leaked.
Out in the hills, down a muddy path shaded by coconut palms, the health workers checked in on a small wooden farmhouse. Two children living there were on a regimen of ready-to-use food — and six were receiving nothing. The older ones watched as their little sister wolfed down an entire cup of peanut paste for the benefit of the visitors. The children’s grandmother, who was looking after them, was asked why malnutrition had been diagnosed in these two and the others not. She said she couldn’t really say, except that there simply wasn’t enough food to go around. There was no foil-wrapped answer to the maddening persistence of poverty. All that existed was a determination to meet the challenge with all the fallible tools of human ingenuity.
The fallible tools of human ingenuity. Perhaps some of that ingenuity could be applied to understanding and correcting the structures which pour the wealth of nations into the pockets of a relative few in each nation. Those structures are neither "natural" nor "necessary." Start with reading Henry George -- a couple of his speeches, perhaps "The Crime of Poverty" and "Thou Shalt Not Steal," followed by a recent abridgment of Progress and Poverty. You'll know more about poverty and its causes -- and what needs to be reformed in order to end involuntary poverty -- than many of the world's "experts," who seek to tweak poverty while not disturbing the status quo -- not rocking any yachts or luxury cruiseships. Leave more for the robber who takes all that is left, if you will.
George used his ingenuity to understand the structures and to describe them clearly to his readers and listeners.
One of my google alerts has brought me some news items about residents' objections to a recent revaluation of property in the Township and Borough of Princeton, New Jersey. 200 residents turned out at a recent meeting to discuss the data.
I haven't been in Princeton in at least 30 years, and my familiarity with it is from bits and pieces I've heard over the years, and from two articles and some letters to the editor.
I am not an assessor or an appraiser, but an "amateur" in the finest sense of that word. As far as I know, I know no-one associated with the assessment company involved. I think good assessments are vitally important and not all that difficult to do well. As I read these two articles, I find reason to suspect that the assessments are of better quality than those who are protesting them recognize. I'll leave it to you to read the citations above, and just move to some comments.
First, Princeton's taxes have been based on valuations done in 1996. Between 1996 and 2010, here are some of the things which have happened:
land values have risen tremendously, and -- almost certainly -- unevenly. Property within walking distance of various amenities, including jobs and transportation, will have risen faster in value than land which is less well-located, even in this high-priced town. Princeton likely has an excellent school district, and even small and (relatively) badly located lots are likely to have appreciated faster than those outside the school district.
houses in Princeton, like those anywhere else, are depreciating. A Federal Reserve Board study (May, 2006) pegs annual depreciation at 1.5%.
in affluent areas, homeowners may make major improvements to their homes, which offset that depreciation somewhat.
it is likely that some of Princeton's transactions have been followed by teardowns and the building of a new home on a choice site. The assessor may have valued those new homes at some estimate of what they would have been worth in 1996, in an attempt to be equitable.
Not all lots are created equal, and even if they were, they wouldn't stay equal.
The Woodpeckers were advancing in civilization and took up something
like the English land system. It was shown that holes in a tree
trunk were fixed improvements which could not be made unless ownership
of the tree was secure. Full title to the trees was, therefore,
confirmed to various Woodpeckers.
Thereupon the more active and long-headed Woodpeckers began to affix to
each vacant tree a little red leaf like a seal, so as "to hold it until
is is wanted."
The Woodpeckers increased in number so that there were not unclaimed
trees enough for everybody; later all the convenient trees were full,
and there were still more applications.
I heard parts of this when it was initially broadcast, and hunted around for the text version. It contains some statistics that surprised me. Here's the first part of the interview:
MICHELE NORRIS, host: Earlier
this week, Mexican President Felipe Calderon defended Mexico's war
against the drug cartels, and cast some blame on his neighbor to the
north: the U.S. The origin of our violence problem begins with the fact
that Mexico is located next to the country that has the highest level of
drug consumption in the world, Calderon wrote in a newspaper editorial.
It is as if our neighbor were the biggest drug addict in the world.
Harsh words, to be sure. It got us wondering
about the appetite for drugs in the U.S., and whats being done to curb
For answers, we turn to Joseph Califano,
the former secretary of Health, Education and Welfare, and now director
of the National Center on Addiction and Substance Abuse at Columbia
Mr. Califano, welcome to the
Mr. JOSEPH CALIFANO (Director,
National Center on Addiction and Substance Abuse, Columbia University):
Nice to be here.
NORRIS: Now first, any
truth in President Calderon's statement? Is it fair to characterize the
U.S. as the biggest drug addict in the world?
CALIFANO: The U.S. is 5 percent of the world's population. We consume
two-thirds of the world's illegal drugs. So there is a lot of truth...
CALIFANO: ...in what President Calderon said.
Let me ask you about the war on drugs right now. The current
administration is trying to focus on a balance between interdiction and
treatment: drug courts, for instance, followed by mandatory treatment,
things like that.
Will that shrink the
domestic market for drugs - since when you're talking about treatment,
there are so many issues surrounding access to treatment?
Mr. CALIFANO: You're absolutely right. The rhetoric of the
administration is good, but the dollars haven't changed. We're still
putting roughly two-thirds into interdiction and enforcement, and
one-third into treatment and prevention. Interestingly, when President
Nixon started the war on drugs, his first budget was two-thirds for
prevention and treatment, and one-third for interdiction.
NORRIS: Oh, so it's flipped.
CALIFANO: It's flipped totally. Now, we have to look at a lot of
systems to really do something about this. The drug courts are great.
We've analyzed them at our center. They work. And the prison population
is important because 65 percent of the people in prison meet the medical
criteria for drug or alcohol abuse and addiction. That's a wonderful -
in a sense, captive audience. But we don't provide much treatment for
NORRIS: So it's just a wasted
opportunity. They're not getting treatment.
CALIFANO: About one in 10 that need treatment gets some kind of
treatment. But most of it is not good.
a Medicaid population: 30 percent of the beneficiaries of Medicare have
drug and alcohol problems. We have to go after those populations. That's
the short-run - in a sense - solution to this problem.
There's a longer-run solution. We know from our research
that if you get a child through age 21 without getting into this stuff,
that child is virtually certain to be home free for the rest of his or
her life. And when you say a drug-free society - and there will always
be drugs being used - what you're really talking about is that
population of children - and that's parents, that's schools, that's people
that are dealing with that. And they've got to get focused on it.
NORRIS: Is the U.S. serious enough about the war on
Mr. CALIFANO: No, we're not. I'll
tell you - and we're not serious. The government is not serious enough.
You can barely hear any of the leaders in the government talk about it.
The medical profession is not serious enough. The public-health
profession is not serious enough.
Think about it. The richest nation in the world. And our wealth is quite concentrated in a relatively small portion of our population: 1% of us have over one third of the net worth. 10% of us have over 71% of the net worth.
And 10% of us get nearly half of the pre-tax income, and 20% of us get 61%, and 40% of us get 80%, leaving not much for the rest.
The rest of us keep talking about our nation's ideals, as if we'd already achieved them and we should all be content. But clearly our concentration of wealth and concentration of income are producing effects which burden a large number of us and then get transmitted to other parts of the world. (Am I a master of understatement?)
A friend sent me two prayers, both by John Archer, of Huddersfield, in the UK. I'm guessing they might be 100 years old.
The Prayer of the Landless.
O THOU, who didst decree all things, and who didst breathe upon us, giving us life, for what purpose didst Thou create us?
For we are aliens upon the soil which gave us birth, and we are trespassers in the land of our fathers.
Thou didst fashion us in nakedness, and didst bid us break the bread we eat in the sweat of our brows. But though we would fain comply with Thy command, we may not do so without the consent of others.
And the price of such consent is so exacting that our lives are made bitter by hard bondage.
We plough the fields and scatter the good seed o'er the land, but a mere pittance of the golden grain is our portion of the harvesting.
We spin and weave, but it is the bodies of others which are kept warm by the cloth our hands doth make.
We build ships and carry over the face of the deep the fruits of the labours of our brethren, and we return laden with the fruits of Thy beneficence and other men's labours in the lands we have visited, but others than ourselves and our brethren appropriate the fruits of our activities.
Down, down we go into the deeps of the mind, and through danger attended with discomfort we dig and hew the coal which shall give warmth and glow to the hearthstones of our homes; but divers rents, royalties and wayleaves impoverish the hire of our labour in order to enrich the exchequer of those who neither toil nor spin.
The rights of the birds of the air and of the beasts of the field to their place on this planet of Thy creation is acknowledged, but ours is challenged. We have not where to lay our heads, we have not where to place the soles of our feet -- without permission. And we may only secure such permission by the payment of annual tribute known as ground-rents.
Jesus, our elder Brother, who taught us to believe that Thou art equally the Father of us all; didst also command us to render to Thee the things which belong to Thee.
The earth, created Thou it! Hast Thou given the title deeds thereof to those who refuse to us the right of a standing and a resting place thereon, unless we pay rent to them annually?
If Thou hast bestowed on them the title deeds, wherein have we sinned against Thee, and wherein have they so pleased Thee, that they should be thus lifted above compliance with Thy decrees and ordinances, and we be so penalised that our children languish for lack, their mothers droop and die, thus causing many of us to curse the day we were born.
If these things be not of Thy ordering, so incline the hearts of all Thy people to the issues of justice, that they may be made to realise they but mock Thee with vain petitions when they pray, "Thy will be done on earth as it is in heaven," until they right this wrong which dishonours Thee and which enslaves and destroys Thy disinherited children. Amen.
It may not be immediately obvious to those who haven't thought about this before that the alternative is for every individual who possesses land to pay to the commonseach year the annual value of the land itself -- that size lot in that location. Each pays for what he uses, and thus keeps for himself no more than what he is actually using. This creates an economy in which valuable sites get used for valuable purposes, not held out of use as someone's nestegg for their children or grandchildren. No one grows wealthy off others' labor, and this flow of land rent gets used for common purposes rather than pouring into the portfolios of a select few.
Click on this link to see all the Landlord and Landless prayers I've got on a single page.
I've found a longer version of a Landlord's Prayer which Henry George published in The Standard (late 1880s, or early 1890s). This one was reprinted in December, 1920 in an IBEW publication, and is sourced there to the Dundee People's Journal.
(By William Allan.)
Lord, keep us rich and free from toil
Are honored holders of thy soil,
Which democrats would fain despoil
O Lord, our fathers got the land
For serving men whom Thy right hand
Had chosen to be great and grand,
Tho' taken by stealth, we're not to blame;
Thou knowest, O Lord! it is a shame
To say to us of titled name
Lord, let us live in wealth's content
Lord, we are by Thy mercy meant
To rule mankind and make our rent
The birds that hunt the moors and hills,
The fish that swim in streams and rills,
The beasts that roam as nature wills,
E'en Lord, the minerals that lie
Beneath the earth's periphery
Belong to us -- Thou knowest why
Lord, on the rugged rabble frown,
Are foes to us, Thy church and crown;
Lord, bare Thine arm and grind them
O Lord, our God! we make their laws,
Which they reject with wild applause;
Be Thou a buckler to our cause
They scorn our love, Thy name and word,
They reverence neither squire nor lord;
Lord, them consume with fire and sword
Lord, they are poor and ignorant,
Compared with us, how different
In manner, garb, and lineament,
Lord, never let them get or see
The power which lies in unity.
Keep us apart from them -- for we
Protect us from their greedy hands,
Protect us from their vile demands,
Protect us in our wealth and lands,
This article, by David Cay Johnston, is at least a few months old, and I didn't see it when it first came out. I did see a blog post which referred to it, and quoted some passages of it. Here are the ones which caught my eye then:
Without a doubt, the much lower tax rates at the top encouraged people
to realize more income in the tax system. And if the only measure is
that some people made more, then this would be a good.
But let’s ask the question that the
classical economists would have asked back when they were known as
moral philosophers and their leaders spoke of policies that benefited
the majority. Let’s go back to a time before Vilfredo Pareto’s
observations began what is the overwhelmingly dominant orthodoxy today,
neoclassical economics with its focus on gain.
What is the social utility of creating a society whose rules generate a
doubling of output per person but provide those at the top with 37
times the gain of the vast majority? ...
Is a ratio of gain of 37 to 1 from the top to the vast majority
beneficial? Is it optimal? Does it provide the development, support,
and initiative to maximize the nation’s gain? Are we to think that the
gains of the top 398 or 400 taxpayers are proportionate to their
economic contributions? Does anyone really think that heavily
leveraged, offshore hedge fund investments are creating wealth, rather
than just exploiting rules to concentrate wealth, while shifting risks
to everyone else?
Under the overwhelmingly dominant economic theory of today, this is all
good. Pareto argued that if no one was harmed, then all gain was good.
Carried to an extreme, neoclassical economics would say that if the
bottom 99.9999997 percent had the same income in 1961 and 2006, and all
of the gain went to the one other person in America, that would be a
Is our tax system helping us create wealth and build a
stable society? Or is it breeding deep problems by redistributing
benefits to the top while maintaining burdens for the rest of Americans?
Think about that in terms of this stunning fact teased from the
latest Federal Reserve data by Barry Bosworth and Rosanna Smart for the
Brookings Institution: The average net worth of middle-income families
with children whose head is age 50 or younger, is smaller today than it
was in 1983.
But the original has some other important things to say. It begins,
Imagine that all you had to live on was the amount of tax you saved in
your best year because of the many tax rate cuts Congress has put in
place since 1964, when President Johnson signed into law the Kennedy tax
For most Americans, living off income tax savings would mean starvation.
Their income tax savings have been minor, and when looked at over a
long period, say since 1961, increases in payroll taxes have more than
offset their slight income tax reductions.
But for the very few who have gained the most from living in the United
States, the story is quite different. Their tax savings alone from a
single year, invested to earn just 5 percent annually, would be enough
to provide a lifetime income at nearly twice the income threshold for
being in the top tenth of 1 percent.
That's a remarkable decrease for some very privileged folks! Johnston goes on to compare what has happened with incomes at the very top of the scale between 1961 and 2006 with what has transpired for the bottom 90% of us. The bottom 90% saw real income rise from $22,366 to $31,642 (both in 2006 dollars). At the 90th percentile, wages rose from $60,404 to $104,440. DCJ goes on to make some points which Elizabeth Warren and Amelia Tyagi made in "The Two Income Trap:"
That tiny increase in pay does not represent a real increase in wages,
only total income. That is because in the middle of that 45-year era, a
profound transformation took place in America.
In 1961 most families lived on one income, maybe supplemented by some
part-time work by the wife for what was quaintly known back then as "pin
money." Now two-income households are the norm.
The overall wealth of America grew and grew during this era. GDP,
adjusted for inflation and increased population, was up 227 percent. But
wages and fringe benefits did not grow with the economy. For most
workers, they fell. Wages peaked way back in 1972-1973, were on a mostly
flat trajectory for more than two decades, rose briefly in the late
1990s, and then fell sharply in the new century. Airline pilots have
seen their 1990s income cut by more than half; some union factory
workers have seen their pay slashed by two-thirds. Millions are out of
work, and the jobs they once held are gone and are not coming back. And
even if the Great Recession is coming to an end, we face years of jobs
growing more slowly than the working-age population, which could
radically transform America's culture, work ethic, and sense of
In 2006 families worked on average about 900 more hours than families
did in the 1960s and early 1970s. That is a roughly 45 percent increase
in hours worked accompanied by a 41 percent increase in total income.
For many, the reality is that two jobs produce the same or a smaller
after-tax income than just one job did three and four decades ago.
Compare that to the top 400 taxpayers:
The average income for the top 400 taxpayers rose over the 45 years from
$13.7 million to $263.3 million. That is 19.3 times more.
The income tax bill went up too, but only 7.8 times as much because tax
rates plunged. Income tax rates at the top fell 60 percent, three times
the percentage rate drop for the vast majority. And at the top, the
savings were not offset by higher payroll taxes, which are insignificant
to top taxpayers.
The average income tax rate for those at the top in 1961 was 42.4
percent. By 2006 it was down to 17.17 percent. Add on payroll taxes, and
the 2006 rate is 17.2 percent, the same as rounding the income tax
Readers of this site will know that I have no use for income taxes. But until we shift to smart and just taxes, a sharply progressive income tax seems to me to be a better-than-nothing way to fund our common spending.
Johnson ends with this:
Is our tax system helping us create wealth and build a stable society?
Or is it breeding deep problems by redistributing benefits to the top
while maintaining burdens for the rest of Americans?
Think about that in terms of this stunning fact teased from the latest
Federal Reserve data by Barry Bosworth and Rosanna Smart for the
Brookings Institution: The average net worth of middle-income families,
with children, whose head is age 50 or younger, is smaller today than it
was in 1983.
In my humble opinion, DCJ isn't looking quite deep enough. Our tax system -- federal, state and local combined -- is permitting those who own our most valuable common assets (land value and nonrenewable natural resources) to privatize their value, year after year, generation after generation -- and grow hugely wealthy and powerful -- and then merely taxing some of the income from them.
The alternative? Tax the annual value of those resources -- which are rightly COMMON property, provided by the Creator and by the presence of all of us and the spending/investment of the entire Community, not by individuals or corporations -- heavily (say, 90% or 95% of the annual value) and reduce or even eliminate -- starting at the bottom -- the wage and interest and sales taxes and taxes on manmade improvements to land. Think about the ramifications of that reform. They're profound, and point in the direction of a healthier, more stable and more just economy. Will the revenue generated be sufficient to fund all of today's public spending? Probably not. But
1. that's no reason not to shift our taxes off bad taxes onto good ones; and
2. we may find that with good taxes, things change enough that we no longer need to spend large amounts on the social safety net, because a vibrant economy with opportunities for all and a somewhat more equal distribution of income and of wealth and power permits the vast majority of us to be self-sufficient and prosperous.
The bottom 70% or so of us CAN'T save. Large shares of our incomes are devoted to housing and transportation, and to all sorts of FIXED costs. We can't increase our spending on other goods, and we can't save. We have to fix that. We have to do things which distribute the value of that which SHOULD be common, and end the privatization of value which ought to be common.
I came across an interesting paragraph in the January, 1887, issue of The Democrat, a British publication, which speaks to our 21st century economy:
The Rothschilds all over Europe are
calculated to possess a yearly income of at least six millions.
Suppose they spend only one million, laying aside five, what does
this really mean? It means that they demand from the producers a
tribute of six millions a year, not in goods, but in money; to raise
this tribute-money, the producers have to sell six million
pounds' worth of their productions in a market in which the
Rothschilds purchase only one million's worth, having no requirements
for more goods, their spending capacity, viz., their demand: for
necessities and luxuries, not having increased so fast as their income.
The producers — the people at large — cannot fill the gap by purchasing
these remaining five million pounds' worth of goods, much as they need
them, because they have to pay the proceeds of their labour as a
tribute to the Rothschilds to the tune of £6,000,000 a year.
Here, then, is the solution of the great problem, why goods are not
saleable, why labour can find no employment, though the greatest need
for goods exists.
It is attributed to Michael Flurscheim, a manufacturer in
the Grand Duchy of Baden.
America's FIRE sector -- Finance, Insurance, Real Estate -- continues to harvest huge amounts of the production of American workers who are fussy enough to want a place to live. They don't have sufficient cash to buy the land and structure outright, and 15-year mortgages have given way to 30-year mortgages, fixed rates to adjustable rates, 20% downpayments to 10% and 5% and less -- with private mortgage insurance -- and $8,000 tax credits often are the equity in a newly purchased home. And the top few hundred employees of each behemoth pay themselves and each other awesomely high bonuses, on top of salaries which would alone place them in the top 1% of our income spectrum. Our best and brightest students are drawn, not to medicine, or scientific research, or engineering, or production management, or any of a number of fields in which they could make a positive impact on the lives of their fellow human beings (and be comfortably compensated with opportunities for leaving their children well-situated as well), but into Finance and Consulting, where the goal is to suck the vitality out of productive companies and out of wage-earning individuals.
The alternative? It is remarkably simple. So simple that "smart" people scoff at it. It is also wise, and just, and efficient, and conducive to solving many of our most pressing -- and supposedly intractable -- social, economic, environmental and justice problems.
This is the first poem in "Broadcast" by Ernest H. Crosby, and it is entitled "Democracy." It is quite long, and I'll include it all (on the jump), but on this front page, will share a few stanzas I particularly like.
The common people,—why common people?
Does it not mean common life, common aspirations,
community of interests, communion of man with man?
Does it not imply the spirit of communism, of
fellowship, of brotherhood?
Does it not suggest that human life down at the
bottom is more fluid and intermingled and social than up at the top?
Is not all this hidden away in the words "common
Would you make brothers of the poor by giving to
Try it, and learn that in a world of injustice it is the most unbrotherly of acts.
There is no gulf
between men so wide as the alms-gift.
There is no wall so impassable as money
given and taken.
There is nothing so unfraternal as the
dollar,—it is the very symbol of division and discord. Make
brothers of the poor if you will, but do it by ceasing to steal from them;
separates and only justice unites.
Peace between capital and labour, is that all that you ask?
Is peace then the only thing needful?
There was peace enough in southern slavery.
There is a peace of
life and another peace of death.
It is well to rise above violence.
is well to rise superior to anger. But if peace means final
acquiescence in wrong,—if your aim is less than justice and peace, forever one —then your peace is a crime.
I am homesick,—
Homesick for the home that I never have seen,—
For the land where I shall look horizontally into the eyes of my fellows,—
The land where men
rise only to lift,—
The land where equality leaves men free to differ as they will,—
The land where freedom is
breathed in the air and courses in the blood,—
Where there is nothing
over a man between him and the sky,—
Where the obligations of love are
sought for as prizes and where they vary with the moon.
is my true country. I am here by some sad cosmic mistake,—and I am homesick.
I came across a poem I thought worth sharing. It comes from a book of poetry entitled "Broadcast", by Ernest Howard Crosby.
WHERE is my gift," said God, "that I gave to men—
The sun-wed, fruitful earth, with her freight of good
For all their wants? What mean these prayers for food?
Are there poor in a world which bursts
with its golden stores?
Who are the few that dare to withhold from all My
gift to all of the fruitful, sun-wed earth?"
And the few replied: "O, Lord, we give Thee
Thou gavest the earth to all, it is true, but lo!
Thy angels, Law and Order, who rule the world
When Thou art far away, have learned our worth,
And rightly bestowed on us Thine inheritance."
"I know them not," said God; "they are fiends from hell
That juggle thus with the gift
that I gave to man.
I am never far away from the world I gave.
once more and forevermore I give
This fruitful earth anew to the sons of
Woe to the fiends who shall dare usurp my place!
Woe to the few who say that my gift is theirs!
to the man who grasps his neighbour's land!"
It brings to mind several things I've read. First, this passage from "Progress and Poverty" by Henry George:
We sail through space as if on a well-provisioned ship.If food above deck seems
to grow scarce, we simply open a hatch -- and there is a new supply. And
a very great command over others comes to those who, as the hatches are
opened, are permitted to say: "This is mine!"
Second, two different versions of "The Landlord's Prayer" which I posted on this blog earlier:
from the Anglican Book of Common Prayer
A Prayer For Landlords
"The earth is
thine, O Lord, and all that is contained therein; notwithstanding thou
hast given the possession thereof to the children of men, to pass over
the time of their short pilgrimage in this vale of misery. We
heartily pray thee to send thy holy spirit into the hearts of those that
possess the grounds, pastures and dwelling places of the earth, that
they, remembering themselves to be thy tenants, may not rack or stretch
out the rents of their houses or lands; not yet take unreasonable fines
and incomes, after the manner of covetous worldlings; but, so let them
out to others that the inhabitants thereof may be able both to pay
rents, and also honestly to live, to nourish their family and to relieve
the poor. Give them grace also to consider that they are but
strangers and pilgrims in this world, having here no dwelling-place, but
seeking one to come; that they, remembering the short continuance of
their lives, may be content with what is sufficient, and not join house
to house, nor couple land to land, to the impoverishment of others; but
so behave themselves in letting out their tenements, lands and pastures,
that after this life they may be received into everlasting
dwelling-places, through Jesus Christ our Lord."
and from Henry George's newspaper, The Standard:
Lord, keep us rich and free from toil,
Are honored holders of Thy soil,
Which democrats would now despoil
O! Lord, our fathers got the land
For serving those whom Thy right hand
Had chosen to be great and grand
Tho' ta'en by force, we're not to blame,
Thou know'st, O! Lord, it is a shame
To say to us - of titled name,
Lord, let us live in wealth's content,
Lord, we are by Thy mercy meant
To rule mankind, and make our rent
The birds that haunt the moors and hills,
The fish that swim in streams and rills,
The beasts that roam as Nature wills,
E'en Lord, the minerals that lie
Beneath the earth's periphery
Belong to us! Thou knowest why
Crosby's poem is wonderful. Perhaps we can explain a significant portion of the concentrations of wealth and income in the hands of a few:
And the few replied: "O, Lord, we give Thee
Thou gavest the earth to all, it is true, but lo! Thy angels, Law and Order, who rule the world
When Thou art far away, have learned our worth,
And rightly bestowed on us Thine inheritance."
"I know them not," said God; "they are fiends from hell
That juggle thus with the gift
that I gave to man.
A piece today on Huffington Post about Passover and Moses caught my attention. I learned a few things. It gives "talking points" about Moses; I've omitted the supporting material from all but one:
1. A quote from Moses appears on the Liberty Bell. ...
2. The Founding Fathers proposed that Moses appear on the
U.S. seal. ...
3. Moses was the national hero for slaves. ...
4. The Statue of Liberty was modeled on Moses. ...
5. Superman was a modern-day Moses. ...
6. Cecil B. DeMille turned Moses into a Cold War icon.
The 1956 epic The Ten Commandments, which is the fifth
highest grossing movie of all time, opened with DeMille appearing
onscreen. "The theme of this picture is whether men ought to be ruled by
God's law or whether they are to be ruled by the whims of a dictator,"
he said. "The same battle continues throughout the world today." To
drive home his point, DeMille cast mostly Americans as Israelites and
Europeans as Egyptians. And in the film's final shot, Charlton Heston
adopts the pose of the Statue of Liberty and quotes the line from the
third book of Moses -- Leviticus -- inscribed on the Liberty Bell:
"Proclaim liberty throughout all the land unto all the inhabitants
7. Moses is the Patron Saint of Washington. ...
Cecil B. DeMille's Moses was, at least in part, inspired by his connection via his brother's marriage, to Henry George, the author of Progress and Poverty (1879), and a speech George gave the year before about Moses, and probably made repeatedly over the following years, on lecture tours around the world. (Cecil B. DeMille was born in 1881, and died in 1959. His older brother, William, married Henry George's daughter Anna George, a few years after George's death; their daughter was the choreographer Agnes de Mille (1905-1993.)
George's ideas provide a modern way to achieve a stable and just middle class society and economy in which all can prosper -- a modern version of the OT land laws.
Here's a short excerpt from "Moses":
to its roots the cause that is producing want in the midst
ignorance in the midst
democracy, weakness in strength –- that is giving to our civilisation a
one-sided and unstable development –- and you will find it something
this Hebrew statesman three thousand years
ago perceived and guarded against. ...
Everywhere in the Mosaic institutions is
treated as the gift of the Creator to His common
no one has the
right to monopolise. Everywhere it is, not your estate, or
not the land which you bought, or the land which you
conquered, but "the land which the Lord thy God giveth thee" –- "the land
which the Lord lendeth thee".
Glenn Beck, a cable TV personality, urged Christians to leave their churches if the words "social justice" were used. He is quoted as saying,
I'm begging you, your right to religion and freedom to exercise religion
and read all of the passages of the Bible as you want to read them and
as your church wants to preach them . . . are going to come under the
ropes in the next year. If it lasts that long it will be the next year. I
beg you, look for the words 'social justice' or 'economic justice' on
your church Web site. If you find it, run as fast as you can. Social
justice and economic justice, they are code words. Now, am I advising
people to leave their church? Yes.
This makes me think about some of what went on in Alabama a few years ago -- the notion that churches should be dispensers of charity, and that they should not be campaigning for social justice because if there were social justice, there would be no need for charity!
As I read some of the comments on a NYT blog,
"Lord, when was it that we saw you hungry and gave you food, or thirsty
and gave you something to drink? And when was it that we saw you a
stranger and welcomed you, or naked and gave you clothing? And when was
it that we saw you sick or in prison and visited you?' And the king will
answer them, 'Truly I tell you, just as you did it to one of the least
of these who are members of my family, you did it to me." (Matthew 25)
I am led to wonder whether people understand the difference between charity and justice. To me, Matthew 25 merely describes charity. Helping an individual in difficult circumstances, without seeking to correct the structures which put him into those circumstances and will put the next person in those circumstances. If he is hungry because he has no job and no skills, feeding him will keep him alive another day, and training him will aid him if a job is available -- but if there is no available land for him to labor on, you've not moved a step toward justice. Welcome, and clothing, and visits are all wonderful -- but they don't change the structure which makes it impossible for some people to provide for their own needs and the needs of their families.
Susan Pace Hamill, the University of Alabama law professor who has made extensive studies of Alabama's tax system and the federal tax system and is now running for the state legislature in Alabama, said of the churches a few years ago -- I'm paraphrasing -- that even if they deserve an "A" for charity, if they earn an "F" in justice, that does not come out to a "C"; it is failure. If I recall correctly, the Alabama chapter of the Christian Coalition was opposed to tax reform (reducing sales taxes on groceries, raising the state income tax threshold to approximately the poverty line -- no one was even talking about reforming the perversely low property tax) on the basis that churches would no longer have as many objects for their charity if Alabama moved in the direction of economic justice. They'd be depriving the churches of poor people to serve!
I wonder whether Mr. Beck considers our current society to already be perfectly socially just and economically just, and, if not, what entity(s) he considers should seek to move us in that direction if he specifically excludes the Christian churches from having a concern for these issues.
To me, social justice and economic justice start with treating that which nature -- God, if you prefer -- provides, and that which the community creates -- as our common treasure, and treating that which individuals and organizations create as their private treasure. Glenn Beck, Dick Armey and Grover Norquist may be very focused on that second portion, but if they fail to get the first half right -- first! -- they will not create a stable -- or just -- economy or society.
About time! The new measure (the old one will remain; this is supplemental) will take into account the local cost of living:
Federal officials describe the supplemental measure as experimental and a
work in progress. It establishes a poverty threshold that depends on
the cost of food, shelter, clothing and utilities “plus a little more”
for “a population that is not poor but is somewhat below the median.”
The original measure figured costs for two adults and two children. The
new one covers one adult and two children, a family structure more
prevalent these days among lower-income households, and would be
adjusted to reflect living costs in different metropolitan areas.
The threshold would be adjusted to calculate the value of in-kind
benefits, like food stamps, and whether homeowners have a mortgage. Tax
credits would be added to the total income and benefits; taxes, work
expenses (including commuting and child care), and out-of-pocket medical
costs would be deducted.
It sounds to me as if someone has been reading the Self-Sufficiency Standard Studies, which take into account local costs for rent, commuting, health care, child care, and a (usually) national figure for 100% home-cooked meals.
The new figures will not be published until Fall, 2011 (August is the time of year the annual poverty data currently is published). I look forward to seeing the methodology, and how it differs from or matches the Self-Sufficiency Standard study assumptions, which are based on the Fair Market Rent for a suitably sized apartment in each county. That's generally the 40th percentile of the local market (occasionally the 50th). Will this new poverty "threshold" use the 40th, or something lower? How will it be calculated? Does HUD make available the, say, 20th percentile? 25th?
There is a parallel study to the Self-Sufficiency Standard studies, which are generally oriented to working-age individuals and families, which relate to the cost of living for seniors. I've read the one for Pennsylvania. It works with both rented and owned housing, county by county, in that state, for a single senior and a married couple.
Under the new poverty measure, poverty rates will likely rise significantly in America's cities, particularly on the coasts. (Look for the legislators from the heartland states to question the new measure: a lower share of poverty will be in their districts and states.)
My calculations, from the Overlooked and Undercounted studies, suggest that 35% to 45% of our children are in families with insufficient income to meet the family's most modestly defined needs. (Click on the link for Self-Sufficiency Standard studies in the cloud at left, for more details.)
I expect that, when we see how many people simply have little discretionary income, it will become clearer to us what it will take to make our economy work better: insure that more people have spendable income.
Those who have spent some time exploring this blog will know that the ways I'd propose to achieve that are different from what is usually proposed.
The term "millionaire" used to always be a reference to net worth. Recently, we've started to see it used to refer to people with annual incomes of $1 million or more -- usually in articles suggesting that a significant and growing percentage of us fall into that category and isn't America wonderful?
In 2007, according to the Federal Reserve Data, only 9% of U.S. households had at least $1 million in net worth. That
9% made the majority of charitable contributions, owned the majority of
equity in unincorporated and closely held businesses, and had a
disproportionately large share of investable assets as compared with
the remaining 91% of the population. These “wealthy households” made
53% of all household charitable contributions ($117 billion). They also
owned 93% ($13.7 trillion) of business equity owned by all households
in unincorporated and closely held businesses, and they had 41% ($10.3
trillion) of investable assets owned by all households, i.e. liquid
assets, stocks, bonds, and mutual funds. Typically, wealthy households
do not have million dollar incomes. In 2006, the average wealthy
household income before tax amounted to $354 thousand, while the median
amounted to $159 thousand. Only 6% of millionaire households made as
much as $1 million in 2007. The pattern is similar for unearned income.
The average household unearned income of millionaire households was
$145 thousand in 2006 and the median was $18 thousand. Only 6% of
wealthy households had unearned income of as much as $500 thousand.
Nevertheless, wealthy households received 86% of total unearned income received by all households in 2006.
Among wealthy households, both household income and household assets
are importantly related to charitable giving, but assets, especially
investable assets, are much more important than income. Statistically,
the relationship between the value of assets and the amount of
charitable giving is roughly 7 times stronger than the relationship
between the level of income and the amount of charitable contributions.
Put simply, millionaire households make charitable contributions more
because they are wealthy than because they earn a high income.
Most (more than 90%) millionaires acquired their wealth in their own
lifetimes through business, investment, or service as corporate
executives rather than through inheritance. The majority became wealthy
through growing their own business or investing in businesses of
others. They tend to be entrepreneurial and agents of economic
expansion. In earlier paragraphs we saw that as a group they own 93% of
the equity in unincorporated and closely held businesses owned by all
households in the U.S. Even in retirement millionaires participate in
business opportunities. They contribute to local economic development
as a source of funds, as a potential investor, and as an agent for
creating new businesses and expanding established ones.
This seems to be a paean to trickle-down economics, and even those of us who don't believe in trickle-down economics can be tempted to accept that, since our wealthiest fellow citizens have such a large fraction of the total net worth, trickle-down must be the only relevant model for understanding wealth.
I question the realities behind the statement that "Most (more than 90%) millionaires acquired their wealth in their own
lifetimes through business, investment, or service as corporate
executives rather than through inheritance."
Many of them, I suspect, were given college educations by their parents or grandparents; a private college education today costs about $200,000. Not an insubstantial figure. Graduate school runs about the same amount, particularly in the private universities or for out-of-state students at public universities.
Many of them, I suspect, were given the 20% down payment on a home either by the government or by their parents or other relatives. It might have been 20% of $80,000 or $125,000, which might sound trivial in relation to their 2007 $1,000,000 corpus -- but it made a big difference which the paragraph above fails to acknowledge. (Paying off the other 80% made a relatively small contribution to their "home equity.") The appreciation of the land under that home may be a major contributor to their net worth.
We may call that "investment" but it is really the legalized privatization of that which one's community and one's local, state and federal governments' spending has created. Self made men? Hmph! And the startup funds for their businesses may have come from borrowing on that land equity. -- and of course that interest is deductible on one's federal and, likely, state income taxes. A nice subsidy, huh? And the most profitable businesses tend to be those who own the building and land on which the business is conducted -- and the sites of others' businesses too! Those folks may work hard -- almost as hard as their employees -- but they also get the benefit of the local economic activity as it drives the selling and rental value of their landholdings upward. Bu we permit them to call themselves self-made. Aren't we generous? Or would it be more accurate to say that we're wearing blinders?
We should set the playing field level between landlord businesses and tenant businesses. (Land value taxation would do this.) Landlords do not create land! To permit structures which compensate them as if they do is dumb.
A bit later, the study continues,
According to the Survey of Consumer Finances, sponsored by the Board of Governors of the Federal Reserve, on a national basis households
with net worth of at least $1 million, headed by a person age 60 or
older, comprise 4% of all households but donated approximately 25% of
all household charitable contributions in 2007 (the most recent year for which data is available).
The first paragraph of their 3-paragraph conclusion reads:
During the December 13, 2009 edition of “Meet the Press” former Chairman of the Federal Reserve, Alan Greenspan, touted the importance of rising stock prices to economic recovery. In a broader context Greenspan’s words highlight the importance of wealth to economic growth. During decades of research at the Center on Wealth and Philanthropy we have consistently found that wealthy households contribute disproportionately more to charitable causes both from their household assets and from their foundations, trusts, and donor advised funds.
Perhaps we would have less need for charity if we had a less concentrated distribution of wealth in America. Perhaps, if we funded our local, state and federal spending via taxes on the value of the commons that individuals and corporations and other domestic and foreign entities claim as their own -- instead of taxing sales and wages and buildings -- we'd create more opportunity for more people to earn adequate incomes.
Until we do that, though, shouldn't we be collecting back this land appreciation once per generation, through taxes on the largest estates?
A friend sent me this poem, which seems a complement to Uncivilized, by Edmund Vance Cooke (1866-1932). I first heard Uncivilized at a CGO meeting in
Alburquerque perhaps 5 or 7 years ago, when Everett Gross recited it
from memory. The third verse of this one seems to me to be a direct reference to Uncivilized.
The Monkeys Disgrace
Three monkeys sat in a coconut tree
Discussing things as they're said to be.
Said one to another, "Now listen, you two,
There's a certain rumor that cannot be true,
That man descends from our noble race -
The very idea is a disgrace.
No monkey ever deserted his wife,
Starved her babies and ruined her life;
And you've never known a mother monk
To leave her babies with others to bunk,
Or pass them on from one to another
Til they scarcely know who is their mother.
And another thing you'll never see -
A monk build a fence around a coconut tree
And let the coconuts go to waste,
Forbidding all other monks to taste.
Why, if I put a fence around this tree,
Starvation would force you to steal from me.
Here's another thing a monk won't do -
Go out at night and get on a stew,
Or use a gun or club or knife
To take some other monkey's life;
Yes, Man Descended - That ornery cuss -
But, brother, he didn't descend from us!"
An ancient ape, once on a time,
Disliked exceedingly to climb,
And so he picked him out a tree
And said, "Now this belongs to me.
I have a hunch that monks are mutts
And I can make them gather nuts
And bring the bulk of them to me,
By claiming title to this tree."
"We ranked the household incomes of all households in the U.S. in 2008
in ascending order and calculated the cutoff points for each decile
(ten percent) of the income distribution (See Appendix A). The bottom
decile included all households with annual incomes at or below $12,160
while the top decile was comprised of all households with pre-tax,
annual incomes above $138,800.
We then assigned each employed person in the October-December 2009
period into the 2008 household income decile that came closest to
matching their reported household income on the 2009 CPS interview."
The study shows the underemployment rates among those 16+ who were employed in 4Q-2009 for each 2008 income decile (Table 1). It ranges from 1.6% in the top income decile to 20.6% in the bottom one.
Table 3 shows the 4Q-2009 Unemployment Rate and Underemployment Rate by 2008 income decile.
"The underutilization rate for workers in any income group can be interpreted in the following manner: for every 100 members in the adjusted civilian labor force in the fourth quarter of 2009, how many were left unemployed, underemployed, or a member of the labor force reserve."
"The unemployment rates of workers in the fourth quarter of calendar
year 2009 varied extremely widely across the ten household income
deciles.8 Workers in the lowest income decile faced a Great Depression
type unemployment rate of nearly 31% while those in the second lowest
income decile had an unemployment rate slightly below 20% (Table 3 and
Chart 2). Unemployment rates fell steadily and steeply across the ten
income deciles. Workers in the top two deciles of the income
distribution faced unemployment rates of only 4.0 and 3.2 percent
respectively, the equivalent of full employment. The relative size of
the gap in unemployment rates between workers in the bottom and top
income deciles was close to ten to one. Clearly, these two groups of
workers occupy radically different types of labor markets in the U.S."
Table 4 is the most striking. It shows, by income decile, the number of unemployed people, underemployed people, and the "labor force reserve" -- those who would like to work, but are not considered part of the labor force. It also shows an "adjusted labor force" total and calculates an underutilization rate for each decile. Take a look, and ponder it for a while:
The Number of Unemployed and Underemployed Persons, Members of the Labor Force Reserve, the Pool of Underutilized Labor, and Labor Underutilization Rate by Decile of the Household Income
Distribution, 4th Quarter 2009
$12,160 or less
$12,160 – 20,725
$20,725 – 29,680
$29,680 – 39,000
$39,000 – 50,000
$50,000 – 63,000
$63,000 – 79,100
$79,100 – 100,500
$100,150 – 138,700
Note: The totals for “All” include persons with missing household
incomes on the October/December 2009 files.
Findings on the estimated sizes of the unemployed, underemployed, and
labor force reserve groups can be combined to estimate the overall
labor underutilization rates for workers in each of the household
income deciles.11 The calculations for the underutilization rates for
each income group are displayed in Table 4 and for selected decile in
Chart 5. The range in these labor underutilization ratios is extremely
wide as one would have expected given the huge gaps in each form of
underutilization between the bottom and top deciles of the income
distribution. The underutilization rate for workers in the lowest
decile was slightly over 50% and remained just under 38% for those in
the second lowest decile. These
extraordinarily high rates of labor underutilization among these two
income groups would have to be classified as symbolic of a True Great
Depression. Workers in the two deciles in the middle of the
distribution (the fifth and sixth) faced underutilization rates of 15
to 17 percent, representative of a severe recession. In substantial
contrast, workers in the top two income deciles encountered
underutilization rates of only 6 to 8 percent. Given their very low
official unemployment rates of 3.2% and 4.0% for the top and second
highest deciles respectively, one would have to characterize their
labor market situation as a near “full employment environment.
11 One cannot simply add the three
percentages in Table 4 to generate an underutilization rate since the
denominator of the three ratios are somewhat different for each
measure. The unemployment rate is based on the official civilian labor
force, the base for the underemployment rate is the number of employed,
and the labor force reserve is based on the adjusted civilian labor
Here are the final two paragraphs of the study:
At the end of calendar year 2009, as the national economy was
recovering from the recession of 2007-2009, workers in different
segments of the income distribution clearly found themselves in
radically different labor market conditions. A true labor market
depression faced those in the bottom two deciles of the income
distribution, a deep labor market recession prevailed among those in
the middle of the distribution, and close to a full employment
environment prevailed at the top. There was no labor market recession
for America’s affluent.
In testifying before a Congressional committee in the late 1960s on the
need for a sub-employment index to capture the high variations in labor
market conditions in different neighborhoods and local labor markets,
Secretary of Labor Willard Wirtz was asked how workers were doing on
“on average”. He reportedly replied, “When you have your head in the
freezer and your feet in the oven, on average you are doing Ok.”
Similar remarks apply to the state of American labor markets today. Who
will tell the people? Does anybody care?
As this blog has pointed out, when it comes to income, most of us are below average. Lake Wobegon in reverse.
I am reminded of Henry George's statement:
It is as though an immense wedge were being forced, not underneath
society, but through society. Those who are above the point of
separation are elevated, but those who are below are crushed down.
Bob Herbert's column on this study ends with this:
Those who believe this grievous economic situation will right itself of
its own accord or can be corrected without bold, targeted (and, yes,
expensive) government action are still reading from the Ronald Reagan
(someday it will trickle down) hymnal.
I think there is a better way. I think it can be found in the ideas of Henry George. Let's not make the situation worse by trying to aid those who are affected without going to the root of the problem. Seek the root, and eradicate it. Don't hack at the leaves.
Op-Ed Columnist - The House of Tranquillity - NYTimes.com.
Finally, Biden was asked to come up with a middle-class agenda. This is a surprisingly difficult job because many of these programs — credits for college affordability and child care — fairly reek of Clintonism. This is an administration that is staffed by Clintonites but does not want to appear Clintonian in any way.
Let's talk about America's middle class. How should we define the middle class? If we define it in terms of income, we find that the middle quintile of households in 2007 had median net worth of $88,100. That is, of the middle 20% of us, half had household net worth of less than $88,100, and half had more. That's not a whole lot of money to fall back on, particularly when one considers that much of that is home equity.
The same middle-income quintile had a median before-tax family income of $47,300. That is, half had more, half had less.
That middle income quintile accounted for 10.9% -- no! that was the the 1989 figure. By 2007, it was 7.54% -- of America's net worth in 2007.
Here's how the net worth was distributed across the income quantiles in 2007:
Top income decile:
59.45% of the net worth
Second income decile:
10.92% of the net worth
Top income quintile:
70.37% of the net worth
Second highest income quintile:
13.48% of the net worth
Middle income quintile:
7.54% of the net worth
Fourth highest income quintile:
4.84% of the net worth
Bottom income quintile:
3.77% of the net worth
[source: SCF chartbook, p. 43, and my calculations]
If we define the middle class more broadly -- as the middle 60% of the income distribution -- our "middle class" has 25.86% of the net worth.
And here's how the before-tax income was distributed across the same income quantiles:
Top income decile:
47.19% of the before-tax income
Second income decile:
13.77% of the before-tax income
Top income quintile:
60.96% of the before-tax income
Second highest income quintile:
18.18% of the before-tax income
Middle income quintile:
of the before-tax income
Fourth highest income quintile:
6.72% of the before-tax income
Bottom income quintile:
2.92% of the before-tax income
[Source: SCF Chartbook, page 7 and my calculations]
Using the broader definition of middle class -- again, the middle 60% of the income distribution -- our "middle class" has 36.13% of the before-tax income.
Alternatively, if we define the middle class in terms of net worth -- erase the above income-based definitions from your mind for the moment! -- here's the corresponding data:
The median household arranged according to net worth had net worth of $120,600 [source: SCF Chartbook, p. 39] That doesn't sound so bad, does it?
Let's look at the net worth quantiles:
Top net worth decile:
71.46% of aggregate net worth
Second 15% of net worth holders:
15.83% of aggregate net worth
Top net worth quartile:
87.29% of aggregate net worth
Second highest net worth quartile:
10.21% of aggregate net worth
Third highest net worth quartile:
2.60% of aggregate net worth
Bottom net worth quartile:
-0.10% of aggregate net worth
[Source: SCF Chartbook, 2007, page 73]
The middle 50% of us, arranged according to net worth have 12.81% of the net worth.
If you define our middle class as those between the 50th and 85th percentiles of the net worth distribution, our middle class owns 26.04% of the net worth.
How is the income distributed across those same net worth quantiles?
Top net worth decile:
41.25% of before-tax income
Second 15% of net worth holders:
16.56% of before-tax income
Top net worth quartile:
57.81% of before-tax income
Second highest net worth quartile:
19.76% of before-tax income
Third highest net worth quartile:
13.80% of before-tax income
Bottom net worth quartile:
8.63% of before-tax income
The middle 50% of us, arranged according to net worth, have 33.56% of before-tax income
If you want to define our middle class as those between the 50th and 85th percentiles of the net worth distribution, our middle class is getting 36.32% of the before-tax income. 35% of us getting 36% of the income. That's middle, I guess.
If you've gotten this far, I'll bet that you will think that we might want to tax income more heavily at the upper end of the income spectrum, or tax large estates more heavily.
I'm going to propose something different. Something which digs deeper, and seeks the source, the cause of the problem, rather than trying to redistribute the income or net worth after the fact.
Henry David Thoreau, in Walden, wrote this:
There are a thousand hacking at the branches of evil to one who is
striking at the root, and it may be that he who bestows the largest
amount of time and money on the needy is doing the most by his mode of
life to produce that misery which he strives in vain to relieve. It is
the pious slave-breeder devoting the proceeds of every tenth slave to
buy a Sunday's liberty for the rest. Some show their kindness to the
poor by employing them in their kitchens. Would they not be kinder if
they employed themselves there? You boast of spending a tenth part of
your income in charity; maybe you should spend the nine tenths so, and
done with it. Society recovers only a tenth part of the property then.
Is this owing to the generosity of him in whose possession it is found,
or to the remissness of the officers of justice?
Henry George wrote this, in the opening chapter ("The Problem") of Progress & Poverty (1879), describing the first 100 years of America's existence as a nation:
It is true that wealth has been greatly increased, and that the average
of comfort, leisure, and refinement has been raised; but these gains
are not general. In them the lowest class do not share. I do not mean
that the condition of the lowest class has nowhere nor in anything been
improved; but that there is nowhere any improvement which can be
credited to increased productive power. I mean that the tendency of
what we call material progress is in no wise to improve the condition
of the lowest class in the essentials of healthy, happy human life.
Nay, more, that it is to still further depress the condition of the
lowest class. The new forces, elevating in their nature though they be,
do not act upon the social fabric from underneath, as was for a long
time hoped and believed, but strike it at a point intermediate between
top and bottom. It is as though an immense wedge were being forced, not
underneath society, but through society. Those who are above the point
of separation are elevated, but those who are below are crushed down.
Now go back and look at the distributions of income and of net worth in America in 2007. I've not provided the trend data here, but the 2007 snapshot tells the story well enough.
That's the slogan on the two-story high advertising mural found recently on a building in Galesburg, Illinois. (Photo here.) It is an ad for Henry George 5 cent cigars. (See also this page of cigar ads.)
The "I am for men" slogan was on a pin I found on ebay a few years ago. The seller made some comment about it being anti-feminist. Well, she or he didn't know much about George.
When I googled the phrase, I found some interesting things. Here's one:
Henry George, a nineteenth-century
American author and political economist, was nominated for the office of mayor
of New York in 1886. He was called to a meeting at the Cooper Institute to speak
to working men. The chairman of the meeting gave him a flowery introduction with
the customary political rhetoric. The chairman concluded by saying, "Henry
George is the friend of the working men." As soon as Mr. George rose to his
feet, slowly and emphatically he said, "I would like to announce that I am
not the friend of the working man." Stunned silence ensued -- a strange kind
of bewilderment. He went on, "Nor am I the friend of capital. I am for men
simply as men, regardless of any accidental or superfluous distinctions of race,
creed, color, class, function, or employment." [source.]
I found a front-page article in the Scranton (PA) Tribune and Kansas City Journal (among others) of October 30, 1897, the day after Henry George's death, which reported some of the campaign speeches George had given on his last day, a few days before the 1897 mayoral election. Here is one of them:
At College Point there were 1,200 common laborers, a rough crowd, closely packed in the hall. Mr. George was introduced as the friend of the working man.
He began: "I have never claimed to be a friend of the workingmen. I do not now make any such claim (there was a pause of dead silence). I have not and do not intend to advocate anything in the special interest of the laboring man (another dead pause; Mr. George walked the full length of the platform and let out his full voice in a shout:). I am for men! (The crowd set up such a cheering and stamping that the room was filled with a choking dust). I am for men! -- the equal rights of all men. Let us be done with asking privileges for the laboring men."
I also found a 1906 book called "Looking Forward," by August Cirkel, which has a chapter by that title which starts with these paragraphs:
"I am for men." This
famous expression, uttered by Henry George, sounds the keynote of the
true spirit in which every public policy should be tested. Does it make
men? Does it make them stronger, or wiser, or better? These are the
all-important questions to be asked, when the effect of any system is
to be noted. If the answer cannot be made affirmatively, sophistical
must be the arguments that support it.
The kind of laws and
institutions any people lives under is the kind of laws and
institutions that that people deserves to live under. Every thing of
life builds the body that it inhabits, and what kind of abode it
constructs for itself, that is the kind of abode it must dwell in.
Every people makes its own government. Where a race is ruled by
tyrants, craven fear smites the hearts of the masses, and rather than
endure the dangers of asserting their divine prerogative of freedom,
they shuffle through life in cowardly submission to a few men no
stronger than themselves.
I found a 1910 speech by Theodore Roosevelt, entitled "New Nationalism" which contains these paragraphs:
I believe in shaping the ends of government to protect property as well
as human welfare. Normally, and in the long run, the ends are the same;
but whenever the alternative must be faced, I am for men and not for
property, as you were in the Civil War. I am far from underestimating
the importance of dividends; but I rank dividends below human
character. Again, I do not have any sympathy with the reformer who says
he does not care for dividends. Of course, economic welfare is
necessary, for a man must pull his own weight and be able to support
his family. I know well that the reformers must not bring upon the
people economic ruin, or the reforms themselves will go down in the
ruin. But we must be ready to face temporary disaster, whether or not
brought on by those who will war against us to the knife. Those who
oppose reform will do well to remember that ruin in its worst form is
inevitable if our national life brings us nothing better than swollen
fortunes for the few and the triumph in both politics and business of a
sordid and selfish materialism.
Near the end of the same speech, TR says this:
One of the fundamental necessities in a representative government such
as ours is to make certain that the men to whom the people delegate
their power shall serve the people by whom they are elected, and not
the special interests. I believe that every national officer, elected
or appointed, should be forbidden to perform any service or receive any
compensation, directly or indirectly, from interstate corporations; and
a similar provision could not fail to be useful within the States.
The object of government is the welfare of the people. The material
progress and prosperity of a nation are desirable chiefly so long as
they lead to the moral and material welfare of all good citizens. Just
in proportion as the average man and woman are honest, capable of sound
judgment and high ideals, active in public affairs; but, first of all,
sound in their home, and the father and mother of healthy children whom
they bring up well; just so far, and no farther, we may count our
civilization a success.
(TR by that time had become quite comfortable with Henry George's ideas. See his party's 1912 platform "A Confession of Faith.")
In 1917, Luke North (James Hartness Griffes) published a book of poetry entitled "Songs of the Great Adventure" which included this:
"I AM FOR MEN"
He stood for Men —
Not for parties, sections, classes;
Not for dogmas, doctrines, isms —
Nor all the minutiae of over-elaborated plans for the future,
Nor for craven caution, dissimulation, equivocation —
Patience that now outrages virtue —
Program'd ways and means which if not followed
The world may stay in hell.
He stood for Men —
For in his soul he knew the line of cleavage
Was not between the robber and the robbed —
Was not marked by external difference,
By rank or class or occupation or wealth or poverty.
He knew that poor men could be very cruel and rich men kind.
He knew the line of cleavage was in the heart — those who care and those
who don't —
This Henry George who wrote "Progress and Poverty."
He stood for Men —
And was he wrong to yield no tithe to classes?
What has now become of all the appeals
To class interest, class consciousness, class solidarity?
The human heart will not respond to them — in every class are tyrants.
The human mass forgets its every interest,
Flings to the wind all self and class advantage
And goes out to die for a word.
He stood for Men —
And showed the world how to unshackle the chains that bind men. He showed how poverty begins,
Where modern slavery has its roots,
And how to tear them up.
The earth is for all men, he said —
And his word has gone around the world —
And now it's time to act!
He stood for Men —
Not creeds and doctrines, nor all the lesser details of future
He bared the earth to man.
It is for us to take it.
He tried to gain it, and was beaten back to his death.
Now we will gain it —
At whatever cost!
Check out this fine book of poetry -- and if you know of a songwriter looking for inspiration, send them to this starting page.
It is ironic that Henry George's name became associated with cigars. He smoked, and that likely contributed to his premature death at age 58. He wrote about cigar-making and taxation as follows, in Chapter 8 of "Protection or Free Trade?"
It is no wonder that princes and ministers anxious to make their
revenues as large as possible should prefer a method that enables them
to "pluck the goose without making it cry," nor is it wonderful that
this preference should be shared by those who get control of popular
governments; but the reason which renders indirect taxes so agreeable
to those who levy taxes is a sufficient reason why a people jealous of
their liberties should insist that taxes levied for revenue only should
be direct, not indirect.
It is not merely the ease with which indirect taxes can be collected
that urges to their adoption. Indirect taxes always enlist active
private interests in their favor. The first rude device for making the
collection of taxes easier to the governing power is to let them out to
farm. Under this system, which existed in France up to the Revolution,
and still exists in such countries as Turkey, persons called farmers of
the revenue buy the privilege of collecting certain taxes and make
their profits, frequently very large, out of the greater amount which
their vigilance and extortion enable them to collect. The system of
indirect taxation is essentially of the same nature.
The tendency of the restrictions and regulations necessary for the
collection of indirect taxes is to concentrate business and give large
capital an advantage. For instance, with a board, a knife, a kettle of
paste and a few dollars' worth of tobacco, a competent cigar maker
could set up in business for himself, were it not for the revenue
regulations. As it is, in the United States, the stock of tobacco which
he must procure is not only increased in value some two or three times
by a tax upon it; but before the cigar maker can go to work he must buy
a manufacturer's license and find bonds in the sum of five hundred
dollars. Before he can sell the cigars he has made, he must furthermore
pay a tax on them, and even then if he would sell cigars in less
quantities than by the box he must buy a second license. The effect of
all this is to give capital a great advantage, and to concentrate in
the hands of large manufacturers a business in which, if free, workmen
could easily set up for themselves.
But even in the absence of such regulations indirect taxation tends to
concentration. Indirect taxes add to the price of goods not only the
tax itself but also the profit upon the tax. If on goods costing a
dollar a manufacturer or merchant has paid fifty cents in taxation, he
will now expect profit on a dollar and fifty cents instead of upon a
dollar. As, in the course of trade, these taxed goods pass from hand to
hand, the amount which each successive purchaser pays on account of the
tax is constantly augmenting. It is not merely inevitable that
consumers have to pay considerably more than a dollar for every dollar
the government receives, but larger capital is required by dealers. The
need of larger capital for dealing in goods that have been enhanced in
cost by taxation, the restrictions imposed on trade to secure the
collection of the tax, and the better opportunities which those who do
business on a large scale have of managing the payment or evading the
tax, tend to concentrate business, and, by checking competition, to
permit large profits, which must ultimately be paid by consumers. Thus
the first payers of indirect taxes are generally not merely indifferent
to the tax, but regard it with favor.
The other passage about cigars which I recalled turned out to be not from Henry George, but from his friend Louis F. Post, who went on to be President Wilson's Secretary of Labor:
Though land value has no effect upon the price of good,
it is easier to sell goods in some locations than in others. Therefore,
though the price
and the profit of each sale be the same, or even less, in good locations
poorer ones, aggregate receipts and aggregate profits are much greater
at the good location. And it is out of his aggregate, and not out of each
that rent is paid, For example: A cigar store on a thoroughfare supplies
a certain quality of cigar for fifteen cents. On a side street the same quality
of cigar can be bought no cheaper. Indeed, the cigars there are likely
poorer, and therefore really dearer. Yet ground rent on the thoroughfare
is very high compared with ground rent on the sidestreet. How, then, can
the first dealer, he who pays the high ground rent, afford to sell as good
or better cigars for fifteen cents than his competitor of the low priced
location? Simply because he is able to make so many more sales with a given
labor and capital in a given time that his aggregate profit is greater.
This is due to the advantage of his location, and for that advantage he pays
a premium in higher ground rent. But that premium is not charged to smokers;
the competing dealer of the side street protects them. It represents the
greater ease, the lower cost, of doing a given volume of business
upon the site for which it is paid; and if the state should take any of
it, even the
whole of it, in taxation, the loss would be finally borne by the owner
of the advantage which attaches to that site — by the landlord. Any
attempt to shift it
to tenant or buyer would be promptly checked by the competition of neighboring
but cheaper land.
Location, location, location! Or, as a friend in the advertising business put it when I told him about George's ideas, Location, Location, Taxation!
As I read and listen to and watch the news -- earthquake, ice storms -- and think about the past year -- floods, fires, mudslides, hurricanes, nor'easters, more earthquakes -- it seems to me that nature provides us plenty of opportunities to exercise our compassion and charity, individually and as a nation, and plenty of spending opportunities for maintaining necessary infrastructure.
We don't need to maintain economic structures which create additional human misery. There is enough without them.
We can't control nature. But we CAN correct man-made structures which victimize our fellow human beings.
We don't need poverty in the world. We could manage just fine without it.
It is time to delve into those structures, and get to the root of them.
When we get to the root, we'll recognize it and know what to do about it.
When we've done that, our safety nets will be there for those who have health problems, or accidents, or are victims of nature's whims. We'll be able to devote our energies and funds to things which can't be avoided -- acts of nature -- instead of trying to patch up the victims of our economic system.
The good news is that economics need not be a dismal science. When viewed through the lenses of the classical economists, a lot more things look a lot more fixable.
Poverty is a structural problem. Nothing we try to do for or with individuals is going to make the least bit of difference in the structures which are producing poverty. While I applaud the hearts and efforts of those who seek to improve the lives of individuals afflicted with poverty through charity, through education, through aid, even through job creation, none of these things is going to end poverty until we correct the structures which take for some that which others create. You might move one person from being a sower to being a reaper, but you aren't going to reduce the problem of some being permitted to reap what others sow until you attack the structures which permit it!
And isn't it government's job to create and promote structures which protect all of us from exploitation by others?
Howard Zinn died a few days ago, at 87. I think my first awareness of him might have been via Marian Wright Edelman's writings; he was among her college professors and mentors.
I found Bob Herbert's tribute, titled "A Radical Treasure," very moving and relevant. It got into the significance of, if not the relevance, of "radical."
I always wondered why Howard Zinn was considered a radical. (He called
himself a radical.) He was an unbelievably decent man who felt obliged
to challenge injustice and unfairness wherever he found it. What was so
radical about believing that workers should get a fair shake on the
job, that corporations have too much power over our lives and much too
much influence with the government, that wars are so murderously
destructive that alternatives to warfare should be found, that blacks
and other racial and ethnic minorities should have the same rights as
whites, that the interests of powerful political leaders and corporate
elites are not the same as those of ordinary people who are struggling
from week to week to make ends meet?
Mr. Zinn was often taken to task for peeling back the rosy veneer of
much of American history to reveal sordid realities that had remained
hidden for too long. When writing about Andrew Jackson in his most
famous book, “A People’s History of the United States,” published in
1980, Mr. Zinn said:
“If you look through high school
textbooks and elementary school textbooks in American history, you will
find Jackson the frontiersman, soldier, democrat, man of the people —
not Jackson the slaveholder, land speculator, executioner of dissident
soldiers, exterminator of Indians.”
Radical? Hardly. ...
He was a treasure and an inspiration. That he was considered radical says way more about this society than it does about him.
Radical. Do you know the root of the word? Pun intended, of course. Radix -- root -- as in radish. It brings to mind the words of Henry David Thoreau:
There are a thousand hacking at the branches of evil to one who is
striking at the root, and it may be that he who bestows the largest
amount of time and money on the needy is doing the most by his mode of
life to produce that misery which he strives in vain to relieve. It is
the pious slave-breeder devoting the proceeds of every tenth slave to
buy a Sunday's liberty for the rest. Some show their kindness to the
poor by employing them in their kitchens. Would they not be kinder if
they employed themselves there? You boast of spending a tenth part of
your income in charity; maybe you should spend the nine tenths so, and
done with it. Society recovers only a tenth part of the property then.
Is this owing to the generosity of him in whose possession it is found,
or to the remissness of the officers of justice?
The birth of the first of the next generation in my family this week -- our great niece -- got me thinking. I think of a friend who said of herself "I don't think I'd be a good mother, but I'm a wonderful aunt." I think of my own great-aunts and great-uncles. My paternal grandmother's sister, who was a lovely, gentle, elegant woman, and a sweet reminder of my own grandmother after her early death. My paternal grandfather's sister, who I didn't meet until his 75th birthday (families are complicated!), but whose correspondence with him as they rediscovered each other was a treasure. My maternal grandfather's brother and his wife, and her siblings, who lived very differently from anyone else I knew, but always gave me a sense of 'rootedness" when I visited their small town. (I remember my shock -- and youthful disillusionment -- when I realized this "plain" lady made her cakes using cake mixes!)
The world they lived in, and the world my new great niece is coming into, are so different from each other. I think about my high hopes that we can make her world a better place, in part through sharing a set of ideas which were well-known at roughly the time my great-aunts and uncles were born (1885-1905), and are today relatively unknown, but no less important and full of potential for good -- the common good.
And we are reminded, as we plan, to think about the seventh generation. What are the effects of our actions on those who will follow us? What do we owe them? And of course, what do we owe each other?
The new film, "The End of Poverty? Think Again" had its NYC premier back in November, and is now back for a second round.
I commend it to your attention. It is beautifully filmed, and, while it doesn't provide clear answers, it raises a lot of important questions -- different questions from the ones commonly being discussed -- and considers them in light not only of economic justice, but also the sustainability of our planet.
The title is a direct challenge to Jeffrey Sachs' 2005 book "The End of Poverty." The film looks for the roots of global poverty, and who benefits from the current structure. It provides a lot to think about.
Here are three websites I encourage you to explore
the film company's website, http://theendofpoverty.com This will tell you where you can find the film and provides some additional clips.
The solutions to poverty that most people are talking about -- microcredit, vaccines, drinking water improvements, etc. -- are not going to put a major dent in the problem. None of them, and no combination of them, goes to the ROOT of the problem, the underlying cause.
I'm actually not altogether sure that the filmmaker himself fully understands the root of the problem -- but it seems to me that he is at least on the right track. And I think his film has the potential to get the conversation going, which is a lot better than where we've been.
When I think about the other proposals that are being made to end poverty, I think of a passage from Henry George, the beginning of a chapter called "The Robber That Takes All That is Left:"
Labor may be likened to a man who as he carries home his earnings is waylaid by a series of robbers. One demands this much, and another that
much, but last of all stands one who demands all that is left, save just enough to enable the victim to maintain life and come forth next day to work. So long as this last robber remains, what will it benefit such a man to drive off any or all of the other robbers?
I'm not saying that disabling or disposing of some of these other robbers isn't noble work. But we ought not to fool ourselves that it is sufficient. And we're operating in the dark if most people don't even realize the existence of that other robber, who also robs them, day in and day out.
Remember that in America, which has, most of us think, solved most of the problems these people set out to solve, has tremendous concentration of wealth:
10% of us hold 71.5% of the aggregate net worth. The next 10% have 13.5%.
That doesn't leave a whole lot for the bottom 80% of us. And recent developments, including the Supreme Court decision in Citizens United, lead some of us to expect that wealth will concentrate further in America.
Unfortunately, the link to the Stiglitz interview doesn't work ... but here is a short one from the same interview. It is an excerpt from the Philippe Diaz film, The End of Poverty? Think Again. Once you see that one, you'll also see links to other excerpts from the film and to trailers and other information.
The Davos website is not what it appears to be, but I encourage you to explore it anyway. Some of the videos are priceless.
The link under "initiatives" for "Sane Tax Initiative" strikes me as directionally correct:
Sane Tax Initiative
The cancellation of taxes on labor and basic consumption, the creation of a 2% worldwide tax on property ownership (except basic habitation for the poor), and the implementation of a global 0.5% flat tax on all financial transactions with a total prohibition of speculation on food products.
Until the beginning of the 19th century, taxes were largely used as a means of reducing inequalities, and fell mainly on property ownership.
Neoliberal policies of the 20th century slowly shifted the tax burden away from the rich to the poor by taxing labor and consumption—making the poor responsible for financing our economic system while giving the rich most of the benefit. And we all know what became of trickle-down theory.
Taxes must be shifted away from basic necessities and consumption, and back to profit-making operations, and the ownership of natural resources and other industrial properties. A tax must also be levied on financial transactions.
I would differentiate between property in land, which I strongly believe ought to be taxed, with the revenue applied to public purposes, and property in buildings and other owner-created structures and improvements to land, which I do not believe ought to be taxed.
Further, I do not think that "operations" ought to be taxed because they are profitable or buildings because they are "industrial." But I do agree that the ownership of natural resources ought not to enrich private individuals, or corporations, or any entity other than the public at large. (Alaska has taken important steps in this direction, with good results, over the past 30 or so years.)
I'm not sure what I think of taxing financial transactions, but I'm certainly in favor of measures which would end the speculation which we've been seeing and which has contributed to awesomely large fortunes created by hedge funds and other traders. Those fortunes don't come out of thin air, and the traders aren't growing the wealth pie or adding to the stability of our economy; when some reap what they didn't sow, others who sowed are not getting to reap. And that's wrong.
I'll post separately about the film, "The End of Poverty? Think Again," which is currently showing in NYC.