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 hospitals (of England) are full of the ancient. . . . The
almshouses are filled with old laborers. Many there are who get
their living with bearing burdens, but more are fain to burden the
land with their whole bodies. Neither come these straits upon men
always through intemperance, ill-husbandry, indiscretion, etc.; but
even the most wise, sober and discreet men go often to the wall when
they have done their best. . . The rent-taker lives on the sweet
morsels, but the rent-payer eats a dry crust often with watery eyes.
—Robert Cushman, Plymouth, 1621, in Young's "Chronicles of the
We worked through spring and winter,
through summer and through fall.
But the mortgage worked the hardest
and steadiest of them all;
It worked on nights and Sundays, it
worked each holiday;
It settled down among us and it never
Whatever we kept from it seemed almost as bad as theft;
It watched us every minute and it
ruled us right and left.
The rust and blight were with us
sometimes, and sometimes not;
scowling mortgage was forever on the spot.
The weevil and the cutworm they went
as well as came;
The mortgage stayed forever, eating
heartily all the same.
It nailed up every window, stood
guard at every door,
And happiness and sunshine, made
their home with us no more;
Till with falling crops and sickness
we got stalled upon the grade.
And there came a dark
day on us when the interest wasn't paid.
And there came a sharp foreclosure,
and I kind o' lost my hold.
And grew weary and discouraged and
the farm was cheaply sold.
The children left and scattered, when
they hardly yet were grown;
My wife she pined and perished, and I found myself alone.
What she died of was a mystery, and
the doctors never knew;
But I knew she died of mortgage — Just
as well as I wanted to.
If to trace a hidden sorrow were
within the doctors art.
They'd ha' found a mortgage lying on
that woman's broken heart.
Worm or beetle, drought
or tempest, on a farmer's land may fall.
But for a first-class
ruination, trust a mortgage 'gainst them all.
How much of a farmer's mortgage is for the value of the land itself, and how much for the present value of the improvements which previous owners have made, such as clearing, draining, fencing, irrigating, building structures, plus, perhaps, equipment purchased with the land and buildings?
For that matter, how much of a homeowner's mortgage is for the value of the land itself --including its access to community-provided services such as city water and sewer, fire hydrants, and the like -- and how much for the purchase price of the landscaping and structures on the property, built by any of the previous owners?
To what degree is the modern buyer including in his formal calculations or his underlying assumptions the notion that the land will increase in value during his tenure? (See Case & Schiller, 2003.)
To such a point have we been brought by an artificial system of
society, that we must either deny altogether the right of the poor
to their just proportion of the fruits of the earth, or afford them
some means of subsistence out of them by the institution of positive
— SIR WALTER SCOTT, St. Ronan's
Well, Chap. XXXII., Note G.
"But how is it that you allow these chiefs — landlords, don't you call them? — to taboo the
soil, and prevent you all from even walking on it? Don't you see
that if you choose to combine in a body, and insist upon the
recognition of your natural rights — if you determined to make the landlords give up
their taboo, and cease from injustice, they'd have to yield to you?
And then you could exercise your natural right of going where you
pleased, and cultivate the land in common for the public benefit,
instead of leaving it as now, to be cultivated anyhow, or turned
into waste, for the benefit of the tabooers?"
— GRANT ALLEN, The British
Barbarians (Words spoken by Bertram).
As I listen to the 2012 party platforms, I am reminded of what they ought to be focused on, embodied pretty well in this platform from 1886-87.
PLATFORM OF THE UNITED PARTY.
Adopted at Syracuse August 19, 1887.
We, the delegates of the united labor party of New York, in state
convention assembled, hereby reassert, as the fundamental platform of
the party, and the basis on which we ask the co-operation of citizens of
other states, the following declaration or principles adopted on
September 23, 1886, by the convention of trade and labor associations of
the city of New York, that resulted in the formation of the united
"Holding that the corruptions of government and the impoverishment of
labor result from neglect of the self-evident truths proclaimed by the
founders of this republic that all men are created equal and are endowed
by their Creator with unalienable rights, we aim at the abolition of a
system which compels men to pay their fellow creatures for the use of
God’s gifts to all, and permits monopolizers to deprive labor of natural
opportunities for employment, thus filling the land with tramps and
paupers and bringing about an unnatural competition which tends to
reduce wages to starvation rates and to make the wealth producer the
industrial slave of those who grow rich by his toil.
'“Holding, moreover, that the advantages arising from social growth and
improvement belong to society at large, we aim at the abolition of the
system which makes such beneficent inventions as the railroad and
telegraph a means for the oppression of the people and the
aggrandizement of an aristocracy of wealth and power. We declare the
true purpose of government to be the maintenance of that sacred right of
property which gives to every one opportunity to employ his labor, and
security that he shall enjoy its fruits; to prevent the strong from
oppressing the weak, and the unscrupulous from robbing the honest; and
to do for the equal benefit of all such things as can be better done by
organized society than by individuals; and we aim at the abolition of
all laws which give to any class of citizens advantages, either
judicial, financial, industrial or political, that are not equally
shared by all others."
We call upon all who seek the emancipation of labor, and who would make
the American union and its component states democratic commonwealths of
really free and independent citizens, to ignore all minor differences
and join with us in organizing a great national party on this broad
platform of natural rights and equal justice. We do not aim at securing
any forced equality in the distribution of wealth. We do not propose
that the state shall attempt to control production, conduct
distribution, or in any wise interfere with the freedom of the
individual to use his labor or capital in any way that may seem proper
to him and that will not interfere with the equal rights of others. Nor
do we propose that the state shall take possession of land and either
work it or rent it out. What we propose is not the disturbing of any man
in his holding or title, but by abolishing all taxes on industry or its
products, to leave to the producer the full fruits of his exertion and
by the taxation of land values, exclusive or improvements, to devote to
the common use and benefit those values, which, arising not from the
exertion of the individual, but from the growth of society, belong
justly to the community as a whole. This increased taxation of land, not
according to its area, but according to its value, must, while
relieving the working farmer and small homestead owner of the undue
burdens now imposed upon them, make it unprofitable to hold land for
speculation, and thus throw open abundant opportunities for the
employment of labor and the building up of homes.
While thus simplifying government by doing away with the horde of
officials required by the present system of taxation and with its
incentives to fraud and corruption, we would further promote the common
weal and further secure the equal rights of all, by placing under public
control such agencies as are in their nature monopolies: We would have
our municipalities supply their inhabitants with water, light and heat;
we would have the general government issue all money, without the
intervention of banks; we would add a postal telegraph system and postal
savings banks to the postal service, and would assume public control
and ownership of those iron roads which have become the highways of
While declaring the foregoing to be the fundamental principles and aims
of the united labor party, and while conscious that no reform can give
effectual and permanent relief to labor that does not involve the legal
recognition of equal rights, to natural opportunities, we nevertheless,
as measures of relief from some of the evil effects of ignoring those
rights, favor such legislation as may tend to reduce the hours of labor,
to prevent the employment of children of tender years, to avoid the
competition of convict labor with honest industry, to secure the
sanitary inspection of tenements, factories and mines, and to put an end
to the abuse of conspiracy laws.
We desire also to so simplify the procedure of our courts and diminish
the expense of legal proceedings, that the poor may be placed on an
equality with the rich and the long delays winch now result in
scandalous miscarriages of justice may be prevented.
And since the ballot is the only means by which in our Republic the
redress of political and social grievances is to besought, we especially
and emphatically declare for the adoption of what is known as the
“Australian system of voting,” an order that the effectual secrecy of
the ballot and the relief of candidates for public office from the heavy
expenses now imposed upon them, may prevent bribery and intimidation,
do away with practical discriminations in favor of the rich and
unscrupulous, and lessen the pernicious influence of money in politics.
In support or these aims we solicit the co-operation of all patriotic
citizens who, sick of the degradation of politics, desire by
constitutional methods to establish justice, to preserve liberty, to
extend the spirit of fraternity, and to elevate humanity.
We occupy an island, on which we live by the fruits of our labor; a shipwrecked sailor is cast up on it; what is his right? May he say: "I, too, am a man; I, too, have a natural right to cultivate the soil. I may, therefore, on the same title as you, occupy a corner of the land to support myself by my labor?"
— EMILE DE LAVELEYE, Primitive Property, Chap. XXVII., p. 351
This being the case, in what manner are the Irish people to subsist in future? There is the land and there is labor enough to bring it into cultivation. But such is the state in which the land is placed, that capital cannot be employed upon it. You have tied up the raw material in such a manner — you have created such a monopoly of land by your laws and by your mode of dealing with it — as to render it alike a curse to the people and to the owners of it.
— JOHN BRIGHT, Speech in the House of Commons, April 2, 1849. Speeches of John Bright, I., p. 332, (Edition of 1868).
The man of wealth and pride Takes up a space that many poor supplied — Space for his lake, his park's extended bounds, Space for his horses, equipage and hounds; The robe that wraps his limbs in silken cloth Has robbed the neighboring fields of half their growth; His seat where solitary sports are seen Indignant spurns the cottage from the green; Around the world each needful product flies, For all the luxuries the world supplies, While thus the land adorned for pleasure all In barren splendor feebly waits the fall.
Here is the fundamental error, the crude and monstrous assumption, that the land which God has given to our nation, is or can be the private property of anyone. It is a usurpation exactly similar to that of slavery.
— PROF. F. W. NEWMAN, Lectures on Political Economy (1851), Lecture VI., p. 533.
Wherever there is in any country uncultivated lands and unemployed poor, it is clear that the laws of property have been so far extended as to violate natural right. The earth is given as a common stock for man to labour and live on.
— THOMAS JEFFERSON (1785), Ford's Writings of Jefferson, Vol. VII., 36.
"One only master grasps the whole domain, And half a tillage stints thy smiling plain.
* * * * * *
Ill fares the land to hastening ills a prey: Where wealth accumulates and men decay: Princes or lords may flourish or may fade; A breath can make them as a breath has made; But a bold peasantry, their country's pride, When once destroy'd can never be supply'd.
* * * * * *
A time there was ere England's griefs began; When every rood of ground maintained its man; But times are alter'd, trade's unfeeling train Usurp the land, and dispossess the swain."
Goldsmith: The Deserted Village
Other excerpts from this poem appear in Crosby's Calendar, but this one does not. I hereby add it!
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).
Every proprietor, therefore, of cultivated land owes to the community a ground rent (for I know of no better term to express the idea) for the land which he holds.
— THOMAS PAINE, Agrarian Justice, Paine's Writings, Vol. III., p. 329 (1795-6).
If all men were so far tenants to the public that the superfluities of gain and expense were applied to the exigencies thereof, it would put an end to taxes, leave never a beggar and make the greatest bank for national trade in Europe.
— WILLIAM PENN, Reflections and Maxims, Sec. 222, Works V., pp. 190-1.
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.
37. Our ancestors bought or stole the land which the ancestors of some of those now identified as "Native Americans" relied on. How should we and our children pay back them and their children?
A. By giving them the privilege of selling cigarettes without taxes, forgoing revenue that could help meet the health costs associated with smoking, both for smokers and for those who live with them.
B. By giving them the privilege of running casinos, even if a percentage of that revenue must be contributed to the state, and even if gambling is creates tremendous problems for some individuals in society, beyond those who actually gamble.
C. By collecting from everyone who owns land and natural resources the annual economic value, and giving everyone a per-capita share of those resources, every year, forever. (Similar to the Alaska Permanent Fund)
D. By collecting from everyone who owns land and natural resources the annual economic value, and giving everyone a per-capita share of those resources, every year, forever, and providing a double share to those who are starting from a disadvantaged position for some fixed number of years
E. By collecting from everyone who owns land and natural resources the annual economic value, paying the costs of government and common spending from that source, producing equal opportunity for all.
This is from Joseph Dana Miller, the editor of the Single Tax Year Book (1917), and it is a concise statement which might help make clear why I think this such an important reform in the 21st century.
Men have a right to land because they cannot live without it and because no man made it. It is a free gift of nature, like air, like sunshine. Men ought not to be compelled to pay other men for its use. It is, if you please, a natural right, because arising out of the nature of man, or if you do not like the term, an equal right, equal in that it should be shared alike. This is no new discovery, for it is lamely and imperfectly recognized by primitive man (in the rude forms of early land communism) and lamely and imperfectly by all civilized communities (in laws of "eminent domain", and similar powers exercised by the State over land). It is recognized by such widely differing minds as Gregory the Great and Thomas Paine (the religious and the rationalistic), Blackstone and Carlyle (the legal and the imaginative). All points of view include more or less dimly this conception of the peculiar nature of land as the inheritance of the human race, and not a proper subject for barter and sale.
This is the philosophy, the principle. The end to be sought is the establishment of the principle -- equal right to land in practice. We cannot divide the land -- that is impossible. We do not need to nationalize it that is, to take it over and rent it out, since this would entail needless difficulty. We could do this, but there is a better method.
The principle, which no man can successfully refute or deny even to himself, having been stated, we come now to the method, the Single Tax, the taking of the annual rent of land -- what it is worth each year for use -- by governmental agency, and the payment out of this fund for those functions which are supported and carried on in common -- maintenance of highways, police and fire protection, public lighting, schools, etc. Now if the value of land were like other values this would not be a good method for the end in view. That is, if a man could take a plot of land as he takes a piece of wood, and fashioning it for use as a commodity give it a value by his labor, there would be no special reason for taxing it at a higher rate than other things, or singling it out from other taxable objects. But land, without the effort of the individual, grows in value with the community's growth, and by what the community does in the way of public improvements. This value of land is a value of community advantage, and the price asked for a piece of land by the owner is the price of community advantage. This advantage may be an excess of production over other and poorer land determined by natural fertility (farm land) or nearness to market or more populous avenues for shopping, or proximity to financial mart, shipping or railroad point (business centers), or because of superior fashionable attractiveness, (residential centers). But all these advantages are social, community-made, not a product of labor, and in the price asked for its sale or use, a manifestation of community-made value. Now in a sense the value of everything may be ascribed to the presence of a community, with an important difference. Land differs in this, that neither in itself nor in its value is it the product of labor, for labor cannot produce more land in answer to demand, but can produce more houses and food and clothing, whence it arises that these things cost less where population is great or increasing, and land is the only thing that costs more.
To tax this land at its true value is to equalize all people-made advantages (which in their manifestation as value attach only to land), and thus secure to every man that equal right to land which has been contended for at the outset of this definition.
From this reform flow many incidental benefits -- greater simplicity of government, greater certainty and economy in taxation, and increased revenues.
But its greatest benefit will be in the abolition of involuntary poverty and the rise of a new civilization. It is not fair to the reader of a definition to urge this larger conclusion, the knowledge of which can come only from a fuller investigation and the dawning upon his apprehension of the light of the new vision. But this conclusion follows as certainly as do the various steps of reasoning which we have endeavored to keep before the reader in this purely elementary definition.
If you've just arrived at this page, this is the first (last) of perhaps 10 items I've picked up from reading a year's worth of an 1895-6 weekly called The San Jose Letter. I'm amazed how topical they are 115 years later!
From The San Jose Letter, of November 28, 1896:
THE SUPERFICIAL REFORMER.
A great fault of the human family today, when starting out on reform measures, is to battle with effects and neglect the primary causes of the evil. What man, be he the most uneducated tiller of the soil, would start out to eradicate weeds by cutting them off at the surface of the ground? Would he not dig down and remove the roots? And yet all the great reform parties, temperance people and labor organizations, are fighting effects, all claiming to be right, while the "ignis fatuus" is luring them on to their own destruction.
What, then, is the primary cause of the evil that is today filling our jails and insane asylums, making prostitutes of women and placing a premium upon drunkenness and suicide, while the products of industry are taxed to their utmost to keep up this damnable retrograde movement of our civilization? Are these the results of man's development in freedom, or are they the results of present conditions over which he has, or thinks he has, no control? Cannot this entire brood of evils be laid at the door of poverty and want, the result of bad laws? Anything, therefore, that will better man's condition will certainly lesson crime. Such a state of affairs is what the single tax will bring about. It has already been shown that taxing a thing has a tendency to discourage it, hence we are going to stop taxing industry and production, because these are the mainstays of existence, and to discourage them is to say that we have no right to that which nature decreed should be ours, but our entire revenue for community purposes, we propose to take from land values created by reason of the presence of the community.
—George W. Loehr in National Single Taxer.
If we don't go to the root of the problem, we and our descendants are going to be spending centuries trimming the weeds.
"Radical" has an honorable root: Radix, radicis --the root! Radish, radius, eradicate, radical ...
The current conversation about "tax reform" seems to mostly consist of arguing about federal income tax brackets. It doesn't go to the root of the problem. Most of those carrying on the conversation wouldn't know the root if they stumbled across it.
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.
How does this strike you? If this is the first thing you've read here, it may seem very odd to you. I invite you to explore the ideas involved, through the tags (below this post) and in the cloud, at left. Comments welcome, of course!
Single Tax Platform
The single taxers of Delaware are conducting a red hot campaign. The single tax will be the issue in that state this fall, and Justice, the state single tax organ, published the following as their Single Tax Platform:
We assert as our fundamental principle, that all men are equally entitled to the use of the earth;
Therefore, No one should be permitted to hold land without paying to the community the value of the privilege thus accorded; and from the fund so raised all expenses of government should be paid. We would therefore abolish all taxation, except a tax upon the value of land exclusive of improvements. This tax should be collected by the local government and a certain proportion be paid to the state government.
This system of taxation would dispense with a horde of tax-gatherers, simplify government and greatly reduce its cost.
It would do away with the corruption and gross inequality inseparable from our present methods.
It would relieve the farmer, the workman and the manufacturer of those taxes by which they are unjustly burdened, and take for public uses those values due to the presence of population.
It would make it impossible for speculators to hold land idle, and would open unlimited opportunities for the employment of labor and capital, which is essential to the solution of the labor problem.
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.
In September, 1889, Thomas Shearman, co-founder of the NYC law firm Shearman & Sterling, published an article in The Forum, entitled "Henry George's Mistakes." This was ten years after the publication of Henry George's "Progress and Poverty," which was, by that time well known to most Americans and many in other parts of the world; by 1900, P&P had sold something like 6 million copies and been serialized in many periodicals. As the first paragraph shows, George's ideas were controversial, particularly with the vested interests who were more than happy with the current structure, and were in a position to spend to influence public opinion.
Shearman is responding to those who thought that George's Remedy (the subtitle to P&P is "An inquiry into the cause of industrial depressions and of increase of want with increase of wealth ... The Remedy") was unrealistic, and in particular, to an 1887 article in The Forum.
Shearman shows why indirect taxes raise prices and the cost of living, particularly for the poor. Recall Leona Helmsley's statement about taxes: "We don't pay taxes. The little people pay taxes." I don't think she was talking about tax evasion; she was talking about tax structures.
I've taken the formatting liberty of presenting some lists contined in paragraphs as bullet points.
HENRY GEORGE'S MISTAKES.
Since the mistakes of Moses were so triumphantly demolished by Col. Ingersoll, his example has been followed by numerous writers, who, possibly because they concluded that the Mosaic field has been sufficiently occupied, have devoted themselves to an equally triumphant demonstration of the mistakes of Henry George. Space could not be afforded for even an abstract of these brilliant productions. Crushed by the Duke of Argyll, refuted by Mr. Mallock, extinguished by Mayor Hewitt, undermined by Mr. Edward Atkinson, exploded by Prof. Harris, excommunicated by archbishops, consigned to eternal damnation by countless doctors of divinity, put outside the pale of the Constitution by numberless legal pundits, waved out of existence by a million Podsnaps, and finally annihilated by Mr. George Gunton, still Henry George's theories seem to have a miraculous faculty of rising from the dead. For it is certain that his general doctrines are more widely believed in today than ever before; while the one practical measure which he advocates for present and immediate enactment is accepted by a vast number of intelligent men on both sides of the Atlantic. It is, therefore, still worth while to look into this terrible delusion, and to inquire seriously what are these fatal mistakes which, being so often slain, nevertheless live.
Mr. George has devoted a large portion of his famous book, "Progress and Poverty," to the assertion and illustration of his belief that, all over the civilized world, the rich are growing richer and the poor relatively poorer. He undertakes to trace the cause of this assumed evil to the private ownership of land and the steady increase of economic rent. He insists, with admitted eloquence and earnestness, that private ownership of land must be abolished; but he proposes one remedy and only one, the concentration of all taxes upon ground rent alone. He urges that these taxes should be increased to such an amount as will absorb ground rent. This, in view of statements made by all Mr. George's opponents, would seem to be really only a matter of detail, concerning which any one might be at liberty to entertain, as Mr. Disraeli used to say, a "pious opinion." For they all, with one voice, maintain that ground rent would never be sufficient to meet the existing taxes; and so this question, if any of Mr. George's critics are correct, could never arise.
To a practical mind there are only two important questions involved in this controversy.
First, is there any undesirable tendency toward the concentration of wealth in the hands of a few?
Secondly, is the concentration of all taxes upon ground rent alone a real, just, and effective remedy?
Let us inquire whether there is any excessive concentration of wealth going on in the United States of America. Leaving mere clamor and unsupported assertions out of consideration, on either side, let us look into facts. As lately as 1847, there was but one man in this country who was reputed to be worth more than $5,000,000; and though some estimated his wealth at $20,000,000, there is no good reason for believing it to have been so great. The wealth of his lineal descendants is estimated at $250,000,000, or over $50,000,000 each. In 1867, in the New York constitutional convention, one of the most prominent delegates stated that he could name 30 men, residing in that State, whose wealth averaged $15,000,000 each. The St. Louis "Globe" recently published a list of 72 persons who were worth, collectively, the whole amount of our national debt, averaging $18,000,000 each. The wealthiest railroad manager in America, in 1865, was worth $40,000,000, but not more. His heir died recently, leaving an estate of nearly $200,000,000; and there are several gentlemen now living who are worth over $100,000,000 each. Within a short period, a number of quiet, unobtrusive men, of no national fame, have died in Pennsylvania, leaving estates of over $20,000,000 each. Twenty living persons, in the oil business, are reputed to be as rich. Forty persons could be easily named, none of them worth less than $20,000,000, and averaging $40,000,000 each. At the lowest reasonable estimate, there must now be more than 250 persons in this country whose wealth averages over $20,000,000 for each. But let us call the number only 200. Income-tax returns in Great Britain and in the United States show that, in general, the number of incomes, when arranged in large classes, multiplies by from three to five-fold for every reduction in the amount of one-half.* For extreme caution, however, we estimate the increase in the number of incomes at a very much lower rate than this. At this reduced rate, the amount of wealth in the hands of persons worth over $500,000 each in the United States would be about as follows:
200 persons at
* In Brooklyn, N. Y., in 1865, the tax returns showed one income of $600,000, 2 incomes of $200,000, 11 incomes of $100,000, 61 incomes of $50,000, 1,700 incomes averaging $7,000. See also the "Cyclopedia of Political Science," art. "Income Tax."
In Great Britain, in 1872, 3 landlords averaged each $1,100,000 rent, 14 averaged $675,000, and 83 averaged over $250,000. In 1884, the returns of business profits, only, showed 104 incomes averaging $450,000,1,192 of $85,000, 1,871 of $32,000, and 20,534 of $9,000.
This estimate is very far below the actual truth. Yet, even upon this basis, we are confronted with the startling result that 25,000 persons now possess more than half of the whole national wealth, real and personal, according to the highest estimate ($60,000,000,000) which any one has yet ventured to make of the aggregate amount. Nor is this conclusion at all improbable.
Let us test the question in another way. Eastern savings banks show an average deposit of $365. This sum represents the extreme savings of the average thrifty workingman of the East. But even estimating that 20,000,000 workers of 1889, earning an average of less than $400 each, of whom 5,000,000 are women and children, have saved, on the average, $600, still, their aggregate savings would not amount to $12,000,000,000, or $1,100 for each average family. Let us suppose that the 1,000,000 workers of superior class, earning an average of $1,000 each, have saved $3,000 — a monstrous exaggeration. This would make their total possessions $3,000,000,000. The result would be to show that 21,000,000 persons had saved up in the whole course of their lives $15,000,000,000, leaving $45,000,000,000 in the possession of not more than 400,000 persons.
Look again. Excluding churches, public buildings, etc., from the items of wealth enumerated in the census estimate for 1880, it is reduced to $41,000,000,000. Railroads, telegraphs, shipping, mines, quarries, canals, merchandise, and specie count for $13,500,000,000. These certainly do not belong to $400 workingmen. $5,000,000,000 is charged to household furniture, paintings, and jewelry. Two-thirds of this would be an extreme allowance for the 9,700,000 families of the poorer class; but let us allow them more, and estimate the furniture of the 300,000 richer families at only $5,000 each. Farms stand for $10,000,000,000, of which more than one-fourth were owned by landlords and leased to tenants, while one-fifth were so large as to imply wealthy owners; and mortgages were certainly outstanding for more than one-fifth of the rest. Business and residential real estate, water-power, etc., were estimated at about the same value. Of this, at least three-fourths was owned by the wealthy class, either absolutely or by mortgages. On this basis we arrive at the following estimate of the possessions, in 1880, of not more than 300,000 persons:
Railroads, shipping, mines, merchandise, specie, etc.
Farms, 45 per cent
Mortgages on farms, 20 per cent
Other real estate
The total national wealth held as private property being $41,000,000,000, this estimate confirms the previous one, that a small minority of the people own two-thirds of the national wealth. Is Mr. George so very much mistaken, in view of these figures, when he asserts that the rich are growing richer and the poor relatively poorer?
A sufficient cause for the immense and growing chasm between the rich and the poor of this country is to be found in indirect taxation. The population of the United States has increased in 25 years from 35,000,000 to 60,000,000. Let us call the average 45,000,000. The average annual taxes for the same period have been about $175,000,000 on imports, $136,000,000 on domestic productions, $14,000,000 on incomes, $25,000,000 miscellaneous, and $300,000,000 State and local taxes, mostly on houses and improvements and personal property. Duties on imports have entailed an average increase of prices on domestic goods to the amount of fully thrice the duties, say $525,000,000. Excise duties, by promoting monopolies, have largely increased prices, as in the well-known case of matches, where a duty of one cent caused an increase in price of' two cents. Let us, however, call this increase only one-fifth of the excise, or $27,000,000. But upon these taxes there are three profits, made by the importers or manufacturers, the jobbers, and the retailers, amounting to not less than 20% in all, or $172,600,000. Two-thirds of the State and local taxes are paid by middlemen, who of course add a profit; but this may be put as low as 5%, or about $10,000,000. The grand total now comes to $1,384,000,000 per annum, as the average annual burden borne by the people for 25 years past. Of this all was indirect taxation, except something over $100,000,000; leaving the average annual burden imposed by indirect taxation at $1,280,000,000.
This burden was distributed as equally as possible by natural laws, in proportion to the expenditure of each income-receiver in the support of his family. As each worker supported, on the average, three persons, including himself, the people may be divided into 15,000,000 families, or rather groups of three.* On the basis of the careful estimate of Mr. Atkinson, 14,000,000 of these must have been supported upon incomes of less than $400 (in my judgment less than $350), 700,000 on less than $1,000, and the other 300,000 on larger incomes. The average annual earnings of the nation during 25 years cannot have exceeded $7,500,000,000. Allowing 15% as savings, destruction, and cost of replacement, and adding to this the tax burdens, which must be paid out of savings, there would remain, as the sum expended in the support of the people, an average of less than $5,100,000,000 per annum. On this the burden of indirect taxation has averaged 25%. We are now prepared to calculate the effect.
* The actual number of real families was much less. It was under 10,000,000 in 18S0, averaging 5 persons each.
Supposing them exempt from taxes, still it would be unreasonable to expect the mass of the laborers to support their groups of three on less than $300 a year. Their burden of taxation, then, has averaged 25% on this, or $75 a year. Contrast with this the case of men who enjoyed an income of $1,000,000, which a fortune of $15,000,000 would on an average easily have produced in simple interest during this period. Allow them $100,000 each, for a modest living; on which their tax would be $25,000 each. From what fund would these taxes be paid? Obviously, from what would have been saved, but for taxation, not from what was spent. This fund, in the case of the masses, would amount to $100 each; tax, $75. In the case of the great millionaires, $900,000; tax, $25,000. Tax on the property of the very rich, less than 3%. Tax on the property of the masses, more than 75%.
What would be the result, at the end of a year, on these two classes? Assume only 200 such very wealthy men; yet their savings would be, under such taxation, $175,000,000. Assume only 600 more, with incomes of $500,000 each, spending $50,000, and taxed therefore $12,500; their net savings would be $437,500 each, or $262,500,000 in all. Thus 800 rich men would save $437,500,000. The savings of the 14,000,000 laborers could not exceed $25 each, or $350,000,000. But, if taxes could be dispensed with, the savings of the millions of poor men would have reached $1,400,000,000, while those of the 800 rich would not have exceeded $450,000,000.
Here is a mathematical demonstration that the mere fact of indirect taxation is sufficient to strip the poor of three-fourths of their natural savings, and to concentrate a majority of the wealth of the community in the hands of an infinitesimally small part of its number.
What, then, is the remedy proposed by the wild fanatic whose blunders we are considering? It is threefold.
First, the total abolition of indirect taxation.
Secondly, the substitution of a single tax on ground rent, the only sufficient form of strictly direct taxation which has ever been invented.
Thirdly, the gradual increase of this direct tax, if necessary to that end, to an amount sufficient to absorb ground rents. This is all.
The third branch of this proposition is the only one which has brought the penalties of everlasting damnation upon Mr. George's head, from the hand of Dr. Van Dyke. But Prof. Harris and Mr. Atkinson are sure that they have saved his soul, at the expense of his arithmetic, by demonstrating that rent is a very insignificant item, which would not suffice to meet the present necessary taxes. Assuming, for the moment, that Mr. George's arithmetical critics have delivered his soul from Sheol, let us try to rescue his body from the lunatic asylum.
Every form of tax upon personal property or improvements upon land, whether in the form of a tariff, an excise, a license, or a so-called "direct tax" upon their value, is, in the inherent nature of things, an indirect tax. It is and always must be shifted from the original tax-payer to the final consumer. In many individual cases the original tax-payer is unable thus to shift the tax; but in that event he is crippled in business, and, if the difficulty is permanent, he is ruined and driven out of business, to give place to a shrewder man, who makes the customer pay the tax in the end, with a bigger profit than would have contented the weaker man.
There are no direct taxes worth discussing, except the income tax, the succession tax, and the tax on land, valued without reference to its improvements. The income tax opens the door to innumerable frauds, and puts a premium upon perjury and corruption. If adopted in this country as the sole method of taxation, it will open the way to such plunder of the honest rich as will make them sigh for Henry George and his tax on rent. Poor folk and rascals will escape from all taxation whatever. The succession tax will fall exclusively upon the rich. If made high enough to support the cost of all government, it will fail, because it will be evaded. There remains only the tax on land values, or the natural rent of land, irrespective of improvements.
This tax is absolutely direct. It cannot be evaded. It cannot be shifted by the original tax-payer. That is an axiom of economic science. If it were not so, there would not be a particle of the clamor which is raised against it. The thunders of the pulpit would have slept forever, if the land-owner could make poor folk pay his land tax, with a little profit. The adoption of this tax would therefore put an end to all the unnatural impoverishment of the poor and enrichment of the rich, which take place under the present system. It would amount to a total abolition of taxation, as to that vast majority of the poor who own no land. Whereas now they pay both rent and taxes, then they would pay rent alone. This simple fact is a complete answer to the inquiry: "How are the masses to get the benefit of taxing rent?" As to such of the poor as own land, they would be relieved from the taxes which they now pay on personal property and improvements, that is, from more tax than would be added to their land tax. For we need reckon none among the poor who own more than $3,000 worth of land clear, that being more than the average value of improved farms; and those who own less than $6,000 worth of improved real estate are now paying more taxes indirectly than they could ever be required to pay under the single-tax system.
Let us briefly consider "Henry George's Mistake about Land," as set forth by Prof. W. T. Harris, in the Forum for July, 1887. That "mistake" lies in his assumption that ground rent would be sufficient to defray all the expenses of government, national, State, and local. Prof. Harris, finding that the official assessment of real estate in this country, in 1880, was about $13,000,000,000, and estimating that this was two-thirds of the market value, and the value of the land alone about one-half of the whole, or somewhat less than $10,000,000,000, calculates the ground rent at 4% on this sum, or $400,000,000 per annum; which of course is wholly insufficient to meet the taxes of $700,000,000 levied in 1880. He then refers to Great Britain and Ireland, where, he says, land forms only one-fifth of the total wealth, with an annual rental of £65,442,000. As British taxes altogether amount to about £118,500,000, it is clear that, if this estimate is correct, the single tax would not suffice to meet British taxes.
Taking first the case of the United States, the census report of 1880 shows conclusively that assessments are worthless, as a means of estimating real values. They vary from 10% to 70% of the true value of real estate; and no average can be estimated from them. The census of 1880, upon which Prof. Harris relies to show the proportion of land to the aggregate wealth, and which he must not therefore desert for local assessment tables, contains items of real estate, including all privileges over land, aggregating over $28,000,000,000. Adopting the rule of division between land and improvements propounded by him, the lowest estimate of pure land values for 1880 would be between $15,000,000,000 and $16,000,000,000. There is no estimate whatever of wild lands belonging to private individuals, unconnected with farms, the value of which could hardly have been less than $2,000,000,000; but of this we will take no notice. The rental of 4% for 1880, upon which Prof. Harris bases his calculation, is utterly absurd. Strictly first-class mortgages could not be placed at less than 5% in the city of New York in 1880; and such mortgages averaged, the country over, nearer 7% than 6%. It is impossible that the ownership of land, which is no better than a second mortgage, should not, on the average, produce a rate of interest higher than a first mortgage. The lowest rate of interest to be allowed on the value of land would therefore be 6.5%. But to this must be added the amount of taxation which actually fell upon land values in 1880. This could not have been less than 0.5%. Such taxes, being paid by landlords and not by tenants, necessarily depreciate the market value of the land; and this amount should be either added to the rent, or deducted from the amount expected to fall upon lands in consequence of the adoption of the single tax, since this falls upon it already.
It follows that the ground rent of the United States, in 1880, was considerably over $1,000,000,000. The taxes for that year were about $700,000,000. But of this, $100,000,000 was levied only for the purpose of piling up a surplus. The necessary taxation was only $600,000,000; and the land-owners of the United States would have been able to pay all taxes and yet retain a very large surplus. The value of land in the United States is now not less than $20,000,000,000; but the rate of interest is lower, and ground rent has not increased in equal proportion to nominal values.
Turning to Great Britain, the mistakes of Prof. Harris can be readily shown to be vastly greater than any mistakes of Henry George. His fundamental errors are three.
He mistakes the rent of agricultural lands alone for the whole rent of the United Kingdom;
he mistakes the valuation of "houses" for that of structures alone, without the lots beneath them; and
he assumes that railways are not built upon land.
The following are the official figures for 1884, taken from the 28th British Inland Revenue Report; to which we append a very low estimate of the proportion of mixed land values which should be charged to ground rents alone:
British Pure Annual Land Values, 1884.
Lands, returned as such
Manors, tithes, fines, etc.
Fishing and shooting rights
Markets and tolls
British Mixed Annual Land Values, 1884.
Houses and lots
Canals, water-works, mines, gas, iron, etc
One-half of these values as land
Total land values
Now the whole net amount of British taxes is £118,500,000. But of this, over £27,500,000 is already assessed upon pure land values. The adoption of the single tax would therefore increase the burden upon land only by £91,000,000. The net rental value of land being over £158,000,000, it follows that the land-owners of Great Britain and Ireland could pay all national and local taxes, and still retain for their own benefit the comfortable margin of £67,000,000. Prof. Harris will do well to study his statistics carefully before he again undertakes to exhibit "the mistakes of Henry George." *
*Prof. Harris quotes Mulhall, as proof that "land" in the United Kingdom is worth only £1,737,000,000, in a total of £8,720,000,000, or one-fifth of the whole. But Mulhall distinctly shows that this amount includes only agricultural land ("Dictionary of Statistics," 5); and he very properly recognizes houses and railways as real estate, stating (p. 280) that 62%, of British wealth consists of real estate. It is notorious that the mere land occupied by British railways was enormously costly, and is now worth far more than it cost. Land alone, on Mulhall's showing, forms one-third of British values, just as it does in America.
Mr. Gunton, in the Forum for March, 1887, had preceded Prof. Harris in the same field and with about equal accuracy. He calls the entire rental value of real estate in the United Kingdom, including, of course, improvements, £131,468,000. The correct official figure (including £43,000,000 taxes, paid by occupiers) was, in 1884, almost exactly £293,000,000; and the real value is far greater. Instead of being only 11% of the gross produce, as claimed by Mr. Gunton, it is fully 25%. It is not worth while to follow either Mr. Gunton's figures or arguments any further.
I regret that the space allotted for this article will not allow an examination of Mr. Edward Atkinson's calculations on the same general point. His statistics are far more accurate than those of Messrs. Harris and Gunton. Accepting all his statistics as absolutely accurate, I have shown in another place, by his own figures, that two-thirds of the ground rents of Boston would provide for all local, State, and national taxes on Boston.
The single tax, therefore, would be a real, effective, and adequate remedy for the present unjust intervention of the state in favor of the rich and against the poor.
There still remains the question: "Is the remedy just?" Many of Mr. George's critics (notably Mr. Gunton) are debarred from raising this question, since they assert the absolute right of the state to deal with all property as may be deemed expedient. But the majority of them are better represented by Dr. Van Dyke, who thinks the proposition of Mr. George "thoroughly unrighteous." So far as we can make out, this is because the state has in the past allowed private individuals to appropriate land and its rent to their own use, and is therefore estopped from taking away that rent by taxation. But land has always been taxed. In most of our large cities it is now theoretically taxed at least 2% on its value; often 3%. Why should a tax of 2% or 3% be just and righteous, but a tax of 4%, 5%, or 6% incur penalties of everlasting damnation? Is it because land is especially singled out for taxation? Then is there not at least equal wickedness on the part of Congress, which for half a century singled out the business of importation as the only subject of taxation, and still taxes it ten times as heavily as anything else? Does the wickedness consist in taxing land up to its full value? Then is it not equally wicked to tax the poor man's window glass 100% upon its value? Does the wickedness consist in imposing a tax for the purpose of accomplishing some ulterior result? How about our whole tariff legislation, which is avowedly maintained for an ulterior purpose? Is it wicked to tax private property out of existence? How about the tax on bank notes, which was levied for the express purpose of destroying State banks? How about the tax on oleomargarine? Is it wicked to tax property out of existence, without giving compensation? Why do not those who urge this plea petition Congress for compensation for those whose wealth has been destroyed and whose occupation has been taken away by taxes avowedly levied for that purpose? Not one of these critics has ever suggested such a petition; not one of them would sign such a petition; and not one of the many thousands who have suffered from such tax laws ever thought of presenting such a petition.
Judged by any standard which has ever been applied to public affairs, even by clergymen, the proposition of a single tax on land values is perfectly reasonable, moral, and honorable. As to the amount of such a tax, that is a question to be decided by a wise expediency. There is not the slightest moral obligation on the part of the state to make the tax small, or to leave any margin to land-owners, so long as no more is taken than is needed for the honest use of the state.
It is not necessary to follow any further the proposition of Mr. George to increase taxation up to a point which would practically absorb all ground rent. Every one of the critics who has discussed the point at all, has committed himself to the theory that no such artificial increase of taxation would be necessary to absorb rent. Moreover, it is not a practical question at present, and will not be for a very long time to come, if ever. Taxation rises quite fast enough, without artificial efforts to increase it. In 40 years, in Ohio, population increased 100%, assessed wealth 1,000%, and taxation 1,360%. It is sufficient for the present to show that the actual remedy proposed by Henry George for the evils of our present social condition, the only practical measure which he asks to have adopted today, is a real remedy, an adequate remedy, and a just remedy. The criticisms of his adversaries have been directed to mere side issues, to his minor arguments, to his intellectual processes, to his illustrations, to anything except the real pith of the matter in hand. Not one of them has really wrestled with the problem; not one of them (except Mr. Atkinson) has been even approximately correct in his statistics; not one of them has failed to commit mistakes in his reasoning and his calculations far more serious than any which can be fastened upon Henry George.
A few lifts: from Russia's Economic Interests (Part 1)
We all know that the world is unfair. The most useful question to ask
is how much poverty is economically necessary, how much is a product of
policies that can be alleviated? ...
For starters, it is necessary to distinguish between how much poverty
is “economically” justified and how much is unnecessary. There are many
ways to get rich, and countries are experiencing various kinds of
poverty. The good news is that much of today’s poverty does not stem
from technological or other “objective” causes such as low productivity.
Rather, it stems from special interests carving out privileges to
extract income without any technologically necessary cost of production,
but simply by ownership of “tollbooths”: land, mineral rights, or basic
monopolies and banks privileged to create credit.
Poverty and austerity are the result of special interests
monopolizing the economic surplus at the expense of the economy at
large. The main rentiers falling into this category are the financial
class, landowners and natural resource owners at the top of the economic
pyramid. It is to them that the bottom 90% are indebted and must pay
interest, rent, user fees and other access charges. Rent seeking is an
economically unnecessary burden – and one from which the classical
economists sought to free society. The idea of a “free market” from the
Physiocrats and Adam Smith down through John Stuart Mill and the 19th
century socialists was to free industrial capitalism from the rentier
class that itself was a carry-over from Europe’s feudal epoch.
However, today’s neoliberal advisors turn this classical idea of free
markets upside down. Their idea of “free” markets is one free of
government price regulation, “free” of taxation on land rent, monopoly
rent, financial interest and other categories of what the classical
economists called “unearned income.” So we find ourselves with two quite
different ideas of the economy. The classical idea was to grow by
avoiding “artificial poverty,” purely extractive forms of wealth-seeking
at society’s expense.
The neoliberal idea is to dismantle the government’s ability to
regulate markets to steer growth and economic advance in the national
interest. They claim that this is an alternative to centralized
planning. But the reality is that it simply centralizes planning in the
hands of bankers – primarily those of Wall Street and the City of
London, followed by financial interests in satellite economies and other
subordinate partners in this policy.
Neoliberal economists endorse this as being the “natural” way in
which economies grow and accumulate wealth. Their concept of “wealth” in
this case takes the form of financial riches and special privileges,
not the means of production, education and skills, or research and
technology. In this respect, “bad” forms of wealth-seeking have become
the major threat to national economic growth and power today. This in
turn results from a failure to draw the classical economic distinctions
between productive and unproductive investment.
I suggest to focus on public tax policy and infrastructure investment
to steer wealth to expand national output and living standards, because
this is the line of least resistance in overcoming poverty and economic
polarization spurred by bad taxes – not by taxes as such, but by
dysfunctional taxes favoring special interests at the expense of the
economy at large.
In Western textbooks the wealthy are supposed to earn income and grow
rich by investing in economic growth. Corporate profits are re-invested
in new plant and equipment, to raise productivity. Credit is supposed
to finance investment that will generate enough new income to pay off
loans with interest, leaving a profit for the entrepreneur or other
Since the 19th century, industrialists have justified their personal
wealth by claiming to use it to invest in building up the economy’s
stock of capital, employing more labor in the process – and of courses,
donating to charity, especially to universities and policy “think tanks”
these days. The business schools and lobbying tanks that they endow
depict them as wise managers of companies run by industrial engineers.
But this is not what happens in reality. It is easier to make money by
predatory means. That is how the great American fortunes were made, by
the railroad land barons, and by Wall Street railroad and stock market
manipulators. Heavy industry was turned into trusts that fought against
labor unionization, against the drive for safer and better working
conditions, and to raise prices without regard for costs.
The vested interests broke away from classical political economy’s
value system that underlay this takeoff. The break was mainly over the
claim that all wealth is “earned.” There’s no recognition of unearned
wealth achieved at other peoples’ expense. This “value-free” doctrine
rejects not only Marx, but also Adam Smith, John Stuart Mill and other
classical economists. Every way of getting rich is now deemed to be
“productive,” in proportion to the wealth it creates at the top of the
economic pyramid. The neoliberal Chicago economist Milton Friedman went
so far as to claim that “There is no such thing as a free lunch.”
But even as he made this claim, the U.S. and European economies were
becoming more and more about how to get a free lunch. By the 1980s a new
form of economic polarization occurred. If industrialists were getting
rich by squeezing out more profits to invest in capital,
industrialization would have called for more employment, and also
higher-grade labor. Instead, wealth has concentrated at the top of the
economic pyramid by financial means, and by creating monopolies bought
and sold on credit – on terms where the gains are paid out as interest
and dividends. While industrial profits have shrunk, the financial
sector has increased its share of reported profits in the U.S. national
income and product accounts (NIPA) to 40%. This phenomenon has
gone hand in hand with de-industrialization of the U.S. economy – and
also those of the post-Soviet states, I should add.
Domestically, in each economy the bubble economy raised the price of
housing, forcing consumers to take on a lifetime of debt to afford it.
The rental income was turned into interest. Educational fees also were
imposed, financed by student loans. In the United States, these loans
cannot be wiped out via bankruptcy. Many students took on debt that will
take a number of decades to pay off – without regard for their ability
to earn income as unemployment levels rise.
The financial sector also funded the takeover of companies. Raiders
used corporate cash flow (ebitda: earnings before interest, taxes,
depreciation and amortization) to pay their bankers and bondholders, and
simply to buy up their own stock in an effort to increase its price –
and hence, the value of their own stock options. Industrial companies
were run by Chief Financial Officers, not by industrial engineers or
even salesmen. The aim was not to make the economy richer, but to make
themselves wealthier – not by new direct investment, but by
disinvesting, downsizing and outsourcing, and in the end by asset
This was the mentality of the neoliberals who came to “help” Russia
during the 1990s. They did not come to exploit your labor by hiring it
and squeezing out surplus value. They didn’t want much to do with your
labor at all. They wanted your raw materials resources on the cheap.
They wanted to help your leading scientists and industrial engineers to
emigrate to America, because the United States was producing mainly
financial graduates, not technology-oriented graduates. And they wanted
your flight of capital as well as skilled labor.
The financial polarization process went hand in hand with fiscal
polarization. From the 1980s onward in the US, the tax burden was
shifted off the higher wealth brackets and onto employees – onto the
middle classes and indeed, the bottom 80% of the population. Taxes on
real estate and financial gains were slashed to only a fraction of
income taxes (if such gains were taxed at all). Meanwhile, public social
spending on Social Security, Medicare and other programs were treated
as “user fees” and financialized – paid for in advance by employees (up
to a $102,000 cut-off point), providing the government with enough
revenue to cut taxes on wealth. The result was that the tax system
became regressive instead of progressive.
... from "Policy Conclusions for Russia (Part 2)"
The most obvious caused poverty is by debt. And the largest category
of personal debt in today’s world is mortgage debt to obtain a family
home of one’s own. The price of homes rises when taxes are lowered (or
shifted off property and onto employees), because more rental value is
left for new buyers to pledge to banks for loans to buy the property on
credit. From America to much of Europe, families have to take on a
lifetime of debt in order to obtain housing of their own. The winning
bidder for property is whoever pays the most of the site’s rental value
as interest. So the banks end up with the rent. This is why the
financial sector has grown so rich, and also why debtors have so little
money remaining to spend on goods and services. So markets shrink and
economies fall into recession.
The second problem impoverishing labor from North America to Europe
is the tax shift off wealth (especially off finance, real estate and
monopolies) onto employees and consumers.
These two problems can be solved simultaneously by following what
classical economists recommended: basing the tax system on “free lunch”
income: land rent and monopoly rent, while keeping as many natural
monopolies as possible in the public domain to provide services at
subsidized rates or freely (as in the case of roads, water, etc.).
It may seem counter-intuitive to say that rising real estate taxes
will lower housing prices, but it is easy to explain. A major reason why
real estate prices have soared is the fact that the tax collector has
relinquished its tax obligation. The high point of land taxation in
England, for example, was in the Domesday Book
ordered by William the Conqueror. The idea was that land ownership
would be the tax base. Increasingly, landlords fought back to “free”
themselves of this tax. These efforts forced governments to tax sales
and income of labor and industry. The result was that lower property
taxes “freed” land rent to be pledged to the banks for mortgages, while
shifting the tax burden onto the production-and-consumption economy.
This tax shift had a major negative impact on the national interest.
Taxing the land and monopolies leaves less to be pledged for bank loans,
and hence keeps down the price of housing, office building and other
debt-financed rent-yielding assets. But taxing labor and industry (via
sales taxes, income taxes, etc.) raises the cost of living and doing
business. So this tax shift makes economies less competitive
business economists of the late 19th century explained that the nation
could become more competitive by treating public infrastructure
investment as a “fourth factor of production” alongside labor, capital
and land (Simon Patten’s words). Its “return” did not take the form of
income (wages, profits or rent), but rather the degree to which it would
lower the national price structure.
By contrast, privatization in a financialized manner adds on
pseudo-costs. These technologically unnecessary charges are headed by
the credit borrowed to buy the asset from the government, high payments
to management, and most of all, stock options and capital gains. In
effect, privatizers install “toll booths” across the economy to extract
Digging through primary sources can provide some great thrills. I stumbled onto this article about The Landlords' Game in the Autumn, 1902, number of The Single Tax Review (then a 64-page quarterly, later more frequent) . It was the Landlord's' Game which was later revised to create the board game Monopoly. As I've written earlier here, the Landlords' Game (probably in later editions than what is referred to here) came with 2 sets of rules, one which would create widespread prosperity, and the other which would create a winner-take-all situation.
Magie's comments are quite relevant to understanding the game of Monopoly, too:
from The Single Tax Review, Autumn, 1902
THE LANDLORDS' GAME.
AN INTERESTING INVENTION OF A YOUNG LADY IN WASHINGTON BY WHICH CHILDREN AT THEIR PLAY MAY BE TAUGHT THE TRUE LAWS OF ECONOMICS. Miss Lizzie J. Magie, a single taxer of Washington, D. C has invented an ingenious game, played with checkers and dice as is parcheesi, and thus describes it for the Review:
"It is a practical demonstration of the present system of land-grabbing with all its usual outcomes and consequences," says Miss Magie. " It might well have been called the 'Game of Life,' as it contains all the elements of success and failure in the real world, and the object is the same as the human race in general seem to have, i. e., the accumulation of wealth. Representative money, deeds, mortgages, notes and charters are used in the game; lots are bought and sold; rents are collected; money is borrowed (either from the bank or from individuals), and interest and taxes are paid. The railroad is also represented, and those who make use of it are obliged to pay their fare, unless they are fortunate enough to possess a pass, which, in the game, means throwing a double. There are two franchises: the water and the lighting; and the first player whose throw brings him upon one of these receives a charter giving him the privilege of taxing all others who must use his light and water.
"There are two tracts of land on the board that are held out of use—are neither for rent nor for sale—and on each of these appear the forbidding sign: 'No Trespassing. Go to Jail.' One of these tracts of land (the largest on the board) is owned by Lord Blueblood, of London, England, and represents foreign ownership of American soil. A jail is provided for any one who trespasses upon this land, and there the unfortunate individual must linger until he serves out his time or pays the required fine. 'Serving out his time' means waiting until he throws a double.
"Before the game begins, each player is provided with a certain amount of cash, sufficient to pay all necessary expenses until he is well enough along in life to earn his living. Should any one be so unlucky, or so reckless and extravagant, as to become 'broke,' there is a nice little poor house off in one corner where he may tarry until he makes a lucky throw or until some friend takes pity on him and lends him enough to set him on his feet again. And here is where he generally gets 'soaked,' for the other players, taking advantage of the unfortunate one's necessities, demand an enormous rate of interest which the impecunious individual must pay before he can complete his round and get his wages.
"The rallying and chaffing of the others when one player finds himself an inmate of the jail, and the expressions of mock sympathy and condolence when one is obliged to betake himself to the poor house, make a large part of the fun and merriment of the game.
"Each time around the board represents so much labor performed, for which so much wages are paid. When a player has been the rounds ten times he retires from his labors, although he still remains in the game, which is not finished until the last player has made his tenth round. It takes forty moves to make a round and there is in each round one little black-bordered spot marked 'Legacy,' and whenever a player stops on this he receives a cash legacy. In each round there are three spots marked 'Luxury,' and these the player may indulge in or not, according to his inclinations or finances, but each luxury purchased counts the player so much more at the end of the game.
"General directions for playing the game accompany this description, but it is difficult to make a set of rules that will cover all contingencies since no two games are alike. The combination of circumstances are so many that almost every time the game is played new situations are brought out. Thus it is a game that is always interesting—never monotonous. It was the original intention of the author simply to work out a demonstration of how the landlord gets his money and keeps it, but while doing this there gradually developed a game which has proven one of amusement as well as of instruction and one which has attractions for both old and young.
"Children of nine or ten years and who possess average intelligence can easily understand the game and they get a good deal of hearty enjoyment out of it. They like to handle the make-believe money, deeds, etc., and the little landlords take a general delight in demanding the payment of their rent. They learn that the quickest way to accumulate wealth and gain power is to get all the land they can in the best localities and hold on to it. There are those who argue that it may be a dangerous thing to teach children how they may thus get the advantage of their fellows, but let me tell you there are no fairer-minded beings in the world than our own little American children. Watch them in their play and see how quick they are, should any one of their number attempt to cheat or take undue advantage of another, to cry, 'No fair!' And who has not heard almost every little girl say, 'I won't play if you don't play fair.' Let the children once see clearly the gross injustice of our present land system and when they grow up, if they are allowed to develop naturally, the evil will soon be remedied."
To read more about The Landlord's Game, explore the two "Monopoly and the Landlord's Game" tags in the cloud (I can't seem to meld them into a single one!) It is quite an interesting story.
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.
"There is nothing to fear," says the complacent Robert Collyer, "from the multimillionaire." The reason for Mr. Collyer's confidence is his assumption that "few fortunes survive three generations." This assumption is a pleasant tradition, formerly phrased as "three generations from shirt sleeves to shirt sleeves;" but it has long since ceased to express a fact, since John Jacob Astor showed Americans how to establish fortunes they have become as stable in America as in England.
But even if the tradition were as true today as it was in the earlier periods of the settlement of this new country, what satisfaction could a thoughtful man draw from it?
The social evil is not great fortunes. It is great poverty among those who earn so much wealth that they do not get.
To them it can make no difference whether fortunes are stable or not.
The great, obtrusive, undeniable and invariable fact is that no matter who may be rich nor how long his fortune may remain intact, the mass of those who do the work of the world, and without whose work there would be fortunes for nobody, are permanently poor and dependent.
To borrow a suggestive illustration from the gambling table, what matters it to the many who never win if the few who do soon lose their winnings again?
I stumbled across this document in a little book which runs to 24 pages, from 1887. Those with an interest in Alabama history, particularly as it relates to taxation, might find that it helps explain how the 1903 constitution came about -- whose interests it sought to protect. Consider it, too, in light of our current economic situation -- too few jobs, lots of income and wealth concentration; not enough credit available to afford housing or commercial sites. These problems can be solved, but not in the ways we've already tried.
The Case Plainly Stated By H. F. RING
PREFATORY NOTE -- This address originally was delivered to the United Labor Organization of Houston, Texas, in 1887. It appeared in full the next morning in the Houston Daily Post, and afterwards in The Standard, published at that time in New York by Henry George. Mr. George then issued it in tract form, giving it the name of "The Case Plainly Stated." Many editions of it have since been published from time to time in this country and in Europe and Australia, and it is generally regarded as one of the clearest brief statements extant of the philosophy of land value taxation as taught by Henry George in his famous "Progress and Poverty."
MR. CHAIRMAN:— The land question is simply a question as to how the use of the bounties of nature shall be best regulated and controlled. By bounties of nature I mean the coal beds, the mineral deposits, the land — all those natural elements which were not created by human industry, but which Nature has freely and abundantly provided for the use and enjoyment of all the children of men; and I propose to show how the right of capital and. labor to use these natural elements should be regulated by the government*, so as most to conduce to the happiness and well-being of mankind.
* The word "government" as used in this presentation of the Single Tax refers to the tax levying power as vested, not alone in the federal, but also and even primarily in the state, county, and municipal governments. It is probable that a complete application of the Single Tax will be reached through its gradual adoption at first in cities, counties and states, before it is substituted for tariff and internal revenue taxation.
I am a Single Taxer, and a discussion of the land question by me can be nothing more than a mere attempt to expound the teachings of that great master of the subject, Henry George.
George, at the outset, calls attention to the marvelous improvements in the arts and sciences, the discoveries, inventions, and labor-saving machines which, within the past 100 years, have so immensely increased the productive powers of the human race. Is it not a moderate estimate to assume that on an average the labor of one man today, with all these labor-saving inventions, will produce as much of the comforts and luxuries of life as the labors of four men would a hundred years ago? And does it not follow that the average workman of today creates, by each day's labor, four times as much wealth as the average workman did a hundred years ago? George teaches that if the workman of today, on an average, creates four times as much wealth as the workman of a hundred years ago, then the services of this workman of today are four times as valuable to society; then why should not his wages of right be four times as great? Why should he not be four times as independent? Why should it not be four times as easy for him to make a living and support his family in comfort and decency?
Will any one presume to assert that this is in fact the case? On the contrary, is it not just about as hard for the poor man to make a living today as it ever was? Does he not dread the loss of a position today just as much as he ever did? George asserts that labor-saving machinery really ought to lessen the burdens of labor, to make it easier for the laborer to live, and in fact, to lighten his toil. But alas, from some apparently mysterious cause, — a cause which many comfortably well-to-do people insist is one of the unfathomable mysteries of Divine Providence, — what George claims should rightly result from inventions does not result from them. And still we are all the time making new discoveries, and year by year increasing, by means of new inventions, the productive powers of working men; yet, with the increase of population, the lot of those who produce all this wealth seems to be becoming more precarious, less independent and more and more wretched.
Who denies that under the present social system, wages tend to fall irresistibly to the point at which the wage-workers can barely subsist? This is called the iron law of wages, and all the strikes conceivable can only temporarily, and but fitfully, arrest this steady tendency. For so long as unemployed men compete for employment against the employed, wages cannot permanently advance. The worker may create quadruple the wealth, but he is not permitted to retain any more of it as his share.
WHO GETS THE WEALTH?
Now, where does this wealth go — this wealth which we now produce so much more easily and in such vastly greater quantities than ever before? What becomes of it? Who gets it? Why is it that in this age of wealth-producing and labor-saving machinery, poverty as abject and hideous as ever before seen in the history of the world abounds and increases in our midst? What is the cause of the so-called iron law of wages? Henry George has discovered it. He has pointed it out, and he has shown us the remedy. He has demonstrated beyond a doubt or question that it does not result as a fatal necessity from the nature of things, but that it is a result of violation of natural law, of a refusal on the part of society to recognize the inalienable right of every citizen of access to the bounties of nature within the territory of his country on equal terms with every other citizen of that country.
Let me now give you a short lesson in the elements of this new political economy.
Three factors enter into the creation of every conceivable kind of wealth. By wealth we mean any material thing produced by human industry which gratifies human desires. These factors are land, labor and capital. Wealth in a civilized community is produced only by means of a union or partnership between land, labor and capital. Labor does the work, capital loans the tools, and land furnishes the natural elements on which, and out of which all material things resulting from human industry are created. In speaking of land in the new political economy we never include improvements or anything which is the result of human toil. We simply mean the opportunities which land and the elements within it afford for the employment of capital and labor — we mean the raw elements as they lie on or in the bosom of the eartli, untouched by the hand of man.
Now, as before remarked, the product of land, labor and capital is wealth, and after it is produced, it is divided among these factors entering into its composition. A certain portion of it, called rent, goes to land, either directly in the form of rent or in the form of interest on the selling price of the land or of the coal bed, or whatever it is; another portion of it, called profit or interest, goes to capital for the use of tools which capital has furnished, and the balance left, after land has been paid rent and capital has been paid interest or profits, goes to labor as wages for the work which labor has done, including the labor of superintendence.
MEANING OF RENT.
Now what does rent signify as used here? Rent is the price paid for the privilege of access to the raw material — for the mere privilege of getting hold of something not created by man, on which and out of which labor and capital can produce wealth. This rent may be paid periodically, or may be paid in a lump in the form of purchase money. In either case the result will be the same. Is it not clear that in the division of wealth after it has been produced by this partnership between land, labor and capital, the more land gets for rent the less there will be left for capital and labor? Is it not quite as plain as A B C that the more it costs capital and labor to get hold of these natural elements, the coal beds, the mines, the water fronts, the land — the gifts of nature which a kind providence has provided for the equal use and enjoyment of all — the less there will be for labor and capital to divide between them?
In the new political economy we must never confuse land with capital. One is never the synonym of the other. Land, as before stated, is simply the natural opportunity, exclusive of improvements or anything done to it by man. Capital is something that has been made by man, like a machine for instance, which is useful in the production of wealth. It is wealth used to produce more wealth.
LABOR AND CAPITAL PARTNERS.
But someone asks: Suppose the capitalist who is using the coal bed or using this natural opportunity, whatever it may be, is also owner of it. Where then does your partnership between land, labor and capital come in? We answer just the same as before. A sum equal to the interest on the market value of the coal bed (independent of the machinery, excavation work, etc.) is in such cases a factor of rent. The owner, in addition to profit or interest on his capital, as before defined, must also take from the wealth produced a sum equal, approximately, to interest on the market value of the coal land, otherwise he would sell out and quit. It is evident that the more money the owner is obliged to invest in purchasing the coal bed, for instance, the greater must be the sum which he takes out of the wealth produced to cover interest on that investment, and hence such interest money is simply rent paid for the use of a natural element, for the privilege of access to one of the bounties of nature. Therefore, is it not equally plain in this case that the more paid for this privilege of use, the less will remain out of which labor can get wages?
A few years ago we read in the newspapers of a great boom in the vicinity of Birmingham, Alabama. We were exultingly told that the lands containing coal beds and mineral deposits in northern Alabama had gone up in value from $75,000 to $50,000,000 in the space of six years. What does this signify? It means that when capital and labor shall attempt to utilize these coal beds and mineral deposits, when capital and labor shall unite together, the one to furnish the tools, the other the labor, with which to produce wealth out of this raw material, then will a set of landlords step forward and block the enterprise with a demand for $50,000,000 for the mere right of access to these free gifts of nature, or in lieu of it the payment of $3,000,000 a year as tribute money, that being the interest of $50,000,000 at six per cent.
There lie the coal beds and mineral deposits untouched by man, fresh from the hands of the Creator, intended by Him, if He is the just, benevolent Being whom we have been taught to worship, for the equal use and enjoyment of all His children, and yet our laws say that capital and labor must pay a few forestallers $3,000,000 a year for the privilege of applying the hand of industry to these elements.
And after this blackmail has been paid, how much will there be left for the wages of labor? The answer is, just as little as labor can ordinarily subsist upon. Why? Because this monopolization of the gifts of nature going on, not only in northern Alabama, but everywhere else, enables capital to drive a hard bargain with labor. For this reason, and this alone, they can't deal with each other on equal vantage grounds. Suppose labor objects and says to capital: "I'll not accept the pittance you offer." Capital replies: "All right, go elsewhere." And so labor starts out to get work for himself, and what does he find? Here he is, living in a country capable of raising food for ten times its present population, and he finds four-fifths of the land untilled or but partially cultivated. He finds four-fifths of the coal beds and mineral deposits unused. He finds vacant land and unused lots on every side. He goes to New York City even and he finds there within its corporate limits almost one-third the area of that city vacant, unoccupied, and unused, although there are miles and miles of tenement houses, in which men and women and innocent children are packed and crowded like maggots, as though there wasn't ample room in the city for the comfortable housing of every human being in it. He finds unused natural elements all around him wherever he goes, sufficient to give employment and support in abundance to tens of millions of happy families.
But now suppose labor attempts to make use of any of these unused natural opportunities? Suppose he concludes to go to work for himself upon a piece of vacant land in the suburbs of a city, for instance, where labor could be applied to the greatest advantage. What happens? An individual comes along and waves a title deed, and orders him off the premises. He finds that all these unused natural opportunities are owned by individuals and claimed as private property. He finds himself frustrated at every point. He finds that he can't go to work anywhere without paying blackmail to the owner of some natural element for the mere privilege of working and so he strikes back to northern Alabama and takes off his hat to Capital and bows very low and says: 'Please, sir, give me a bare living and I will be your slave."
And that is about all that he does get, and that is all he ever will get under the present system of land ownership, though you may strike and boycott and potter about graduated land taxes, graduated income taxes, and graduated nonsense until doomsday.
THE GREAT PARASITE.
With advancing population the greater becomes the demand for natural opportunities and the higher the prices which can be extorted for the privilege of using them. As population increases, the town lots, the coal beds, the mineral deposits, the water fronts, the land, go up in value, and so goes up also the amount of tribute money which labor must pay for access to them, for the privilege of employment. The more of the products of industry which go for the payment of this constantly increasing tribute, the less and less will grow the share allowed the laborer and the more dependent and the more wretched will his lot become.
Here in Houston today, suppose Enterprise has $50,000 to invest in the paper mill business, a sum barely sufficient to put up the building, buy the machinery and carry stock. He finds a beautiful site for his mill on the banks of the bayou. It is a vacant lot. The hand of man has never been applied to it, and it stands there now just as it stood when the Indian roamed over the site of this city. The owner of that block, however, thinks he can make Enterprise pay him $20,000 for the privilege of giving employment to labor on this natural opportunity — this piece of ground. That is the price, and if he can't get it today he will get it when the city grows a little larger. But Enterprise says to him: "I have only $50,000 capital, all of which I shall need in my business." The land owner answers it is not his lookout, and so Enterprise turns away checkened and baffled, and the mill is not built.
CAUSE OF DULL TIMES.
And so it is everywhere. Wherever we find a portion of the vacant surface of the earth which could be utilized by capital and labor, and which affords an opportunity for human toil and enterprise, there we find a human vampire with a paper title in his hand warning off labor; and that vampire must always be placated by the payment of blackmail before the wheels of industry can begin to turn.
Need we wonder that these wheels turn slowly, and that they are always getting out of gear; that we are always talking about dull times; that men are always out of employment and always hunting for work, regarding it as a favor even to be allowed to work; that we are all the time growing too much cotton, when millions of human beings have only one shirt to their names; that we are producing too much food, when half the population of the world is insufficiently fed; that carpenters are out of work, when half the people are not comfortably housed; shoemakers wanting work and millions needing shoes? How could it be otherwise, when labor is compelled to beg for work in the midst of limitless unused opportunities for work, on which opportunities, however, sit these human vampires, these dogs in the manger, waving labor back with their paper title deeds?
Now let us go back for a moment to that partnership between land, labor and capital. For illustration, suppose the wealth produced by the partnership to be created by the application of capital and labor to those coal beds and mineral deposits in northern Alabama, valued, as we have seen, at $50,000,000. In the division of wealth produced we have shown how, say six percent of this $50,000,000, or $3,000,000, must go to land as rent. Or, in other words, $3,000,000 a year must be paid to land owners directly as rent or interest on purchase money for the bare privilege of utilizing these gifts of nature. Now, in the division of wealth produced, why is labor entitled to any portion of it? Clearly because labor's industry has contributed to its creation. Why is capital entitled to any part of it? Because capital has furnished labor with tools with which to develop the mineral deposits. The capitalist who owns the tools can trace his title back to the creator of them, to some individual or set of individuals whose industry produced them and from whom he purchased or inherited them. The title, then, of both labor and capital to a portion of the wealth produced from these mineral deposits originates in human industry, and it is a sacred title. Now then, why should the land owner get any portion of this wealth, to produce which capital has supplied the tools and labor has done the work? This owner claims the right of making capital and labor pay him interest on $50,000,000, or $3,000,000 a year, for the mere privilege of access to this raw coal and raw ore. Ought we not to scrutinize most carefully his right to extort this immense tribute? And if he can show no natural and moral right to claim it, does not society countenance the robbery of labor in permitting him to do so? Where does his title originate?
We find that six or seven years ago he paid someone who claimed to own the land in which these mineral deposits are found $750,000 for the raw natural element for which he now demands $50,000,000. Was this additional value of $49,250,000 in six years produced by his industry? Was it produced by the industry of any previous owner of these natural elements? Did it cost $49,250,000 to discover these mineral deposits? We trace back his title a little further, and we find that perhaps a hundred years ago it originated in a grant to John Jones from the government — that is to say, the people who inhabited this country a hundred years ago and who constituted the government said: "We will divide the land and we will give John Jones this particular tract for his private property."
But did these people create that land and the coal and iron in it? Can it be shown that they had any better right to it from the Almighty Creator than the people of this generation have? Was the earth intended by the Heavenly Father for one generation to dispose of forever, or as an abiding place for all generations? Was Thomas Jefferson right or wrong when he wrote: "The earth belongs in usufruct to the living; the dead have no right or power over it?" By what authority could the people living here a hundred years ago, long since dead and gone, confer upon John Jones, also dead and gone, a right which would enable John Smith today, by tracing a paper chain of titles from him, to extort from capital and labor a tribute of $3,000,000 a year for the bare privilege of getting to that coal and iron and making it useful to mankind?
Who dares to blaspheme the name of the Almighty Ruler of the universe by saying that the coal and iron were not intended by Him for the equal use and the enjoyment of all His children — the humblest babe born today in a garret equally with a child of the proudest duke who ever lived?
MAN IS A LAND ANIMAL.
Is not man a land animal? Can he live without land? Can he any more rightfully be deprived of access to land than he can rightfully be deprived of life itself? Can he any more rightfully be compelled to yield up to a forestaller, a mere owner of land, a portion of the fruit of his industry for the privilege of getting hold of the raw material elements than he can rightfully be compelled as a slave to yield up to a master a portion of the fruits of his industry? To compel him to do so is as much a robbery of labor in one case as in the other. Why then is not the humblest babe that God sends into this world naturally and by inalienable right entitled to access to land on equal terms with all his fellow human beings?
ORIGIN OF PROPERTY RIGHT.
Mind, when we say access to land we do not include access to improvements on land, or access to anything produced by human industry, a title to which can be shown originating in human toil; we simply mean access upon equal terms to the free bounties of nature as they lie upon the kind bosom of mother earth, untouched and undisturbed by the hand of man. What I produce by my industry is mine. What I obtain by exchanging the products of my industry for the products of another's industry is mine. What my father or my grandfather produced by his industry was his, and if he has given it to me it is mine.
In all these cases human industry is the origin of property right, and property rights originating in human industry must be held sacred, else there would be no incentive to human effort. Do not the values produced by the individual belong to the individual producing them? Do not the values produced by the community belong to the community producing them? Is there anything wrong, immoral or communistic in this ideal? And yet this is the sum and substance of the Henry George philosophy.
Take the case of the vacant block on the bank of the bayou which Enterprise wanted for a paper mill and could not get. Fifty years ago it was worthless. Now labor must pay a tribute of over $20,000 to the so-called owner for the privilege of using it. Whose industry has put $20,000 of value on that piece of vacant ground? Not the industry of the present owner, nor the industry of any former owner, because no man has ever done a stroke of work upon it. That value of $20,000 has been placed upon the land by the common energy and enterprise of the entire community. Since the community has produced that land value why does it not belong to the community? Why has not the community the same rights to the value it creates as the individual has to the values which he individually creates?
How shall this derangement of the wheels of industry, this blackmail upon enterprise, this robbery of labor, this eager and fatal competition among laborers for employment, this slavish fear of the loss of a situation in the midst of abundant unused opportunities for employment — how shall this curse which our present land system has fastened upon the productive industry of the country, be removed? Simply by doing justice; by being honest; by recognizing in our laws one of the inalienable rights of man; by recognizing in every human being, in every generation, the present as well as the past, an inalienable right of access to the bounties of nature on equal terms with every other human being.
How shall this right of access on equal terms be secured? Simply by making every individual who claims a right to the exclusive possession of a tract of land pay in the form of a tax approximately what the use of that tract of land is worth, exclusive of all improvements on it or anything done to it by the hand of man, and by abolishing every other form of taxation. Take the rent of land for public use instead of taxes.
WILL SIMPLIFY GOVERNMENT.
Some one asks: "Will not this proposed change vastly increase the functions of government and immensely add to the number of government employees?" I reply no. On the contrary, at least two-thirds of the present army of revenue collectors and tax gatherers will be dispensed with, and the remaining one-third will collect this single tax on land values at one-third the expense now incurred in the collection of national, state, county, and municipal taxes.
Another inquirer asks: "Will not the new system offer abundant opportunities for corruption and partiality in fixing the amount of this tax annually to be paid for the exclusive use of a piece of land? And how do you propose the amount of the tax shall be determined?" It will be determined by the same law of demand and supply which now determines the amount of tax under the present system. The single tax will be fixed by the same machinery of an assessor and a board of equalization which fixes it now. For instance, under this system a piece of property on Main street rents for $5,000 a year. Interest at the prevailing rate on the building alone, added to the annual cost of insurance, repairs and caretaking, and a sum sufficient to provide a sinking fund for renewals amounted to, say $3,000 a year. The landlord is then collecting the difference between $3,000 and $5,000, or $3,000 for the use of this naked earth. That is to say, he is collecting $2,000 a year for the use of something never created by man, to which all are by natural right equally entitled, and which owes its rental value of $2,000 a year exclusively to the common enterprise and energy of the entire community.
This is the sum which, under Henry George's system, would be turned over to the government in the form of a tax for the common benefit of the community who collectively have made the use of this land worth $2,000 a year.
Here an interested friend anxiously inquires: "But if the landlord has to pay this tax of $2,000 a year for the use of the land, will he not take it out of the tenant by raising his rent to $7,000?" No, for the landlord's charges now all he can compel the tenant to pay. Suppose he tries to. Suppose he says to his tenant: "You must now pay me $7,000 a year." What happens? Just what happens every day now. If the tenant can do no better he pays the increase. But now, mark you, when the landlord goes to pay his tax what happens then? Why the board of equalization says to him, you have received $7,000 a year rent for the use of improvements worth only $3,000 a year. You are therefore collecting $4,000 a year instead of $2,000 for the use of the naked lot, and you will therefore pay the city or state $4,000 a year for the privilege of the exclusive use of the ground instead of $2,000 a year as heretofore. Now what has the landlord made by jumping up the rent? Nothing. What would be made by thus jumping up the rents under the present system? Everything. Under which system would landlords be more apt to force up rents?
DETERMINING THE TAX.
Another way by which the board of equalization under the George system would determine the amount of tax to be paid for the privilege of the exclusive possession of a tract of land, and which would also compel landlords to collect from their tenants and turn over to the government in the form of a tax the full value of the use of the land, would be from observation of the prices which real estate brought in the market. But note, at this point some smart fellow jumps up — and he is likely enough to be a newspaper editor — and vehemently protests, saying: "Why, sir, the taxation of ground values plan does not propose to allow any exclusive ownership of land. It demands that the government own it all and rent it out or divide it up into 60,000,000 or 70,000,000 little bits, or do something of that kind with it, and here you are talking about lands being bought and sold under the Henry George system. Why, man alive, you don't know what that system is!"
Now, Mr. Editor, or Mr. Who-ever-you-are, let me say to you that in your ignorance, or in your indifference to the sufferings of your fellowmen, or in your desire to pander to the greed of monopoly, or to the timidity of capital, you may say what you please; you may misrepresent as much as you please for the purpose of bringing odium and contempt upon the cause; you may call it what you please — state ownership, state landlordism, ownership in common, communism, nihilism, anarchism or anything else; but the fact, nevertheless, remains that, under the just and righteous land system which we are trying to explain, the land will continue to be bought and sold under the same form of paper deeds, precisely as it is bought and sold today. It will continue in precisely the same way to pass to devisees by will and to heirs by law of descent and distribution. The right of control, of exclusive possession and dominion over a piece of land and of the free and exclusive enjoyment of all improvements on it, will in no way be abridged or disturbed. When you buy a lot on Main street today worth $10,000 with a building on it worth $10,000 more, your deed recites a consideration of $20,000. Now when you buy this same property under the George system, the only difference in the whole transaction will be that your deed for it — assuming that the price accords with the market value prevailing at the time of your purchase — will recite a consideration of only $10,000, and $10,000 is all that you will then pay for the property. You will pay nothing for the land. After you have bought the property you will pay yearly in the form of a tax to the government, approximately the full market value of the (yearly) use of it — which will amount to the annual rental value of the land, and as the man from whom you purchased had to pay the government the same annual rental value, you will consequently pay nothing, or approximately nothing*, to him for the land itself when you purchase the property. You thus save an investment of $10,000 in dirt; instead of such investment you will pay for the common benefit of the community, including yourself, what the privilege of the exclusive use of that spot of earth is worth — nothing more, nothing less — and that is simply what you ought to pay. The $10,000, which, under the present system, you are compelled to bury in a bit of earth, you will have left you with which to increase your business; and if you do increase your business with it, and add another story to your building, no tax gatherer will come around and impose an additional fine upon you for doing something with your money which gives employment to labor.
* There will, no doubt, be instances where the desire of an individual to get and retain possession of a certain piece of property, will cause him tooffer a bonus over and above the market value of the improvements.
NO PROPERTY IN LAND.
Thus, under the single tax system, land would be sold and would change hands as it does now, but it would only bring in the market approximately the value of the improvements on it. If land in any locality should get to selling for considerably more than the value of the improvements on it, this would be a certain indication that the parties using the natural elements in that neighborhood were not paying for the benefit of all the people what the use of the same was worth, and so a board of equalization would put the tax up. As population increases the value of the use of land increases, and with it, under the George system, the revenue from this tax on land values will increase, and thus the entire people who collectively produce this increasing value will get the benefit of the values collectively produced by them. As it is now, the increase in the value of land, which amounts to several billions annually in the United States, four-fifths of which is increase in the value of city and town lots and mineral deposits, goes to a comparatively small number of individuals who do no more to produce these values than any other members of the community.
Another doubter puts this objection: Under the George system you would make the owner of a lot on Main street, with an improvement on it worth $10,000, pay as much tax as the owner of a similar lot adjoining, having a building on it worth $50,000. What justice is there in that?
Let us see. Take away the improvements and these two lots are of the same value — that is to say, the value of the use of both lots for ordinary business purposes is the same. Suppose it is $300 a year. Now, the man with the $50,000 improvement collects from his tenant ten percent on his $50,000, or $5,000. He also collects $300, the value of the use of the lot, making in all $5,300. The man with the $10,000 improvement also collects ten percent upon the valuation of his improvement from his tenant, of $1,000. He, too, collects $300 in addition for the use of the lot, making in all $1,300. Now after both have paid the government $300 apiece for the privilege of the exclusive use of these lots, each will have left ten percent upon the capital invested, and why should one be entitled to any greater percent upon the capital invested than the other?
The fact is, that under this system there will be no such thing as taxes. Taxation, as we now understand it, will be abolished. The revenue derived by the government from requiring all who use a natural opportunity to pay into the common treasury what the use of that opportunity is worth, if it is worth anything at all, will be more than sufficient to enable the government to dispense with every species of taxation. As it is now, when you pay your taxes, you are simply robbed of a portion of the fruits of your industry, for which you do not get, directly, any equivalent. Under the proposed system, when you pay your single tax on land values you will get directly a full equivalent for every dollar paid. You will get the privilege of the exclusive use of a tract of land for what that privilege is worth.
ACCESS TO UNUSED LAND.
If this system were adopted what would become of the vacant lots and lands, the unused coal beds and mineral deposits, the unoccupied water fronts and water privileges over which human vampires now stand guard, retarding enterprise and driving off labor? They would become absolutely free. No one could afford to hold them and pay taxes on them. The vampires would turn them loose. Land speculators and land sharks, instead of trying to grow rich by forestalling labor and capital and thus preying like devouring beasts on their fellowmen, would turn their talents to better account. Wherever labor could find an unused lot or coal bed or mineral deposit or unused tract of land, there labor could go to work and employ itself without being required to invest a dollar in the purchase of a right of access to the natural element, without being compelled to first make terms with a dog in the manger claiming it as private property and holding it for speculative purposes.
If that vacant natural opportunity were situated near a center of population, or were of a character to bestow peculiar money-making advantages upon the persons using it, this advantage would create a demand for it, and this demand would regulate in the manner already pointed out the amount which labor and capital would pay for the use of it, in the form of a tax for the common benefit of all. If that vacant opportunity, for instance, were a tract of land four or five miles from this city, it would have few advantages to make the use of it at present peculiarly valuable. Why? Because there is so much vacant land of the same character near it, the use of which is equally valuable, that no one would give a bonus, as it were, for the use of that particular tract. Labor would, therefore, at first get the use of that land for nothing. It would have no taxable value at all until all the other vacant land similarly situated was put into use. Under this most just and equitable system the taxable values of land would be confined almost exclusively to the cities and towns and the coal and mineral deposits. Where people congregate, there land has value. In New York City alone, capital and labor today pay to a few thousand land owners, in ground rent alone, exclusive of rent paid on improvements, for the bare privilege of living and doing business, tribute money amounting to hundreds of millions annually, a sum almost equal to the expense of carrying on the government of the United States. It is in these great centers of trade and commerce that land has its greatest value; it is here that land values are mostly found and from these centers nine-tenths of the revenue of the government from this tax on land values would be derived.
FARMERS WOULD BE BENEFITED.
If the George plan were suddenly put in force today, not only would all farmers be relieved from direct and indirect taxation, not only would farmers participate in common with all others in the universal and uninterrupted prosperity which would result from removing the obstructions which needlessly hamper and clog enterprise, but probably three-fourths of the working farmers in this country would pay no land tax at all. Why? Because with so much vacant or but partially cultivated land as there is here today three-fourths of the farmers would have no taxable value at all; and all who are counting on the farmers of America being so foolish as not to see how they will be as much benefited by a just and righteous land system as any other class will certainly be disappointed.
EFFECT ON FARMS.
"Yes," says our farmer friend, "but you propose to confiscate the farmer's land." Let's see about that. You are a farmer owning say a hundred-acre farm, situated like a majority of farms, in a neighborhood where for every acre of land in cultivation there are two or more acres unimproved or but partially improved. Your farm is worth under the present system, say $2,000. A hundred acres of this unimproved land adjoining it of the same quality is held by some speculator at $500. Your tax on your hundred-acre farm is $10 a year, the speculator's tax on the hundred acres of land adjoining of equal value, exclusive of improvements, is $2.50 a year — one-fourth as much as yours. You give employment to labor on your land, and thereby add to the prosperity of the community. The speculator excludes labor from employment on his land, and thereby retards the prosperity of the community. Why should you be taxed any more for using your hundred-acre tract, and giving employment to labor on it, than the speculator is taxed for holding in idleness a tract of equal value and preventing labor from using it? Why should not the speculator pay at least as much tax for the privilege of excluding labor from his tract as you have to pay for the privilege of employing labor on yours? Have you hurt anyone by turning up the wild sod and building fences and houses and putting $1,500 worth of improvements on your land? If not, why should you be fined for it by having your taxes increased?
Where our plan is adopted you will have no taxes at all to pay until this vacant land around your farm is put into use. Until then no land value could attach to your farm, and the tax which, with increasing population, you would ultimately be required to pay, would seldom equal and rarely, if ever, exceed that which farmers now pay on the improvement valuation. Assuming that you spend say $600 a year on your family, then under the present system your taxes, direct and indirect, and the toll which the merchants take for collecting indirect taxes, amount to at least $100 a year. You may not know it, because an indirect tax always fools a fellow paying it. You will be relieved from all these taxes, but best of all, men who are now idle and who can't buy what you raise will all be at work, and not only that, but their wages will be high enough to pay good prices for what you raise. It is true that under the new system you could only sell your place for $1,500. Still, with this same $1,500 you could buy just as good a place from some one else. The purchasing power of your farm, when it comes to buying another farm, would not have been reduced. Do not your interests as producer or a laborer vastly exceed your interests as a land owner?
LANDLORDISM AND GOVERNMENT
Now, coming back to the elements of the new political economy, some one says: "What difference does it make to the workmen whether labor and capital pay this ground rent to the individual or to the government, since, according to your theory, it must be paid all the same?" In the first place, if it is paid to the individual none of it ever comes back to labor and capital unless value received is paid for it; so far as labor and capital are concerned, it might about as well be cast into the sea. But when it is paid to the government in the form of a tax on land values it does come back to labor and capital again in the form of relief from every species of taxation, direct and indirect.
Again, the amount that Enterprise would pay the government for the privilege of access to the natural elements would be less under the single tax than is now paid individuals for this privilege. Under the land value tax the prices could not be advanced by monopolization of these elements, as is being done now.
But best of all, and by far the most glorious result that will flow from the establishment of a just and righteous land system, is that it will enable the wealth creator to stand erect, presenting to capital an unterrified front.
Return for a moment to the coal beds of northern Alabama and imagine the Henry George system adopted. Labor now again objects to the terms offered by capital, and again capital tells him to go. And again labor goes forth hunting for work. But how different he finds the aspect of things. He finds the same unused natural elements, the same unused coal beds and mineral deposits, the vacant lots and lands, but he no longer finds a fellowman sitting upon every vacant opportunity for work and waving him off. They have vanished. They have gone to work themselves. He finds every unused opportunity for labor, wherever it may be, absolutely free. Not a dollar of capital need be invested in buying a natural opportunity, in paying for the privilege of work. When labor went forth hunting work before, he not only had to ask capital to pay for the tools, but also to pay, usually a greater sum, to some forestaller, in addition, as blackmail, for the privilege of access to a natural element.
This will all be changed. It won't take near as much capital to start enterprises as it did, or in other words, to give employment to labor. In fact, labor could then take even an axe and hoe and find plenty of vacant opportunities on which he could make a living without having to bury himself in a wilderness to do it. All this makes him feel independent and enables him to bargain with capital for employment on equal vantage grounds.
MONOPOLY IS PROFITABLE.
Some time since a large manufacturing firm in Massachusetts adopted the eight-hour system. After trying it a year they gave it up and went back to the ten-hour system. The general manager said they could only make five percent profit on their investments by requiring only eight hours' work, and that unless they could make a bigger percentage than that, they would not be bothered with the management of the business — they would put their money into town and city lots, because that species of property would certainly enhance in value as much as five percent annually, and that, too, without any trouble to the owner, and so it is everywhere. Now, is it not absurd to expect to reduce the rate of profits with which capital will be content below this steady percent of increase in the value of town and city lots, by any combination of labor, or by any legislation which falls short of restoring these land values to the people who collectively create them?
Suppose you have $10,000 today. The best and safest thing you can do with it is to invest it in town lots in or near some growing town. Ten years from today, unless the George theory becomes generally understood, the lots will be worth $20,000 and you will have drawn to yourself $10,000 worth of wealth for which you have given no equivalent. You will simply have robbed the labor of the country of $10,000. But now suppose ground values to be appropriated to the public use by taxation. What are you to do with your $10,000? You would not buy vacant lots now; there is no speculation in them. The tax which you would have to pay for the privilege of excluding capital and labor from the opportunities for employment which vacant lots afford, would be too heavy for you. In fact, you couldn't even loan on land alone, because land alone will have no selling value in the market. The result is, that unless you let your money lie idle and so lose interest on it, you will be compelled to invest it so as to give employment to labor. You must put it into buildings, into machinery, into manufactory stock, into farm implements, into some channel where it will be active and where it will afford employment to labor.
Not only must you do this with your capital, but every other capitalist must do the same with his capital. Capitalist thus must bid against capitalist, since capital can only increase by calling labor to its aid and giving it employment.
Under the present system the rich can grow richer without calling in the aid of labor, without giving employment to labor. They do so by buying space and monopolizing land.
Under the present system, as wealth accumulates, the wealthy seek to invest in land, to get control of natural elements, and get into a position from which to blackmail labor, thus becoming an obstacle in the way of the production of more wealth.
Under the better system, however, wealth could not thus be made to set up an obstacle to the creation of more wealth, or, in other words, to the employment of labor. It can then only obtain a profit by investing in lines of enterprise which give employment to labor.
Under which system will the demand for labor be greater? Under which will earnings be higher?
I had the pleasure of stumbling across a piece of writing from about 100 years ago. It is in one of quite a large number of books written by enthusiastic admirers of the ideas of Henry George, put online by Google Books. This is from a book by one James Love (written under a pseudonym). I've reformatted it a bit to make it easier to read here. It is a good summary of "Progress and Poverty," still the best book I know on political economy and economic justice -- why we suffer from wealth concentration, income concentration, poverty, sprawl, and a number of our other most serious social and environmental problems. Here's the excerpt; read it slowly and consider its implications!
This man, who I believe to be the completest in thought and language that the world has seen, and his book the most precious ever given by man to men, concludes
that the world (even more necessary to our existence than our own bodies are) is intended for all men of all generations, and not for some men alone.
That every human being born into the world has a natural right in it equal to that of every other human being born into it.
That as man by his nature seeks to gain his ends in the easiest way, some parts of the earth on which he can accomplish much become more desirable than other parts on which he can accomplish less.
That this varying desirability, causing competition for the use of certain lands, shows itself in "rent," which is thus a communal product, and as clearly belongs to communities as the remainder of the produced wealth belongs to the individual producers.
That it is as impolitic and unjust to take from the individual for the use of the community what has been produced by the individual as it is impolitic and unjust not to take for the use of all, or of the community, that which is produced in common by the community.
That, in short, "rent" is the natural, God-intended fund for general public use. And
that in denying this moral law of equal rights to land there is brought about a pitiful inequality of true wealth, and a sordid struggle for existence, destructive of human freedom and eventually bringing progress to a halt.
And that we are at last learning that in setting up "vested rights" — based whether on ancient force or ancient law — developed into modern custom — and denying this equality, we rob men and deny the truly sacred right of every man to the product of his labor; deny the sacred right of property in "wealth."
And that in treating private property in land as sacred (worse than treating property in man as sacred) "there never was a more degrading abasement of the human mind before a fetich."
But that, on the contrary, "by conforming our institutions to this divine law of justice we will bring about conditions in which human nature can develop its best;
will permit such enormous production of wealth as we can now hardly conceive;
will secure an equitable distribution;
will solve the labor problem and dispel the darkening clouds now gathering over the horizon of European civilization.
We will make undeserved poverty an unknown thing;
will check the soul-destroying greed of gain, and
will enable men to be at least as honest, as true, as considerate and highminded as they would like to be.
We will open to all, even the poorest, the comforts and refinements and opportunities of an advanced civilization; and
we will thus, so we reverently believe, clear the way for the coming of that kingdom of right and justice, and consequently of abundance and peace and happiness, for which the Master told his disciples to pray and work."*
* "The strength of ' Progress and Poverty' is not that it restated fundamental truths which others had before stated. It is that it related these truths to all other truths. That it shattered the elaborate structure that under the name of 'Political Economy' had been built up to hide them, and restoring what had, indeed, been a dismal science to its own proper symmetry, made it the science of hope and of faith." —Reply to charge of plagiarism.—Henry George.
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.
The Social Security Administration released some interesting information a few weeks ago (and corrected it after David Cay Johnston called attention to some anomalies in the data, which turned out to have resulted from false W-2's from two individuals; what's reported below is the corrected data) on 2009 wages.
First, here is a summarized table of the 150.9 million individual wage earners in 2009.
75% of wage earners earned $50,000 or under; 25% earned less than $10,000
Nearly 94% of wage earners earned less than $100,000. (Is this how you pictured it?)
The 6.3% of us who earned over $100,000 received over 30% of the wages.
In total, 32% of wage earners deferred any wages; the deferrals equaled just 3.56% of aggregate wages.
Net Compensation Interval
Number of Wage Earners
Percent of Total Wage Earners
Cumulative Percent Wage Earners
Percent of Aggregate Wages
Cumulative Percent Aggregate Wages
$0 to $10,000
$10,000 to $30,000
$30,000 to $50,000
$50,000 to $100,000
$100,000 to $500,000
memo: contributions to deferred compensation plans
These data do not include funds received by hedge fund managers which most of us would consider wages, but which get treated as capital gains, and taxed at a much lower rate than do all but the lowest wages. It would be interesting and useful to see those data arranged next to these.
One might use these data to consider whether there should be a separate bracket for higher incomes. Keep in mind that these are individual wages, net only of 401(k) type deferrals of income, not adjusted gross income at the taxpayer/household level.
The next table examines the amount of wage income which is represented by the portion of wages over $100,000, just below the current level at which one stops paying social security withholding.
Net Compensation Interval
Number of Wage Earners
Percent of Total Wage Earners
Cumulative Percent Wage Earners
Aggregate Wages over $100,000
Percent of Aggregate Wages
Cumulative Percent Aggregate Wages
$100,000 to $500,000
14.10/85.90 = 16.4%
So how does all this relate to this blog's focus on Land Value Taxation?
The focus is on smart, just, efficient taxation -- and on ending the privileges which enrich some people and impoverish the vast majority of us.
Many of the ways that people "earn" large salaries are in large part the result of our permitting privileges: the privatization of the value of natural resources; the privatization of the value of urban land; and structures which permit some sectors of the economy to skim off value created by all of us. (Did anyone yell FIRE?)
We have to hold the feet of our elected representatives to the fire: make it worth their while NOT TO obey the requests of their huge campaign contributors and TO listen to the rest of us and reconfigure the structures which funnel wealth and income into the pockets of the currently-and-traditionally-privileged folks.
Are you ready?
I think there were some signs in this recent midterm election that voters in several states were not bowled over by the well-constructed advertising and heavy media buys of some very rich candidates for office, and I find that encouraging. Connecticut's Foley and McMahon, California's Fiorino and Whitman, and a number of entities enabled by the Citizens United ruling by the Supreme Court spent large amounts of money, with very uneven results.
MUMBAI, India — Vinod Khosla, the billionaire venture capitalist and co-founder of Sun Microsystems, was already among the world’s richest men when he invested a few years ago in SKS Microfinance, a lender to poor women in India.
But the roaring success of SKS’s recent initial public stock offering in Mumbai has made him richer by about $117 million — money he says he plans to plow back into other ventures that aim to fight poverty while also trying to turn a profit.
Now let's do a thought exercise. Let's say that the microcredit projects are extremely successful, leading to abundant economic activity for thousands, hundreds of thousands, even millions, of women and their families.
Among the effects of that increase in economic activity will be an increase in the value of land in the places where that activity is taking place. That means that those who own land will be able to charge those who do not own land more for access to it. If the recipients of microcredit are already landholders, they will benefit as rents rise in their community. If the recipients of microcredit are not yet landholders, they will find themselves paying more rent to those who are. The tenants become sharecroppers, sharing their product with a landholder who provided no value added. Landed gentry.
Q. So how do we make microcredit's benefits accrue to the community as a whole, rather than simply to the landholders?
A. We encourage nations and communities to place more -- even all -- of their revenue collection onto the value of land and of natural resources, rather than permitting that value to accrue to those who claim title to the best land
Socialize that value -- treat it as the common treasure of the entire local community, rather than as the private windfall-collector of any individual or group. Collect that rent, rather than letting it accrue to the benefit of an individual. Use it to build schools, to dig wells, to clean water, to fund public services.
That is how to help whole communities. That is how we can end poverty.
Microcredit alone will make winners out of a fortunate few. But it won't improve life for the community, or create opportunities for the next generation. Collecting the increase in land value that the increase in economic activity creates WILL.
Does this take anything that the borrower created, either by their efforts or their risk-taking? No. They get to keep that.
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.
Where have all the economic gains gone? Mostly to the top. The economists Emmanuel Saez and Thomas Piketty examined tax returns from 1913 to 2008. They discovered an interesting pattern. In the late 1970s, the richest 1 percent of American families took in about 9 percent of the nation’s total income; by 2007, the top 1 percent took in 23.5 percent of total income.
It’s no coincidence that the last time income was this concentrated was in 1928. I do not mean to suggest that such astonishing consolidations of income at the top directly cause sharp economic declines. The connection is more subtle.
The rich spend a much smaller proportion of their incomes than the rest of us. So when they get a disproportionate share of total income, the economy is robbed of the demand it needs to keep growing and creating jobs.
What’s more, the rich don’t necessarily invest their earnings and savings in the American economy; they send them anywhere around the globe where they’ll summon the highest returns — sometimes that’s here, but often it’s the Cayman Islands, China or elsewhere. The rich also put their money into assets most likely to attract other big investors (commodities, stocks, dot-coms or real estate), which can become wildly inflated as a result.
Meanwhile, as the economy grows, the vast majority in the middle naturally want to live better. Their consequent spending fuels continued growth and creates enough jobs for almost everyone, at least for a time. But because this situation can’t be sustained, at some point — 1929 and 2008 offer ready examples — the bill comes due.
This time around, policymakers had knowledge their counterparts didn’t have in 1929; they knew they could avoid immediate financial calamity by flooding the economy with money. But, paradoxically, averting another Great Depression-like calamity removed political pressure for more fundamental reform. We’re left instead with a long and seemingly endless Great Jobs Recession.
THE Great Depression and its aftermath demonstrate that there is only one way back to full recovery: through more widely shared prosperity.
I think Robert Reich sees part of the problem, but he doesn't see the solution. How do we achieve more widely shared prosperity? By a variation on Alaska's theme. In Alaska, a significant share of the value of the state's natural resources is used to fund state government, and another significant share is placed each year into the Alaska Permanent Fund, which is invested in a broadly diversified portfolio and pays an annual dividend of $1000 to $2000 to every permanent resident of Alaska, of all ages. [See http://www.nytimes.com/2010/09/04/us/politics/04alaska.html for an article mentioning this, and the Alaska Permanent Fund link, at the left of this page.] Alaska has it half right: they collect a decent share of the value of the natural resources, but they don't tax their land value much.
How do we share the prosperity beyond the top 10%? By shifting our incentives so that those who currently grow wealthy in their sleep by collecting economic rent find themselves sharing that rent with the rest of us. Untax wages, starting with incomes under the median. Untax sales. Untax buildings. Tax land value. Tax the value of those things which the classical economists would have recognized as land -- water rights, "rights" to pollute, airport landing rights at congested airports, geosynchronous orbits (which prevent satellites from bumping into each other), electromagnetic spectrum (those airwaves which most people would say "belong to the American people" but which we have permitted corporations -- public and private -- to privatize), natural resources such as oil, natural gas, copper, coal, lithium, etc.. All these things are going into corporate portfolios (here and abroad -- and some of those corporations are families in power, despite attempts at nation-building), week in and week out, and their value accrues to the shareholders of the corporations. Stock ownership is quite concentrated, and these benefits flow into the pockets of a relative few, who, as Reich rightly points out, may or may not spend or invest in America's products. When they do invest, they often acquire our best land and resources, buying thereby the labor of thousands of Americans. When an acre in Manhattan can be worth $400 million, the seller of that land didn't make it valuable. WE did! So why should an individual, or a corporation, or a trust, or a university, or a pension fund -- or any private entity -- get to pocket that value as if they did? (The kindest thing I can say is that we have a bad habit! Something like chattel slavery -- and look at how long it took us to end that.)
Pocketing that value has two sorts of effects: when they sell, they pocket that so-called "capital" gain. It isn't capital! It is land value! Capital depreciates; what rises in value is land, and it rises for reasons which have nothing at all to do with the "fellow" who owns it.
But even when they buy and hold, there are important effects of permitting that privatization. The rich don't need to put the land to its highest and best use, because they can get by with something less while they wait for the community to cause it to grow. (See The Taxpayer at 72nd and Madison. Notice all the surface parking lots in Manhattan, Philadelphia, Hartford and many other cities. See the 4.3 acre "hole in the ground" in Stamford, CT, right near the city's 100% location, vacant since the early 1980s.) They're patient! They can afford to be. The top 10% of us hold 71.5% of the chips, according to the 2007 Survey of Consumer Finances.) Not using the land well reduces the supply of housing close to the center of things (adding to sprawl) and/or of jobs (which we say we want) and contributes to a wide range of our most serious social, economic, environmental and justice problems.
If we collected more of the annual rental value of our urban land, the holders of that land would turn into active users or sell it to someone who would put it to good use. Good use creates jobs, and homes and other things that the market wants. But when the market can't afford them, it does without. People are priced out of housing in the places they'd prefer to live. They lack jobs or are underemployed, and the rich keep getting richer.
Reich advocates extending the EITC, exempting the first $20,000 of wages from payroll taxes, improving and extending early childhood education, making public universities free in return for 10% of the first 10 years of full-time earnings, creating "earnings insurance." He concludes,
Policies that generate more widely shared prosperity lead to stronger and more sustainable economic growth — and that’s good for everyone. The rich are better off with a smaller percentage of a fast-growing economy than a larger share of an economy that’s barely moving. That’s the Labor Day lesson we learned decades ago; until we remember it again, we’ll be stuck in the Great Recession.
OUR CONCLUSIONS point to a solution. It is so radical that it will not be considered if we believe less drastic measures might work. Yet it is so simple that its effectiveness will be discounted until more elaborate measures are evaluated. Let us review current proposals to relieve social distress. For convenience, we may group them into six categories:
1. More efficient government 2. Better education and work habits 3. Unions or associations 4. Cooperation 5. Government regulation 6. Redistribution of land
That 10% of us who hold 71.5% of the net worth also received 41.3% of the current income. [Note that these percentages are understated, since the SCF purposely omits the Fortune 400 families. They hold about 1% of the nation's net worth.]
Picketty & Saez provide annual updates on income concentration. For 2008, they report that the top 10% of us (sorted by income, not net worth) received 45.60% of the income when capital gains are excluded and 48.23% of income including capital gains. (For 1988, the corresponding figures are 38.63% and 40.63%; in 1958, 32.11% and 33.56%. Do we notice a trend here? Do we like it or think it a healthy trend?)
We have permitted and supported a structure which funnels wealth and income into relatively few pockets. We have to reform this structure, and we have to recognize that the current beneficiaries are not likely to be keen on reform -- conservatives have a lot to conserve for themselves -- and those who are dependent for their salaries on being popular with those beneficiaries are not likely to be particularly interested in looking at the underpinnings of the structure with an eye to removing some of the ladders (escalators!!) or gentling the chutes.
Those who get to privatize the value of what ought to be common assets grow wealthy in their sleep. Until enough of us understand the mechanism to constitute a majority, we aren't likely to correct it.
It is a bit disheartening to think how many well-regarded economists live in California, the land of Proposition 13, and haven't lifted a finger or opened their mouths to suggest that it is not in the best interests of California's people. Milton Friedman acknowledged many times that the tax on land values was the "least bad" tax -- and didn't have anything to say about Proposition 13, which was the antithesis of what a wise person or society would do with that information. So I guess I shouldn't be surprised that today's California economists, with very few exceptions, aren't all that concerned with the economic wellbeing of ordinary people any more than economists elsewhere are. Or maybe, as my late mother would have expressed it, their educations have simply been neglected. (At which point she would proceed to fill in my newly-identified knowledge gap.) Economists can start with the links in this post, and then explore from there.
Inadequate taxes on mining means the people of Australia are being cheated and the economy is getting poorer, a Nobel Prize-winning economist told a crowd of 1400 people at The University of Queensland last night.
Professor Joseph Stiglitz shared his thoughts on the proposed mining tax in response to a question from an audience member during the seventh UQ Centenary oration.
“Natural resources lead to an appreciation of the currency and that leads to an imbalanced economy because it's hard for any other sector to do well, competing with imports or exporting,” Professor Stiglitz said.
“You're selling off your assets and in many cases you're selling them off at a very low price.
“If you are taking resources out of the country and you are not reinvesting those resources in one way or another – a stablisation fund, human capital, infrastructure – then your economy is getting poorer, not richer, and a good accounting framework can show that,” he says.
“When you're taking out natural resources from an economy you ought to have a subtraction from GDP - a firm that held a resource and was selling it off would take off depreciation and that would show up in its books as depreciation.”
Professor Stiglitz told a packed UQ Centre that Australia's economic stimulus package was the best designed in the world.
AND he said natural resources - coal, iron ore - should be properly valued at market just like the electromagnetic spectrum.
The government auctions the spectrum to the highest bidders who want to operate mobile phone networks, cable companies, television and radio stations.
Basically, a country - like Australia - will end up poor if doesn't get the best price for its assets - and natural assets are not renewable, once they are gone they are gone. If the proceeds from the sale of these assets are not invested in infrastructure to support and grow other sectors the economy (manufacturing and value-adding, goods creation) then a country and it's people will not prosper - HELLO! HELLO! Drowning not waving.
"It should be subtracted from Gross Domestic Product (GDP)," he said. "You are selling off assets at a very low price if you don't have adequate taxes on mining - you are being cheated," he said to audience applause.
He thinks resources should be auctioned off to the highest bidder - the free market at work. Of course, the mining industry will make all kinds of threats.
To everyone's amusement he joked about how mining companies bamboozled, threatened and bribed governments of developing, fragile nations.
"I assume that's not the case in Australia," he mused.
To prosper, a country needs to set up a stabilization fund (from a mining tax, if not a resources auction) for nation building.
This is what he calls an investment fund for building infrastructure and to grow value-adding industries, maintain education, job creation.
Not only that but the sell-off of natural resources should appear on a country's accounts as a kind of depreciation of assets - otherwise the accounts are not accurate. ...
He made these comments at the end of the oration after he explained the difference between the financial sector and the economy - the economy is not the financial sector.
The financial sector (the banks and regulators) are the culprits behind the global financial crisis which has crippled the global economy. Apparently, moneylenders have been skimming 40 percent of the profits from companies that actually make and produce things. His big point was that this is not really the role of the financial sector. The financial sector's job is to support economic growth, not cripple it.
"Finance is a means to an end," he said. "The lack of balance between the financial sector and the economic sector was actually the real problem in this economic crisis (NOT the real estate bubble)."
The second account concludes with:
And as for Climate Change and the price of carbon and waiting for the rest of the world before we do anything?
Economies are not restructuring because there is no carbon price. The western world worries about the growing and changing consumption patterns of China and India.
Professor Stiglitz doesn't believe the West should begrudge them at all.
It's not consumption that's evil - it's profligacy. WASTE! Now, I wonder who wastes more the West or countries raising people out of poverty?
India and China will follow the wasteful ways of the West if the world fails to set a carbon price and force everyone to consume less to save the planet - the planet will force us to change in the end (*he says).
"If we had agreed to have a price on carbon at Copenhagen that would have been the answer," he said. "It would have provided an increase in global aggregate demand (global economic spending) as firms all over the world needed to retrofit (their business to meet pollution standards)."
So why is the US not hearing this advice? There is a lot here that speaks to issues which Americans would be wise to attend to. Alaska pays for a large portion of its costs by taxing its natural resources, and also provides an annual income to every permanent resident, of any age, from the proceeds of investing oil revenue into a broadly diversified portfolio, through the Alaska Permanent Fund. We have sacrificed many American lives in Iraq, but not produced a situation in which Iraq's oil revenue gets used either to finance infrastructure and government-provided services OR to provide an income to every citizen.
Re-read these excerpts with Iraq in mind, and then thinking of Afghanistan, and then of America.
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.
This is a good article, by James Surowieki, on the prevalence of financial ignorance in America. I'm going to take the liberty of including the entire article here, but want to preface it with the thought that the problem is deeper and broader than he suggests. Remember that Case and Shiller (2003, if I recall correctly) found that people buying homes expected them to appreciate significantly; this expectation likely caused them to take on amounts of debt that in the absence of such an expectation would have made absolutely no sense.
How many people realize that houses depreciate? Houses depreciate. (A May, 2006, Federal Reserve Board study cited 1.5% as an annual depreciation for single-family housing stock.) What rises in value is land. It rises in value for reasons which have nothing at all to do with the activity or inactivity, presence or absence of any individual landholder. It rises because of increased in population (general and local); because of public investment in infrastructure and services which appeal to buyers and tenants (residential and commercial); because of advances in technology (e.g., elevators, air conditioning, even fiberglass boats!). It is also influenced by interest rates and by loan underwriting rules, and by pent-up demand for a place to live, and a willingness to commit a huge portion of one's savings (if any) and present and future income to paying a seller for value he didn't create, on the basis that this is a better choice than paying a landlord for value he didn't create.
(The alternative, of course, is to reform our taxes, and place more of the burden onto the value of land, not a square foot of which will disappear or be hidden, and less on buildings, wages, purchases and other standardly-used tax bases which behave badly when taxed. But our financial ignorance goes far beyond ignorance of personal finance. Very few of us have a realistic understanding of political economy, the science which deals with the natural laws
governing the production and distribution of wealth and services. Very hard to make sense of the micro if you have an unrealistic or limited understanding of the macro!)
Individuals buying their first homes hoped to supplement their meager wages with significant unearned increases in land value. But they failed to note what Leona Helmsley laid out: it is the little people who pay the taxes, and the little people who support the public spending which enriches those who hold our best-located land (be they individuals or corporations, domestic or otherwise). Details, details.
Halfway through his Presidency,
George W. Bush called on the country to build “an ownership society.”
He trumpeted the soaring rate of U.S. homeownership, and extolled the
virtues of giving individuals more control over their own financial
lives. It was a comforting vision, but, as we now know, behind it was a
bleak reality—bad subprime loans, mountains of credit-card debt, and
shrinking pensions—reflecting a simple fact: when it comes to financial
matters, many Americans have been left without a clue.
of our financial ignorance is startling. In recent years, Annamaria
Lusardi, an economist at Dartmouth and the head of the Financial
Literacy Center, has conducted extensive studies of what Americans know
about finance. It’s depressing work. Almost half of those surveyed
couldn’t answer two questions about inflation and interest rates
correctly, and slightly more sophisticated topics baffle a majority of
people. Many people don’t know the terms of their mortgage or the
interest rate they’re paying. And, at a time when we’re borrowing more
than ever, most Americans can’t explain what compound interest is.
illiteracy isn’t new, but the consequences have become more severe,
because people now have to take so much responsibility for their
financial lives. Pensions have been replaced with 401(k)s; many workers
have to buy their own health insurance; and so on. The financial
marketplace, meanwhile, has become a dizzying emporium of choice and
easy credit. The decisions are more numerous and complex than ever
before. As Lusardi puts it, “It’s like we’ve opened a faucet, and told
people they can draw as much water as they want, and it’s up to them to
decide when they’ve had enough. But we haven’t given people the tools to
decide how much is too much.”
Unsurprisingly, the less people
know, the more they run into trouble. Gary Rivlin’s blistering new
examination of the subprime economy, “Broke, U.S.A.,” is full of stories
of financially ignorant people bamboozled into making bad
decisions — refinancing out of low-interest mortgages, say, or buying
overpriced credit insurance — by a consumer finance industry adept at
creating confusing products. Such stories are backed up by the numbers. A
study by economists at the Atlanta Fed found that thirty per cent of
people in the lowest quartile of financial literacy thought they had a
fixed-rate mortgage when in fact they had an adjustable-rate one. A
study of subprime borrowers in the Northeast found that, of the people
who scored in the bottom quartile on a very basic test of calculation
skills, a full twenty per cent had been foreclosed on, compared with
just five per cent of those in the top quartile.
What can be
done? One solution is regulation: the financial-reform bill now before
Congress will create a consumer financial-protection agency that should
help curb the finance industry’s most predatory excesses. Another
solution is to tinker with “choice architecture” — doing things like
enrolling people in 401(k)s automatically — in order to “nudge” them
toward better decisions. Both of these strategies are necessary, but
they’re not enough on their own, because financially illiterate
consumers are always going to be easy victims. We also urgently need
proper financial education.
This seems obvious, but it’s surprisingly
controversial. Some suggest that financial illiteracy is an example of
what economists call “rational ignorance” — inattention that is justified
because the costs of paying attention outweigh the benefits. But few
decisions affect us more directly than the ones we make about our money.
Critics also argue that financial education may make people
overconfident, and therefore more likely to make bad decisions. In fact,
the reverse is true: the less people know, the more overconfident in
their abilities they tend to be. In a German study, eighty per cent of
those surveyed described themselves as confident in their answers on a
questionnaire, yet only forty-two per cent got even half the questions
right. This is known as the Dunning-Kruger effect: people who don’t know
much tend not to recognize their ignorance, and so fail to seek better
information. No wonder, then, that the least knowledgeable people in the
Atlanta Fed study were also the least likely to do research before
getting a mortgage. By contrast, well-informed people are more likely to
ask others for help. If financial education taught people only how
little they actually know, it would accomplish quite a lot.
government’s new consumer-protection agency has the authority to “review
and streamline” financial literacy programs, but that’s not enough. We
really need something more like a financial equivalent of drivers’ ed.
There’s evidence that just improving basic calculation skills and
inculcating a few key concepts could make a significant difference. One
study of the few states that have mandated financial education in
schools found that it had a surprisingly large impact on savings rates.
And the Center for American Progress has found that, across the country,
education and counselling by nonprofit organizations, like the
Massachusetts Affordable Housing Alliance, have helped low-income
families buy and hold onto homes, even during the housing bubble. The
point isn’t to turn the average American into Warren Buffett but to help
people avoid disasters and day-to-day choices that eat away at their
bank accounts. The difference between knowing a little about your
finances and knowing nothing can amount to hundreds of thousands of
dollars over a lifetime. And, as the past ten years have shown us, the
cost to society can be far greater than that. ♦
On one of the NYT blogs in the "New Old Age" series, someone ("been there" in Boston) posted a very wise comment I thought worth passing along. The original post was entitled "No Place Like Home."
Think about it with respect to public policy such as California's Proposition 13.
I've added a bit of formatting to make it easier to read.
I understand the current sentiment for "growing old in place", but I
really believe we need to rethink the idea of spending limited resources
trying to keep elderly people living in the homes they raised their
families in. This feel-good concept actually has several drawbacks in a
variety of areas. As larger numbers of baby boomers move into retirement
these issues will only get worse.
First, with one or two elders living
in a three or four bedroom home, young growing families have too few
move-up houses available to them so they build new houses in the exurban
ring which 30 years down the road will exacerbate the real estate pull
back as the boomer generation passes and the baby bust can't replace
Second, as this article points out, access to services
and health care is terribly expensive and inefficient when those needing
a high level of health care are in single family homes.
stress of owning a home that an elder cannot adequately repair or
maintain becomes a constant low level of stress in their lives.
all too often, the elderly are stuck in a financial situation where the
ongoing costs of their primary home are wrecking their budget. Reverse
mortgages with their high fees and lousy financial terms are a terrible
solution. We need to develop a wider array of 55+ housing solutions at a
wider selection of price points and housing styles in the communities
where elders live so they can maintain the relationships that nurture
them while providing housing situations that allow them access to all
the services they will need.
I couldn't have said it better! Policies which significantly favor older homeowners over their younger fellow community members (e.g., California's Proposition 13 or Florida's Save Our Homes) drive up housing prices, monthly housing expenses, commuting expenses, pollution, sprawl, commuting time, profits for mortgage lenders. They lead to the premature need for adding infrastructure, destroying farmland, spending public money to enrich private entity landholders.
If our incentives instead encouraged the prompt and ongoing redevelopment of choice sites, well-served by taxpayer-funded infrastructure and services, there would be affordable, appealing housing for people of all ages and stages, all places on the income spectrum. It wouldn't be single-family houses downtown; it might be midrises or highrises, close to all the amenities which make downtown areas good places to live: medical care, restaurants, entertainment, libraries, emergency services, etc.
We just need to rationalize -- make rational! -- our system of incentives and privileges. We ought to align our incentives with where we want to go, and with what eliminates privilege for some which are funded by burdens on others. (Some of our privileges are so things we're so used to that we don't see that they burden and victimize others. Private collection of land rent and natural resource value is in that category.)
Here are a few paragraphs -- please read the whole thing online, because I've omitted some important material!:
“I’ve really been studying
perpetrators and violence all my life.”
How she came to this realization is the subject of her new book, “Denial: A Memoir of Terror,” which Ecco published
last week. The book recounts how, in 1973, when Ms. Stern was 15, she
and her younger sister were raped at gunpoint in their home in Concord,
Mass. The police disbelieved the girls’ account and bungled the
investigation; their father, in Europe at the time, didn’t think it
necessary to cut his trip short and return. The whole community, she
writes, seemed to be in denial.
The experience created in Ms. Stern a kind of emotional numbness — a
calmness, even a fearlessness, that has proved oddly useful in her
“I am fascinated by the secret motivations of violent men,” she writes
in “Denial,” “and I’m good at ferreting them out.” She found that
terrorists would talk openly to her, she said, because she could “go
into a state where I almost tried to become that person, and where I
felt that if I allowed myself even the tiniest judgmental thought, they
could probably sense it.” ...
Not the least of her contributions, he went on to say, was that she was
one of the very first terrorism scholars to realize that the way to
discover what terrorists were thinking was to go and talk to them.
“She was asking the right questions of the right people,” he added, “and
if some of that comes from her own experience of being terrorized, then
the lessons were very fruitful.” ...
She began to come to terms with what was a traumatic family history even
before the rape: her mother died when she was 3; her father, a German
émigré who had been persecuted by the Nazis, remarried but six years
later divorced his second wife, leaving his daughters with her for
almost two years while he lived on his own.
And with the help of an investigator, Ms. Stern even tracked down the
story of her rapist, who served 18 years in prison and then hanged
himself. He turns out to have been responsible for at least 44 rapes or
attempted rapes between 1971 and 1973, all with a trademark methodology
that the police somehow failed to pick up on. Among other things, he
found most of his prey at girls’ boarding schools or at Radcliffe
College, and many of his attacks involved two or more young women. ...
Ms. Stern interviewed friends or relatives of the rapist and uncovered a
long and depressing history of parental abandonment (he was adopted,
though he didn’t know it for years, and a woman he thought was his aunt
was really his mother); confused sexual identity; drug use (he even
dropped acid once with Timothy Leary); and possible childhood
molestation (his parish church harbored a series of predatory priests).
He had probably been traumatized himself, and then in the classic
fashion went on to traumatize others. ...
Writing the book, she added, taught her a lot about the effects of
post-traumatic stress syndrome, of which she now considers herself a
victim, and also helped refine her thinking about terrorism. Her
researches have taught her that there is no common denominator in
determining why people become terrorists, but she has identified a
checklist of risk factors. These include alienation, coming from a
society with a youthful population bulge or a high male-to-female ratio
and, for the people who wind up being used as cannon fodder by the
To the list she would now add sexual humiliation, and in January she
published an article in Foreign
Affairs in which she pointed out that sexual abuse of boys in the
Islamic religious schools known as madrasas is not uncommon, and
neither is the rape of boys in Afghanistan, especially on Thursday,
known as “man-loving day,” because Friday prayers are thought to absolve
a sinner of all his guilt.
“I’ve known about this for years,” Ms. Stern said, “but until I wrote
this book, I didn’t make the connection. I’m not sure how you study it,
but I do think it’s there. Humiliation is definitely a risk factor, and
this may be a particular kind of it.”
She paused and added: “But why humiliation in some places and some
people but not others? Harvard is a humiliation factory, and yet we
don’t produce a lot of terrorists.”
Most of those at Harvard come from a lot of money, and/or can expect to earn a lot of money in this society, which probably cushions them greatly from the effects of any humiliation they might suffer at the hands of their classmates or teachers. Who cushions the poor from what they suffer as ordinary humans in a society which is structured to concentrate income and wealth in relatively narrow slices of the spectrum?
Or is this an inconvenient thing we ought to continue to ignore?
Relatedly, one might think about how someone who is in the 20% of America which receives, say, 4% of America's income might feel about those who are in the 1% who receive about 20% of America's household income, and what their opportunities are to move up even a quintile or two.
See also the next post, about a neurologist looking at his own family history, and the difference that a secure and serene childhood can make in one's chances in life. I heard these two stories within a couple days of each other -- what a juxtaposition!
This is a fascinating story, and I commend it to your attention. The link takes you to the transcript and the option to listen to the story. It describes a university neuroscientist who looks into his own family history and, with the cooperation of family members, brainscans and DNA of a number of others descended from the same line:
About four years ago, Fallon made a
startling discovery. It happened during a conversation with his then
88-year-old mother, Jenny, at a family barbecue.
"I said, 'Jim, why don't you find out about your father's
relatives?' " Jenny Fallon recalls. "I think there were some cuckoos
"There's a whole lineage of very violent people —
killers," he says.
One of his direct
great-grandfathers, Thomas Cornell, was hanged in 1667 for murdering his
mother. That line of Cornells produced seven other alleged murderers,
including Lizzy Borden. "Cousin Lizzy," as Fallon wryly calls her, was
accused (and controversially acquitted) of killing her father and
stepmother with an ax in Fall River, Mass., in 1882.
A little spooked by his ancestry, Fallon set out to see whether
anyone in his family possesses the brain of a serial killer. Because he
has studied the brains of dozens of psychopaths, he knew precisely what
to look for. To demonstrate, he opened his laptop and called up an image
of a brain on his computer screen.
The story is fascinating. I'm sharing it here because of the final lines. First, a bit more of the story:
After learning his
violent family history, he examined the images and compared them with
the brains of psychopaths. His wife's scan was normal. His mother:
normal. His siblings: normal. His children: normal.
"And I took a look at my own PET scan and saw something
disturbing that I did not talk about," he says.
What he didn't want to reveal was that his orbital cortex
"If you look at the PET scan,
I look just like one of those killers."
he says the evidence is accumulating that some people's brains
predispose them toward violence and that psychopathic tendencies may be
passed down from one generation to another.
And that brings
us to the next part of Jim Fallon's family experiment. Along with brain
scans, Fallon also tested each family member's DNA for genes that are
associated with violence. He looked at 12 genes related to aggression
and violence and zeroed in on the MAO-A gene (monoamine oxidase A).
This gene, which has been the target of considerable research, is also
known as the "warrior gene" because it regulates serotonin in the brain.
Serotonin affects your mood — think Prozac — and many scientists
believe that if you have a certain version of the warrior gene, your
brain won't respond to the calming effects of serotonin.
Fallon calls up another slide on his computer. It has a
list of family members' names, and next to them, the results of the
genotyping. Everyone in his family has the low-aggression variant of the
MAO-A gene, except for one person.
that? I'm 100 percent. I have the pattern, the risky pattern," he says,
then pauses. "In a sense, I'm a born killer."
Fallon was prompted to
study his brain after his mother, Jenny, told him his ancestry was full
of alleged murderers.
Fallon's being tongue-in-cheek — sort of. He
doesn't believe his fate or anyone else's is entirely determined by
genes. They merely tip you in one direction or another.
And yet: "When I put the two together, it was frankly a
little disturbing," Fallon says with a laugh. "You start to look at
yourself and you say, 'I may be a sociopath.' I don't think I am, but
this looks exactly like [the brains of] the psychopaths, the sociopaths,
that I've seen before."
I asked his wife,
Diane, what she thought of the result.
wasn't too concerned," she says, laughing. "I mean, I've known him since
I was 12."
Diane probably does not need to
worry, according to scientists who study this area. They believe that
brain patterns and genetic makeup are not enough to make anyone a
psychopath. You need a third ingredient: abuse or violence in one's
That's why I'm sharing this one here. 35% to 40% of America's children live in families where the household income is insufficient to meet the most modestly defined needs of a family of that size and configuration in that location. (See "Self-Sufficiency Standard" for more information.) How many more live in families which have below-average income, little financial security, little in savings, shaky housing situations, unemployment or underemployment?
Our nation's concentration of income and concentration of wealth mean that about 80% of us are below average. Every time you see a report about average wealth, or average income, please recognize that we live in Lake Wobegon in Reverse. Most of our children live in families that are below average, particularly those who were born to young parents, to less educated parents, to single parents, or who made unfortunate choices of who their parents would be, or what pressures their parents' marriages would come under, particularly financial pressures.
We have a poverty machine. The rich keep getting richer, and the rest -- including the families of a very large proportion of our children -- are struggling to keep their heads above water.
How do we fix this poverty machine? How do we transform it into a rising prosperity-for-all machine? For that, you'll have to do some reading. Start with the works of Henry George --
Then, you might read Bob Andelson's Henry George and the Reconstruction of Capitalism at wealthandwant.
How do we reduce the chances that conditions in a child's life will cause them to become people who victimize others as adults? By assuring that all get what they need as children, and are protected from victimization by adults and by other children.
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.
Pennsylvania is a diverse state. Its major cities and their suburbs tend to have higher costs of living, and its smaller cities and rural counties are much less expensive. But even the least expensive counties have bare-bones cost of living far about the Federal Poverty Guideline.
Here are the Federal Poverty Guidelines for 2009, which were extended into at least mid-2010:
The barebones cost of living in the least expensive counties is over 150% of the FPG for a single adult; and nearly twice the FPG for adults with children.
A similar lifestyle would cost far more in Pittsburgh (about 250%, with children) and Philadelphia (about 300%, with children. In suburban Pittsburgh, the figure is slightly higher than in the city itself. In Lancaster County, the costs are similar to suburban Pittsburgh's.
And in the suburban counties of Philadelphia, that still-bare-bones lifestyle costs more yet: 325% to 350% of the Federal Poverty Guideline.
Few people live in the rural counties, where costs are low. (So are wages and opportunities!)
Most people live in the urban and suburban counties, where costs are higher. (And if they tried to live in the rural counties and work in the urban ones, their high transportation costs would eat up much of the difference.)
High population density goes with high median income; low population density goes with low median income.
All these places need janitors, and nurses' aides, and fast-food workers, and retail clerks, and many other jobs which pay wages which are insufficient for an adult to live independently on, much less support a family on. (And most places have zoning regulations which prohibit more than a few unrelated adults from living in a single housing unit, which would be a way to reduce the cost of living.) Encouraging individuals to seek more education to move beyond these jobs is fine, but it doesn't mean that those jobs won't be needed in a hypothetical more-educated future. Do we really expect that they will be filled by people who will be content with dormitory living, and not having children, or supporting an elderly relative, or that young people will fill these jobs briefly and then move into higher-paying jobs when they marry and have children? Really?
Trickle-down economics doesn't speak to how all these people can afford to live. The SSS is not a middle-class lifestyle, at least not the way most of us think of "middle class." It is the just-getting-by-without-depending-on-help (though it does take into account EITC, CCTC and CTC; the EITC is only relevant in a few rural counties -- see the tables starting at page 42). We need to understand why wages are so low, and why our wealth and income are so concentrated. And we need to understand the structures that create this situation, in order to correct them.
Median Family Income
Persons per Square Mile
Federal Poverty Guideline
source: Census Quick Facts site, except for Allegheny County: Pittsburgh city data
Here's another interesting article from the January 1, 1887 edition of The Democrat. It speaks to some very 21st-century issues: wealth concentration, population growth, access and ownership of land and natural resources, and equality of opportunity -- to name a few. I've Americanized the spellings to make it an easier read for US readers. "Labor" refers to us, ordinary folks who need to work for a living -- not to organized labor specifically.
THE LABOR PROBLEM.
By An American.
The signs of dissatisfaction on the part of the
laboring classes are clearly apparent everywhere. Labor
organizations, strikes, boycotts, labor journals -- all these mean
something, and what that something is we cannot find out too soon.
Is the dissatisfaction
of labor simply the result of human perverseness, the envy and
jealousy of idleness and carelessness at the better success of industry
and thrift, or are there unjust forces operating on society producing
Has every man the same
chance? Can all men attain to the same fortune if all are equally
industrious and thrifty? Is there a fair field and no favor?
Certainly there is, cries a host of respondents.
Is not each man the architect of his own fortune? And they quote case
after case of men who began at the foot of the ladder, but who with
indomitable pluck gained step after step until they conquered fortune,
while others who began at the same point, neglected their opportunities
and are still toiling in poverty, where they are destined to stay to
the end of the chapter.
Is society so
constructed that to all there is the same chance? Can all by exercising
the same industry and thrift become equally wealthy? This question goes
directly to the core of the labor problem. If there is the same chance
to all, then what reason has the laborer to complain? A
little consideration answers this question.
In how many years
could society with its utmost exertions and greatest economy accumulate
enough so that toil would be no longer necessary, and forever after all
succeeding generations could live in idleness. No more plowing in
spring, no reaping in harvest, no toiling in the mine, no sailing on
the ocean — a huge, everlasting pic-nic!
Never! Toil, to restore the faded or to replace
the worn out, must be as lasting as the race. Toil, toil, toil, is the
"Men may come and men may go,
But toil goes on for ever."
Note that as fact number one and put fact
number two alongside it.
And fact number two is this: Certain families
now have the power of living for ever without toil. They
organize no industry, invent no machine, do nothing to furnish supplies
for themselves or their fellows — drones in the human hive, and yet their
cruse of oil never fails.
Now, put these two facts together:
1st. Toil must be lasting as the race;
2nd. Some are now eternally exempt from toil;
Therefore, as certain as any therefore can be,
some are endowed with privileges from which the
rest of the race must be by an inexorable physical law for ever excluded.
That figure has been in the news and opinion columns a great deal in the past couple of weeks. It is the percentage of Americans who pay nothing in federal income taxes (as distinct from federal withholding for social insurance).
Some of the articles and related comments have focused on the concept that everyone should be paying something, so that they "have some skin in the game" so that there is an incentive not to vote for spending that others will have to pay for. Some have approached the 47% as "freeloaders."
It is funny that in our largest state, where, for 30+ years, Proposition 13 has put a ceiling on property taxes, so that landholders, who are the primary beneficiary of the effects of state and local spending (and federal funding of state and local projects) can expect their tenants to contribute mightily to the projects they vote for -- and no one has made an impression by pointing this out.
And none of the articles I've seen about the 47% figure -- which went viral after an article by Bob Williams in the WaPo -- have spent much time exploring the policy decisions behind this.
I am reminded that according to our official Federal Poverty Guideline, about 13% of us live "in poverty." And that even the Census Bureau, which collects and reports the data on who lives below the Federal Poverty Threshold (a retrospective figure which relates closely to the FPG) willingly recognizes that the Federal Poverty threshold and guideline are merely a statistical yardstick, with no particular logical relationship to the cost of living anywhere in America.
I am reminded that for the states for which a Self-Sufficiency Standard Study has been published (about 35 in all), the bare-bones cost of living for a young working family typically runs from 180% of the Federal Poverty Guideline -- in the least expensive counties (where very few people live) to perhaps 210% in the major cities of our smaller states to 300% or 400% in the major cities in our larger states.
Should the incomes -- mostly wages -- of our working people whose incomes are insufficient or barely sufficient to meet their own and their families' most modestly defined needs, be taxed?
I am reminded of the Overlooked and Undercounted studies, which typically follow a Self-Sufficiency Standard Study, and seek to quantify the number and percentage of working-age families whose incomes are insufficient to cover their bare-bones cost of living. Significant percentages of these families are at these income levels. 30% to 35% sticks in my mind -- and a larger percentage of America's children.
I am reminded that a large percentage of today's seniors are hugely reliant on their income from Social Security, and that the level of Social Security income is established upon retirement and thereafter only rises to keep up with the CPI-U; our oldest retirees are receiving Social Security incomes which are a function of their wages 30 years ago -- roughly as logical as California property taxes for long-time owners being based on the selling price of California housing 30 years ago!
I am reminded that many people get to deduct their mortgage interest and real estate taxes from their taxable income (they're typically in the coastal states; in the heartland states, the standard deduction often turns out to be higher, since taxes and interest payments tend to be lower ... which may correlate to the percentage of children who attend 4 year colleges).
And I am reminded that state and local taxes fall more heavily on low-income people than they do on high income people. (See "Who Pays? A Distributional Analysis of the Tax Systems in All 50 States", particularly the "Averages for All States" table on page 124 of 130), which shows that, on average, the bottom quintile of us pay 10.9% of our income in state and taxes, while the fourth quintile pays 8.5% and the top 1% pays just 5.2%, on average.
I am reminded of our concentration of income:
10% of us receive 47.19% of the before-tax income
20% of us receive 60.96% of the before-tax income
40% of us receive 79.14% of the before-tax income
60% of us receive 90.37% of the before-tax income [see middle-class agenda, on the next page of this blog]
So the bottom 40% of us receive less than 10% of the before-tax income. And those who think they don't pay enough in taxes would like them to pay more into the system than they already do? The problem is one of low wages, unemployment and underemployment. The best solution to these problems I've come across lies in the ideas of Henry George. The law of wages is something like the law of gravity: we operate in ignorance at our own risk.
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.